ACTIVE IQ TECHNOLOGIES INC - 10-Q Quarterly Report

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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _______ TO _______

COMMISSION FILE NUMBER 1-12401

- --------------------------------------------------------------------------------

WITS BASIN PRECIOUS MINERALS INC.
(Exact Name of Registrant as specified in Its Charter)

MINNESOTA 84-1236619
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

800 NICOLLET MALL, SUITE 2690, MINNEAPOLIS, MN 55402
(Address of Principal Executive Offices)

612.664.0570
(Issuer's Telephone Number, Including Area Code)

ACTIVE IQ TECHNOLOGIES, INC.
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes [ ] No [X]

As of August 11, 2003, there were 17,057,181 shares of common stock, $.01 par
value, outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements (as such term is defined in
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended) and information relating to us that
is based on the current beliefs of our management as well as assumptions made by
and information currently available to management, including statements related
to the markets for our products, general trends in our operations or financial
results, plans, expectations, estimates and beliefs. In addition, when used in
this Form 10-Q, the words "may," "could," "should," "anticipate," "believe,"
"estimate," "expect," "plan" and similar expressions and their variants, as they
relate to us or our management, may identify forward-looking statements. These
statements reflect our judgment as of the date of this Form 10-Q with respect to
future events, the outcome of which is subject to risks, which may have a
significant impact on our business, operating results or financial condition.
Readers are cautioned that these forward-looking statements are inherently
uncertain. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or outcomes may
vary materially from those described herein. We undertake no obligation to
update forward-looking statements. The risks identified in the section of Item 2
entitled "RISK FACTORS," among others, may impact forward-looking statements
contained in this Form 10-Q.

2

WITS BASIN PRECIOUS MINERALS INC.
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)
FORM 10-Q INDEX
JUNE 30, 2003

3

WITS BASIN PRECIOUS MINERALS INC. AND SUBSIDIARIES
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS

See accompanying notes to condensed consolidated financial statements

4

WITS BASIN PRECIOUS MINERALS INC. AND SUBSIDIARIES
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

See accompanying notes to condensed consolidated financial statements

5

WITS BASIN PRECIOUS MINERALS INC. AND SUBSIDIARIES
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

See accompanying notes to condensed consolidated financial statements

6

WITS BASIN PRECIOUS MINERALS INC.
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2003
(UNAUDITED)

NOTE 1 - NATURE OF BUSINESS

On June 26, 2003, under our former corporate name of Active IQ Technologies,
Inc. ("we," "us," "our," "its" or the "Company") we began our participation in a
joint venture with Hawk Precious Minerals USA, Inc., a Minnesota corporation and
wholly owned subsidiary of Hawk Precious Minerals, Inc., (a corporation
organized under the laws of the Canadian Province of Ontario) for the
exploration of gold minerals in the Republic of South Africa. The joint venture,
named Active Hawk Minerals, LLC (a Minnesota limited liability company) was
created to pursue the mineral rights to the FSC Project ("FSC") area in South
Africa held by Kwagga Gold (Proprietary) Limited ("Kwagga"). Mineral rights are
in the form of exclusive, notarized Prospecting Contracts applied for and/or
issued by the State and various option agreements with private owners over a
land package totaling approximately 269,000 acres. The area has excellent
infrastructure and is easily accessible, limited environmental issues, no known
indigenous land claims, and provision has been made to convert the rights under
the new Minerals and Petroleum Development Act of South Africa. Kwagga is a
wholly owned subsidiary of AfriOre International (Barbados) Ltd. ("AfriOre").
AfriOre is a coal producer and a precious minerals exploration company with
offices in Johannesburg, South Africa and the operator of the project. The FSC
area has the potential for containing Witwatersrand-type gold mineralization.
The historic Witwatersrand basin is host to the world's largest reserves of
gold. It has produced over 1.5 billion ounces of gold during the past 117 years.

Prior to April 30, 2003 we provided accounting software through our Accounting
Software Business ("ASB") and until March 14, 2003, we provided
industry-specific solutions for managing, sharing and collaborating on business
information on the Internet though our Hosted Solutions Business ("HSB"). In
December 2002, our Board of Directors authorized a plan to sell the ASB and as a
result of the formal plan, the results of operations have been reported as
discontinued operations (the "Discontinued Operations") and previously reported
condensed consolidated financial statements have been restated for the three
months and six months ended June 30, 2002. See Note 5 for further discussion
regarding the Discontinued Operations of ASB.

Subsequent to our decision the sell the ASB, we came to the conclusion that due
to current market conditions for capital funding of Internet opportunities, it
would be extremely unlikely for us to secure the financing necessary to fund our
HSB beyond the near term and thereby provide assurance to future customers of
our long-term viability. On March 14, 2003, we sold all of our assets related to
the HSB. See Note 3 for a further discussion regarding the HSB.

We were originally incorporated under Colorado law in December 1992 under the
name Meteor Industries, Inc. In April 2001, in conjunction with our merger with
activeIQ Technologies, Inc., we reincorporated under Minnesota law and changed
our name to Active IQ Technologies, Inc. On July 9, 2003, we changed our name to
Wits Basin Precious Minerals Inc. in an effort to align the Company with its
core focus, that of sharing in rights of minerals exploration.

Our principal office is located at 800 Nicollet Mall, Suite 2690, Minneapolis,
Minnesota 55402. Our telephone number is (612) 664-0570 and our Internet address
is www.witsbasin.com.

7

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared by us in accordance with accounting principles generally accepted in
the United States of America ("US GAAP"), for interim financial information
pursuant to the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by US GAAP for complete financial statements. The unaudited condensed
consolidated financial statements should be read in conjunction with the audited
financial statements and notes thereto included in our Form 10-K filed March 31,
2003. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the six months ended June 30, 2003 are not
necessarily indicative of the results that may be expected for the year as a
whole.

Revenue Recognition and Deferred Revenue

We did derive revenues from customers of the online document management service
for monthly access to the service and initial service
configuration/implementation. Customers were invoiced at the beginning of each
month for access service and revenue was recognized when invoiced.
Configuration/implementation revenue was invoiced the month after the services
were performed and recognized in the month invoiced.

We did recognize the revenues derived from ASB sales after all of the following
criteria have been met: there was an executed license agreement, software had
been delivered to the customer, the license fee was fixed and payable within
twelve months, collection was deemed probable and product returns were
reasonably estimable. Revenues related to multiple element arrangements were
allocated to each element of the arrangement based on the fair values of
elements such as license fees, maintenance, and professional services. Fair
value was determined based on vendor specific objective evidence. Service
revenue was recognized ratably over the term of the agreement, which was
typically one year. All service revenue invoiced in excess of revenue recognized
was recorded as deferred revenue. At December 31, 2002, deferred revenue was
$1,774,491, as reported in the Discontinued Operations, see Note 5.

Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing the net loss
by the weighted average number of common shares outstanding during the periods
presented. The impact of common stock equivalents has been excluded from the
computation of weighted average common shares outstanding, as the net effect
would be antidilutive.

Use of Estimates

Preparing financial statements in conformity with US GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Income Taxes

We account for income taxes using the liability method to recognize deferred
income tax assets and liabilities. Deferred income taxes are provided for
differences between the financial reporting and tax bases of our assets and
liabilities at currently enacted tax rates.

We have recorded a full valuation allowance against the net deferred tax asset
due to the uncertainty of realizing the related benefits.

8

Software Development Costs

Effective January 1, 1999, we implemented Statement of Position ("SOP") 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for Internal
Use. Pursuant to SOP 98-1, expenditures for internal use software are expensed
during the preliminary project stage.

Stock Based Compensation

In accordance with Accounting Principles Board ("APB") Opinion No. 25, we use
the intrinsic value-based method for measuring stock-based compensation cost
which measures compensation cost as the excess, if any, of the quoted market
price of our common stock at the grant date over the amount the employee must
pay for the stock. Our general policy is to grant stock options and warrants at
fair value at the date of grant.

We have adopted the disclosure only provisions of Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." We recorded compensation expense pursuant to APB Opinion No. 25
and related interpretations on options granted and due to modifications of
options of $172,836 and $64,212, for the six months ended June 30, 2003 and
2002, respectively. We recorded expense related to stock based compensation
issued to non-employees in accordance with SFAS No. 123. Had compensation costs
for employees been recognized based upon the fair value of options at the grant
date consistent with the provisions of SFAS No. 123, our results would have been
as follows for:

In determining the compensation cost of the options granted during the six
months ended June 30, 2003 and 2002, as specified by SFAS No. 123, the fair
value of each option grant has been estimated on the date of grant using the
Black-Scholes option pricing model and the weighted average assumptions used in
these calculations are summarized below for the six months ended June 30:

9

Recent Accounting Pronouncements

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities," effective for
contracts entered into or modified after June 30, 2003. This amendment clarifies
when a contract meets the characteristics of a derivative, clarifies when a
derivate contains a financing component and amends certain other existing
pronouncements. We believe the adoption of SFAS No. 149 will not have a material
effect on our consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS No. 150 requires the classification as a
liability of any financial instruments with a mandatory redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable number of its equity shares. We do not have any financial
instruments as defined by SFAS No. 150. We believe the adoption of SFAS No. 150
will not have a material effect on our consolidated financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after December 31, 2002. The disclosure requirements of FIN 45 are effective for
financial statements for periods ending after December 15, 2002. The adoption of
FIN 45 did not impact the Company's consolidated financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 states that companies that have
exposure to the economic risks and potential rewards from another entity's
assets and activities have a controlling financial interest in a variable
interest entity and should consolidate the entity, despite the absence of clear
control through a voting equity interest. The consolidation requirements apply
to all variable interest entities created after January 31, 2003. For variable
interest entities that existed prior to February 1, 2003, the consolidation
requirements are effective for annual or interim periods beginning after June
15, 2003. Disclosure of significant variable interest entities is required in
all financial statements issued after January 31, 2003, regardless of when the
variable interest was created. We do not expect the adoption of FIN 46 to have a
material impact on our consolidated financial statements.

NOTE 3 - HOSTED SOLUTIONS BUSINESS AND PREPAID ROYALTIES

In 2001, through a licensing agreement, we acquired the rights to develop and
market, on a hosted basis, the online document management solutions of Stellent,
Inc. This application service provider (ASP) software license agreement was the
basis for our HSB, in which we were required to make advanced royalty payments
and certain minimum royalty fee payments to Stellent. The balance of our prepaid
royalties at December 31, 2002 was $975,000. During the quarter ended March 31,
2003, we recorded $54,776 against the prepaid. The remaining balance of the
prepaid royalties was expensed and netted together with the assets and
liabilities in the sale of the HSB as described below.

On March 14, 2003, we sold all of the assets relating to our HSB to Stellent,
Inc. for $650,000 cash plus the reimbursement of transaction-related expenses
incurred by us in the amount of $150,000 and the assumption of certain
obligations, liabilities and employees of the Company. The transaction was not
subject to shareholder approval. With the completion of this sale, we no longer
operate in the online document management business. During the quarter ended
June 30, 2003, our HSB generated no revenues. During the same quarter of 2002,
our revenues were derived from our E-commerce business model known as the Epoxy
Network.

10

NOTE 4 - EXPLORATION AGREEMENT

On June 26, 2003 we began our participation in a joint venture with Hawk
Precious Minerals USA, Inc. ("Hawk USA") a Minnesota corporation and wholly
owned subsidiary of Hawk Precious Minerals, Inc. (a corporation organized under
the laws of the Canadian Province of Ontario), for the exploration of gold
minerals in the Republic of South Africa. The joint venture, named Active Hawk
Minerals, LLC (the "LLC") a Minnesota limited liability company, was created to
pursue the mineral rights to the FSC Project area in South Africa held by Kwagga
Gold (Proprietary) Limited ("Kwagga"). Kwagga is a wholly owned subsidiary of
AfriOre International (Barbados) Ltd. ("AfriOre"). AfriOre is a coal producer
and a precious minerals exploration company with offices in Johannesburg, South
Africa and the operator of the project.

Through a Joint Venture and Joint Contribution Agreement (the "Agreement"), the
Company and Hawk USA have both made certain contributions to the LLC in exchange
for their equal ownership in the LLC. We made an initial $500,000 contribution
as specified under the Agreement. This was the first of three contributions that
will total $2,100,000. The balance of the remaining two contributions is as
follows: on September 27, 2003, $1,000,000 is due, and on November 11, 2003,
$600,000 is due. Hawk USA has contributed its interest in the FSC Project, known
as "Heads of Agreement" as well as its interest in the "Oxide Zones" on its
Holdsworth Property near Wawa, Ontario, Canada. Since the LLC was formed in late
June 2003, the LLC did not have any material revenues or expenses for the period
ended June 30, 2003.

As additional compensation for Hawk USA's mineral rights contributions, Hawk USA
was issued 3,750,000 unregistered common shares of our common stock valued at
$0.73 per share, based on the closing sale price of our common stock on June 26,
2003 as listed on the OTCBB.

We issued a warrant to purchase 100,000 shares of common stock with an exercise
price of $0.40 per share to a former director of ours for the consulting
services rendered to complete this joint venture transaction. The warrant was
valued at $100,000 using the Black-Scholes pricing model.

Components of exploration agreement are as followings:

Since the LLC had not, as of June 30, 2003, pursued any exploration, the
intangible asset (exploration agreement) was not amortizable as of June 30,
2003. Based on future information, we will determine an amortization period for
the intangible asset.

NOTE 5 - DISCONTINUED OPERATIONS

In December 2002, our Board of Directors authorized a plan to sell our ASB to
key employees of that division. The ASB publishes traditional accounting and
financial management software for small and medium sized businesses, farms and
ranches throughout North America. We formed (through three mergers/acquisitions)
the ASB during the year ended December 31, 2001 for the purpose of utilizing the
businesses' customer base to market other of our E-commerce products and
services. The ASB consisted of two accounting software applications companies:
Red Wing Business Systems, Inc. and Champion Business Systems, Inc.,
collectively referred to as Red Wing. Also during 2002, we determined to abandon
our E-commerce business after acquiring the rights to develop and market hosted
online document solution products. Therefore, since we abandoned the E-commerce
business model to focus on the hosted solutions business, the accounting
software business no longer fit within our business plan.

11

On April 30, 2003, we completed the sale of substantially all of the assets of
the ASB to key employees of that division (the "Purchaser"). The assets sold
consisted primarily of all intellectual property rights, cash, accounts
receivable, inventories, property and equipment, and customer contracts. The
Purchaser assumed substantially all the liabilities of the ASB incurred in the
ordinary course of the business consisting of trade payables, accrued expenses,
debt and liabilities arising from contractual obligations related to the ongoing
operations. In addition, the Purchaser paid us cash sufficient to discharge
outstanding debt that was incurred during 2001 to acquire the ASB. The
shareholders of the Company approved the sale at a special meeting on April 29,
2003.

The following are condensed consolidated statements of discontinued operations
for the:

Assets and liabilities of the ASB consisted of the following at December 31,
2002:

Cash $ 526,447
Accounts receivable, net 176,370
Inventories 46,438
Property and equipment, net 119,561
Acquired software developed, net 492,170
Goodwill, net 1,318,260
Other intangibles, net 869,927
Other assets 40,568
-----------
Total assets $ 3,589,741
-----------

Accounts payable 81,064
Accrued expenses 244,360
Deferred revenue 1,774,491
Notes payable 1,582,904
Total liabilities $ 3,682,819
-----------
Net liabilities of operations of discontinued
accounting software business $ (93,078)
===========

With the completion of the sale of the ASB on April 30, 2003, all assets and
liabilities were transferred in the sale to the Purchaser.

12

NOTE 6 - MINORITY INTEREST IN ACTIVE HAWK MINERALS LLC

As a 50% owner in the joint venture LLC with Hawk USA, we will be sharing in the
rights from mineral exploration projects being operated by AfriOre in the FSC
Project area of South Africa. Our ownership is based on cash contributions to
total $2,100,000. Hawk USA has contributed its interest in the Heads of
Agreement, as well as its interest in the "Oxide Zones" on its Holdsworth
Property near Wawa, Ontario, Canada.

We have a "Buyout Option" in which we can acquire Hawk USA's 50% interest in
the LLC by issuing Hawk USA 2,500,000 of unregistered common shares (as
appropriately adjusted for any stock splits, combinations, or similar events
with regard to the equity securities of the Company), $0.01 par value, on or
before October 6, 2003.

Based on our 50% ownership and Buyout Option we have in Active Hawk Minerals
LLC, the financial statements of Active Hawk Minerals LLC have been consolidated
into our consolidated financial statements with a minority interest presented
for the 50% owned by Hawk USA.

NOTE 7 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

NOTE 8 - SUBSEQUENT EVENT

On July 9, 2003, we changed our name to Wits Basin Precious Minerals Inc. in an
effort to align the Company with its core focus, that of sharing in rights of
minerals exploration. Presently, we trade on the OTCBB under "AIQT" and have
made application for a trading symbol change. Upon confirmation of our new
trading symbol, we will provide such information when available.

13

WITS BASIN PRECIOUS MINERALS INC.
(F/K/A ACTIVE IQ TECHNOLOGIES, INC.)

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following management's discussion and analysis of financial condition and
results of operations should be read in connection with the accompanying
unaudited condensed consolidated financial statements and related notes thereto
included elsewhere in this report and the audited consolidated financial
statements and notes thereto included in our Form 10-K for the fiscal year ended
December 31, 2002.

OVERVIEW

On June 26, 2003, under our former corporate name of Active IQ Technologies,
Inc. ("we," "us," "our," "its" or the "Company") we began our participation in a
joint venture with Hawk Precious Minerals USA, Inc. a Minnesota corporation and
wholly owned subsidiary of Hawk Precious Minerals, Inc. (a corporation organized
under the laws of the Canadian Province of Ontario) for the exploration of gold
minerals in the Republic of South Africa. The joint venture, named Active Hawk
Minerals, LLC (a Minnesota limited liability company) was created to pursue the
mineral rights to the FSC Project ("FSC") area in South Africa held by Kwagga
Gold (Proprietary) Limited ("Kwagga"). Mineral rights are in the form of
exclusive, notarized Prospecting Contracts applied for and/or issued by the
State and various option agreements with private owners over a land package
totaling approximately 269,000 acres. The area has excellent infrastructure and
is easily accessible, limited environmental issues, no known indigenous land
claims, and provision has been made to convert the rights under the new Minerals
and Petroleum Development Act of South Africa. Kwagga is a wholly owned
subsidiary of AfriOre International (Barbados) Ltd. ("AfriOre"). AfriOre is a
coal producer and a precious minerals exploration company with offices in
Johannesburg, South Africa and the operator of the project. The FSC area has the
potential for containing Witwatersrand-type gold mineralization. The historic
Witwatersrand basin is host to the world's largest reserves of gold. It has
produced over 1.5 billion ounces of gold during the past 117 years.

Prior to April 30, 2003 we provided accounting software through our Accounting
Software Business ("ASB") and until March 14, 2003, we provided
industry-specific solutions for managing, sharing and collaborating on business
information on the Internet though our Hosted Solutions Business ("HSB"). In
December 2002, our Board of Directors authorized a plan to sell the ASB and as a
result of the formal plan, the results of operations have been reported as
discontinued operations (the "Discontinued Operations") and previously reported
condensed consolidated financial statements have been restated for the three
months and six months ended June 30, 2002. See the information in the Results of
Operations that follows for further details regarding the Discontinued
Operations of ASB.

Subsequent to our decision the sell the ASB, we came to the conclusion that due
to current market conditions for capital funding of Internet opportunities, it
would be extremely unlikely for us to secure the financing necessary to fund our
HSB beyond the near term and thereby provide assurance to future customers of
our long-term viability. On March 14, 2003, we sold all of our assets related to
the HSB and no longer operate any on-line hosted business models.

We were originally incorporated under Colorado law in December 1992 under the
name Meteor Industries, Inc. In April 2001, in conjunction with our merger with
activeIQ Technologies, Inc., we reincorporated under Minnesota law and changed
our name to Active IQ Technologies, Inc.

On July 9, 2003, we changed our name to Wits Basin Precious Minerals Inc. in an
effort to align the Company with its core focus, that of sharing in rights of
minerals exploration. Presently, we trade on the OTCBB under "AIQT" and have
made application for a trading symbol change. Upon confirmation of our new
trading symbol, we will provide such information when available.

14

Our principal office is located at 800 Nicollet Mall, Suite 2690, Minneapolis,
Minnesota 55402. Our telephone number is (612) 664-0570 and our Internet address
is www.witsbasin.com.

RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 COMPARED
TO THE THREE AND SIX MONTHS ENDED JUNE 30, 2002.

Revenues

Revenues for the three months ended June 30, 2003 were $0 compared to $165,771
for the same period in 2002. The 2002 revenues of $165,771 were generated by our
HSB.

Revenues for the six months ended June 30, 2003 were $132,455 compared to
$269,559 for the same period in 2002. All of the 2003 revenues were generated by
our HSB, whereas, the 2002 revenues were as follows: our HSB generated $222,785,
and our former E-commerce model, called the Epoxy Network, generated $46,774. We
sold our rights to the E-commerce model in 2002.

Since the completion of the sale of our HSB during the first quarter of 2003 and
the reclassification of our ASB to Discontinued Operations, we do not anticipate
having any future revenues until an economic mineral deposit is discovered or
unless we make further acquisitions or complete other mergers or joint ventures
with business models that produce such results. We anticipate that our success
in providing shareholder value is directly connected to the performance and
discoveries made via the FSC Project in South Africa.

Operating Expenses

Cost of goods sold for the three months ended June 30, 2003 were $0 compared to
$122,928 for the same period in 2002. Cost of goods sold for the six months
ended June 30, 2003 were $35,354 compared to $200,943 for the same period in
2002. These costs include hosting fees and royalty payments due under the
license agreement of the HSB. At this time, we do not anticipate incurring any
more costs associated with sales, unless in the future, we were to add a
business model with such components of operating expense.

Selling, general and administrative expenses were $180,069 for the three months
ended June 30, 2003 as compared to $1,211,097 for the same period in 2002.
Selling, general and administrative expenses for the six months ended June 30,
2003 were $510,252 as compared to $2,033,027 for the same period in 2002. These
large reductions show the effect of the sale of all of our operating assets
during the first half of 2003. We anticipate the rate of spending for the third
and forth quarters selling, general and administrative expenses will continue to
decrease.

Depreciation expense of property and equipment for the three months ended June
30, 2003 was $216 compared to $34,831 for the same period in 2002. Depreciation
expense of property and equipment for the six months ended June 30, 2003 was
$8,935 compared to $78,876 for the same period in 2002. The large decreases
reflect the overall decrease in our fixed asset base. With the completion of the
sale of the HSB and ASB, we no longer have any depreciable assets and until such
time as we make capital expenditures for new property or equipment, we do not
expect to record any depreciation expense in future quarters. Our only
amortization expense is reported in the Discontinued Operations as detailed
below.

During the three months ended June 30, 2003, we recorded a loss on disposal of
assets of $1,633 as compared to $71,945 for the same period in 2002. During the
six months ended June 30, 2003, we recorded a loss on disposal of assets of $884
as compared to $97,425 for the same period in 2002. The 2002 losses primarily
represent the closing of our Las Vegas location and the sale of older computer
hardware in preparation of the HSB model.

Other Income and Expenses

Our other income and expense consists of interest and dividend income, other
income and other expense. Interest

15

income for the three months ended June 30, 2003 was $1,604 compared to $19,506
for the same period in 2002. Interest income for the six months ended June 30,
2003 was $25,148 compared to $60,758 for the same period in 2002. The interest
income we reported for 2003 was primarily earned from a Federal Income Tax
refund filed with the IRS. The interest and dividend income we reported for 2002
was related equally to portfolio interest and the interest accrued on stock
subscription receivables. For the three and six months ended June 30, 2002, we
had recorded an interest expense of $119,206, which related to a short term note
payable, both as interest and conversion into common stock expense.

For the quarter ended June 30, 2003, we recorded $150,000 of other income for
referral fees for our sales efforts in connection with customers that were not
candidates for our online document management hosted solution. We recorded
$20,000 of other income for the quarter ended March 31, 2002, when we granted
the non-exclusive rights to use and distribute our E-commerce business to an
unrelated third party.

For the six months ended June 30, 2003, we have $434,895 of other expense
related to the sale of our HSB to Stellent, Inc., which occurred in March 2003.
The remaining balance of the prepaid royalties was expensed and netted together
with the assets and liabilities of the HSB sold in the transaction.

Income Tax Refund

We filed an amended Federal Income Return on prior Non-Operating Losses (NOL's)
and received a tax refund in the amount of $243,920 during the three months
ended June 30, 2003. No further refunds will be available based on current tax
law for the periods previously amended.

Discontinued Operations

The following are condensed consolidated statements of discontinued operations
for the:

Adoption of New Accounting Standards

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities," effective for
contracts entered into or modified after June 30, 2003. This amendment clarifies
when a contract meets the characteristics of a derivative, clarifies when a
derivate contains a financing component and amends certain other existing
pronouncements. We believe the adoption of SFAS No. 149 will not have a material
effect on our consolidated financial statements.

16

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS No. 150 requires the classification as a
liability of any financial instruments with a mandatory redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable number of its equity shares. We do not have any financial
instruments as defined by SFAS No. 150. We believe the adoption of SFAS No. 150
will not have a material effect on our consolidated financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after December 31, 2002. The disclosure requirements of FIN 45 are effective for
financial statements for periods ending after December 15, 2002. The adoption of
FIN 45 did not impact our consolidated financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46"). FIN 46 states that companies that have
exposure to the economic risks and potential rewards from another entity's
assets and activities have a controlling financial interest in a variable
interest entity and should consolidate the entity, despite the absence of clear
control through a voting equity interest. The consolidation requirements apply
to all variable interest entities created after January 31, 2003. For variable
interest entities that existed prior to February 1, 2003, the consolidation
requirements are effective for annual or interim periods beginning after June
15, 2003. Disclosure of significant variable interest entities is required in
all financial statements issued after January 31, 2003, regardless of when the
variable interest was created. We do not expect the adoption of FIN 46 to have a
material impact on our consolidated financial statements.

Liquidity and Capital Resources

We have funded our operations and satisfied our capital requirements primarily
through the sale of our business assets. Net cash provided by operating
activities was $270,368 for the six months ended June 30, 2003, compared to net
cash used by operating activities of $1,393,310 for the same period in 2002.

We had working capital deficit of $24,346 at June 30, 2003, compared to working
capital deficit of $509,372 at December 31, 2002. Cash and equivalents were
$80,160 at June 30, 2003, representing an increase of $66,949 from the cash and
equivalents of $13,211 at December 31, 2002.

On March 14, 2003, we sold all of the assets relating to our HSB to Stellent,
Inc. for $650,000 cash plus the reimbursement of transaction-related expenses
incurred by us in the amount of $150,000 and the assumption of certain
obligations, liabilities and employees of the Company. The transaction was not
subject to shareholder approval. With the completion of this sale, we no longer
operate in the online document management business.

On April 30, 2003, we completed the sale of substantially all of the assets of
the ASB to key employees of that division (the "Purchaser"). The assets sold
consisted primarily of all intellectual property rights, cash, accounts
receivable, inventories, property and equipment, and customer contracts. The
Purchaser assumed substantially all the liabilities of the ASB incurred in the
ordinary course of the business consisting of trade payables, accrued expenses,
debt and liabilities arising from contractual obligations related to the ongoing
operations. In addition, the Purchaser paid us cash sufficient to discharge
outstanding debt that was incurred during 2001 to acquire the ASB.

On June 26, 2003 we began our participation in a joint venture with Hawk
Precious Minerals USA, Inc. ("Hawk USA") a Minnesota corporation and wholly
owned subsidiary of Hawk Precious Minerals, Inc. (a corporation organized under
the laws of the Canadian Province of Ontario), for the exploration of gold
minerals in the Republic of South Africa. The joint venture, named Active Hawk
Minerals, LLC (the "LLC") a Minnesota limited liability company, was created to
pursue the mineral rights to the FSC Project area in South Africa held by Kwagga
Gold (Proprietary) Limited ("Kwagga"). Kwagga is a wholly owned subsidiary of
AfriOre International (Barbados) Ltd.

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("AfriOre"). AfriOre is a coal producer and a precious minerals exploration
company with offices in Johannesburg, South Africa and the operator of the
project.

Through a Joint Venture and Joint Contribution Agreement (the "Agreement"), the
Company and Hawk USA have both made certain contributions to the LLC in exchange
for their equal ownership in the LLC. We made an initial $500,000 contribution
as specified under the Agreement. This was the first of three contributions that
will total $2,100,000. The balance of the remaining two contributions is as
follows: on September 27, 2003, $1,000,000 is due, and on November 11, 2003,
$600,000 is due. We are investigating all methods to raise the remaining
$1,600,000 and make no assurance that our efforts will provide the necessary
results on a timely basis or on terms acceptable to us. Additionally, we can
acquire Hawk USA's 50% interest in the LLC by issuing Hawk USA 2,500,000 of our
unregistered common stock on or before October 6, 2003.

We anticipate that the existing sources of liquidity will not provide cash to
fund operations for the next twelve months. We will continue our attempt to
raise additional capital. Some of the possibilities available to us are through
private equity transactions, to develop a credit facility with a lender or the
exercise of options and warrants. There can be no assurance that additional
capital will be available on terms acceptable to us or on any terms whatsoever.
In the event that we are unable to obtain additional capital, we would be forced
to reduce operating expenditures and/or cease operations altogether.

RISKS FACTORS

OUR COMMON STOCK HAS BEEN DELISTED FROM THE NASDAQ SMALL CAP MARKET.

Since our common stock has been delisted from the Nasdaq SmallCap Market,
trading, if any, in our common stock will be conducted in the over-the-counter
markets in the so-called "pink sheets" or the "OTC Bulletin Board."
Consequently, the liquidity of our common stock is impaired, not only in the
number of shares which could be bought and sold, but also through delays in the
timing of the transactions, reduction in the coverage of our securities by
security analysts and the news media, and lower prices for our securities than
might otherwise prevail. In addition, our common stock has become subject to
certain rules of the Securities and Exchange Commission relating to "penny
stocks." These rules require broker-dealers to make special suitability
determinations for purchasers other than established customers and certain
institutional investors and to receive the purchasers' prior written consent for
a purchase transaction prior to sale. Consequently, these "penny stock rules"
may adversely affect the ability of broker-dealers to sell our common stock and
may adversely affect your ability to sell shares of our common stock in the
secondary market.

WE HAVE SOLD OUR ONLY CONTINUING OPERATIONS REVENUE SOURCE AND SUBSTANTIALLY ALL
OF OUR ASSETS

On March 14, 2003, we executed a definitive purchase agreement with Stellent,
Inc. and completed the sale of the Hosted Solutions Business, which was our only
continuing operations revenue source. We received $650,000 in cash for the
assets used in the Hosted Solutions Business, plus we were reimbursed $150,000
for expenses we incurred as a result of the transaction.

On April 30, 2003, we completed the sale of substantially all of the assets of
the Accounting Software Business to key employees of that division. Our original
reason for acquiring these companies was to be able to utilize the businesses'
customer base in order to market to those customers our E-commerce products and
services. We concluded that these customers would not be prospects for any type
of Web-based, hosted solution products or services. Therefore, since we had
already sold the E-commerce to focus on the Hosted Solutions Business, the
Accounting Software Business no longer fit our business plan. Furthermore, the
results of operations have been reported as discontinued operations, providing
no future benefit to our ongoing business plan.

Accordingly, we do not anticipate having any future revenues until an economic
mineral deposit is discovered or unless we make further acquisitions or complete
other mergers or joint ventures with business models that produce

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such results. We anticipate that our success in providing shareholder value is
directly connected to the performance and discoveries made via the FSC Project
in South Africa.

WE ANTICIPATE INCURRING LOSSES FOR THE FORESEEABLE FUTURE.

For the six months ended June 30, 2003, we had a net loss of $377,996, and since
our inception through June 30, 2003, we have incurred an aggregate net loss of
$22,958,990. As of June 30, 2003, we had total assets of $5,561,709. We expect
operating losses to continue for the foreseeable future and there can be no
assurance that we will ever be able to operate profitably.

WE WILL REQUIRE FUTURE FINANCING.

Significant additional financing will be needed in order to meet our obligation
to the Active Hawk Minerals LLC and we could potentially make further
acquisitions or complete other mergers or joint ventures with other business
models. Moreover, we cannot guarantee that the additional financing will be
available when needed.

Our activities will be initially directed to the search for and the development
of new mineral deposits, and significant capital investment will be required to
achieve commercial production from successful exploration efforts. There is no
assurance that we will have, or be able to raise, the required capital to
continue these activities.

FLUCTUATIONS IN GOLD PRICES

Our development efforts and the profitability of our operations, once commenced,
will be significantly affected by changes in the market price of gold. Mine
production and the willingness of third parties such as central banks to sell or
lease gold affect the supply of gold. Demand for gold can be influenced by
economic conditions, attractiveness as an investment vehicle and the relative
strength of the US dollar and local investment currencies. Other factors include
the level of interest rates, exchange rates, inflation and political stability.
The aggregate effect of these factors is impossible to predict with accuracy.
Gold prices are also affected by worldwide production levels. In addition, the
price of gold has on occasion been subject to very rapid short-term changes due
to speculative activities. Fluctuations in gold prices may adversely affect our
financial performance and results of operations.

UNCERTAINTY OF RESERVE AND MINERAL RESOURCE ESTIMATES

At this time, we cannot make any estimates regarding probable ore reserves and
mineral resources and therefore, no assurance can be given that any size of
reserves or grades of reserves will be realized. The ore grade actually
recovered by us, if any, may differ from the reserves and mineral resources
already recovered by others in the same region of our planned exploration.
Production, if begun, could differ dramatically for the following reasons:

o mineralization or formations could be different from those
predicted by drilling, sampling and similar examinations;

o increases in mining operating costs and processing costs could
adversely affect ore reserves;

o the grade of the ore reserves may vary significantly from time
to time and there is no assurance that any particular level of
gold may be recovered from the ore reserves; and

o declines in the market price of gold may render the mining of
some or all of our ore reserves uneconomic.

Any of these factors could require us to significantly alter operations or
increase our costs. Short-term factors, such as the need for the additional
development of a deposit or the processing of new different grades, may impair
our profitability. Should the market price of gold fall, we could be required to
materially write down our investment in mining properties or delay or
discontinue production or the development of new projects.

NATURE OF MINERAL EXPLORATION AND MINING

The exploration for and development of mineral deposits involves significant
financial risks, even with a

19

combination of careful evaluation, experience and knowledge may not eliminate.
While the discovery of an ore body may result in substantial rewards, few
properties are ultimately developed into producing mines. Major expenses may be
required to establish ore reserves, to develop metallurgical processes and to
construct mining and processing facilities at a site. It is impossible to ensure
that the current programs planned by us will result in a profitable commercial
mining operation.

Our operations are subject to all of the hazards and risks normally incident to
exploration, development and production of gold, any of which could result in
damage to life or property, environmental damage and possible legal liability
for any or all damage. Our activities may be subject to prolonged disruptions
due to weather conditions, depending on the location of operations, in which we
have interests. Hazards, such as unusual or unexpected formations, rock bursts,
pressures, cave-in, flooding or other conditions may be encountered in the
drilling and removal of material. While we may obtain insurance against certain
risks, in such amounts as we consider adequate, the nature of these risks are
such that liabilities could exceed policy limits or could be excluded from
coverage. There are also risks against which we cannot insure or against which
we may elect not to insure. The potential costs which could be associated with
any liabilities not covered by insurance or in excess of insurance coverage or
compliance with applicable laws and regulations, may cause substantial delays
and require significant capital outlays, adversely affecting our earnings and
competitive position in the future and, potentially, our financial position and
results of operation.

Whether a gold deposit will be commercially viable depends on a number of
factors, some of which are: the particular attributes of the deposit, such as
its size and grade; proximity to infrastructure; financing costs; and
governmental regulations, including regulations relating to prices, taxes,
royalties, infrastructure, land use, importing and exporting of gold and
environmental protection. The effect of these factors cannot be accurately
predicted, and combination of any of these factors may result in our not
receiving an adequate return on invested capital.

CAPITAL INVESTMENT

Mineral exploration involves financial risk and capital investment and our only
means of acquiring investment capital will be by the sale of equity shares or
the rights to acquire equity shares. Other than the interest earned on our
short-term investments or further financing, we have no other source of funds to
engage in additional exploration and development, which may be necessary to
exploit our properties.

LICENSES AND PERMITS

Our operations require licenses and permits from various governmental
authorities. We will endeavor to seek all necessary licenses and permits under
applicable laws and regulations with respect to our mining and exploration
properties. There can be no guarantee that we will be able to obtain or maintain
all necessary licenses and permits, that may be required to explore and develop
our properties, to commence construction or the operation of mining facilities
and properties under exploration or to development or to maintain continued
operations that economically justify the cost.

COMPETITION

The mineral exploration and mining business is competitive in all of its phases.
There is a limited supply of desirable mineral properties available for claim
staking, lease or other acquisition in the areas where we contemplate conducting
exploration activities. We compete with numerous other companies and
individuals, including competitors with greater financial, technical and other
resources than we posses, in the search for and the acquisition of attractive
mineral properties. Our ability to acquire properties in the future will depend
not only on our ability to develop our present properties, but also on our
ability to select and acquire suitable producing properties or prospects for
mineral exploration. There is no assurance that we will continue to be able to
compete successfully with our competitors in acquiring such properties or
prospects.

POLITICAL RISK

We believe that governments in the countries in which we currently operate and
explore support the development of

20

their natural resources by foreign companies. However, there is no assurance
that future political and economic conditions in these countries will not result
in their governments adopting different policies respecting foreign ownership of
mineral resources, taxation, rates of exchange, environmental protection, labor
relations, repatriation of income or return of capital. The possibility that a
future government in any of these countries may adopt substantially different
policies, which might extend to the expropriation of assets, cannot be ruled
out.

TITLE MATTERS

We expect that we will have good and proper right, title and interest in and to
the mining claims we currently respectively own, have optioned or intend to
acquire, being the mining claims that it is intended we will explore and
develop, subject to the description of the properties appearing elsewhere in
this information. No assurance, however, can be given that such claims are not
subject to prior unregistered agreements or interests or undetected claims or
interests, which could be material and adverse to us. The failure to comply with
all applicable laws and regulations, including failure to pay taxes, carry out
and file assessment work, may invalidate title to portions of the properties
where the mineral rights are held by us.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

Our proposed activities are subject to extensive federal, provincial and local
laws and regulations controlling not only the mining of and exploration for
mineral properties, but also the possible effects of such activities upon the
environment. Permits from a variety of regulatory authorities are required for
many aspects of mine operation and reclamation. Future legislation and
regulations could cause additional expense, capital expenditures, restrictions
and delays in the development of our properties or optioned properties, the
extent of which cannot be predicted. In the context of environmental permitting,
including the approval of reclamation plans, we must comply with known
standards, existing laws and regulations which may entail greater or lesser
costs and delays depending on the nature of the activity to be permitted and how
stringently the regulations are implemented by the permitting authority. It is
possible that the costs and delays associated with the compliance of such laws,
regulations and permits could become such that we would not proceed with the
development or operation of a mine. While we are not presently aware of any
material environmental constraints affecting the development of our properties
that would preclude their economic development or operation, the manner in which
environmental legislation is evolving, will require stricter standards and
enforcement, increased fines and penalties for non-compliance, more stringent
environmental assessments of proposed projects and a heightened degree of
responsibility for companies and their officers, directors and employees. There
can be no assurance that future changes to environmental regulation, if any,
will not adversely affect our operations. Environmental hazards may exist on the
properties in which we hold interests that have been caused by previous or
existing owners or operators. Furthermore, compliance with environmental
reclamation, closure and other requirements may involve significant costs and
other liabilities.

PERFORMANCE OF KEY PERSONNEL

We are dependent on a relatively small number of key employees and consultants,
the loss of any could have an adverse effect on us. We currently do not have key
person insurance on these individuals.

CONFLICTS OF INTEREST

Certain of our directors and officers may serve as directors or officers of
other companies, or have shareholdings in other companies, involved in natural
resource exploration and development, and to the extent that such other
companies may participate in ventures in which we may participate, the directors
of the Company may have a conflict of interest in negotiating and concluding
terms respecting the extent of such participation.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Sensitivity

We do not enter into contracts for speculative purposes, nor are we a party to
any leveraged instruments. There has been no material change in our market risks
associated with debt obligations during the quarter ended June 30, 2003.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Pursuant to Rule 13a-14(c) of the Securities Exchange Act of 1934, as of the end
of the period of this quarterly report (the "Evaluation Date"), the Company
carried out an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and procedures. This evaluation was carried
out under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer. Based upon that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective. Disclosure controls and procedures are controls and
other procedures of the Company that are designed to ensure that information
required to be disclosed in the reports that the Company files or submits to the
SEC is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
to the SEC is accumulated and communicated to the Company's management,
including the Company's Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosures.

(b) Changes in internal controls.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect the Company's internal controls
subsequent to the Evaluation Date, including any corrective actions with regard
to significant deficiencies and material weaknesses.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Recently, we were named as a defendant in a lawsuit by Jack A. Johnson, who
served as our President and CEO until leaving the Company to accept employment
from Stellent, Inc. following the sale of our hosted solutions business.
Notwithstanding that he accepted a full-time employment position with Stellent,
Mr. Johnson is seeking damages in excess of $50,000 pursuant to the terms of an
alleged employment agreement with us. This matter is currently in the discovery
phase.

We have also been named as a defendant in two separate actions in District
Court, City and County of Denver, Colorado relating to corporate guaranties
purportedly executed by the Company in 1999 for obligations incurred in
connection with the oil and gas business then engaged in by the Company. One of
the complaints, filed by the Farmers State Bank of Fort Morgan, Colorado is
seeking approximately $300,000 from the Company relating to a guaranty of
secured indebtedness incurred on or about April 30, 1999. In the other lawsuit,
filed by Timothy L. White, who obtained a judgment order against Active IQ
Technologies, Inc. in the amount of $102,750 pursuant to a lawsuit filed in
State District Court in Denver, Colorado (Timothy L. White v. Active IQ
Technologies, Inc. f/k/a Meteor Industries Inc., Case No. 03 CV 3437), we have
filed motions to vacate due to improper service.

With respect to these latter two actions, we have determined that we are
entitled to indemnification for all losses relating to these purported
guaranties by Capco Energy, Inc., as well as certain other affiliates of Capco
Energy. However, we are unable to determine at this time, whether and to what
extent, we are obligated under the purported guaranties, and the likelihood of
actually obtaining indemnification pursuant to such indemnification agreements,
if necessary.

On May 15, 2003, Bobby Abrams filed suit against us, in the amount of $100,000,
relating to an accounting software upgrade for his personal business. Mr. Abrams
claims to be entitled to an upgrade of a legacy Champion Business Systems DOS
product, which, while we were operating the accounting software business, we
discontinued providing upgrades to certain legacy software versions. The claim
involves the receipt of a $95.00 payment made by Mr. Abrams, received by our
accounting software business subsidiary and deposited, after which it was
discovered that we no longer provided the requested software upgrade. We
refunded Mr. Abrams funds, via a Company check, which, as to date, has not been
cashed. Subsequently, in negotiations with Mr. Abrams, Mr. Abrams has required
absolute proof that his upgrade, if available, would work on all of his
operating platforms. We cannot make such a guarantee. We have provided the
necessary software upgrades to Mr. Abrams and as such, are waiting to see if
technical support will have to be involved to close this matter.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

On June 26, 2003, we entered into a joint venture with Hawk Precious Minerals
USA, Inc., ("Hawk USA") a Minnesota corporation and wholly owned subsidiary of
Hawk Precious Minerals, Inc., (a corporation organized under the laws of the
Canadian Province of Ontario) for the exploration of gold minerals in the
Republic of South Africa. Subject to the terms of the "Joint Venture and Joint
Agreement," we issued to Hawk USA 3,750,000 original issue shares of our
unregistered common stock, $0.01 par value, as additional consideration to
complete the joint venture. In connection with this issuance, we relied upon the
exemptions from registration provided by Sections 4(2) and 3(b) of the
Securities Act of 1933 and Rules 505 and 506 promulgated thereunder, since this
was a private transaction, not constituting a public offering.

Additionally, we have a "Buyout Option" in which we can acquire Hawk USA's 50%
interest in the joint venture by issuing Hawk USA 2,500,000 unregistered common
shares (as appropriately adjusted for any stock splits, combinations, or similar
events with regard to the equity securities of the Company), $0.01 par value, on
or before October 6, 2003.

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ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS

On April 29, 2003, we held a special meeting of shareholders for the sole
purpose of considering the sale of our Accounting Software Business, which
represented substantially all of our assets. As of March 4, 2003, the record
date for determining the shares of the Company's stock outstanding and entitled
to vote at the meeting, there were 12,764,681 shares of common stock issued and
outstanding. A total of 8,122,216 shares were represented at the meeting. The
shareholders voted as follows:

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1 Articles of Merger

31.1 Certification of CEO pursuant to Securities Exchange Act Rules
13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

31.2 Certification of CFO pursuant to Securities Exchange Act Rules
13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

On May 12, 2003, the Company filed a Current Report on Form 8-K dated April 30,
2003, under items 2 and 7 to disclose that (1) the Company had completed the
sale of all or substantially all of the assets used in its accounting software
applications business pursuant to an Asset Purchase Agreement dated February 17,
2003, among the Company, Red Wing Business Systems, Inc., Champion Business
Systems, Inc. and Red Wing Software, Inc.; and (2) that pro forma financial
information was not required.

On May 27, 2003, the Company filed an Amendment to a Current Report on Form
8-K/A dated March 14, 2003, under items 2 and 7. The Company previously filed a
current report on Form 8-K on March 21, 2003 to disclose: (1) that on March 14,
2003, the Company sold all or substantially all of the assets relating to our
Hosted Solutions Business to Stellent, Inc. for $650,000 in cash, plus the
reimbursement of $150,000 of expenses; (2) that following the sale of Hosted
Solutions Business, the Company agreed to terms with Jeffery M. Traynor
regarding his separation from the Company as its Chief Financial Officer and
Secretary; (3) the resignation of a member of our board of directors; and (4)
that pro forma financial information concerning the sale of our Hosted Solutions
Business will be filed by amendment on or before May 28, 2003. The Company filed
this Amendment to Form 8-K to provide unaudited pro forma financial information
and the related notes.

On July 1, 2003, the Company filed a Current Report on Form 8-K dated June 26,
2003, under items 5 and 7 to disclose that (1) the Company had entered into a
joint venture with Hawk Precious Minerals USA Inc.; and (2) certain of its
officers and directors had resigned.

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SIGNATURES

In accordance with the requirements of the Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

WITS BASIN PRECIOUS MINERALS INC.
(f/n/a ACTIVE IQ TECHNOLOGIES, INC.)

By: /s/ H. Vance White
-----------------------------------------
H. Vance White
Chief Executive Officer

By: /s/ Mark D. Dacko
-----------------------------------------
Mark D. Dacko
Chief Financial Officer

Date: August 12, 2003

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