Independent Auditors Report

To the Board of Directors and Stockholders
Roanoke Technology Corporation
Roanoke Rapids, North Carolina

We have audited the accompanying balance sheet of Roanoke Technology Corporation, as of October 31, 2002 and 2001, and the related statements of operations, capital surplus and cash flows for the twelve months then ended October 31, 2001 and 2000. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Roanoke Technology Corporation, as of October 31, 2002 and 2001, and the results of its operations and its cash flows for the months then ended in conformity with generally accepted accounting principles.

           ROANOKE TECHNOLOGY CORPORATION
                   AND SUBSIDIARY
                   BALANCE SHEETS
           As of October 31, 2002 and 2001

                       ASSETS

                                              2002                       2001
                                          ------------               ------------
CURRENT ASSETS
  Cash                                            $    18,587       $        35
  Accounts receivable                                  10,524            64,598
  Less: allowance for doubtful accounts                (3,500)          (30,000)
  Prepaid Insurance                                    13,289                 0
  Employee advances                                     2,030             5,494
                                                  -----------       -----------
     Total Current Assets                              40,930            40,127

PROPERTY AND EQUIPMENT

   Equipment and leasehold improvements               552,628           517,220
   Less: accumulated depreciation                    (198,033)         (133,647)
                                                  -----------       -----------

      Total Property and Equipment                    354,595           383,573

OTHER ASSETS

   Organization costs                                   1,000             1,000
   Loan origination costs                              13,927            13,927
   Goodwill                                            19,614            19,614
   Software                                           313,000           313,000
   Less: Accumulated amortization                    (347,541)         (294,419)
                                                  -----------       -----------
   Net intangibles                                          0            53,122
   Deposits                                             5,250            19,850
   Officers' receivable                                 8,500            76,368
                                                  -----------       -----------
      Total Other Assets                               13,750           149,340

           TOTAL ASSETS                           $   409,275       $   573,040
                                                  ===========       ===========


                                      -2-




LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

   Accounts payable and accrued expenses          $   396,662       $   294,427
   Payroll tax and penalty payable                    600,910           332,293
   Credit card payable                                  9,784            17,588
   Current maturity of long-term debt                  69,993            35,411
                                                  -----------       -----------
      Total current liabilities                     1,077,349           679,719

LONG TERM LIABILITIES

   Long term debt                                     290,652           284,024
   Debenture bond                                     438,000                 0
   Less: current portion                              (69,993)          (35,411)
                                                  -----------       -----------
     Total long term liabilities                      658,659           248,613
                                                  -----------       -----------
       TOTAL LIABILITIES                            1,736,008           928,332

STOCKHOLDERS' EQUITY
- --------------------

STOCKHOLDERS' EQUITY

   Common stock - $.0001 par value;
    150,000,000 shares authorized;
    59,059,057 and 38,337,597 issued
    and outstanding, respectively                       5,906             3,834
   Additional paid-in capital                       6,307,696         5,782,645
   Allowance for long-term
     Stock compensation                              (153,429)         (205,199)
   Retained earnings                               (7,486,906)       (5,936,572)
                                                  -----------       -----------
       TOTAL STOCKHOLDERS' EQUITY                  (1,326,733)         (355,292)
                                                  -----------       -----------

       TOTAL LIABILITIES AND EQUITY               $   409,275       $   573,040
                                                  ===========       ===========


                                      -3-




                       ROANOKE TECHNOLOGY CORPORATION
                               AND SUBSIDIARY
                          STATEMENTS OF OPERATIONS
            For the Twelve Months Ended October 31, 2002 and 2001


                                                    2002              2001
                                                ------------      ------------
REVENUE

  Sales                                         $  1,715,387      $  1,551,609
  Cost of sales                                   (1,040,707)         (742,016)
                                                ------------      ------------
GROSS PROFIT                                         674,680           809,593

GENERAL & ADMINISTRATIVE EXPENSES                 (1,831,183)       (2,403,982)
RESEARCH & DEVELOPMENT                              (323,680)         (255,274)
                                                ------------      ------------
INCOME (LOSS) FROM OPERATION                      (1,480,183)       (1,849,663)

OTHER INCOME AND (EXPENSE)

   Interest - net                                    (70,151)          (29,716)
                                                ------------      ------------
   Total Other                                       (70,151)          (29,716)
                                                ------------      ------------

NET INCOME (LOSS)                               $ (1,550,334)     $ (1,879,379)
                                                ============      ============

NET EARNINGS PER SHARE

   Basic Net loss per share                             (.04)             (.21)
   Fully diluted Net Loss per share                     (.03)             (.21)

Basic and fully diluted Weighted Average
  Number of Common Shares Outstanding             36,697,129         9,129,693*


*as revised for a 7 for 1 reverse stock split

                                      -4-





                           ROANOKE TECHNOLOGY CORPORATION
                         STATEMENT OF STOCKHOLDERS' EQUITY
                               As of October 31, 2002


                                                       ADDITIONAL
                                    COMMON STOCK       PAID
                                 SHARES     AMOUNT     CAPITAL    ALLOWANCES      DEFICIT      TOTAL
                          ----------------------------------------------------------------------------
Issuance for services          1,525,000     $  153   $   59,323 $         0 $           0  $  59,476
Acquisition                      500,000         50       19,450                               19,500
First offering                   800,000         80       19,920                               20,000
Second offering                1,000,000        100       49,900                               50,000
Third offering                   880,000         88       87,912                               88,000
Stock compensation             3,175,000        318      123,507                              123,825
Net loss for the year                                                             (305,545)  (305,545)
                          ----------------------------------------------------------------------------
Balance at October 31, 1998    7,880,000     $  789   $  360,012 $         0 $    (305,545) $  55,256

Third offering                 1,349,572        135      354,635                              354,770
Issuance for consulting fees     250,000         25       24,975                               25,000
Officer compensation             850,000         85    1,991,165                            1,991,250
Asset acquisition                999,111         99      629,901                              630,000
Stock issued for services          1,500                  11,813                               11,813
Net loss for the year                                                           (2,686,404)(2,686,404)
                           ---------------------------------------------------------------------------
Balance at October 31,1999     11,330,183    $1,133   $3,372,501 $         0 $  (2,991,949)$  381,685

Officer compensation            1,500,000       150      899,850                              900,000

Net loss for the year                                                           (1,065,244)(1,065,244)

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

Balance at October 31, 2000    12,830,183    $1,283   $4,272,351 $         0 $  (4,057,193)$  216,441

Stock issued for cash           5,000,000       500       49,500                               50,000

Reverse stock split           (11,854,443)   (1,185)       1,185                                    0

Stock issued for cash           3,000,000       300      174,700                              175,000

Officer compensation            5,200,000       520      811,720                              812,240




                                      -5-




Stock issued for services       4,161,857       416      455,189                              455,605


Stock issued to retire
 short–term note payable       20,000,000     2,000       18,000                               20,000

Allowance for prepaid
 stock compensation
 for services                                                       (205,199)

Net loss for the year                                                           (1,879,379)(1,879,379)

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

Balance at October 31, 2001    38,337,597    $3,834   $5,782,645  $ (205,199) $ (5,936,572)$ (355,292)

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

Stock issued for services      14,300,000     1,430      321,520
                                                                  322,950

Stock issued in debenture
   bond conversion              4,321,460       432       46,741                               47,173

Stock issued for
   Litigation settlement        2,100,000       210      156,790                              157,000

Allowance for prepaid
   stock compensation                                                51,770
                                                                   51,770

Net Loss                                                                      (1,550,334)  (1,550,334)
                           ---------------------------------------------------------------------------
Balance at October 31, 2002    59,059,057   $ 5,906    $6,307,696 $(153,429) $(7,486,906) $(1,326,733)
                           ===========================================================================

                                      -6-


                         ROANOKE TECHNOLOGY CORPORATION
                                 AND SUBSIDIARY

                            STATEMENTS OF CASH FLOWS

             For the Twelve Months ending October 31, 2002 and 2001


                                                         2002                   2001
                                                     ------------           ------------
CASH FLOWS FROM OPERATING ACTIVITIES

   Net income (loss)                                 $(1,550,334)           $(1,879,379)

   Adjustments to reconcile net income to net cash
    provided by  (used in) operating activities:

   Depreciation and amortization                         117,508                180,724
   Compensation in the form of stock                     531,720              1,062,646
  (Increase) decrease in accounts receivable              27,574                 20,362
  (Increase) decrease in employee advance                  3,464                 (5,494)
  (Increase) decrease in officers' receivable             67,868                (76,368)
  (Increase) decrease in prepaid expense                 (13,289)                     0
  (Increase) decrease  in deposits                        14,600                (24,827)
   Increase (decrease) in payables & accrued expenses    295,487                391,090
   Increase (decrease) in accrued interest                65,666                                                           0
   Increase (decrease) in credit card payable             (7,804)                17,588
                                                     ------------           ------------
      Total adjustments to net income                  1,102,794              1,565,721
                                                     ------------           ------------

   Net cash flows from operations                       (447,540)              (313,658)

CASH FLOWS FROM INVESTING ACTIVITIES


   Capital expenditures on equipment                     (35,408)              (240,471)
                                                     ------------           ------------
   Net cash flows from investing                         (35,408)              (240,471)
                                                     ------------           ------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from note payable                                  0                290,000
   Proceeds from debenture bond                          501,500                      0
   Proceeds from issuance of common stock                      0                225,000
   Proceeds from short-term note payable                       0                 20,000
   Payments on notes                                           0                (21,830)
                                                     ------------           ------------
   Net cash flows from financing                         501,500                513,170
                                                     ------------           ------------
CASH RECONCILIATION

   Net increase (decrease) in cash                        18,552                (40,959)
   Cash at beginning of year                                  35                 40,994
                                                     ------------           ------------
CASH BALANCE AT APRIL 30, 2002 AND 2001                 $ 18,587               $     35
                                                     ============           ============


                                      -7-

ROANOKE TECHNOLOGY CORPORATION
AND SUBSIDIARY

NOTES TO THE FINANCIAL STATEMENTS

1.      Summary of significant accounting policies:

Industry - Roanoke Technology Corporation (The Company) was incorporated December 11, 1997 as Suffield Technologies Corp., its original name, under the laws of the State of Florida. The Company is headquartered in Roanoke Rapids, North Carolina and does business as Top-10 Promotions, Inc. The Company is engaged in the design, development, production, and marketing of technology to provide enhanced internet marketing capabilities.

Revenue Recognition and Service Warranty - Revenues resulting from technology consulting services are recognized as such services are performed and paid. A deferred revenue account had been established in the financial statements during 1999 to account for revenue and costs of revenue to be recognized in the income statement at the end of the service agreement period. During February of 2000 the service agreement was changed thus not requiring a deferred revenue account. Services are most often paid for in advance of the service being performed. The services performed are completed by software programs leaving the time when a service is paid for and the time the service is performed immaterial. The Company has no extended maintenance contracts and warrants its consulting services to meet the consulting service contract guarantee. No provision for estimated future costs relating warranties have been made as these costs have been historically immaterial.

Cash and Cash Equivalents The Company considers cash on hand and amounts on deposit with financial institutions which have original maturities of three months or less to be cash and cash equivalents.

Basis of Accounting - - The Company's financial statements are prepared in accordance with generally accepted accounting principles. All costs associated with software development and advancement are expensed as a cost of sales through an ongoing research and development program.

Property and Equipment - - Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets as follows:

Leasehold improvements are amortized on the straight-line basis over the lessor of the life of the asset or the term of the lease. Maintenance and repairs, as incurred, are charged to expenses; betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts; gain or loss on the disposition thereof is included as income.

Long-lived Assets - Long lived assets, including property and equipment and certain intangible assets to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets and certain identifiable intangibles to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

Intangibles - Goodwill represents the excess of purchase price over the fair value of business acquired and is amortized on a straight-line basis over 3 years.

Other acquired intangibles principally include core technology in the form of software programs and are amortized over their estimated lives of primarily 3 to 5 years, existing Organization costs are being amortized by the straight-line method over 5 years.

Research and Development - - Research and development costs incurred in the discovery of new knowledge and the resulting translation of this new knowledge into plans and designs for new services, prior to the attainment of the related products’ technological feasibility, are recorded as expenses in the period incurred.

Income Taxes - The Company utilizes the asset and liability method to measure and record deferred income tax assets and liabilities. Deferred tax assets and liabilities reflect the future income tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Fair Value of Financial Instruments - The Company's financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts payable and liabilities to banks and shareholders. The carrying amount of long-term debt to banks approximates fair value based on interest rates that are currently available to The Company for issuance of debt with similar terms and remaining maturities. The carrying amounts of other financial instruments approximate their fair value because of short-term maturities.

Earnings Per Share – Basic earnings per share (“EPS”) is computed by dividing earnings available to common shareholders by the weighted-average number of common shares outstanding for the period as required by the Financial Accounting Standards Board (FASB) under Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per Shares". Diluted EPS reflects the potential dilution of securities that could share in the earnings.

Concentrations of Risk - Financial instruments which potentially expose The Company to concentrations of credit risk consist principally of operating demand deposit accounts. The Company’s policy is to place its operating demand deposit accounts with high credit quality financial institutions.

No customer represented 10 % or more of The Company’s total sales as of the current reporting period.

The Company has a concentration of revenue dependancy on a limited number of services.

Stock-Based Compensation - In accordance with the recommendations in SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS No. 123”), The Company’s management has considered adopting this optional standard for disclosure purposes, along with Accounting Principles Board opinion no. 25. The Company may consider using full implementation of SFAS No. 123 at a future date. The Company accounted for stock bonus’ during the years ending October 31, 2000 and 1999 of 1,500,00 shares and 850,000 shares of restricted stock, respectively, given to the President of the company as compensation. The bonus was accounted for in the periods in order to match the compensation expense with the time in which it was earned. In accordance with the tax accounting, the compensation will not be deductible until the President sells those shares. The shares are restricted from sale for a period of two years from the date of issuance and are accounted for at their fair value.

2.      Going Concern:

The Company’s financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has suffered losses from operations and may require additional capital to continue as a going concern as The Company develops its new markets. Management believes The Company will continue as a going concern in its current market and is actively marketing its services which would enable The Company to meet its obligations and provide additional funds for continued new service development. In addition, management is currently negotiating several additional contracts for its services. Management is also embarking on other strategic initiatives to expand its business opportunities. However, there can be no assurance these activities will be successful. There is also uncertainty with regard to managements projected revenue being in excess of its operating expenditures for the fiscal year ending October 31, 2003.

Items of uncertainty include the Company’s liabilities with regard to its payroll tax liability of $600,910 and its Small Business Administration loan with a principal balance of $270,807 and accrued interest of $48,290. The Company is currently in default of these liabilities and is in negotiations regarding resolution of these matters. The outcome of these negotiations is uncertain as of October 31, 2002. If the Company is not successful in these negotiations, there is substantial doubt as to the ability of the Company to continue as a going concern.

3.      Accounts Receivable and Customer Deposits:

Accounts receivable historically have been immaterial as The Company’s policy is to have the internet services provided paid for in advance. As of the balance sheet date there were no deposits paid in advance.

4.      Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect 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.

5.      Revenue and Cost Recognition:

The Company uses the accrual basis of accounting for financial statement reporting. Revenues are recognized when services are performed and expenses realized when obligations are incurred.

6.      Accounts payable and accrued expenses:

Accounts payable and accrued expenses consist of trade payables and accrued payroll and payroll taxes created from normal operations of the business.

7.       Long-term debt:

Long – term debt consists of:

On May 31, 2002, The Company entered into a stock purchase agreement which was comprised of convertible debenture bonds with attached warrants. The bonds provide interest in the amount of 12% per year. The offering involved attached warrants for the purchase of 3,600,000 shares. The total offering is in the amount of $600,000 of which $501,500 has been issued. During the period $47,173 of the bond balance was converted to 4,321,460 common shares.

On November 7, 2000, The Company entered into a loan agreement with First International Bank, Hartford, CT. The U.S. Small Business Administration is the guarantor on this loan in the amount of $290,000. The initial interest rate, a variable rate, is 11.50% per year. This initial rate is the prime rate on the date The U.S. Small Business Administration received the loan application, plus two percent. The Company must pay principal and interest payments each month, beginning two months from the date of the note. Payments will be made on the first calendar day in the months that they are due. The note has a term of seven years with a late fee of up to four percent of the unpaid portion of the regularly scheduled payment. The President of The Company maintains a life insurance policy as required by the loan agreement. The following is a schedule of the intended use of funds received:

During the July quarter of 1998, the Company entered into a note payable to a finance company which bears interest at 16.53%. The note is collateralized by equipment and requires that monthly payments of $197 be made through the maturity date of June, 2003.

During the April quarter of 1999, the Company entered into a capital Lease with a finance company which bears an interest rate of 13.61%. The lease is collateralized by equipment and requires that monthly payments of $534 be made through the maturity date of April, 2002.

Aggregate maturities of long – term debt over the next five years are as follows:

8.      Operating Lease Agreements:

The Company rents office space with monthly payments of $6,000. The lease term for this space is seven years beginning on October 1, 2000. This lease includes an option to purchase whereby $1,000 of each month’s rent may be applied to the purchase price.

The Company rented a house for the convenience of Company employees that are relocating to the area and out of town business guests. The house also served as a satellite office as added security for computer system continuation in the event that the main office should encounter problems with their system. The house had monthly payments of $1,200. The lease term was on a month to month basis and expired during the year 2002.

The Company also leases its phone systems, internet lines and various equipment . The lease terms are month to month leases.

For this reason, The Company considers all of these types of lease arrangements as operating. Currently the lease costs are at $33,800 per year and shown as part of cost of sales.

9.       Stockholders' Equity:

Preferred Stock

The Company has been authorized 10,000,000 shares of preferred stock at $.0001 par value. As of October 31, 2000, none of these shares had been issued and the limitations, rights, and preferences were yet to be determined by the Board of Directors.

Common Stock

During the fiscal year end October 31, 2002, the Company converted debenture bond principal and interest into 4,321,460 common shares for a value of $47,172. The Company continues to convert debenture bond principal and interest into common shares subsequent to fiscal year end.

On October 28, 2002 the Company entered into consulting agreements with Nicole Leigh Van Coller, John A. Palmer, Jeremy Leigh Van Coller, Christopher Ebersole and Mary Gimmelli for financial consulting services over a six month term. As compensation, the Company issued 12,000,000 shares of common stock for a value of $156,000. The shares were registered on Form S-8 with the U.S. Securities and Exchange Commission.

On January 7, 2002 the Company entered into a settlement agreement regarding litigation. The Company agreed to issue 100,000 shares of common stock for a value of $17,000.

On February 15, 2002 the Company entered into a consulting agreement for services regarding tax representation with Byron Rambo. The Company issued 700,000 shares of common stock for a value of $31,920. The shares were registered on Form S-8 with the U.S. Securities and Exchange commission.

On February 22, 2002 the Company entered into a settlement agreement regarding litigation. The Company agreed to issue 2,000,000 shares of common stock for a value of $140,000 and a payment in cash of $20,000. The shares will be issued in amounts of 500,000 each six months until expired. The Company also issued stock options for the purchase of 2,000,000 shares of common stock in the amount of $.04 per share with an expiration date of 20 years from the date of the agreement.

On April 4, 2002 the Company entered into a consulting agreement with Nicole Leigh Van Coller for financial consulting services. As compensation, the Company issued 1,000,000 shares of common stock for a value of $120,000. The shares were registered on Form S-8 with the U.S. Securities and Exchange commission.

On August 14, 2001, the Company received proceeds of a loan from the Company’s President in the amount of $20,000 with a provision of conversion of the loan to 20,000,000 shares of restricted common stock after a 15 day period if not repayed. The loan was converted by the Company as called for in the agreement for a value of $20,000.

On August 27, 2001, the Company issued 2,500,000 shares of common stock as compensation for a one year consulting contract valued at $52,500. The compensation is amortized to expense over the contract term from an allowance account as can be reviewed in the statement of equity.

During the quarter ended July 31, 2001, the Company filed S-8 stock registrations for consulting services for a value of $364,534 and the issuance of 3,519,000 common shares. Of these shares, 2,000,000 common shares per the agreement call for the purchase of these shares at a value of a 40% discount on the bid price when purchased. The discount has been accounted for as an expense for consulting services. The term of services per the registrations range from five months to a year from the contract agreement date. The stock has been accounted for as issued and an allowance account has been set against this stock account to amortize the costs over the term as an expense over the service term as can be reviewed in the statement of equity.

On April 12, 2001, the Company issued 5,200,000 shares of common stock to the president of the Company valued at market price in the amount of $812,240. These shares were issued in accordance with the compensation agreement.

On March 15, 2001, the Company elected a 7 for 1 reverse stock split. The statements of operations have been adjusted to reflect this split with the earnings per share calculation.

During the quarter ended January 31, 2001, The Company filed an SB-2 filing with the U.S. Securities and Exchange Commission. The filing called for 2,000,000 common shares to be offered at a price of $.05 per share. 1,000,000 common shares have been sold for cash and 1,000,000 (142,857 after the 7 for 1 reverse stock split) shares were issued for services.

During the period ending October 1998, the Board of Directors issued 1,525,000 shares of restricted common stock to The Company’s officer’s, and legal counsel in exchange for services, and issued 500,000 shares of restricted common stock in the acquisition of Top-10 Promotions, Inc.

In addition to the restricted shares issued, The Company sold common stock through two separate private offerings during the period. In the initial offering 800,000 shares were sold each at a price of $0.025. In the second offering 1,000,000 shares were sold each at a price of $0.05.

On October 15, 1998, the majority shareholders of The Company undertook a Regulation – D, Rule 504, offering whereby it sold 2,000,000 shares of common stock, $.0001 par value per share or an aggregate of $200,000. In addition, each investor in the offering received an option to purchase, for a twelve month period commencing on the date of this offering, an additional one share of The Company at $1.00 per share for each eight (8) shares purchased in the original offering (or $250,000). In addition, each investor received an option to purchase for an eighteen month period commencing on the date of this offering an additional one (1) share of The Company for each 8.88 shares previously purchased at $2.00 per share or an aggregate of 225,000 shares (or $450,000).

The Company also approved of the investment by Arthur Harrison & Associates in the offering provided that such investment in The Company was in lieu of monies owed to Arthur Harrison & Associates by The Company for two (2) promissory notes dated September 22, 1998 and October 10, 1998. Further more, Arthur Harrison & Associates agreed to waive its rights to any interest on promissory notes.

10.      Acquisitions:

On March 30, 1999 The Company acquired assets of Offshore Software Development Ltd. (“Offshore”) in an exchange of assets for 999,111 shares of The Company issued to the shareholders of that company. The Company’s management has valued the transaction at $630,000.

The assets included were comprised of four computers valued at $8,000 and two software programs valued at $622,000. The value of these assets was determined on the basis of the management’s estimation.

An unusual impairment loss of $257,075 was recorded in October of 1999 to reflect an impairment of the intangible assets resulting from the acquired “Offshore” assets on March 30, 1999. The impairment resulted from the Company’s revised forecast of the cash inflows expected from intangible assets. Amortization expenses will drop by $8,583 per month.

Effective May 29, 1998, The Company acquired all the outstanding common stock of Top-10 Promotions, Inc., consisting of 100 shares, effective. These shares were redeemed and canceled. The 100 shares of Top-10 Promotions, Inc. were acquired in exchange for 500,000 “restricted” shares of The Company’s common stock issued to David Smith, the sole shareholder of Top-10 Promotions, Inc. This transaction has been accounted for using the purchase method of accounting. The value of the share exchanged by both parties was determined to be $19,500, including a value of $(114) attributed to the fair value of assets and liabilities, and $19,614 of goodwill attributed to the method of doing business and the internally developed software.

Simultaneous with the acquisition, The Company purchased all of the remaining authorized shares of Top-10 Promotions, Inc. for $50,000 payable at closing and $17,500 per month payable over an eleven month period as other consideration. The Company borrowed funds for this transaction and later, upon agreement with the lender, converted a portion of the amount due as capital contributed to The Company.

Also, the former owner of Top-10 Promotions, Inc. was given the right to borrow up to 25% of retained earnings of Roanoke Technology Corporation in fiscal year 1998 or the first two quarters of fiscal 1999. Such borrowings shall be secured by his restricted stock received in the acquisition at a 75% discount value to market. Repayment shall be for a two-year period at a 5% annual interest rate. The Company also entered into an employment contract with the former owner of Top-10 Promotions.

11.      Employment Contract and Incentive Commitments:

The Company has entered into a five year employment contract with the former owner of Top-10 Promotions as amended on April 12, 2001.

The contract provides for a salary of $150,000; a stock bonus of 5,200,000 restricted common shares; a stock bonus of 1,000,000 common shares per year for each year that the Company generates a profit during the five year term; quarterly bonus of 30% of the net income before income tax of The Company; standard non-competition clause; an option to renew the employment agreement for an additional two year term (provided he is not in default under the employment agreement); and annually, with approval of the Board of Directors, receive up to one percent of the issued and outstanding shares of the Company determined on December 31^st of each year.

On November 1, 1998 The Company’s management approved the issuance of 750,000 shares of restricted common shares of The Company to the former owner of Top-10 Promotions for attaining gross revenues in excess $200,000.00 or more in sales for the first three month period of 1999. The shares have been issued at a market value of $1,181,250. An additional 1,500,000 shares of restricted were issued in accordance with the revised employment agreement during the year ended October 31, 2000 for a value of $900,000.

12.      Payroll Taxes Payable and Deferred Tax Assets and Liabilities:

The Company accrues payroll and income taxes. The Company, currently a C-Corporation, accounts for income taxes in accordance with Statements on Financial Accounting Standards 109. As of October 31, 2002, The Company had a deferred tax asset in the amount of approximately $1,871,726 that is derived from a net operating tax loss carryforward. A portion of this carryforward is associated with stock compensation to officers and is deductible for tax purposes when the stock is sold by the officers. The deferred tax assets will expire during the years ending October 31, 2013 through 2022 if not used to offset taxable income.

13.      Required Cash Flow Disclosure for Interest and Taxes Paid:

The Company paid interest in the amount of $10,301 during the quarters ended ct6ber31, 2002. The Company had no income tax payments due and did not pay any income tax amounts during the period.

14.      Litigation, claims and assessments:

There are various lawsuits and claims pending against The Company. Management believes that any ultimate liability resulting from those actions or claims will not have a material adverse affect on The Company’s results of operations, financial position or liquidity.

15.      Condensed consolidating financial statements:

RTCHosting Corp (RTCH) is a wholly owned subsidiary of The Company.

RTCH was incorporated on June 12, 2000 in the state of North Carolina. RTCH has 1,000 common shares authorized with no par value and 100 common shares outstanding. The Company has determined that separate financial statements and other disclosures concerning RTCH are not material to investors. RTCH was formed to hold the copyrights of an on line procurement system being developed by The Company. The Company has expensed all research and development costs. The only costs incurred by RTCH has been its incorporation and start-up costs which have been expensed in the amount of $3,050. RTCH currently has no material values of assets, liabilities or equity.

RFQHosting Corp (RFQ) is a 35% owned joint venture in Roanoke Online, LLC. The Company and Roanoke Energy Resources, Inc., a subsidiary of Roanoke Electric Cooperative, entered into a joint venture whereby the Company, through RFQ, receives 35% of the gross revenues of Roanoke Online, LLC, a business to business online procurement service. The Company is responsible for providing software maintenance and support personnel. Roanoke Energy Resources, Inc. is responsible for the day to day management and marketing of RFQ.

16.      Employee stock option:

The Company originated employee stock option plans with 2 of its employees during fiscal year end October 31, 2001. The plan calls for 300,000 option shares to vest on May 2, 2001 for a conversion price of $.001 per share. The plan continues to ratably vest 470,000 option shares over a 4 year period that are convertable for $.001 per share. The intrinsic value of these vested shares is $0 and a fair value compensation value of $6,750 if exercised at the vesting dates.

Item 9.      Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

Our accountant is Gately & Associates, LLC of Florida. We do not presently intend to change accountants. At no time has there been any disagreements with such accountant regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

PART III

Item 10.      Directors, Executive Officers, Promoters and Control Persons: Compliance With Section 16(a) of the Exchange Act

Our directors and officers, as of February 11, 2003, are set forth below. The directors hold office for their respective term and until their successors are duly elected and qualified. Vacancies in the existing Board are filled by a majority vote of the remaining directors. The officers serve at the will of the Board of Directors.

Our sole director will hold office until the next annual meeting of our stockholders and until his successor is elected and qualified or until his earlier resignation or removal. Each officer serves at the discretion of our Board of Directors.

David L. Smith, Jr., RTC Founder, President, CFO, CEO and Director

David L. Smith, Jr. was born and raised in Durham, North Carolina. In 1973 he received an athletic scholarship in wrestling to East Carolina University where he majored in business with a minor in physical education. From 1992 through 1995, David was the owner of DJ Distributors, a sole proprietorship based in Roanoke Rapids, North Carolina. The company was a direct sales organization involved in reselling vacuum cleaners. In 1995, DJ Distributors was no longer involved in direct sales and David used the company to start an Internet business to develop web sites for businesses. In October 1997, David formed Top 10 Promotions, Inc., a North Carolina corporation to continue the business of DJ Distributors. On May 28, 1998, Roanoke Technology Corporation acquired all the shares of Top-10 Promotions, which became a wholly owned subsidiary and David was appointed President, Chief Executive Officer and one of the directors. Along with customary Chief Executive responsibilities, David also is responsible for RTC’s sales effort.

Russell J. Jones, Secretary

Russell J. Jones commenced working with us as one of our founding employees in June, 1998. He is currently responsible for the daily operations of our business. As a founding employee, he assisted us in the pioneering of our sales department and our development of the RTC Click business project. In his employment with us he has acted in the capacity of Sales Manager and Director of Operations. Mr. Jones attended the University of South Alabama from 1986 to 1990 where he majored in Computer Science. He also attended Mississippi Gulf Coast Community College from 1984 to 1986.

Jack M. Webb, Jr., Former President, Secretary, Treasurer, COO, and Director

Jack M. Webb, Jr. was born and raised in Williamsburg, Virginia, where he continues to live. He attended Christopher Newport University where he majored in Management Information Systems. For the seventeen years prior to joining RTC, Jack was a senior Information Technology manager for Ferguson Enterprises, Inc., the nation’s largest wholesale distributor of plumbing and builder products. At Ferguson, Jack was responsible for many of the systems used by this Fortune 500 Company, including Ferguson’s electronic commerce and supply chain technology activities. He was also involved with many of the strategic business partnerships Ferguson developed over the years. At RTC, Jack was responsible for day-to-day operations, business development, strategic partnerships and Finance. Jack was removed as our President, Chief Operating Officer, Secretary, Treasurer and from our Board of Directors on January 29, 2003.

COMMITTEES OF THE BOARD

We presently do not have any committees.

All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. We have not compensated our Directors for service on our Board of Directors, any committee thereof, or reimbursed for expenses incurred for attendance at meetings of our Board of Directors and/or any committee of our Board of Directors. Officers are appointed annually by our Board of Directors and each Executive Officer serves at the discretion of our Board of Directors. We do not have any standing committees. Our Board of Directors may in the future determine to pay Directors’ fees and reimburse Directors for expenses related to their activities.

None of our Officers and/or Directors have filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five (5) years.

Certain Legal Proceedings

No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.

Compliance with Section 16(a) of the Exchange Act

We have not filed a Form 4 or Form 5 for our fiscal year ending December 31, 2001.

Item 11.      Executive Compensation

The following table sets forth the annual and long-term compensation for services in all capabilities to the Company.

(1)      In fiscal 2000, David received 1,500,000 of our restricted common shares per his employment agreement. The shares were valued at $.60 per shares for a total of $900,000. Since the beginning of fiscal 2000, David has received 1,500,000 of our restricted shares pursuant to his execution of a new 3 year employment agreement with us in August 2000. Such shares received by him would normally be valued at the trading price at the time he received the shares ($0.25) in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees.” However, this standard considers the discounting of stock when such stock is restricted; our stock was thinly traded and the number of shares to be traded on the market (1,500,000) would greatly devalue the stock. Therefore, the method used was as follows: Initial price of $0.25; discounted 10% in lieu of the restriction. Based on this, the value is $337,500.

(2)      Effective December 1, 1999, Ed's salary was increased to $72,020 per year. Effective October 1, 2000, Ed's salary was increased to $82,160 per year. In January 2000, Ed entered into a Stock Option Agreement with us whereby he was granted options to purchase 100,000 shares of our common stock at an exercise price of $1.00 each. He did not exercise these options prior to leaving the company and no longer has the authority to do so.

(3)      We made loans to Ed during May and June 2000 totaling $22,932. The loans accrue interest at the rate of 7.5% per annum and all accrued interest and principal are payable in full on or before October 31, 2001. At the time Ed resigned from the company, his loans were forgiven in lieu of any other severance compensation.

(4)      Ryan's employment commenced June 24, 1999. He worked full time through August 1999 and resumed his educational studies in September 1999. He is presently required to work thirty hours per week. His salary is based on $60,000 per year. Ryan has a stock option agreement which provides for the option of purchasing 200,000 shares of common stock at $1.00 per share as follows: The option shall accrue in equal annual increments for each 12 months of service over the next 4 years commencing July 1999. Each annual increment shall relate to 50,000 shares. All shares are restricted for a 1 year period from when we issue the shares to Ryan. Thereafter, the shares can be sold in accordance with Rule 144 of the 1933 Securities Act.

(5)      Jack's annual salary was $100,000. He also received $1,000,000 shares of restricted stock in December 2001 as a bonus incentive. The stock was awarded at par value because the price of the stock when it was issued was below 1 cent. Jack also purchased 5,000,000 shares of stock this year. He paid 1 cent per share. This stock has a two-year restriction and has been placed into his personal 401K plan. Jack's salary in 2001 was based on partial physical year from August 27, 2001 to October 31, 2001.

Compensation of Directors

Our Directors do not receive compensation for their services as directors but may be reimbursed for their reasonable expenses for attending Board meetings.

Item 12.      Security Ownership of Certain Beneficial Owners and Management

The following table sets forth as of February 11, 2003, information with respect to the beneficial ownership of our common stock by (i) each person known by us to own beneficially 5% or more of such stock, (ii) each director who owns any of our common stock, and (iii) all directors and officers as a group, together with their percentage of beneficial holdings of the outstanding shares.

*       Less than one (1%) percent.

The persons named in the table have sole voting and investment power with respect to all shares of common stock.

Item 13.      Certain Relationships and Related Transactions.

We made loans to Ed during May and June 2000 totaling $22,932. The loans accrue interest at the rate of 7.5% per annum and all accrued interest and principal were payable in full on or before October 31, 2001. At the time of Ed’s resignation in 2002, his loans to the company were forgiven in lieu of any other severance compensation.

PART IV

Item 14.      Exhibits and Reports on Form 8-K

The following exhibits are filed with this Form 10-KSB and are identified by the numbers indicated: see index to exhibits immediately following financial statements and schedules of this report.

Item 14.    Controls and Procedures

Evaluation of disclosure controls and procedures

The company’s principal executive officer and principal financial officer evaluated the company’s disclosure controls and procedures (as defined in rule 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended) as of a date within 90 days before the filing of this annual report (the Evaluation Date). Based on that evaluation, the principal executive officer and principal financial officer of the company concluded that, as of the Evaluation Date, the disclosure controls and procedures in place at the company were adequate to ensure that information required to be disclosed by the company, including its consolidated subsidiaries, in reports that the company files or submits under the Exchange Act, is recorded, processed, summarized and reported on a timely basis in accordance with applicable rules and regulations. Although the company’s principal executive officer and principal financial officer believe the company’s existing disclosure controls and procedures are adequate to enable the company to comply with its disclosure obligations, the company intends to formalize and document the procedures already in place and establish a disclosure committee.

Changes in internal controls

The company has not made any significant changes to its internal controls subsequent to the Evaluation Date. The company has not identified any significant deficiencies or material weaknesses or other factors that could significantly affect these controls, and therefore, no corrective action was taken.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

ROANOKE TECHNOLOGY CORP.

Dated:   February 13, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002

I David L. Smith, Jr. certify that: