SELECTED FINANCIAL DATA

11

PLAN OF OPERATION

13

Summary Financial Data

The following table sets forth our summary consolidated financial data.  This information should be read in conjunction with the financial statements and the notes to those financial statements appearing elsewhere in this prospectus.

SELECTED FINANCIAL DATA

The following selected statement of operations data for the period from September 25, 1996, the date of our inception, through September 30, 2002, were derived from our financial statements and notes thereto included later in this prospectus which are audited.  In our opinion, all necessary adjustments, consisting only of normal recurring adjustments, have been included to present fairly the financial position and results of operations for each of the periods presented in our audited financial statements.  Historical results are not necessarily indicative of results that may be expected for any future period.  The following data should be read in conjunction with "Plan of Operation" and our audited financial statements, including the related footnotes.

PLAN OF OPERATION

You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this prospectus.  This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions.  The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those presented under "Risk Factors" on page 4 and elsewhere in this prospectus.

On September 10, 2002, we entered into a royalty and licensing agreement with Two Dog Net, Inc. to be the exclusive marketers of their proprietary and patent pending secured internet service for pre-school to junior high school aged children called The Children’s Internet®.  We plan to introduce the first, fully comprehensive Internet service designed specifically for children that allows them to have completely safe, unrestricted live access to the Internet.  During 2003, we plan to conduct a media test to introduce The Children’s Internet® service to the public at large via a 30-minute infomercial.  The infomercial was produced by Two Dog Net, Inc. over a two-year period and is ready to air.  The results from the media test will serve as a basis for the ongoing media plan to launch the infomercial on a national basis thereafter.  We plan to outsource all non-strategic core competencies.  By following this strategy, we intend to minimize the number of employees required to manage our intended growth through 2003.

In a Stock Purchase Agreement dated October 11, 2002, our original shareholders sold 1,118,500 of their shares of our common stock to various purchasers, two of whom are related parties to us. Some of these purchasers were introduced to the original shareholders by Sholeh Hamedani, our President, Chief Financial Officer, and a Director.  Some of these purchasers resold their shares to unrelated third parties.  A portion of the proceeds received from the stock sale by the purchasers was in turn loaned to Shadrack Films, Inc., our parent company to finance our initial operations thus far.  These amounts are reflected on the financial statements as “Due to Parent Company.”

If we raise the maximum offering, our working capital needs will be met for approximately 24 months.

Additional funds may also be required in order to proceed with our marketing plan described above and our business plan described in “Business of the Company” below.  These funds would be raised through additional private placements or other financial arrangements including debt or equity.  There is no assurance that such additional financing will be available when required in order to proceed with the business plan or that our ability to respond to competition or changes in the market place or to exploit opportunities will not be limited by lack of available capital financing.  If we are unsuccessful in securing the additional capital needed to continue operations within the time required, we will not be in a position to continue operations.

BUSINESS OF THE COMPANY

Company Overview

We were incorporated in the State of Nevada on September 25, 1996 as D.W.C. Installations.  On July 3, 2002, Shadrack Films, Inc. formerly known as The Children’s Internet, Inc., purchased 1,166,755 newly issued shares of our common stock $150,000, thereby obtaining a majority ownership interest.  We changed our name to The Children’s Internet, Inc. on December 27, 2002.  We are a development stage company and currently have no revenues, only minimal assets, and have incurred losses since our inception.

On September 10, 2002, we entered into a license agreement with Two Dog Net, Inc. to be the exclusive marketers of their proprietary and patent pending secured Internet service designed specifically for pre-school to junior high school age children called The Children’s Internet® that allows them to have safe, real-time access to the Internet. Utilizing new technologies in the field of education, entertainment, information technology, and Internet security, we will market these licensed services to Internet service providers ("ISPs") and directly to consumers.  The Children's Internet® offers secure, real time access to approximately one million  pre-selected and pre-approved educational and entertaining age appropriate web pages as well as secure e-mail, homework help, games, news, super portals to learning activities and virtually limitless educational resources all within its safe, protected online environment. We believe that the proprietary, patent-pending security software, Safe Zone Technology® offers unprecedented security against Internet predators and Internet content that is inappropriate for children. The target market for The Children’s Internet® is the 48 million children on-line in 2002, ⁴ as well as America’s schools which are connected to the Internet. The astronomical rate of general Internet use in the United States is expected to grow by 2 million new users per month. ⁵ Nearly two-thirds (62%) of US families have computers at home, but roughly 1 out of 5 (17%) of those with computers do not have Internet access due to safety concerns. ⁶  Surveys tell us that 85% of all parents with children under 11 years of age have expressed concern for their child’s safety by overseeing each and every click and 45% of all parents feel the Internet is critical for educational purposes. ⁷

We will also sell wholesale dial-up service to ISPs.  The US market for Internet services includes over 7,785 ISPs generating revenues of $32.5 billion in 2000 ⁸  Many of these ISPs are unable to obtain cost effective pricing from other Tier 1 bandwidth providers.  Through Two Dog Net’s™ agreement with Qwest Communications as a re-seller of wholesale dial-up service, our license agreement allows us to present ISPs with the ability to lower their telecommunications costs and obtain a national reach by becoming able to accept subscribers from across the United States.

4 - Internet Commerce & Communications Division, Information Technology Association of America, February 2002.

5 - Id.

6 - Report from the Internet Commerce & Communications Division, Information Technology Association of America, February 2002.

7 - Greenfield Online, Inc. April 1999.

8 - Cahners In-Stat Group . The U.S. ISP Industry: Revenues and Services (Report # IS00-04SP) September 2000.

The Problem

The Internet is an increasingly dangerous place for children to roam freely. Nearly three-quarters of adults (71%) are extremely concerned about children's Internet habits and believe that careful adult supervision is needed.  Almost half (45%) of adults think the Internet is dangerous to children due to easy access of its adult content. ⁹   Despite their concern, the fact still remains that the Internet, in the absence of effective security measures, by its very nature of open access to the world, can be harmful and in some extreme cases even deadly to children who are the most vulnerable and have the most to lose. In fact, 1 in 5 children who use the Internet to socialize reported being approached for “cybersex” and 1 in 4 children have received unwanted exposure to sexual pictures online. ¹⁰   Web sites promoting hate, child pornography, illegal activity and violence are increasingly abundant and keep children from using this necessary, exciting and resourceful information technology.

The Solution

The Children’s Internet® offers all of the educational benefits of the Internet, while locking out substantially all of the dangers.  We believe that The Children's Internet® is the answer that reconciles parents’ fear that the Internet could harm their children with the feeling that their children need the Internet for all of its educational value.

The Children’s Internet® provides a broad base of entertaining and educational content.  By simply utilizing the Family Favorites feature, parents can easily customize their children’s access based on their family's beliefs, individual needs and interests by adding other Web sites from outside of The Children’s Internet® while still maintaining total security.  We believe that no other security product offers this level of flexibility and customization. The Children's Internet® works with educators and Internet experts to constantly improve our service, so children are not only safe, but also stimulated to learn and explore.  We have created a parental tool that empowers children with knowledge and  enriching entertainment.  We have put the power back in the parents' hands where, with just one click of the mouse, the world is at the child's fingertips.

The Children’s Internet® uses the proprietary Safe Zone Technology® to provide a:

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Controlled and secure environment that is safe for children

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An effective security product that is easy to install and to use

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Internet communications for children including secure e-mail

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Fun, entertaining, age appropriate children’s content

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A user-friendly customized browser that is easy to navigate

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An educationally based Internet search engine

The Children’s Internet® has age-appropriate content for each of four different age groups:

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3 to 5 year olds;

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6 to 8 year olds;

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9 to 11 year olds; and,

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12 to 14 year olds.  

9 – Pathfinder Study by Arbitron NewMedia. July, 1999.

10 - “Report Statistical Highlight”  National Center for Missing and Exploited Children, Crimes Against Children Research Center and Office of  Juvenile Justice and Delinquency Prevention (June 2000).

Essential elements of The Children’s Internet® include:  

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Greater, More Flexible Security--Unlike unreliable and ineffective filtering and blocking software, The Children’s InternetÒ features our proprietary patent-pending Safe Zone Technology®.  (See Safe Zone Technology® - Security Software.)

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Access to the Best of the Web--The Children’s Internet aggregates high-quality Internet sites that conform to recognized educational standards and appropriate entertainment for children and offers unrestricted access to them.  All content remains in a safe environment free from predators, pornography, hate, and illegal and dangerous activity.

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A Rich and Dynamic Multimedia Environment--The Children’s Internet® features original and entertaining content and uses a combination of technologies to rapidly deliver original interfaces that are full of rich sound, animation and graphics.

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Easy–to–Use Search Engine--Our custom-designed search engine for The Children’s Internet® allows children to find safe sites of interest quickly and easily.

Competitive Advantage

We plan to outsource all non-strategic core competencies.  We believe that by following this outsourcing strategy, we can minimize the number of employees required to manage our growth and this will keep costs competitive and variable.  We have identified the ability to bring a marketing message to the consumer quickly and effectively as one of our core strategic competencies.

Our unique value proposition, technology, ready-to-launch marketing assets (including a 30 minute infomercial), and the technical and sales support we receive from Qwest Communications International, Inc. gives us a competitive advantage. As a virtual integrator with our proprietary technology and ready-to-market services and content, we can differentiate ourselves from our competitors by keeping our overhead costs low, while sustaining scalability.

Industry Background

The Internet

The Internet is a worldwide series of inter-connected computer networks, which enables commercial organizations, educational institutions, government agencies and individuals to communicate freely, access and share information, and conduct business remotely.  

The very openness of the Internet means that transmitted information and data stored in connected hosts are exposed to other users who are able, in the absence of effective security measures, to gain access to inappropriate data.  This fundamental weakness mandates that organizations and individuals weigh security, productivity and censorship concerns against the perceived commercial opportunities presented by millions of Internet users.  Today, more than 48 million children are on line each day. ³  The Internet, by its very nature of open access to the world, is becoming increasingly harmful and in some extreme cases even deadly to children.

Children Online

Nearly three-quarters of adults (71%) are extremely concerned about children's Internet habits and believe that careful adults’ supervision is needed.  Almost half (45%) of adults think the Internet is dangerous to children due to easy access of its adult content. ¹² A 1999 Jupiter survey ¹³ found:

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Children spend between 6 and 10.5 hours per week on the Web.

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Only 41% of parents set up computers to limit where their children travel on the Internet.

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89% of sites collect personal information from children.

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Only 23% of Web sites tell children to ask their parents before giving out family information.

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48 million children are currently online with an expected growth rate of 2 million users per month.

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64% of US families have computers at home

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¾ of all US teenagers are currently online

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The number of children with classroom Internet access will jump from 1.5 million (1996) to 20.2 million in 2002.

One in 5 children who use the Internet to socialize reported being approached for “cybersex” and 1 in 4 children have received unwanted exposure to sexual pictures online. ¹¹ The increasing amount of content devoted to harmful and unwholesome subjects can keep children from learning and using this necessary, exciting and resourceful technology.

In addition to these statistics, the online pornography industry continues to thrive with some calculations estimating that there are more than 12 million web pages devoted to pornography. ¹⁴ Web sites promoting hate, child pornography, illegal activity and violence are increasingly abundant as well. Between the months of February 2001 to July 2001 there was a 345% increase in child pornography web sites. ¹⁵ In spite of law enforcement agencies across the country stepping up their efforts to stop predators from using the Internet to communicate and attempt to lure children from their homes, there are hundreds of cases of cyber-crimes against minors. Another alarming statistic which proves that children need to be protected while online is that children spent 64.9% more time on pornography sites than they did on game sites in September 2000. ¹⁶ It is clear that children need protection and guidance when using the Internet.

At Schools

In addition to the inherent need for safe Internet access for consumers’ use at home, schools are mandated by law to implement Internet security measures for their students. On January 8, 2002, President Bush signed into law the “No Child Left Behind Act of 2001,” re-defining the federal role in K-12 education based on some basic principles: safe Internet access, stronger accountability for results, enhanced collaboration between teachers and parents, and improved academic achievement.  These main points are backed by $26.5 billion in federal funding through 2006.  School districts will have to submit annual "report cards" showing a school's achievement through standardized test scores and validate teachers’ technological qualifications. The law stipulates that the “staff will be replaced” - if the achievement results are not improved by 2006.

Internet Security for Children

The Internet provides easy access to a vast array of information resources and services in addition to enabling communication between people and organizations around the world.  Unfortunately, this feature of the Internet can pose serious problems for children and their parents.  Left unprotected, children can access sites that are not appropriate for them.  Many parents have serious concerns about their children accessing sites that contain pornography, profanity, violence, extreme political views, racism and information on subjects such as manufacturing explosives or drugs.  Statistics confirm that nearly 2/3 of U.S. families with children under the age of 18 are more likely to access the Internet (62%) ¹⁷ Of parents with computers, roughly one out of five (17%) report they do not have Internet access due to safety concerns for their families. ¹³ Parents are also concerned that their children may enter unsupervised chat rooms where children can be exposed to objectionable language or ideas.  These unsafe chat rooms can be havens for sinister individuals who prey on children by disguising themselves as another child.

Parents have relatively few good options available to them for protecting their children from harmful materials on the Internet. Parents have attempted to address their concerns over Internet security for their children in a number of ways:

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Constant parental monitoring;

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Prohibiting Internet access;

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Commercially available filtering and blocking software; and

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Limiting access to only children’s sites.

While there are currently a number of Internet products on the market for children, none of these approaches give a realistic or total solution. All of these approaches have serious drawbacks for both children and their parents.

The constant vigilance required of parents to monitor all of their children’s Internet activities poses tremendous challenges to parents.  Parents cannot always available to monitor children’s Internet access at those times when children want or need to be on-line.  This creates frustration for both parents and children and can have the unintentional effect of limiting children’s access to the Internet.  

Total denial of Internet access is an effective means of keeping children safe from harmful materials on the Internet.  Unfortunately, it also denies children access to the many benefits that the Internet has to offer. Therefore, the tactic of denying Internet access can prove to be crippling to the enrichment of children’s knowledge by eliminating this increasingly valuable resource.  It also inhibits the development of their skills essential in a technologically based society.

We believe that most parents would allow their children to have access to this unique resource if their security concerns were adequately addressed.

Filtering and blocking software attempts to prevent the user from accessing websites that have pre-defined objectionable words or phrases.  These programs can be purchased by consumers and loaded onto a personal computer.  Depending on the vendor, filtering and blocking software varies greatly in its ability to block undesirable material.  Some of the problems with these software programs are:

1.

The security interfaces are generally fairly simple to bypass, allowing the child to exit the program at will.  For example, some filtering programs can be bypassed simply by typing in the URL address of any site on the Internet.

2.

Filtering and blocking programs do not have the capability of successfully evaluating sites for appropriate content.  Educational sites are sometimes blocked because of a misinterpretation of content by the software’s logic program.  For example, a search for information on breast cancer would routinely be filtered out since the word “breast” is within the text and hence blocked by the filtering software.

3.

The company creating the software arbitrarily establishes keywords and topics.  The values of the software maker may not reflect the values of the purchaser.  Depending on the religious/political/social leanings of the company, the child may be prohibited from accessing relevant/appropriate information.

4.

Filtering programs are incapable of matching the dynamics of the Internet.  Each of these software packages relies on a static database of key search terms that are stored on the user’s system.  As Web sites are added to the Internet or are changed, these databases must be updated.  The present rate of update is only once per month for many programs, which limits their ability to block new Web sites.  Also, these products are incapable of evaluating photographic content.

5.

Another security flaw is that most files are stored on the user’s computer, which allows the possibility for tampering or removal of files in an effort to bypass the security program.  Such tampering can cause the system to malfunction.  Computer savvy children can also modify activity logs, thus eliminating evidence of sites visited.

6.

Some ISPs or on-line services such as AOL offer security software.  Most of these features can be easily by-passed by simply turning off the child security feature.

There are several Internet services that are focused on children.  These sites generally have significant limitations with respect to child security:

1.

Content Sites.  These sites contain content directed toward children but do not necessarily provide security.  Some of the major sites, such as Disney and Nickelodeon’s Noggin, utilize proprietary characters and products and stress co-marketing between their Internet sites and their television and movie offerings but lack security features.  Other minor sites offer original children’s content but also lack security features or search engines.

2.

Children’s Search Engines.  Children’s search engines enable children to search for Internet resources from a pre-selected database of children’s sites. These search engines do not offer a security feature.  As a result, children have access to the Internet at large and can access sites that contain objectionable material.  Other search engines have a large selection of prescreened sites, but offer no categorization of content by age.

3.

Closed Sites.  These sites offer original content and access to a limited number of partners’ Internet sites.  However, these sites have no Internet access and, therefore, children cannot take advantage of the relevant, timely information offered in a real-time Internet environment.  

4.

E-Commerce Sites.  These sites are designed to sell products or services to children.  They contain neither security features or search engines.

5.

Another option available to parents is to access the Internet through a secure ISP.  A secure ISP uses filtering software, which prevents the user from accessing offensive materials.  The software resides on the ISP server rather than on the user’s computer, which prevents the user from disabling the software.  This approach restricts not only children but their parents’ use of the Internet as well.  We believe that the inability of parents to customize the filtering software to allow them to have greater Internet access than their children is a significant drawback to the secure ISP.  The secure ISP also suffers from many of the same weaknesses inherent in filtering and blocking software.

Lack of Comprehensive Internet Products for Children

Current Internet product offerings for children are either single faceted or lack one or more of the major features which children and parents want in an Internet service.  We believe that an effective security feature is the cornerstone of a successful Internet product offering for children.  Most parents view security as their primary concern when evaluating Internet usage for their young children.

On the other hand, we believe children have a different set of needs and interests when they access the Internet.  Children want an Internet environment that is fun, entertaining, easy to use and contains specific Internet functionality.  We believe children want Internet content to be as entertaining as the content they get from television and personal computer software programs.  We believe they want to be able to communicate with their friends on-line via e-mail and chat rooms. We believe they also want to be able to search the Internet to help them with their schoolwork or just for fun.   As anyone who has used an Internet search engine is aware, the search process can be difficult and time consuming.  We believe the frustration level for children when they are faced with the prospect of reviewing hundreds of irrelevant or non-age appropriate sites can be overwhelming.

While there are currently a number of Internet products on the market for children, none of them provides the comprehensive solution that parents and children are seeking.  To our knowledge, all currently available products lack one or more of the following essential features that parents demand and that children want:

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An effective security feature that requires little technology skill to use or install

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Internet communications for children including e-mail and chat

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Fun, entertaining children’s content

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Content that is appropriate for a child’s age level

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An Internet search engine that is easy for children to use

We believe that the absence of a comprehensive Internet product for children has provided an opportunity for a company, like ours that can deliver a product, which meets the unfulfilled needs of this very large and rapidly growing market of children Internet users.  We believe the proprietary Safe Zone Technology® does provide the most comprehensive and effective solution available today that parents and children are seeking.

Two Dog Net, Inc.

Since 1996, Two Dog Net, Inc. a Utah corporation, has been developing The Children’s Internet® service and Safe Zone Technology® to provide site content,  navigation tools, and security designed especially for children and their families.  The Children’s Internet® service is designed to allow children to access the Internet in a safe environment that emphasizes educating children and developing their Internet navigation skills. Two Dog Net, Inc. has developed and tested the user interface for the two primary aspects of the system: the Internet service's content areas that allows users to search a wide range of topics while teaching Internet navigation skills and the search engine that allows users to perform direct searches only to pre-approved sites on the Internet.  The Children’s Internet® service also provides users with tools for customizing the scope of Internet access for each family member.

Our Strategy

A Rich and Dynamic Environment

Our strategy for attracting new subscribers and retaining existing ones  is to provide a dynamic environment that continually enhances the users' experience.  A key aspect of this strategy is to deliver rich content and search capabilities coupled with fast download times.  We believe that all users, and children in particular, will stay interested in the content matter and search results and therefore spend more time in the Internet environment if download times are fast and responsive.  The time users spend on the system will directly impact the value of the areas of the website where sponsors and advertisers are presented.

Rich and entertaining content often involves incorporating multi-media files within web pages.  However, these features typically increase download times as compared to text pages or simple graphics.  To obtain fast download times, we provide this graphical content to our subscribers via the installation CD-ROM.  The CD-Rom will interface with the Two Dog Net, Inc. website to create a multimedia and interactive Internet environment, enabling users to enjoy an enriched multi-media experience that includes new original content such as games and instructional content with audio, video, and animation.

Provide a Safe Internet Experience

In addition to the content provided by The Children's Internet ® environment, the user can use the portal to visit pre-approved sites available from the Internet that have been carefully chosen by an advisory board of educators using criteria that emphasizes educational and age-appropriate content.  However, the system is not limited to these pre-approved sites.  It is also designed to allow authorized users, e.g. parents, to add sites from the Internet-at-large to the sites available to his or her family, as well as to remove any of the pre-approved sites currently accessible through the system.  Such modifications will be user-specific, i.e. no other subscriber will be affected by any other subscriber's customized changes.

Promote Product Awareness

We plan to invest heavily in mass media and public relations to create product awareness in order to build a large user base.  In addition to the subscription revenue generated, the number of users and the growth rate of the user base, along with the user time spent on the system, are the key elements in determining the value of the advertising space on our system's web pages.  Accordingly, we plan to pursue an aggressive marketing strategy to continuously promote awareness of The Children's Internet ®.

Technology

Over the past six years, Two Dog Net, Inc. has developed a number of proprietary technologies that ensure that The Children’s Internet® will be safe, secure and reliable.

Safe Zone Technology ® -Security Software

The Children’s Internet® uses Safe Zone Technology®, which we believe is one of the most secure, yet flexible, Internet security systems in the world .  This technology, proprietary to Two Dog Net, Inc., offers a number of distinct benefits:

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Provides unmatched online security by controlling all online access to only The Children’s Internet® environment (until unlocked by an adult with a password).

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Allows access only to pre-approved Internet sites, protecting the child from the hazards of the Internet.

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Provides parents with the ability to customize the system for their children.

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Allows secure e-mail, private chat and a proprietary, child-friendly search engine to function within the security of the system..

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Denies children access to the home PC operating system so those children cannot disable security. Even with its rich set of features and unbreakable safety, it remains simple for an authorized adult with a password to unlock the security in seconds to access their own Internet application and operating system.

Two Dog Net, Inc. built the foundation for Safe Zone Technology® utilizing LDAP (Lightweight Directory Access Protocol).  LDAP is a standard protocol for directory servers and services that makes it easy to customize, modify and update data, communicate between servers across all platforms, and print web interfaces with security.

Two Dog Net, Inc. has successfully applied the Safe Zone Technology® to the Children’s Internet® with unparalleled results. As the default security for The Children’s InternetÒ, Safe Zone Technology® loads below the Windows® operating system to protect the home PC with our secure Web browser, 128-bit cryptography and security system. Until the application is “unlocked” by an adult with an authorized password, the user cannot access the Internet through any other browser (i.e.: Internet Explorer or AOL), children can only access the Internet through The Children’s Internet®.  Because The Children’s Internet® controls the desktop, it also restricts access to the control panel (except by password), which is where most other security products are easily disabled.  The computer is then secured specifically to the millions of pre-approved Web sites and pages.   

Unlike blocking and filtering software, which can limit and even block appropriate and useful information, The Children’s Internet® aggregates content from the Internet and allows live access to Internet sites and pages that meet the top standards for safety, education and entertainment.  Because of the Safe Zone Technology®, for instance, students can find relevant, contemporary information on breast or testicular cancer, or Super Bowl XXX without running into broken links, blocked text or any kind of censorship. In addition, our parental customization feature gives control and choice to the parents by allowing them to add or delete sites to their own PC.  At the same time, they are shielded from encountering inappropriate or harmful content.

The patent pending technology allows unencumbered access to pre-determined Web sites as specified by a defined policy and user customized profiles while, in real-time, prohibiting access to offensive material that does not conform to criteria of The Children’s Internet®.  Safe Zone Technology® conforms to existing rating systems and guidelines as established by national organizations such as the National PTA, RSACI or Recreational Software Advisory Council on the Internet and the American Library Association.  The technology also independently evaluates the large number of sites not as yet rated by these organizations for appropriate content.

Unlike most security programs, Safe Zone Technology®does not use static filtering or blocking techniques because those approaches are easily broached.  Instead, we continually monitor and evaluate Internet sites to add to or delete from our pre-determined site list.  

Safe Zone Technology® is the middleware, which protects and optimizes the home PC and networked environments.  It is built at the control level of network communications and it’s the interface between the operating environment of the PC and the servers that control this access at The Children’s Internet®.  Safe Zone Technology® was designed to improve efficiency, security, and the speed of existing communication by locking this control at the radius interface to the network and behind the Window’s environment to eliminate security holes and redundancies.  Safe Zone Technology® consists of two product groups:  

♦

Client/Server Internet Security modules: (1) Local Monitor, (2) Local Browser,  (3) Twin Ethernet interface, (4) LDAP services, (5) Search Definition Interface, (6) E-mail and Chat Secured List and Proxy Interface.

♦

Network Traffic Pattern Security Monitors: (1) Firewall Monitor, (2) Security Pattern Monitor, (3) Access Pattern Monitor and (4) Web Page Protection.

Safe Zone literally “locks down” a computer so that it will access only pre-approved material while allowing its user complete flexibility and control to customize the content according to their desires. Parents can easily exit The Children’s Internet® to enter the Internet at large through the use of a password.  However, the Safe Zone Technology®functions as the default, so each time someone starts up the computer, it automatically guides users to the Internet through The Children’s Internet® and the computer is in safe mode.

Whenever a user logs onto the system, the server will track the movements of the user.  We intend to use the gathered information, coupled with the data that is gathered on users’ activity to develop advertiser-focused demographics and audiences. However, in compliance with COPPA regulations and our own privacy policy, we will never reveal any personal data concerning The Children’s Internet® users to the public.

The Safe Zone Technology® is made up of three components: Safe Sock™, SockWatch™, and SockSurf™:

SafeSock™ – This interface is used to connect the customer to The Children’s InternetÒ.  It is the core piece of security between the three major components of our product: 1) the customer’s PC, 2) the Internet, and 3) the host site.  When the user requests a communication connection to the Internet, this interface starts a radius connection request for this access.  The user must enter his/her password to validate their level of access.  This level of security is part of the initial login process that the radius security controls before there is a valid network connection.  This prevents any user from logging on to the network and gaining any access without proper security.  The browser plug-in module controls Web sites that can be accessed.  Access is granted via positive authorization, which is determined by querying lists of pre-approved Web sites.  If an individual site is not pre-approved, it is not accessible.  

SockWatch ™ - This module runs unobserved on a client’s computer, monitors the sites that are being browsed as well as other general Internet activity, and creates a log of visited files on the parent’s computer.  Parents and educators can view the logged information at a later time.  Logged information provides authorized persons the ability to recreate Web-browsing sessions that occurred.  The SockWatch™ plug-in allows users to maintain activity logs on their home computer.  We are also developing a system to provide parents with the option of maintaining a log at our server.

SockSurf ™  - This module is a low-level TCP/IP socket interface to programs that have been written to run on the SafeSock Internet server.  It mainly involves the user interface programs on the browser client-side and the related Internet communications protocol that will convey user-entered information to the SafeSock server.  It also involves the communications between the client and server that allows the browser to verify Web sites that are appropriate for an individual user of the SafeSock service.  

The interface between the server-resident SockSurf™ programs and the client-side browser plug-in has been written to utilize the TCP/IP socket protocol for communications. Upon accessing the Internet, the child enters The Children’s Internet® where he or she can access the extensive list of pre-approved web sites plus original content of The Children’s InternetÒ.  The child cannot bypass the security in order to surf the general Internet.

Site Aggregation

The Children’s Internet® recognizes the popularity and value of the rich content that currently exists on the Internet, and with the Safe Zone Technology® we can aggregate them into our secure environment for children.  To our knowledge, no other security product for children can offer this dynamic feature in a live environment. This allows us to:

•

Continually expand and update the product to reflect the best and most popular Web sites and pages for children.

•

Easily add or delete Web content as it evolves.

•

Convert “competition” into content partners; we become a prestigious safe destination and sustainable channel/traffic driver for content providers (i.e., Disney, Sesame Street, etc.).

•

Develop high-quality marketing partnerships with top content providers.

•

Provide value-added safe access to content and partner sites.

Entertaining, Fun and Educational Content and Features

In addition to its live aggregated Web content and security, The Children’s Internet® is the first Internet safety product to provide original content that is both personalized and age specific. We have clustered our content and graphical interfaces into four different age groups, 3 to 5 year olds, 6 to 8 year olds, 9 to 11 year olds and 12 to 14 year olds.  Each age group has fun and innovative themes from which to choose.  The personalization features allow children to design The Children’s Internet® to fit their individual personalities.

We have designed age-appropriate content for each of our four age groups and are aggregating the highest quality live web sites for children within these groups.   Each child can customize his or her Internet environment by choosing from a selection of age specific homerooms.  A large selection of homerooms has been developed to match the varied interests and likes of children from themes such as a tree house or a space age homeroom.  From the homeroom, a child can access all the proprietary features of The Children’s Internet®, including:

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Popular children’s web sites .  We are continuously aggregating the top quality web sites for children to include in The Children’s Internet®. Children can surf freely within the service and get access to the best learning resources and popular web sites designed just for them.

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E-budds™.  This is our secure e-mail where children can send and receive e-mail messages from their friends and family.  Although secure, E-budds™ is not restricted only to users of The Children’s Internet®.  Parents must add desired e-mail addresses to their secure database profile before their child can send e-mail to or receive e-mail from those addresses, but those addresses can be from any email system (hotmail, mindspring, aol, etc.).

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After school lounge .  Children can link to some of the best resource and homework help sites on the web.  Our staff of educators has done the hard work of searching out and categorizing the best sites available so that children can access them with just a click of a mouse.

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News Stand.  This feature provides children with topics of interest to choose from with links to pre-approved news sites.  Topics, which are chosen uniquely for each age group, include subjects such as cartoons, sports, fashion, book club, entertainment, music and what's hot - what's not.    

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Customizable graphical calendar .  This feature offers the children their own personal daily planner that keeps track of their school schedule, vacations, birthdays, special events and other activities.  There is also a feature that explains the meaning of the holidays of each month.

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Daily grab bag.  A host of our colorful characters deliver humorous or esteem building messages, jokes, riddles or interesting trivia each day - customized for each age group.

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Fun facts of the day.  Daily changing educational facts that are delivered by animated characters in short cartoon segments developed specifically for each age group.

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Game Portal .  A portal for children to select from a variety of Internet games appropriate for their age group that are entertaining and educational.  

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Surveys .  Children can answer survey questions, such as, “What is your favorite food? - a) pizza, b) hamburgers, c) burritos or d) spaghetti?” and receive instant feedback on how other children in their age group have responded.

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Incentive system.  We reward children for partaking in the activities we offer such as answering surveys, learning from the fun facts or surfing the Web.  Children collect our cyber coins that we call Diggers and can use them to purchase selected gifts.  The more coins they collect and save the better the gift selection.

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Storytime.  This feature provides our younger children, ages 3 to 8, access to books on-line.  Some of our book selections will read to the children while others are fun for parents or older siblings to read along with the younger child.

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Family Favorites.  By simply utilizing the Family Favorites feature, parents can easily customize their children’s access based on their family's beliefs, individual needs and interests by adding other Web sites from outside The Children’s Internet® while still maintaining total security.

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A Secure Search Engine.   The Children’s Internet® search engine is designed to provide children with a fun, safe, easy to use and educational means to access thousands of age appropriate sites on the Internet.  

Our search engine utilizes graphical interfaces, which are specifically designed for each of our four age categories.  Each child can choose from a number of search themes, designed for their age group, from which to explore the Internet.  Theme pages offer children three ways to perform an Internet search.  

The first is the Graphical Search, which uses animated graphical topics. These topics are nestled in a richly animated environment that is alive with sound and color specifically designed around the topics and age groups.  We choose topics that we believe will encourage children to investigate the good things the Internet has to offer. For example, in the three to five year old category we offer subjects like bugs, telling time, cartoons, ABC’s, and music.  For the 12 to 14 year old age group topics include space, hobbies, body systems, famous speeches and people. Both the graphical theme pages and search topics will change periodically to keep The Children’s Internet® fresh and interesting.

The second means of performing a search is through a Direct Search.  A child types in a word, such as car , and the search engine returns all sites in our secure database relating to cars.

The third method of searching is a category search called Baxter’s Smart Search.  The foundation for the category search is based on the educational standards and curriculum guidelines as set by the Mid-continent regional Educational Labs (McREL).  Baxter’s Smart Search lets a child select from a familiar broad range of subjects generally studied in school, then select from another subset of categories to help a child further define their search until the desired information is found.  The category search is an essential part of instilling time management skills by enabling children to locate sites quickly and easily on specific topics without the frustration of wading through thousands of irrelevant Internet pages.  Baxter’s Smart Search helps to build a child’s confidence and sense of being “smart” through their achievement of locating their desired information.  Our focused search capability is a direct result of our proprietary search engine architecture.

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Distinct Characters.   Appearing throughout The Children’s Internet® are our mascots, Bango and Baxter, our protector and companion dogs.  Each age level also features its own unique characters to enhance the child’s experience.  These proprietary cartoon characters provide a familiar companion to the child throughout the environment as the child explores areas of interest.  In addition, our characters are designed to “grow” with the user as he or she progresses to the next age group within The Children’s InternetÒ.

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Topic based links.   We have organized approximately one million  children’s web pages and sites into a major children portal with topic-based links to general children sites, topics of interest such as entertainment, music, sports, movies, health, fashion and educational topics including government, history, literature, etc.   We will continually add new content and features to The Children’s Internet® to ensure that our service is fresh and inviting for our users and to constantly stay ahead of potential competitors.

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Multi-cultural information.   We intend for The Children’s Internet® to be a multi-cultural place where children can learn other languages and experience different cultures all within a safe, age specific, Internet community.

A Quick, Rich Multimedia Environment

We make heavy use of animation and sound throughout The Children’s Internet® to make the environment entertaining for children and to maintain their interest.  Our focus groups have confirmed our belief that children are generally visually oriented and that sound and movement are major factors in keeping children interested in the content and search results.  We also learned that fast response times are important in maintaining a child’s interest.  Animation and sound are not extensively used over the Internet because sending large multimedia files can significantly slow down response times.  

To obtain faster response times, we will periodically provide new content to our subscribers via CD-ROM.  This includes the background screens for the homerooms and the search engine screens, all of which contain vivid content, animation and sound.  These files are downloaded from the CD to the hard drive of the user’s personal computer and upload from the hard drive almost instantly.  The user’s personal computer interacts over the Internet with our host server.  The server is able to deliver to the user content that is customized for each child and changes daily.  This combined method provides users with a rich, interactive experience with fast response times.

Site Selection  

The Children’s Internet® has approximately one million web pages in our secure database, and we anticipate that number will continue to grow.  We believe that a search engine for younger children should not be burdened with millions of irrelevant sites that make searching very time consuming and frustrating for children.  We believe that safety, quality, age appropriateness and ease of access are the most important features of a child’s search engine.

We have developed a strict selection criteria and process that enables us to choose only sites that have good quality content, are free of objectionable material and are appropriate for one or more of our age groups.  These sites are reviewed and chosen by our staff of educators.  

Search Engine Architecture

Our team of educational consultants designed the architecture of our search engine to generally correspond to the school curriculum for children of each of our four age groups. Utilizing a search engine structure that conforms to a familiar curriculum provides children with a comfortable setting that enables them to locate topics fast and easily.

The search engine is structured differently for each of the four age groups.  As a result, the categories appearing on the search area for younger children will be different from those for the older age groups to reflect their different educational levels and interests.

Hardware and Infrastructure

The key criteria for our system hardware are: 1) easy expandability; i.e., the ability to make upgrades without having to take the system offline for any period of time, 2) a high degree of security to guard against unauthorized entry and 3) the ability of the hardware to accommodate the unique requirements of the Safe Zone Technology®, i.e., the need to restrict the interface between the user and the Internet to pre-approved websites and content.

The Children’s Internet® licenses its technology from Two Dog Net, Inc. the developer of the technology.  The license covers the use of the technology and the use of hardware and software currently owned by Two Dog Net, Inc. on which The Children’s Internet® operates. Future upgrades to the equipment for expansion and modernization will be our responsibility.

Marketing and Sales

We will have two sources of revenue:

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selling monthly subscriptions to the Children’s Internet® service; and

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selling wholesale dial-up service accounts to ISPs.

To reach the 55 million US  households with children, we will invest in television supported by radio and print advertising as well as public relations activities to generate a high level of product awareness.

Our management believes that adding multiple forms of media to an advertising campaign raises total response. A combination of different media increases results because different people respond to different stimuli and reinforces the advertisers' messages.

All of our marketing efforts, regardless of the medium, will integrate references to The Children’s Internet® website. Integration of the website in all marketing will encourage prospective users to test the product, and eventually to order the product online.

Selling and marketing are core competencies at The Children’s Internet®.  We will focus our sales and marketing programs on two distinct yet related areas.  

First we will market our dial-up services to ISPs.

Using the ISPs current customers  as a base, we will market The Children’s Internet® to those users as well as seek new users. Our sales effort with ISPs encompasses the utilization of third-party sales organizations. Two Dog Net, Inc. has signed an agreement with InfoLink, a premier communications technology provider, to sell wholesale dial-up service and The Children's Internet service.  Second, we will focus on establishing long term, value-driven relationships with:

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Parents and Children

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The School Market: School Administrators and Teachers

Children are the single fastest growing segment of Internet users today. Despite this fact, there is an ever-increasing amount of content devoted to harmful and unwholesome subjects that can damage children and inhibit them from learning while utilizing this exciting, resourceful technology. Of the 174 million Internet users in America, 90% of that amount are children and teenagers (ages 5 to 17). ¹¹  In 2000, children 12 years and under influenced the household spending of over $600 billion. ¹²

Careful development of the right message is of critical importance to the success of our marketing efforts and to the accomplishment of our financial objectives short and long term.  Our commitment is to the ongoing testing and refinement of our message and our media mix. Initially we envision both local and regional rollouts prior to a full-scale national program.  In most cases, test programs are most successful when staged over 3 to 4 month timeframes.  Our methodology will develop a program, launch the program, evaluate, refine and continue forward based only upon having received quality customer feedback.

Our overall business and marketing strategy consists of the following key elements:

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Generate Product Awareness.  We will implement an integrated marketing communications and sales strategy that continuously promotes awareness of The Children’s Internet®.  

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Build Brand Equity.   We are dedicated to establishing and building our brand names, and our future plans include marketing and The Children’s Internet® branded products based on our proprietary animated characters.

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Establish lucrative strategic alliances.  We believe that strategic alliances, joint ventures and other similar arrangements will be important elements in The Children’s Internet®.  We intend to attract a select group of high quality marketing sponsorship alliance partners by offering them outstanding cross-promotional and visibility programs through an alliance with The Children’s Internet®.

Consumer Marketing and Sales

The 30 minute infomercial produced by Two Dog Net, Inc. and licensed for use by us will be the cornerstone of our consumer-marketing program.  This direct response-marketing vehicle provides a number of advantages including: a direct sale opportunity, brand development, cost effectiveness, and rapid market response (feedback).

Our infomercial will serve three benefits in our marketing mix: as a primary source to generate qualified leads, a sponsorship tie-in vehicle and a significant brand recognition tool. We will utilize the infomercial to support our dial-up small ISPs, (building new users for them) as well as attracting new small ISPs.  We believe a multi-tiered approach with the infomercial supported by varied marketing campaigns will be highly effective for us.

We will reach parents through an integrated marketing plan that leads with the infomercial and supported by traditional marketing venues such as radio and print.  The infomercial includes powerful testimonials from non-biased “experts” like the FBI, the FCC Chairman Bill Kennard, and IBM’s Director of Educational Services.  The infomercial validates the dangers on the Internet, while simultaneously reinforcing the educational value and need of The Children’s InternetÒ.

Sponsorship Sales, Advertising Banner Sales and E-Commerce

Sponsorship Sales : We intend to present sponsorship opportunities to large consumer driven companies that focus on the specific demographic markets of children and/or their families.  We intend to incorporate sponsor specific content into users’ primary age-specific Web pages or on other high traffic areas of The Children’s Internet®.  Our goals are to provide each sponsor with a targeted audience, and to provide value-added marketing tools to increase both sales and brand equity.  

We intend to create a premier sponsorship program for our corporate sponsors.  Premier sponsors on The Children’s InternetÒ will have unique benefits over traditional sponsorships.  Utilizing our infomercial expertise, sponsors will be able to create multi-media, TV-like commercial spots specifically formatted to “air” on the Internet, otherwise known as Intermercials©, which will appear in different areas of The Children’s Internet®.

The Children’s Internet® has opportunities for events, cross promotions, tie-ins and long term relationships. The Children’s Internet® will seek to attract market leaders in key categories.

11 – “U.S. Internet Population Continues to Grow” Cyber Atlas, Jupiter Media Corporation, February 6, 2002.

12 - McNeal, James (2001). Quoted in McDonald M, Lavelle M. Call it 'kid-fluence'. U.S. News & World Report , July 30, 2001, p.32.

Advertising Banner Sales : Our primary sales effort will be to develop sponsorship relationships.  A secondary effort will be traditional Internet banner advertising.  Because of the nature of The Children’s Internet ® , in which children are automatically directed to and locked into the service, advertisers are more likely to receive a higher traffic volume of their target audience than most other potential advertising sites.  

E-Commerce Partnerships : In the past year, the Internet has become a generally accepted medium for the sale of products and services ranging from books and CD’s to airline and event tickets.  In fact, a survey done by Jupiter Communications in June 1999 forecast that children and teens would spend $1.3 billion online in 2002.

This widespread acceptance of the Internet as a shopping venue for the public at large opens great opportunities for The Children’s Internet®.  We are searching for companies that wish to establish a presence on the Internet for the sale of their products to our target audience or our user base. The Children’s Internet® has the advantage of being able to design content sites targeted at the specific user for specific categories of product sales.  For example, we may design a music store in which children can listen to new CDs and purchase the CD online.  We may create a toy store in which children view new toys, try them out and drag icons of specific toys they want to their own holiday wish list.  Parents will be able to view this list and purchase online the exact toys their child has requested.

Public Relations

Public relations activities will combine events, special promotions, and other integrated marketing strategies with traditional media relations with the objective of remaining top-of-mind with consumers and media.  We will work with our strategic partners, where possible and appropriate, to maximize resources and obtain optimum media coverage.

We intend to:

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Promote a Children’s Internet Safety Week.

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Build relationships with school districts on a countywide basis.

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Establish educator relations program designed to update educators on the latest in Internet technology, including a comprehensive Educator’s Kit and media relations initiatives.

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Develop “Click with Your Children” major initiative and educational program for parents and teachers.

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Encourage use of The Children’s Internet® in classroom settings day in and day out.

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Partner with targeted organizations consistent with The Children’s Internet® overall business direction.

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Position wherever possible, The Children’s Internet® to be the “market leader” in safety on the Internet for children; continually pursue opportunities to place Company management as speakers in appropriate safety and educational forums.

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Provide value-added programming to integrated marketing communications programs as opportunities arise.

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Provide news bureau services and announcements of developments within the company (partners, content, features, etc.).

Online Promotion

With the use of permission marketing, we will allow our best prospects and customers to tell us what kind of information they want and will allow from us and we will provide it. Building this type of relationship is fundamental in running successful online and traditional direct selling programs.  We are after long term relationships with our customer base. It is our hope that children who become users at age four or five stay with us for another five to seven years -- not unlike the loyalty enjoyed by Sesame Street in the 1960s-1990s.

Along with permission marketing, other on-line promotion will include newly developed Intermercials©.  We will create commercials specifically designed for Internet viewing and run them throughout the Internet where there is high visibility of our target audience.

Free CD Distribution

Following the successful software model of free distribution, The Children’s Internet® may distribute CD’s to appropriate and selected non-profit organizations and clubs.   This will allow large numbers of prospects the opportunity to become familiar with our product and services.

School Administrators and Teachers

To accomplish our objectives, we intend to employ the following marketing communications programs and elements:

Teacher Surveys – These surveys will be used to determine technology needs and assess the teachers’ understanding of using the Internet as a primary teaching tool.  This will also deepen our relationships and visibility opportunities with teachers.

Educator’s Package - This package will contain a comprehensive assembly of key printed informational materials to explain the full array of The Children’s Internet® services and products—generic brochure, case studies/testimonials, site screen shots, key facts and fundraising oriented promotional materials.

Educational Conferences - Typically these events attract 3,000 to 6,000 attendees and represent an outstanding direct marketing opportunity to build prospects for our sales and marketing database. Our efforts would include product demonstrations, handouts, and offers to try The Children’s Internet®.

Direct Presentations - This method will involve direct selling to school administrators, technologists, teachers, etc. We will attempt to be represented at key conferences of the PTA nationally and regionally.

Active Participation in selected Advocacy Groups - This action will be designed to enable The Children’s Internet®’s high visibility among groups concerned and focused on Internet safety for children and the expansion of more useful content for schools. This would involve The PTA, National School Board Association and The National Association of Elementary School Principals.

Educator Partnerships - This action involves designing long-term relationships with respected educational authorities that are highly visible throughout the country.

Education Market Media Relations - A series of targeted media relations activities has been developed to engage school personnel, parents and children—all around Internet Safety and the uniqueness of The Children’s Internet®. Media relations will be the foundation used to generate awareness, trial and involvement with our products and services.

The school market is an important vehicle for obtaining product trial by children and awareness of the product by parents.  We intend to implement an aggressive marketing program aimed at school districts and a school fund raising program aimed at local schools, parents’ groups and PTA's.  This would provide not only increased exposure among our target market, but also product trial by the children.

A New Revenue Stream for Schools - Fundraising

The Children’s Internet® has developed a fundraising program for schools with The Children’s Internet® as the centerpiece for local community fundraising efforts. The Children’s Internet® will pay schools or related organizations (PTA or Parents Group) a percentage of the subscription revenue generated from sales of The Children’s Internet® service by the school or related organization.  Initial interest in this program at focus groups of PTA and Parent Group members has been extremely high.  Parents were drawn by the opportunity of selling a product that they perceive to have real value rather than the typical fund raising vehicle of magazines, candy or wrapping paper.  

The typical parent group has 5 to 10 members who are dedicated to making their school better for their children.  These parents have almost a missionary zeal and can be one of our most effective assets.  We will test this method initially with private schools and then expand to the public school sector later on.

Pricing Considerations

The Children’s Internet® anticipates retail pricing at $12.95 per month. Presently, there appear to be no specific competitive price barriers or market forces at work. The Children’s Internet® brand is capable of exceeding customer expectations, the more the possibility of premium pricing exists.

Research and Development

Initially, The Children’s Internet®, based on its Licensing agreement, will look to Two Dog Net, Inc. as its research and development partner and will continue rely on Two Dog Net, Inc. to keep The Children’s Internet® technology current.  To date, all of the research and development efforts have been performed by Two Dog Net, Inc..

Over the course of the past six years, Two Dog Net, Inc. has been focused on the development of Safe Zone Technology®, The Children’s Internet® , the creation of unique user interfaces and feature functionality for The Children’s Internet®.  In the future, in association with Two Dog Net, Inc., we will explore ways to leverage our current knowledge on compatible product enhancements.  For example, some of the development may focus on interactive learning systems, a parent’s portal, multiple participant interactive games for children, a companion product to The Children’s Internet® aimed at the teen market, and on-line books.

We will only begin development of new products after we have successfully launched The Children’s Internet ® and feel comfortable that the research and development effort will not dilute focus and resources from the success of The Children’s Internet ® .

License Agreement

On September 10, 2002, we entered into a License Agreement with Two Dog Net, Inc..  We have an exclusive worldwide license to market and sell The Children’s Internet® service for five years.  Our license automatically renews for an additional five years on the same terms unless either we or Two Dog Net, Inc. terminates the license written notice not less than one year before the end of the first five-year term.  

We are required to pay Two Dog Net, Inc. a monthly royalty payment of 7% of net sales of The Children's Internet® product.  We acquired the license for $2,000,000 required to be paid no later than September 10, 2004.  We paid $15,500 of this amount during the quarter ended September 30, 2002.  

On November 5, 2002, we amended the License Agreement with Two Dog Net, Inc. to issue two million shares of our Series A Convertible Preferred Stock in exchange for the long term debt owed to Two Dog Net, Inc. of $1,984,500 to reduce our long-term debt.

The Children’s Internet, Inc., our parent company, Shadrack Films, Inc., and Two Dog Net, Inc. are related parties in that our President, Chief Executive Officer, and Director, Sholeh Hamedani, is the sole shareholder of Shadrack Films, Inc. which owns 51% of our common stock.  Ms. Hamedani was President of Two Dog Net, Inc. until August 1, 2002.  She also owns approximately 10% of the total outstanding shares of Common Stock of Two Dog Net, Inc..  In addition, the current President, Chairman and Founder of Two Dog Net, Inc. is Nasser Hamedani, the father of our President, Chief Executive Officer, and Director, Sholeh Hamedani.

Ms. Sholeh Hamedani, is our President, Chief Executive Officer, Chief Financial Officer and has been our Chairman of the Board since August 23, 2002.  From May 2002 through the present, she has served as the President, CEO and Founder of Shadrack Films, Inc., formerly The Children’s Internet, Inc.  From July 1995 to August 2002, she was President and co-founder of Two Dog Net, Inc. a security solutions provider and software developer.  She was responsible for managing product development of new technologies, as well as creating and implementing their marketing strategies. Ms. Hamedani’s experience includes local and national advertising campaigns on television, radio, and print as well as producing, scripting and directing educational video programs and television Infomercials. Prior to Two Dog Net, Inc. Ms. Hamedani was part of the founding team at SyberVision Systems in the Production and TV Media Department from 1985 to 1989.  Ms. Hamedani attended California State University, Hayward majoring in Business Administration from 1985 to1988.

Mr. Jamshid Ghosseiri has been a director since August 23, 2002 and Secretary since January 2, 2003.  From January 9, 1989 through the present, he has served as Chief of the Microbiology Department at Mt. Diablo Medical Center. Mr. Ghosseiri has over 35 years of experience in the field of clinical microbiology and research in infectious diseases. He received a B.S. from San Jose State University in 1966 and completed his Post Graduate Studies in Infectious Diseases at Stanford University in 1969.

Mr. Tyler Wheeler has been a director since August 23, 2002.  Mr. Wheeler has spent the greater portion of his life in the presence of computer technology, specializing in system integration and design.  He co-founded Micro Tech Systems in 1989.  In 1993, he and his father founded Integrative Systems, Inc., a hardware and software computer consulting firm. From January 1996 through the present, Mr. Wheeler serves as Vice President of Technology at Two Dog Net, Inc. a security solutions provider and software developer.  Mr. Wheeler completed a BA in Finance and Business Law at California State University, Fresno in May of 1996.  

Mr. Roger Campos, Esq. has been a director since August 23, 2002.  Mr. Campos received his J.D. (law) degree in June 1972 from the United States International University (San Diego, CA) and received his BA in June of 1969 from the University of California at Santa Barbara. He has over 25 years of experience in legal and management positions with five federal U.S. agencies during the Nixon, Ford, and Reagan administrations, including the White House’s Office of Management and Budget. From February 2002 through the present, he serves as President and CEO of the Minority Business Roundtable, a national membership organization, based in Washington DC, for CEOs of the nation’s largest minority-owned companies. From January 2000 to February 2002, Mr. Campos was Executive Director of the Minority Business Roundtable.  From January 2000 to January 1997, he served as Vice President of government relations for the Hispanic Association of Colleges and Universities. Mr. Campos provides consulting services in the areas of contracting, marketing, financing and business transactions.   

Mr. Dale Boehm has been a director since August 23, 2002. From September 2001 continuing through the present, Mr. Boehm has served as Director of Sales at Qwest Telecommunications, Inc. From December 2000 to September 2001, Mr. Boehm was the Regional Vice President of Central Region Sales at OneSecure Inc., a managed security services provider enabling clients to co-manage firewalls. From January 2000 through the present, Mr. Boehm has been an instructor of TCP/IP, Business-to-Business e-Commerce, and IP Technology programs at the University of Wisconsin-Milwaukee.  He is the Chairman on the Executive Steering Committee for the University Outreach Program.  He is also a member of the Information Systems Security Association (ISSA) ^® .  Mr. Boehm received his Certificate of Telecommunications Analysis from the University of Wisconsin-Milwaukee in 1994 and is currently enrolled at Concordia University, Mequon, Wisconsin for a Bachelor of Arts, Management & Communication degree.

Directors are elected to serve until the next annual meeting of stockholders and until their successors have been elected and have qualified. Officers are appointed to serve until the meeting of the Board of Directors following the next annual meeting of stockholders and until their successors have been elected and qualified.

Advisory Board

Mr. Nasser Hamedani.  Chairman of the Board and CEO of Two Dog Net, Inc. the developer of The Children’s InternetÒ technology.  Mr. Hamedani advises us on creative and development matters and  continues new product and technological development at Two Dog Net, Inc. to support the license agreement with The Children’s InternetÒ. Mr. Hamedani has over 40 years of experience as an entrepreneur, marketer, and businessman.  He was formerly head of SyberVision, a company he founded to develop state-of-the-art audio and video programs to help people improve the quality of their lives.  He started SyberVision in 1978 with an idea that people could learn and improve skill in sports through visual muscle memory videos and then translated that same concept into self-help audio programs.  CML Corporation (a NASDAQ Company) purchased SyberVision, which became a subsidiary of CML and Mr. Hamedani remained as Chairman and Co-Founder of SyberVision.  He holds a BA degree from California College of Arts & Crafts and has a Master’s Degree in Fine Arts / Advertising and Marketing from University of Tehran.

Mr. Larry Wheeler Chief Technology Officer of Two Dog Net, Inc. Mr. Wheeler has over thirty-one years experience in the computer sciences industry.  His background includes six years with IBM in San Jose, eight years as an IBM consultant in the software development and application installation of over 1000 clients; ten years as CIO at Zacky Farms and four years with Norcal Waste Systems in the same position.  In 1993, he created Integrative Systems, Inc. and has brought together a select team of highly trained computer and programming leaders with diverse backgrounds in manufacturing, process control, banking, distribution, accounting and import/export.  During eight years as a systems consultant for IBM, he was awarded seven Symposiums (IBM’s Honor Society) and was IBM SE of the year with the company.  He holds a BS degree from the California State University San Jose and spent two years in the IBM advanced studies education system.

Dr. Marilyn Lane Ms. Lane is the spokesperson on all educational matters from kindergarten to post graduate for The Children’s Internet®. She coordinates all educational programs and brings the necessary resources for our educational offerings.  Ms. Lane has the skills to develop curriculum, provide staff development, as well as be a presenter. She is an internationally known educator and expert on self-esteem.   She has worked in Russia and Trinidad-Tobago with the educators to change their educational systems.  Her specific educational areas of expertise are Gifted and Talented Education, Early Education, and parent Education and Involvement.  She holds the title of President of the California Center for Self-Esteem and Vice President of the National Association for Self-Esteem

Dr. Bradley Winch, Ph.D., J.D. Dr. Winch is a noted international scholar, scientist, lawyer, lecturer, educator and publisher.  Academically, he has been affiliated with Wayne State University of Karlsruhe (Germany) the University of Moscow (through the Soviet Academy of Sciences) and Pepperdine University.  His business history includes Director of New Ventures for General Mills, Inc., Director of Educational Products for Mattel, Inc., and he is a licensed attorney.   In 1971, Dr. Winch formed B.L. Winch  & Assoc. a Company that has been a leader in developing, publishing, and distributing educational curriculum and materials for K-12, and to the general public books in the areas of Positive Self-Esteem, Stress Management and Whole Brain Learning.

Mr. Howard Moore.   Mr. Moore has over 50 years experience in marketing, licensing, merchandising and packaging in the toy industry.  After starting his career in a family toy business, Mr. Moore founded Toy Barn Stores in 1957.  Mr. Moore sold Toy Barn Stores in 1966 and founded Toy Town, USA where he was President and CEO.  Mr. Moore sold Toy Town, USA to Lionel Corporation in 1978 where he remained as Senior Vice President of Purchasing until he joined Toys“R”Us in 1980.  At Toys“R”Us, Mr. Moore progressed from Senior Vice President of Purchasing to Executive Vice President, General Merchandising Manager, to Member of the Executive Committee to a Director of the Board.

Mr. Peter J. Newman.   Mr. Newman brings over 30 years of demonstrated effectiveness in brand building, campaign creation, alliance development, integrated marketing communications strategy, and senior level advertising agency management to his role as Vice President of Marketing.  Previously, he served as Dir. of Marketing Communications at Tenzing, a global roaming ISP and E-Mail provider for the world’s airline industry. As Vice President of Marketing & Partner at ifix (formerly zero.one), a web design, technology and marketing Seattle-based Company, he was responsible for marketing and business development.  Peter ran his own firm, Marketing Edge, from 1986-1998, where he served national and regional clients in marketing communications strategy and planning in telecommunications, food, financial services, education as well as several top 10 advertising agencies. His advertising agency senior management account experience includes Volkswagen, Porsche, Kawasaki, Carte Blanche and Nestle Foods. Mr. Newman is co-founder of The Ad Center, Los Angeles, where he served as curriculum developer and Marketing Instructor for over 10 years.

Mr. James R. Lambert, CPA Mr. Lambert has more than thirty years experience in a variety of executive positions.  Most recently he was simultaneously CEO of Chamlian Financial Group and CFO of Alistar Insurance Company and acting CFO for Signature Financial Group.  Prior to assuming those positions Mr. Lambert consulted with companies on strategic issues, mergers & acquisitions, turnaround issues and start-up matters. He is the former CEO of The Lambert Fund, Inc. a seed-round venture capital firm and CEO of JRL Realty Fund, the financier for semi-custom home builders.  While fulfilling those roles, he was also Executive Vice President-Acquisitions and Strategic Planning for Concord General Corporation and was Vice President-Treasurer for First Horizon Insurance Company of Minnesota.  During that tenure, he sat on the boards of various venture portfolio companies including Homestar, Inc., a manufacturer of houseware products, CPS, Inc. the publisher of the Hertz Travel Guide, and PayFax Inc. a public fax operator.  Prior to his career in industry, Mr. Lambert was a tax partner with the public accounting firm of Deloitte & Touche.  Mr. Lambert also currently teaches one-day seminars for financial executives for the Center for Professional Education.  Mr. Lambert is a Certified Public Accountant, a member of the American Institute of CPAs and the California Society of CPAs and an associate member of the Certified Fraud Examiners.  He holds a BS degree (accounting major) from the University of Oregon in 1966 and a Masters of Accounting Science degree from the University of Illinois in 1967.

Meetings of The Board of Directors and Information Regarding Committees

There currently are no committees of the Board of Directors.

The Board of Directors held three meetings in fiscal 2001.  All Directors attended at least 75% of the meetings of the Board of Directors.