UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________TO __________

COMMISSION FILE NUMBER: 33-43423

NUWAY MEDICAL, INC.
(Name of Small Business Issuer in its Charter)

           Delaware                                  65-0159115
           --------                                  ----------
(State or other jurisdiction of           (IRS Employer Identification No.)
incorporation or organization)

2603 Main Street, Suite 1150, Irvine, CA 92614
(Address of principal executive offices, Zip Code)

Issuer's telephone number, including area code: (949) 235-8062

Securities registered under Section 12(b) of the Exchange Act:
None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.00067 par value

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

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB [ ].

Issuer's revenue for its most recent fiscal year: $ -0-

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of December 31, 2003 was $0.04 and as of October 21, 2004 was $0.001.

The number of shares outstanding of the issuer's class of common equity as of December 31, 2003 was 36,386,486 and as of October 21, 2004 was 51,166,486.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]


TABLE OF CONTENTS

PART I

Item 1.  Description of Business                                               3
Item 2.  Description of Property                                              17
Item 3.  Legal Proceedings                                                    18
Item 4.  Submission of Matters to a Vote of Security Holders                  19


PART II

Item 5.  Market for Common Equity and Related Stockholders Matters            20
Item 6.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation                                                 25

Item 7.  Financial Statements                                                 40
Item 8.  Changes In and Disagreements with Accountants on Accounting and
         Financial Disclosure                                                 40

Item 8A.  Controls and Procedures                                             41


PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act                    42
Item 10. Executive Compensation                                               45
Item 11. Security Ownership of Certain Beneficial Owners and Management       49
Item 12. Certain Relationships and Related Transactions                       50
Item 13. Exhibits and Reports on Form 8-K                                     54
Item 14. Principal Accountant Fees and Services                               59

Signatures                                                                    61

Consolidated Financial Statements for the Years Ended
December 31, 2003 and 2002                                            F-1 - F-34

Exhibits Filed With This Report

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

USE OF FORWARD LOOKING STATEMENTS IN THIS REPORT

This Annual Report on Form 10-KSB (the "Annual Report") contains forward-looking statements. These forward-looking statements include predictions regarding our future:

o Business plans;

o Financing plans;

o general and administrative expenses;

o liquidity and sufficiency of existing cash;

o the outcome of pending or threatened litigation; and

o the effect of recent accounting pronouncements on our financial condition and results of operations.

You can identify these and other forward-looking statements by the use of words such as "may," "will," "expects," "anticipates," "believes," "estimates," "continues," or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.

Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under the heading "Risk Factors." All forward-looking statements included in this document are based on information available to us on the date hereof. We assume no obligation to update any forward-looking statements.

The information contained in this Annual Report is as of December 31, 2003, unless expressly stated otherwise.

OVERVIEW

NuWay Medical, Inc., a Delaware corporation (the "Company") had no continuing business operations as of December 31, 2003. At this time, the Company is operating as a public shell and management is seeking merger and acquisition candidates with ongoing operations.

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Over the course of several years, the Company has attempted to enter various businesses through the acquisitions of entities operating ongoing businesses or technology that needed to be developed and marketed. However, as a result of various factors, primarily inadequate capital and the inability to raise financing successfully, these acquisitions could not be properly exploited and integrated to produce profitable operations by the Company. Management of the Company has elected to dispose, through sales or other means, these acquisitions.

The Company also continues to deal with the effects of certain matters that arose (i) under prior management and (ii) from its business dealings with a former consultant and principal stockholder of the Company, Mark Roy Anderson.

The Company is a party to two lawsuits, one brought by Flight Options, Inc. ("Flight Options") as a result of an assignment of contract executed by the Company's former President, Todd Sanders, and the other brought by the Company's former chief financial officer, Geraldine Lyons. See "Legal Proceedings".

Mr. Anderson is a former affiliate of the Company and was involved in the Company from June 2002 until March 2003 through a series of transactions between the Company and Mr. Anderson or companies affiliated with Mr. Anderson. See "Related Parties and Certain Transactions". Mr. Anderson became involved with the Company during a period of transition of management from the Company's prior management team led by Mr. Sanders and a shift in the Company's business focus from a variety of businesses in gaming, tobacco and oil and gas, to healthcare and health-related technology.

In June 2002, Mr. Anderson purchased 1,000,000 shares of the Company's common stock for $250,000. In July 2002, Med Wireless, Inc. ("Med Wireless"), a company in which Mr. Anderson was the founder and principal stockholder, licensed certain medical-related technology to the Company for a 15-year term. In exchange for the license, the Med Wireless stockholders in the aggregate received 6,600,000 shares, or approximately 44%, of the Company's then outstanding common stock. Of that amount, Mr. Anderson and his affiliates received 2,868,928, or approximately 19%, of the Company's then outstanding common stock.

Camden Holdings, Inc. ("Camden Holdings"), another company controlled by Mr. Anderson, was active in the development of the business of Med Wireless, beginning prior to the acquisition of the Med Wireless technology by the Company.

In addition, Camden Holdings was actively involved in the Company's sale-leaseback program of ultrasound machines, which were marketed primarily to doctors, medical clinics and hospitals. Under this program, the Company attempted to arrange the purchase of ultrasound machines by investors, who would

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lease the machines to the Company. In turn, the Company would sub-lease the ultrasound machines to the end user. Camden Holdings secured purchase orders from both investors and prospective end-use lessees of the ultrasound machines. These purchase orders were conditioned upon the Company's ability to secure financing of its own lease obligations of the ultrasound machines from the investors. This was not accomplished because the Company lacked the financial resources and credit to obtain such financing. The Company continued to pursue attempts to arrange such financing through March 2003.

Also in June 2002, the Company purchased a marketing database of healthcare providers in the United States from Genesis Healthtech, Inc. ("Genesis"), a wholly-owned subsidiary of Camden Holdings, which was controlled by Mark Roy Anderson. The total purchase price of $300,000 was satisfied by the issuance of 666,667 shares of the Company's common stock. The database was purchased with the intention of marketing the Company's sale-leaseback program of ultrasound machines. When the Company was unable to make the sale-leaseback program commercially viable, the marketing database became useless to the Company.

In order to focus the Company's then-primary business opportunity in healthcare technology, the Company divested its non-core businesses in gaming, oil and gas and tobacco, during the period that Mr. Anderson exerted his influence over the Company. In October 2002, the Company sold its Latin America gaming businesses, Latin American Casinos Del Peru S.A., a Peruvian corporation, and Latin American Casinos of Colombia LTDA, a Colombian corporation, to Casino Venture Partners ("CVP"), another entity controlled by Mr. Anderson.

Also in October 2002, the Company sold its Canadian oil and gas development businesses, NuWay Resources, Ltd., to Summit Oil & Gas, Inc. ("Summit Oil"), yet another entity which was controlled by Mr. Anderson. In November 2002, World's Best Rated Cigars, Inc., the Company's wholly-owned subsidiary, which was engaged in the distribution and sale of premium brand cigars, was shut down and discontinued. See Note 3 to Notes to Consolidated Financial Statements and "Certain Parties and Related Transactions".

As a result of all of the foregoing transactions with Mr. Anderson and companies controlled by Mr. Anderson, the Company believes that Mr. Anderson was the beneficial owner of an aggregate of 5,777,479 shares, or more than 30%, of the Company's common stock outstanding as of December 31, 2002, assuming Mr. Anderson beneficially owned all the shares at the same time. The Company believes that Mr. Anderson sold some of the shares which were issued pursuant to the Company's 2002 Consultant Equity Plan (the "2002 Plan"), and as such the number and percentage of the Company's common stock held by Mr. Anderson at any one time may have been less than that indicated above. In any event, Mr. Anderson failed to file any reports with the Securities and Exchange Commission

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("SEC") on Schedules 13D or 13G, or on Forms 3 or 4, and, therefore, the Company cannot confirm any of these numbers at any given point in time.

By the end of 2002 and into the beginning of 2003, it had become apparent to the Company that Mr. Anderson had divergent business objectives to those of the Company, and the Company had concerns about additional dealings with Mr. Anderson. In March 2003, the relationship between the Company and Mr. Anderson reached a climax when the Company severed its business relationships with Mr. Anderson. At that time, the Company actively supported Dennis Calvert, the Company's current President, in his purchase of Mr. Anderson's interests in the Company. New Millennium Capital Partners, LLC, a Nevada limited liability company ("New Millennium") controlled by Mr. Calvert, purchased the Company's promissory note in the principal amount of $1,120,000 and an aggregate of 4,182,107 shares of the Company's common stock from various entities controlled by Mr. Anderson, although the total number of shares purchased is in dispute. The transaction was executed as part of a plan to remove Mr. Anderson totally from any involvement in the Company and provide a completely new focus and direction for the Company under new management led by Mr. Calvert.

Please see "Related Parties and Certain Transactions" for more information regarding these businesses and the relationship between the Company and Mark Roy Anderson.

Since March 2003, new management of the Company has struggled to deal with the following issues, often simultaneously:

o Limited capital resources in a prolonged period of difficulty in the capital markets, especially for small public companies, creating severe limitations on the Company's ability to maintain its reporting obligations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and its business operations

o Trying to exploit technologies or businesses that existed when Mr. Calvert took the helm of management

o Determining which businesses were worth pursuing and which were not

o Trying to acquire or develop new businesses

o Because of the scarcity of cash on hand, using common stock and securities convertible into common stock to bring on board employees, directors, consultants, professional service provides and advisors

o Because of the scarcity of cash on hand, using common stock and securities convertible into common stock to acquire businesses

o Dealing with inquiries from the SEC regarding certain practices and transactions in the Company's past, past including questions raised about any continued involvement of Mr. Anderson in the ongoing business of the Company

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o Dealing with the NASDAQ Qualifications Panel hearing process in May 2003

o Dealing with the delisting of the Company's common stock from the NASDAQ Small Cap Market

o Dealing with inquiries from the Federal Bureau of Investigations ("FBI") related to any past dealings with Mr. Anderson or his affiliates

o Dealing with litigation with former officers of the Company and related litigation stemming from their leadership of the Company

These issues present extraordinary challenges to management as it tries slowly to turn the situation around. The Company is presently focused primarily on maintaining the corporate entity, complying with its reporting obligations under the Securities Exchange Act and seeking new business opportunities, including without limitation, healthcare and technology businesses. The Company will need working capital resources to maintain the Company's status and satisfy its reporting obligations, and to fund other anticipated costs and expenses during the year ending December 31, 2004 and beyond. The Company's ability to continue as a going concern is dependent on the Company's ability to raise capital to, at a minimum, meet its corporate maintenance requirements and reporting obligations. If the Company is able to acquire an ongoing business and/or technology that must be exploited, it would need additional capital until and unless that prospective operation is able to generate positive working capital sufficient to fund the Company's cash flow requirements form operations.

The Company was initially organized as Repossession Auction, Inc. under the laws of the State of Florida in 1989. In 1991, the Company merged into a Delaware corporation bearing the same name. In 1994, the Company's name was changed to Latin American Casinos, Inc. to reflect its focus on the gaming and casino business in South and Central America, and in 2001 the Company changed its name to NuWay Energy, Inc. to reflect its new emphasis on the oil and gas development industry. During October 2002, the Company's name was changed to NuWay Medical, Inc. coincident with the divestiture of its non-medical assets and the retention of new management.

IMPAIRED ASSETS AND DISCONTINUED BUSINESSES.

Med Wireless and PRLS Technologies

Management of the Company deemed it necessary to discontinue the Company's attempt to develop and market the Med Wireless and Player Record Library System ("PRLS") technologies, because the Company was unable to raise additional funds to further develop and market those technologies. The Med Wireless technology consists of software that is compliant with the Health Insurance Portability and

7

Accountability Act ("HIPAA"), to electronically organize, store and retrieve medical records and medical images. Although the formal decision to discontinue the operations was made subsequent to December 31, 2003, the Company's financial statements for the year ended December 31, 2003 reflect a discontinued operations segment related to the abandonment of the exploitation of the Med Wireless and PRLS technologies after a charge to impairment in an amount equal to the remaining net book value of the acquired technology. See Note 3 to Notes to Consolidated Financial Statements.

Based on the rapid increase in the number of well-capitalized companies offering competing technologies, as well as the fact that the Company has been unable to continue funding any technology enhancements or development related to the Med Wireless technology, management came to believe that the Med Wireless technology had lost the ability to be a viable competing technology in its sector and that it was not in the Company's best interest to continue to pursue the Med Wireless technology. Moreover, management is doubtful if the Med Wireless technology will be considered of any significant value to a prospective buyer or licensee of the technology. The Company is attempting to sell this technology, but expects to realize only nominal net proceeds, if any, for the technology.

In addition, the Company has abandoned its efforts to market a variety of products and services to the sports industry with an emphasis on health and technology related products. In 2003, the Company focused its primary efforts on developing and marketing PRLS, a technology product that is derived, in part, from the Med Wireless technology. In December 2002, the Company had established NuWay Sports, LLC ("NuWay Sports"), to develop and market the PRLS technology. NuWay Sports is owned 51% by the Company and 49% by former NFL football player Kenyon Rasheed.

PRLS is a highly specialized electronic medical record and workflow process software application, designed to address the information technology needs of the sports industry relating to player health, and create a secure database for athlete/patient medical data that could be acquired, displayed, analyzed, interpreted and archived in a completely digital format that is HIPAA-compliant. With PRLS, player medical data and images (x-rays, CT scans, MRIs, sonograms, etc.) can be electronically acquired and archived in a digital format with enough resolution to allow for medical diagnostics. The database of scanned images and associated data is encoded, encrypted and password protected. The records are accessible over a private network or the Internet, and can be displayed, analyzed and interpreted by team doctors and other authorized officials. The system provides a complete audit trail of keystrokes and a detailed workflow process for all users.

The Company has entered into discussions for the sale of NuWay Sports to a party unrelated to the Company or, to its knowledge, to Mark Roy Anderson. If these negotiations result in a consummated transaction, it is not likely that the Company would receive any up-front cash payments. It should also be noted that because Augustine II, LLC (the "Augustine Fund"), a creditor of the Company, has a lien on the Company's 51% membership interest in NuWay Sports, they would have to approve any such sale. See "Management's Discussion and

8

Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources". To the Company's knowledge, the Augustine Fund is not affiliated with Mr. Anderson or any of his affiliated companies.

During 2003, the Company terminated strategic alliances it had with Think Tank Systems and Radlink, Inc. Think Tank is a reseller of IBM equipment and provided computer equipment used in connection with the PRLS technology. Radlink is a specialized technology provider that converts medical images from a film based medium to a digital format, and whose services were used in connection with the PRLS technology.

Ultrasound Machine Sale-Leaseback Program

Under the Company's ultrasound machine sale-leaseback program, the Company attempted to arrange the purchase of ultrasound machines by investors, who would lease the machines to the Company. In turn, the Company would sub-lease the ultrasound machines to the end user. Camden Holdings secured purchase orders from both investors and prospective end-use lessees of the ultrasound machines. These purchase orders were conditioned upon the Company's ability to secure financing of its own lease obligations of the ultrasound machines from the investors. This was not accomplished because the Company lacked the financial resources and credit to obtain such financing.

The Company continued to pursue attempts to arrange such financing through March 2003. Thereafter, the Company focused primarily on the Med Wireless and PRLS technologies and, after occasional attempts to pursue the sale-leaseback program through mid-2003, this program was no longer pursued.

The termination of the sale-leaseback program also rendered useless the marketing database, which the Company had purchased from Genesis, a wholly-owned subsidiary of Camden Holdings. The database had been purchased with the intention of marketing the Company's sale-leaseback program of ultrasound machines.

Please see "Related Parties and Certain Transactions" for more information regarding these businesses and the relationship between the Company and Mark Roy Anderson.

ABANDONED ACQUISITION

On January 31, 2004, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Premium Medical Group, Inc., a Florida corporation ("PMG") and PMG's sole stockholders, Eduardo A. Ruiz and Luis A. Ruiz (the "PMG Stockholders"). Prior to this transaction, there was no business or other relationship between the Company and its affiliates and PMG or

9

the PMG Stockholders and, to the Company's knowledge, there was no business or other relationship between PMG or the PMG Stockholders and Mark Roy Anderson.

Pursuant to the Stock Purchase Agreement, the Company agreed to acquire 100% of the shares of PMG from the PMG Stockholders in exchange for 30,000,000 shares of the Company's common stock, subject to certain adjustments. The exact number of Company Shares to be issued to the PMG Stockholders was subject to adjustment in the event certain revenue was or was not generated by PMG during one year following the closing of the transaction. PMG had been organized in June 2003 to provide medical products to hospitals and medical clinics in South America, primarily Venezuela. Luis A. Ruiz became a director of the Company in connection with the transaction.

The parties had a difference in expectations regarding who would be ultimately responsible for paying for the audit of PMG that was required in order for the Company to complete its disclosure obligations under the Securities Exchange Act. Additionally, the Company did not have a sufficient number of authorized and unissued shares of its common stock to both satisfy its obligations to the PMG Stockholders and to issue shares of common stock in a meaningful financing transaction, given the low price per share at which the Company's common stock trades. The Company lacked the financial resources to schedule a stockholders' meeting, prepare a proxy statement and solicit proxies for the purpose of amending its Certificate of Incorporation to increase its authorized capital stock.

As a result of these and other factors, the Company and PMG never consolidated their operations, the Company never exercised control over PMG or its operations and the parties never exchanged stock certificates evidencing their ownership in each other.

Therefore, the parties entered into discussions and concluded amicably that it was in the mutual best interest of the respective companies and their respective stockholders, to rescind the transactions provided for in the Stock Purchase Agreement and return all parties to their respective positions prior to the transactions contemplated in the Stock Purchase Agreement.

The parties entered into a Rescission Agreement on October 14, 2004 that provides, in relevant part, that (i) all transactions contemplated by the Stock Purchase Agreement shall be rescinded as if the Stock Purchase Agreement had never been executed and delivered; (ii) the parties forever waive all rights to receive stock in PMG and the Company, as the case may be; (iii) Luis A. Ruiz shall resign as a director of the Company; and (iv) the Company and PMG shall file appropriate documents with the Secretary of State of the State of Florida with respect to the rescission of the exchange of shares provided for in the Stock Purchase Agreement.

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EMPLOYEES

At December 31, 2003, the Company employed two full-time employees, reflecting the reduced operations of the Company at that time.

RISK FACTORS

The Company faces a number of significant risks associated with its current plan of operations. These include the following:

WE HAVE A LIMITED OPERATING HISTORY AND A HISTORY OF LOSSES. The Company has no current operations and, as such, may not be able to overcome unanticipated difficulties that may be encountered related to the implementation of its business plan. The Company has a limited operating history, limited revenue from operations and a history of losses. In addition, because the Company currently has no operations, the Company faces all of the risks inherent with a start-up business, including the possibility that the Company cannot acquire or develop a business that is viable. There is no assurance that, if the Company does find or develop a business, to acquire, whether such business will ever be profitable. The Company may also face unforeseen problems, difficulties, expenses or delays in implementing its business plan.

WE NEED ADDITIONAL FUNDS. If it necessary for the Company to seek to secure additional funds for any new business, general and administrative expenses and period reporting requirements, there can be no assurance that such funds will be available, or will be available on favorable terms. Failure to secure needed funds will directly impact the Company's ability to maintain its publicly-traded status and, potentially, the corporate entity itself. While management has dedicated itself to the efforts to secure needed funds, the outcome and ultimate success of those efforts is uncertain.

THE COST OF MAINTAINING OUR REPORTING OBLIGATIONS IS HIGH. The Company is obligated to maintain its periodic public filings and public reporting requirements, on a timely basis, to remain a public company and maintain its registration as a listed stock. In order to meet these obligations, the Company will need to continue to raise capital. If adequate funds are not available to the Company, it will be unable to comply with those requirements and could cease to be qualified to have its stock traded in the public market. The Company has a history of delinquencies in its filing obligations with the Securities and Exchange Commission.

OUR STOCKHOLDERS FACE POTENTIAL DILUTION IN ANY NEW FINANCING. Any additional equity that the Company raises would dilute the interest of the current stockholders and any persons who may become stockholders before such financing. Given the low price of the Company's common stock, such dilution in any financing of a meaningful amount, could be substantial.

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OUR STOCKHOLDERS FACE POTENTIAL ADVERSE EFFECT FROM THE TERMS OF ANY NEWLY ISSUED PREFERRED STOCK. In order to raise capital to meet expenses or to acquire a business, the Board of Directors of the Company may issue additional stock, including preferred stock. Any preferred stock which the Company may issue may have voting rights, liquidation preferences, redemption rights and other rights, preferences and privileges. The rights of the holder's of the Company's Common Stock will be subject to, and in many respect subordinate to, the rights of the holders of any such preferred stock. Furthermore, such Preferred Stock may have other rights, including economic rights, senior to the Company's Common Stock that could have a material adverse effect on the value of the Company's Common Stock. Preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, can also have the effect of making it more difficult for a third party to acquire a majority of outstanding voting stock of the Company, thereby delaying, deferring or preventing a change in control of the Company.

WE HAVE BEEN UNABLE TO OBTAIN A QUORUM AND SCHEDULE A VOTE OF STOCKHOLDERS TO APPROVE CERTAIN MATERIAL TRANSACTIONS. The Company will be required to amend its charter to increase the authorized number of shares to approve a transaction with New Millennium, which is controlled by our President Dennis Calvert, raise funds or acquire new businesses, which is both costly and uncertain as to its success. The Company has attempted to secure stockholder votes for certain corporate actions in the past and has been unable to secure a quorum. As a result, the Company has been unable to effect certain material transactions, and this inability to act could threaten the viability of the Company.

IF WE ACQUIRE OR DEVELOP ANY BUSINESS, WE WILL BE DEPENDENT UPON MARKET ACCEPTANCE AND COMPETITIVE FACTORS. The success of any business the Company acquires or develops will be highly dependent upon, among other things, gaining market acceptance from customers that will use the company's products and services. More specifically, these factors include how well its products or services perform (ease of implementation, ease of use by customers, reliability, and scope of products and services), competitive forces, the level of consumer demand for products and services offered, the selling prices of its products and services, and the effectiveness of the Company's marketing activities.

OUR COMMON STOCK IS THINLY TRADED AND LARGELY ILLIQUID. In June 2003, our common stock was delisted from the NASDAQ SmallCap Market. Our stock currently trades on the Pink Sheets. The delisting has made it more difficult to buy or sell our stock and has lead to a significant decline in the frequency of trades and trading volume. The delisting will likely adversely affect the Company's ability to obtain financing in the future due to the decreased liquidity of the Company's shares. There can be no assurance when or if the Company's stock will be quoted on the OTC Bulletin Board, in light of the public interest concerns raised by NASDAQ in connection with the delisting of the Company's shares.

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OUR COMMON STOCK IS SUBJECT TO "PENNY STOCK" REGULATIONS THAT MAY AFFECT THE LIQUIDITY FOR OUR COMMON STOCK. Our common stock is subject to the rules adopted by the Securities and Exchange Commission that regulate broker-dealer practices in connection with transactions in "penny stocks." Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ Stock Market, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission, which contains the following:

o a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading

o a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violation to such duties or other requirements of Securities' laws

o a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and significance of the spread between the "bid" and "ask" price

o a toll-free telephone number for inquiries on disciplinary actions; definitions of significant terms in the disclosure document or in the conduct of trading in penny stocks, and

o such other information and is in such form (including language, type, size and format), as the Commission shall require by rule or regulation.

Prior to effecting any transaction in penny stock, the broker-dealer also must provide the customer the following:

o the bid and offer quotations for the penny stock

o the compensation of the broker-dealer and its salesperson in the transaction

o the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock

o the depth and liquidity of the market for such stock, and

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o monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for a stock such as our common stock if it is subject to the penny stock rules.

THE COMPANY, SOME OF ITS DIRECTORS AND ITS OFFICERS FACE RISKS IN CONNECTION WITH THE CRIMINAL INVESTIGATION OF A FORMER CONSULTANT AND PRINCIPAL STOCKHOLDER OF THE COMPANY. In or about May 2003, the Company learned through verbal discussions with representatives of NASDAQ, in preparation for the Company's pending NASDAQ qualifications hearing, that Mark Roy Anderson had a criminal background. In or about May and June 2003, the Company was informed in writing by the United States Attorney's office in Los Angeles, that Mr. Anderson
(i) was the target of a criminal investigation (the "Investigation") pertaining to the sale of securities by Med Wireless (from which the Company licensed certain assets in 2002), and (ii) had been convicted of multiple felonies unrelated to Med Wireless in the 1990s. Mr. Anderson was the founder and principal stockholder of Med Wireless, and first introduced the concept of licensing the Med Wireless software application and contracts to the Company in May 2002.

Dennis Calvert had been approached initially by Mr. Anderson some time in 1996 to consider entering into a business consulting relationship with Anderson-controlled entities. Over the period from 1996 to 2001, Mr. Calvert worked as a consultant periodically with Anderson-related entities for the purpose of evaluating potential new businesses and potential investment opportunities being considered by Mr. Anderson and these entities. In June 2002, Mr. Calvert agreed to become president of Med Wireless, primarily for the purpose of completing the Med Wireless transaction with the Company. As consideration for his agreeing to become President of Med Wireless, Mr. Calvert received 1,327,700 shares of Med Wireless stock from Mr. Anderson's holdings. These shares were subsequently converted into 600,000 shares of the Company's common stock pursuant to the terms of the transaction between Med Wireless and the Company.

On June 28, 2002, Mr. Calvert was appointed president of the Company. At the same time, Joseph Provenzano, who at that time was an employee of Camden Holdings, another affiliate of Mr. Anderson, joined the Company's board of directors. In addition to the Med Wireless transaction, and as disclosed

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elsewhere in this Annual Report, entities that Mr. Anderson controls, including Camden Holdings, Genesis, Summit Oil and CVP, invested $250,000 in the Company, sold the Company additional assets and purchased the Company's previous operating businesses. See "Related Parties and Certain Transactions".

Although Mr. Anderson never served as an officer or director of the Company, he served as a consultant to the Company and received consulting fees in the form of an aggregate 1,241,884 shares of the Company's common stock. Since December 2002 Mr. Anderson has not been a consultant to the Company and since March 2003 has not been involved in any way in the Company's operations. In the purchase agreement between Mr. Anderson, his affiliates and New Millennium in March 2003 (the "New Millennium Agreement"), Mr. Anderson represented that he was selling 100% of his stock to New Millennium and would no longer own any of the Company's stock. Mr. Calvert is the Manager and, together with his wife, the sole member of New Millennium, and this transaction was engaged in to eliminate Mr. Anderson as a stockholder of the Company and to remove him from any involvement in the operations of the Company.

Subsequent to the closing of that transaction, management learned through the Company's transfer agent that Camden Holdings still owns 340,894 shares of the Company's common stock. The Company and New Millennium believe that the existence of these 340,894 shares of the Company's common stock owned by Camden Holdings Inc. is a material breach of the New Millennium Agreement, and the Company and New Millennium are reviewing their respective legal rights with regards to this matter.

Technically, under the terms of the New Millennium Agreement, it is possible that Camden Holdings or Mr. Anderson has the right to reacquire the shares of the Company's common stock that were sold to New Millennium, if New Millennium defaults on the promissory note issued by New Millennium to Camden Holdings to purchase the shares (the "New Millennium Note"). See "Related Parties and Certain Transactions". The New Millennium Note is purportedly secured by the purchased shares of the Company's common stock; however, New Millennium and Mr. Calvert believe that Camden Holdings and Mr. Anderson have not perfected their security interest in those shares. New Millennium has defaulted on the New Millennium Note. However, New Millennium believes that Camden Holdings failed to deliver all the shares of the Company held by Camden Holdings, and thus breached the terms of their purchase agreement, making the New Millennium Note void by its terms. In addition, the Augustine Fund is the pledgee of 2,500,000 of these shares and holds those shares as pledgee.

On or about May 17, 2003, the Company was served by a subpoena issued by the grand jury impaneled to investigate Mr. Anderson, requesting documents relating to Mr. Anderson and his affiliates, including Med Wireless, Camden

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Holdings, Summit Oil and Gas, and Summit Health Care. Additionally, the subpoena requested information relating to the identity of the Company's officers, directors, shareholders and consultants (legal, accounting and otherwise), and that the Company provide copies of its filings and correspondence with the SEC, the National Association of Securities Dealers and the NASDAQ Stock Market. The Company cooperated fully with that request by providing the requested information and intends to continue to cooperate fully with the investigation.

In mid-2003, the Company was also informed by the Assistant United States Attorney handling the Investigation that, although Dennis Calvert and Joseph Provenzano are not currently considered "targets" of the Investigation (and, to their knowledge, are as of the date of the filing of this Annual Report still not "targets" of the Investigation whereas Mr. Anderson is still a "target" of the Investigation), until their respective roles, if any, in the specific events being investigated are determined, they will be considered to be "subjects" of the Investigation, meaning that their conduct is believed by the U.S. Attorney's office to be "within the scope" of the grand jury's investigation.

The Company has learned that private placement memoranda distributed to Med Wireless investors stated that Dennis Calvert was the president of Med Wireless as early as 2001, and additionally believes that Mr. Anderson apparently made a number of similar false representations throughout 2001 and 2002. Mr. Calvert did not approve this disclosure contained in those private placement memoranda nor in any other form, and has informed the Company that he was not engaged as the president of Med Wireless until June 2002 and not any earlier, and that any statements to the contrary are untrue.

Mr. Provenzano joined Camden Holdings in 2001 to assist in its mergers and acquisitions department, and he worked at Camden Holdings until March 2003. Both Mr. Calvert and Mr. Provenzano have informed both the Company and, through their own legal counsel, the Assistant U.S. Attorney, that they intend to cooperate fully with law enforcement officials in the Investigation.

Although neither the Company nor any of its officers or directors is currently the target of any criminal investigation, there can be no assurance that such an investigation will not be undertaken. Additionally, although neither the Company nor its officers or directors have been contacted by either the U.S. Attorney's Office, or the FBI regarding the Investigation since June 2003, neither the Company nor its officers and directors can be certain that such requests will not be made in the future. Furthermore, the ongoing Investigation has in the past occupied, and may in the future occupy, a significant amount of time of the Company and Messrs. Calvert and Provenzano, creating a distraction from the Company's business. The mere existence of the Investigation, not to mention the outcome thereof, depending upon such outcome, could have a material adverse effect on the Company.

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THE COMPANY MAY HAVE VIOLATED CERTAIN SECURITIES LAWS AND IS DELINQUENT IN ITS SEC FILINGS. While the Company and its management seek to operate fully within the scope of the law and fulfill any and all regulatory obligations, the Company has been subject to informal inquiries by the civil enforcement division of the SEC for possible securities violations in the past, including the acts of Mark Roy Anderson.

On June 3, 2003 and September 8, 2003, the Company was served with requests for documentation by the civil enforcement division of the SEC in connection with a non-public inquiry into possible violations by the Company of the federal securities laws. Although the request provides that the inquiry should not be construed as an indication by the SEC that the law has been violated, there can be no assurance that the Company will not, as a result of the inquiry, become the target of a formal SEC investigation. The Company cannot predict the amount of time and resources that management will need to devote to the inquiry, or the results thereof. In the event the inquiry results in a formal investigation, such expenditures of time and resources will likely be significant. In addition, there can be no assurance that stockholders or other regulatory authorities will not initiate proceedings against the Company and/or its officers and directors as a result of past securities law violations, if any, which could have a material adverse effect on the Company. The Company intends to cooperate fully with the SEC in all aspects of its inquiry.

On or about August 19, 2004, the Company received a "Wells Notice" from the SEC that the Company is delinquent in its filing of periodic reports with the SEC and the staff of the SEC may recommend enforcement proceedings be commenced against the Company. The Company is working diligently to file all delinquent reports as quickly as possible and as funds become available to compensate the Company's professional advisors. However, the Company will likely continue to face close scrutiny of its current and future activities. The outcome of this matter, including the possibility that the SEC might commence proceedings against the Company seeking the deregistration of the Company's stock, could have a material adverse effect on the Company in the future.

ITEM 2. DESCRIPTION OF PROPERTY

As of December 31, 2003, the Company maintained its principal place of business at 23461 South Pointe Drive, Suite 200, Laguna Hills, California 92653. The lease for the office was on a month-to-month basis, and was cancelable by either party with sixty days' written notice. Monthly rent was $7,850, payable in cash or shares of the Company's common stock, valued at the then-current market price. In 2003, the Company recorded $96,560 of rental expense in connection with this lease.

On April 1, 2004, the Company terminated this lease. The Company's offices are currently located at 2603 Main Street, Suite 1150, Irvine,

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California 92615. The Company currently occupies space from a consultant at no cost to the Company.

ITEM 3. LEGAL PROCEEDINGS

In June 2002, Geraldine Lyons, the Company's former Chief Financial Officer, sued the Company and the Company's former president Todd Sanders, for breach of her employment contract. The lawsuit was brought in the Circuit Court of the 11th Judicial Circuit in Miami-Dade County in Florida. Ms. Lyons seeks approximately $25,000 due under the contract and the issuance of 100,000 shares of common stock, with a guarantee that the stock could be sold by Ms. Lyons for $300,000. Ms. Lyons alleges that additional funds are due under her employment contract; that the contract requires the Company guarantee that she can sell for $300,000 the 100,000 shares of stock the Company is required to issue her; and, that Mr. Sanders promised to purchase from her 100,000 shares of Company common stock held by her at the price of $4.00 per share.

The Company has counter-sued Ms. Lyons for breach of fiduciary duty, fraud, violation of Section 12(a)(2) of the Securities Act of 1933, violation of
Section 517.301 of the Florida Statutes, negligent misrepresentation, conversion and unjust enrichment resulting from the required restatement of the Company's financial statements for the years ended December 31, 2000 and December 31, 1999. The restatements corrected the previous omission of certain material expenses related primarily to compensation expense arising from warrants issued and repriced stock options, as well as other errors.

The case is ongoing at this time, although it is not being vigorously prosecuted by Ms. Lyons or the Company, in the Company's case primarily because the Company currently lacks the resources to do so. While the Company believes that it has meritorious positions in this litigation, given the inherent nature of litigation, it is not possible to predict the outcome of this litigation or the impact it would have on the Company.

In May 2004, the Company was sued by Flight Options, Inc., a jet plane leasing company, in the Superior Court of Orange County California. The lawsuit alleges that the Company owes Flight Options approximately $418,300, pursuant to a five-year lease assigned to the Company by the Company's former president Todd Sanders, from his corporation, Devenshire Management Corporation. Management of the Company believes that the assignment of the lease was not properly authorized or approved by the Company, and that by Mr. Sander's failure to identify the lease in a December 2002 settlement agreement with the Company, he breached the terms of that settlement agreement and, pursuant to the settlement agreement, must indemnify the Company for any losses owed to Flight Options. The Company has cross-complained against Mr. Sanders for indemnity, and has added the affirmative claim of breach of fiduciary duty. The case is still in its initial discovery phase, and the Court recently set the case for trial in

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April 2005. While the Company believes that it has meritorious positions in this litigation, given the inherent nature of litigation, it is not possible to predict the outcome of this litigation or the impact it would have on the Company.

The Company is party to various other claims, legal actions and complaints arising periodically in the ordinary course of business. In the opinion of management, no such matters will have a material adverse effect on the Company's financial position or results of operations.

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

On December 9, 2003, the Company attempted to conduct a stockholder meeting to approve the 2003 Plan and the conversion of the Company's Promissory Note in the principal amount of $1,120,000, which note is held by New Millennium. Dennis Calvert, the Company's President, is the Manager and, together with his wife, is the sole shareholder of New Millennium The Company was unable to obtain a quorum at the meeting. The meeting was adjourned to December 30, 2003, but again the Company was unable to obtain a quorum, and the Board adjourned the meeting indefinitely. See "Related Parties and Certain Transactions".

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Since October 31, 1998, the Company's Common Stock and Warrants have been listed on the NASDAQ Small Cap Market. Since November 22, 2002 the Company's common stock has traded under the symbol "NMED". The NASDAQ Stock Market suspended trading of the Company's securities as of March 11, 2002 pending discussion with the Company concerning the Company's restatement of its financial statements for the years ending December 31, 1999 and 2000. There is pending litigation against the Company's former Chief Financial Officer (Geraldine Lyons) regarding this restatement. See "Legal Proceedings". Trading was reinstated on April 18, 2002.

The Company's common stock was delisted from trading on the NASDAQ SmallCap Market effective June 10, 2003. The NASDAQ Listing Qualifications Panel had cited numerous concerns, including:

o filing delinquencies for certain of the Company's periodic reports filed with the SEC under the Securities Exchange Act of 1934

o violation of NASDAQ Marketplace Rules regarding the New Millennium Note conversion without a stockholder vote

o violation of NASDAQ Marketplace Rules regarding issuance of securities to directors, officers and consultants without a stockholder vote

o the failure to timely file Listing of Additional Shares ("LAS") forms with NASDAQ

o disclosure practices in the form of press releases and other public communications about the Company

o lack of independent directors

o concerns about the composition of the Company's audit committee

o failure to maintain the minimum $1 bid price

o failure to maintain the minimum $2.5 million stockholder's equity

o public interest concerns because of the former association of Mark Royal Anderson with the Company

Following a hearing before the Qualifications Panel requesting waiver or extension of the time to address and remedy these concerns, the Company received the Qualifications Panel's written determination letter on June 6, 2003. That determination letter set forth the NASDAQ Qualification Panel's determination that an exception to the NASDAQ continued listing qualifications would not be granted due to the Company's failures to timely file periodic

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reports (including the existing delinquency regarding the required filing of a Form 10-Q for the quarter ended March 31, 2003), to make accurate and timely disclosure of material events, to comply with the minimum shareholders' equity requirement, and to timely file LAS forms. As a separate and additional basis to deny the Company's request for continued listing, the Panel cited public interest concerns raised by the gravity of the past disclosure violations and its belief of the continued significant participation in the Company by Mark Roy Anderson.

The Company's common stock is currently quoted on the National Quotation Service Bureau, commonly known as the "pink sheets".

The table below represents the quarterly high and low bid prices for the Company's Common Stock and Warrants for the last two fiscal years as reported by NASDAQ through June 10, 2003 and as reported by Historical Stock Price Reports available at www.yahoo.com thereafter.

Common Stock High/Low Bid Prices:

2002              1st Quarter         $2.12             $1.25
                  2nd Quarter         $1.66             $0.23
                  3rd Quarter         $1.00             $0.15
                  4th Quarter         $0.60             $0.13

2003              1st Quarter         $0.25             $0.10
                  2nd Quarter         $0.14             $0.08
                  3rd Quarter         $0.09             $0.05
                  4th Quarter         $0.06             $0.04

The closing price for the Company's common stock on December 31, 2003 was $.04 per share and on October 21, 2004 it was $.0008 per share.

As of October 21, 2004, there were approximately 280 registered owners and of the Company's common stock.

At December 31, 2003, the Company also had the following warrants outstanding:

o stock purchase warrants to purchase an aggregate 300,000 shares of the Company's common stock, which warrants had been issued in private offerings. These warrants permit the holder to purchase shares of common stock at an exercise price of $1.75 per share through December 11, 2005.

o stock purchase warrants to purchase 100,000 shares of the Company's common stock at $0.30 per share, which were granted in 2002 to a former executive in connection with his resignation.

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o stock purchase warrants to purchase an aggregate 519,322 shares of the Company's common stock, which warrants had been issued in private offerings. These warrants allow for the holder to purchase shares of common stock at an exercise price of $0.20 per share through March 7, 2006 (120,000 shares) and April 15, 2006 (399,322 shares).

o stock purchase warrants to purchase an aggregate 6,158,381 shares of the Company's common stock, which warrants had been issued in a private offering to the Augustine Fund. These warrants initially allowed for the holder to purchase shares of common stock at an exercise price of $0.16 per share through August 10, 2008, but were re-priced in 2004 (in conjunction with an extension of the financing provided by Augustine Fund LLC) to $0.035 per share.

o stock purchase warrants to purchase an aggregate 333,333 shares of the Company's common stock, which warrants had been issued to a consultant that provided services to the Company. These warrants allow for the holder to purchase shares of common stock at an exercise price of $0.06 per share through August 29, 2008.

o unvested stock purchase warrants to purchase an aggregate 2,000,000 shares of common stock at $0.05 a share. If vested, the warrant would expire on October 29, 2004. The Warrant does not vest, and is thus not exercisable, unless and until the Holder introduces to the Company an investor or investors which invest net proceeds in the Company of at least $250,000 within 3 months of the introduction. The closing of any such investment shall be in the sole and absolute discretion of the Company. In order to vest, the investment(s) of at least $250,000 must be made by May 1, 2004. This condition was not met, and thus the warrant did not vest and has expired.

DIVIDENDS

The Company has never declared or paid a cash dividend to stockholders. The board of directors presently intends to retain any earnings which may be generated in the future to finance Company operations.

EQUITY SECURITIES SOLD WITHOUT REGISTRATION

The Company engaged in the following sales of unregistered securities during the fiscal year ended December 31, 2003:

In January 2003, the Company issued 62,500 shares of common stock to William Bossung, former Chief Operating Officer of the Company, in connection

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with the exercise of options that had previously been issued to Mr. Bossung. The options were "cashless" and the Company received no proceeds from this exercise.

In March 2003, the Company entered into two Convertible Preferred Stock and Warrant Purchase Agreements whereby the Company sold an aggregate of 338,022 shares of a newly created series of Preferred Stock, Series A Convertible Preferred Stock, par value $.00067, to private investors, for a total consideration of $169,011. Each share of Series A preferred stock is convertible into one share of the Company's common stock. In addition, for each share of Series A preferred stock purchased, the investor received a warrant to purchase one share of common stock at a price of $.20 per share. The Series A preferred stock may be converted by the holder at any time after six months from the purchase date and the warrant is exercisable for a period of three years from the purchase date.

In April 2003, the Company received an additional $110,650 from the sale of an additional 221,300 shares of Series A Preferred Stock and one share of common stock, at a price of $.20 per share, to the same investors pursuant to the same purchase agreements.

In April 2003, the Company issued 200,000 shares of common stock to Cygni Capital in exchange for services provided the Company.

The Company issued shares of common stock in partial satisfaction of payment of outstanding notes due certain note holders, John Ianetta and Michael and Donna Klein. The issuances to these note holders were as follows:

February 2003 John Ianetta was issued 32,103 shares. December 2003 John Ianetta was issued 500,000 shares. February 2003 Michael and Donna Klein were issued 63,903 shares. February 2003 Michael and Donna Klein were issued 125,000 shares.

In September 2003, the Company issued 325,000 shares to Bryan Wolfe and 250,000 shares to Devon Blaine, in exchange for professional services provided by each of them to the Company.

On October 29, 2003, the Company issued an unvested warrant to an individual to purchase 2,000,000 shares of common stock at $0.05 a share. The warrant expired on October 29, 2004. The Warrant was not exercisable unless and until the Holder introduced to the Company an investor or investors who invested net proceeds of at least $250,000 within three months of the introduction.

On November 20, 2003, the Company received proceeds of $50,000 in exchange for a promissory note in which it agreed to pay $65,000 to the investor 90 days from the date of the loan. The Company's CEO and president Dennis

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Calvert personally guaranteed the note. The Company has paid back $30,000 to the investor, and is currently in default on the note.

Subsequent to end of the fiscal year ended December 31, 2003, the Company has engaged in the following sales of unregistered securities during 2004:

The Company issued 30,000,000 shares of common stock to the Premium Medical Group Shareholders in connection with a transaction in which the Company acquired the outstanding stock of Premium Medical Group. This transaction has since been rescinded by the parties. See Note 15 to Notes to Consolidated Financial Statements.

The Company issued shares of common stock as partial satisfaction of payment of outstanding notes due certain note holders, John Ianetta and Michael and Donna Klein. The issuances to these note holders were as follows:

February 2004 John Ianetta was issued 500,000 shares.

February 2004 Michael and Donna Klein were issued 100,000 shares.

On February 23, 2004, the Company issued an unvested warrant to Sachi International, Inc. to purchase up to 3,000,000 shares of common stock at $0.04 a share. The Warrant vests based on the amount of investment proceeds brought to the Company by the Holder, with 100% vesting if the Holder brings $500,000 in investment capital. In the event less than $500,000 is invested, the warrant vests in a pro-rata amount. The closing of any such investment shall be in the sole and absolute discretion of the Company. Sachi International, Inc., has not met the conditions to vest the warrant.

In March 2004, the Company issued 200,000 shares to David Wiechert in exchange for professional services provided to the Company.

In March 2004, the Company issued 3,000,000 shares to three of its four directors in exchange for services provided to the Company.

All of the above offerings were made in reliance on Rule 506 of Regulation D and/or Section 4(2) of the Securities Exchange Act.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLAN INFORMATION

                                          Number of securities     Weighted average      Number of securities
                                            to be issued upon     exercise price of    remaining available for
                                               exercise of           outstanding           future issuance
                                          outstanding options,    options, warrants
                                           warrants and rights        and rights
     Plan category                                 (a)                   (b)                     (c)
--------------------------------------    --------------------    -----------------    -----------------------
Equity compensation plans approved by              0                      0                            0
security holders

Equity compensation plans not approved             0                      0                   14,541,222
by security holders

Total                                              0                      0                   14,541,222

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes to the consolidated financial statements included elsewhere in this report.

This discussion contains forward-looking statements that involve risks and uncertainties. Such statements, which include statements concerning future revenue sources and concentration, selling, general and administrative expenses, research and development expenses, capital resources, additional financings and additional losses, are subject to risks and uncertainties, including, but not limited to, those discussed above in Part I, Item 1 and elsewhere in this Form 10-KSB, particularly in "Risk Factors," that could cause actual results to differ materially from those projected. The forward-looking statements set forth in this Form 10-KSB are as of December 31, 2003, and we undertake no duty to update this information.

PLAN OF OPERATIONS

The Company had no continuing business operations as of December 31, 2003. Over the course of several years, the Company has attempted to enter various businesses through the acquisitions of entities operating ongoing businesses or technology that needed to be developed and marketed. However, as a result of various factors, but primarily due to its lack of adequate capital and the inability to secure financing successfully, these acquisitions could not be properly exploited and integrated to produce profitable operations by the Company. Management of the Company has elected to dispose or discontinue through sales or other means, these acquisitions, including the Company's attempt to develop and market the 15-year licensing rights acquired from Med Wireless in July 2002. The Med Wireless technology consists of software that is compliant with HIPAA, to electronically organize, store and retrieve medical records and medical images. Although the formal decision to discontinue the operations was made subsequent to December 31, 2003, the Company's financial statements for the year ended December 31, 2003 reflect a discontinued operations segment related to the abandonment of the exploitation of the Med Wireless and PRLS technologies after a charge to impairment in an amount equal to the remaining net book value of the acquired technology. See Note 3 to Notes to Consolidated Financial Statements.

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Based on the rapid increase in the number of well-capitalized companies offering competing technologies, as well as the fact that the Company has been unable to continue funding any technology enhancements or development related to the Med Wireless technology, management came to believe that the technology had lost the ability to be a viable competing technology in its sector and that it was not in the Company's best interest to continue to pursue the Med Wireless technology. Moreover, management is doubtful if the Med Wireless technology will be considered of any significant value to a prospective buyer or licensee of the technology. The Company is attempting to sell this technology, but expects to realize only nominal net proceeds, if any, for the technology.

In addition, the Company has abandoned its efforts to market a variety of products and services to the sports industry with an emphasis on health and technology related products, primarily PRLS. The Company has entered into discussions for the sale of the Company's majority-owned subsidiary, NuWay Sports, which was established to market the PRLS technology. The Company has entered into discussions for the sale of NuWay Sports to a party unrelated to the Company or, to its knowledge, to Mark Roy Anderson. If these negotiations result in a consummated transaction, the Company believes it is not likely that the Company would receive any up-front cash payments. See Note 3 to Notes to Consolidated Financial Statements.

The Company is presently focused on maintaining the corporate entity and seeking new business opportunities. The Company will need working capital resources to maintain the Company's status and to fund other anticipated costs and expenses during the year ending December 31, 2004 and beyond. The Company's ability to continue as a going concern is dependent on the Company's ability to raise capital to, at a minimum, meet its corporate maintenance requirements. If the Company is able to acquire an ongoing business and/or technology that must be exploited, it would need additional capital until and unless that prospective operation is able to generate positive working capital sufficient to fund the Company's cash flow requirements form operations.

As a result of the dramatic change in direction of the Company's scope and focus, and the discontinuation of its operating businesses in 2002 and 2003, comparisons of year-to-year results of operations are not meaningful.

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ANALYSIS OF FINANCIAL CONDITION

During 2003, the Company recorded an impairment charge related to its tangible and intangible assets. The Company earned no revenues and generated no cash from continuing operations.

Cash and Cash Equivalents

Cash and Cash Equivalents increased from $521 as of December 31, 2002 to $671 at December 31, 2003. During the period from September 1, 2003 to current, the Company's President, Mr. Calvert, has incurred approximately $140,000 in costs on behalf of the Company to sustain bare minimum operations. Cash on hand as of October 1, 2004 was $735. The Company recently received cash totaling $80,000 from the sale of its common and preferred shares which has been used to pay for legal and accounting costs associated with the Company's regulatory reporting requirements.

Furniture, Fixtures and Office Equipment

Furniture, Fixtures and Office Equipment decreased from $28,844 as of December 31, 2002 to $0 at December 31, 2003. The decrease was due to normal depreciation totaling $8,552. In addition, on April 1, 2004 the Company closed its offices and has in storage its Furniture, Fixtures and Office Equipment. As these items are idle and there is no foreseeable plan of use, management recorded a write down of the remaining net book value totaling $20,292 as of December 31, 2003.

Other Assets

Marketing Database

The marketing database decreased from $255,000 as of December 31, 2002 to $0 at December 31, 2003. The decrease is due to normal amortization totaling $38,250 and the remaining was due to an impairment charge totaling $216,750. Management had no success in its marketing efforts and its future use was uncertain and at that time it had not used the marketing database to market any product or generate any revenue for the Company.

Med Wireless License

The Med Wireless License decreased from $4,090,000 as of December 31, 2002 to $0 at December 31, 2003. The decrease was due to normal amortization totaling $613,500 and the remaining was due to an impairment charge totaling $3,476,500. During 2003, primarily as a result of its inability to secure financing, Nuway was unable to effectively market the product successfully.

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Liabilities

Total Current Liabilities increased $522,765 from $2,401,579 as of December 31, 2002 to $2,924,344, as of December 31, 2003. The increase is due to
(i) an increase of Notes Payable of $470,000 reflecting a loan obtained from the Augustine Fund totaling $420,000 and the remainder of $50,000 obtained from an advisory board member; (ii) an increase of Accounts Payable and Accrued Expenses of $115,000 related to operating expenses incurred but not paid; offset by (iii) a decrease in Debenture Payable of $25,000 arising from the conversion of debenture holders of the debentures into equity and (iv) the discount assigned to the value of the warrants that were attached to the Augustine Fund term loan.

Stockholder's Deficit

Total Stockholders' Deficit increased by $4,896,459 during the year ending December 31, 2003. The primary reason for the increase is that net loss totaled $7,622,209. This was offset by the issuance of shares of our common stock for salary and to compensate consultants to our Company, which increased Additional Paid in Capital by $2,712,882.

RESULTS OF OPERATIONS - COMPARISON OF THE YEARS ENDED DECEMBER 31, 2003 AND 2002

Revenue

The Company had no revenues from continuing operations during 2003 or 2002. During the last half of 2002, the Company shifted its focus toward the information technology needs of the sports industry by marketing its PRLS platform. The Company's subsidiary, NuWay Sports, LLC, marketed this technology and generated $40,000 of revenue in the first quarter of 2003. This entity is held for sale; consequently the results of operations related to this subsidiary have been reclassified in our consolidated Statement of Operations as a Loss from discontinued operations.

Selling, General and Administration Expense

Selling, and General and Administration expenses were $2,339,264 for the year ending December 31, 2003, as compared to $2,157,289 for the year ending December 31, 2002, or a net increase of 8.4%.

The largest components of these expenses were:

a. Salaries and Payroll-related Expenses: These expenses were $329,622 in 2002 versus $322,532 in the current year 2003, a decrease of $7,090 or 2 percent. At the end of 2003, the Company employed 2 full time employees, while at December 31, 2002 NuWay employed three (3) full-time employees. The Company's

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only two employees have employment agreements calling for the payment in the aggregate of $24,900 per month. Both employees have accrued unpaid compensation totaling $38,300 as of December 31, 2003.

b. Consulting Expense grew in 2003 from $950,532 in 2002 to $1,108,382 in 2003, an increase of 17 percent. This increase is directly related to management's strategy of using consultants on a project-by-project basis. These projects included marketing, technological development and administration and were primarily staffed by independent contractors who were compensated with Company common stock.

c. Rent expense decreased from $96,560 in 2002 to $70,200 in 2003. Currently the Company receives rent at no cost from a shareholder.

d. Legal Expenses increased from $302,088 in 2002, to $694,151 in 2003, an increase of 130 percent. This change is due to the legal assistance required in 2003 for transactions and or activities such as the maintenance of reporting requirements, NASDAQ qualifications panel hearing for continued listing, the need for stock issuances used in lieu of cash to acquire services, as well as review of proposed acquisitions during 2003.

Expenses Associated With Stock Issued for Services

During 2003 the Company issued 19,248,759 shares to approximately 20 consultants, directors, and employees. Of this total 17,327,753 have been registered under a stock compensation plan as filed on Form S-8, while the balance, 1,921,006 shares were unregistered and are restricted in trading. Of the total issued in 2003, 2,633,590 relate to services performed in 2002 and 16,519,169 relate to 2003. The expenses related to the shares issued for 2002 services in 2003 were recorded in the Company's financial statements for the year ending December 31, 2002. In 2003 there was $1,554,700 of expenses recorded related to the issuance of these shares. Of this amount $1,045,600 related to consulting services, $394,000 related to legal services $63,000 related to Advisory and Board of Directors expense, $52,100 related to salary expense and $25,000 to reduce the outstanding debentures.

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Discontinued Operations

As discussed above and in the notes to our consolidated financial statements, we disposed of all operating entities and discontinued all operations. The Company recorded a loss from operations for 2003 of $2,712,940, as compared to a Net Loss from Continuing Operations for the year ended December 31, 2002 of $1,488,680, for a net increase in loss from operations of 82% from December 31, 2002 to December 31, 2003.

Net Loss

Net Loss for the year ended December 31, 2003 was $7,622,209 or $0.25 per share compared to a $4,937,097 loss or $.50 per share for the year 2002, for a net increase of 154% from years 2002 to 2003.

RESULTS OF OPERATIONS - COMPARISON OF THE YEARS ENDED DECEMBER 31, 2002 AND 2001

Revenues

During 2001, total revenues (from continuing operations only) were $3,600, representing rental income earned by the Company. The Company had no revenues during from continuing operations 2002 as it was engaged in the development of new medical technology products. During the last half of 2002, the Company shifted its focus toward the information technology needs of the sports industry relating to player health. This change in focus led to the rapid development of the PRLS system, which began to generate revenues in the first quarter of 2003. Consequently, the results of our prior business line operations in gaming machine rental, oil and gas development and distribution of cigars were reclassified in our consolidated statements of operations as "discontinued operations."

Selling, General and Administration Expense

Selling, general and administrative expenses declined in 2002 by 17 % to $2,157,289 from $2,600,371 in 2001. Salaries and payroll-related expenses were $329,622 in 2002 versus $576,041 in the prior year, a decrease of $246,419 or 43 %. This is consistent with the reduction in employment experienced by the Company after its change in business focus and the divestiture of all operations other than the new medical technology business. At the end of 2002, the Company employed 3 full time employees, while at December 31, 2001 the Company employed 32 full-time employees. The principal reason for the decline in headcount from year to year is the change in business focus and the divestiture of non-medical operations during 2002.

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Consulting expense grew significantly in 2002, to $950,532 from $250,628 in 2001, an increase of 280 %. This increase is directly related to new management's strategy of maintaining a very low permanent staffing level and supplementing that with consultants on a project-by-project basis. Further, the development of new products and technology related to the Company's shift in business focus required additional staff in the areas of applications development, sales, marketing and administration. These positions were primarily staffed by independent contractors who were compensated with shares of the Company's common stock.

Rent expense decreased by 50 % from $192,543 in 2001 to $96,560 in 2002. This decrease is consistent with the reduced staffing levels as well as limited requirement for warehouse space.

Legal expenses grew from $108,474 in 2001 to $302,088 in 2002, an increase of 178 %. This growth is due to the high level of legal assistance required in 2002 for transactions such as (i) the acquisitions of the marketing database from Genesis and the Med Wireless technology license, (ii) financing completed with Camden Holdings, (iii) a major shift in the Company's core business strategy, (iv) a thorough change in management and (v) the need for stock issuances used in lieu of cash to acquire services.

Travel and entertainment expense declined by 82 % in 2002 from $500,045 in 2001 to $90,293 in 2002. This decrease is due to a conscious effort on the part of new management to minimize these expenses as well as a reduced need for travel due to the divestiture of operations that were remotely located in places like Latin and South America and Canada.

Expenses Associated With Stock Issued for Services

Expenses associated with stock issued for services grew by 144% in 2002 over 2001, from $405,650 to $987,944. The primary reason for this increase was that the Company's limited cash position in 2002 caused management to seek other means of compensating employees and contractors for services performed. The expenses recorded in 2002 related to payment for legal, consulting and other services. The fact that the Company was focused on making the transition to a medical technology business meant that no cash was being received while the transition was occurring. Of the approximately $988,000 in expenses in 2002, approximately $500,000 was for legal services, $474,000 was for consultants in several different fields, and $14,000 related to payment of office rent.

Discontinued Operations

As discussed above and in the notes to our consolidated financial statements, we disposed of several operations through the sale of two foreign subsidiaries, Latin American Casinos and NuWay Resources effective October 1,

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2002, and the cessation of the operations of our World's Best Rated Cigar Company subsidiary in November 2002. Due to the discontinuance of these operations, we have reclassified the historical operating results from these ventures for 2001 and the nine months ended September 30, 2002 and disclosed such below the results from our continuing operations in our consolidated statements of operations. These businesses generated losses from operations of $3,910,193 for the year ended December 31, 2001 and $600,986 through the nine months ended September 30, 2002. We also recorded a loss on sale and disposal of the net assets of these businesses of $2,847,431 in the fourth quarter of the year ended December 31, 2002.

Net Loss

Net loss for the year ended December 31, 2002 was $4,937,097 or $0.50 per share, compared to a $6,652,433 loss or $1.56 per share for the year 2001.

Recent Accounting Pronouncements

In July 2002, the FASB issued Statement No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." Statement No. 146 requires companies to recognize costs associated with the exit or disposal of activities as they are incurred rather than at the date a plan of disposal or commitment to exit is initiated. Types of costs covered by Statement No. 146 include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, facility closing, or other exit or disposal activity. Statement No. 146 will apply to all exit or disposal activities initiated after December 31, 2002. At this time, the Company does not expect the adoption of the provisions of Statement No. 146 to have a material impact on the Company's financial results.

In November 2002, the FASB issued Interpretation No. (Interpretation) 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Interpretation 45 requires certain guarantees to be recorded at fair value. In general, Interpretation 45 applies to contracts or indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an underlying that is related to an asset, liability, or an equity security of the guaranteed party. The initial recognition and measurement provisions of Interpretation 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. Interpretation 45 also requires new disclosures, even when the likelihood of making any payments under the guarantee is remote. These disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The changes required by Interpretation 45 are not expected to have a material impact on the results of operations, financial position or liquidity of the Company.

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LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents increased from $521 last year 2002 to $671 at December 31, 2003. We had nominal revenues in 2003 and were forced to consume cash on hand to fund its new operations. Due to our limited liquid resources, and lack of revenues or any viable means of generating income from operations, our auditors have included an explanatory paragraph in this report which expresses substantial doubt about our ability to continue as a going concern.

The Company will be required to raise additional capital to sustain operations for the next twelve months and is actively seeking investments from third parties. There is no assurance that the Company will be able to raise additional capital. It is unlikely that the Company will be able to qualify for bank debt until such time as the Company is able to demonstrate the financial strength to provide confidence for a lender.

The Company has relied upon its award plans, the 2002 Consultant Equity Plan, the 2003 Stock Compensation Plan and the Nuway Medical, Inc. 2004 Equity Plan, to compensate consultants and employees who have assisted in developing and executing the Company's business plan. The Company has significantly relied on these plans to compensate various consultants and personnel, and this reliance has significantly diluted the loss per share. During 2004, these issuances have been of questionable benefit in compensating consultants and employees, as there is little market interest for the Company's stock.

The Company's consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During 2003 and as of September 30, 2004, the Company has limited liquid and capital resources and management is incurring personal losses while seeking acquisition opportunities.

Ultimately, the Company's ability to continue as a going concern is dependent upon its ability to attract new sources of capital, establish an acquisition or reverse merger candidate with continuing operations, attain a reasonable threshold of operating efficiencies and achieve profitable operations.

At December 31, 2003, the Company had no debt obligations requiring future cash commitments other than as follows: Significant debts at December 31, 2003 included: (i) $420,000 (plus interest) due to Augustine II, LLC (see immediately below); (ii) $125,000 of convertible debentures, which were further reduced to $30,000 March 11, 2004, through the issuance of shares of common stock of the Company, (Note 15), (iii) a loan due to a former advisory board member equal to $65,000, subsequently reduced to $35,000 in March 2004, and (iv) a $1,120,000 note payable which was purchased in March of 2003 by New Millennium

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Capital Partners, LLC, an entity owned and controlled by the Company's president and his family, plus accrued but unpaid interest. The Company intends to convert this note payable to equity in the future, upon certain conditions of the Company, namely the availability of shares within the limits of the Company Charter, and upon approval of the Board of Directors of the Company and New Millennium, which has agreed in principal, subject to appropriate regulatory compliance and approvals as may be required.

Augustine II, LLC Note

On June 10, 2003 the Company entered into a Term Loan Agreement ("Loan Agreement") with the Augustine Fund, pursuant to which the Augustine Fund agreed to lend the Company $420,000, payable in installments of $250,000, $100,000, and $70,000 (the "Loan"). The Company has received all scheduled installments, and principal and interest (at an annual rate of 10%) was originally due in full on February 29, 2004.

The Loan Agreement is subject to certain requirements that the Company make mandatory prepayments of the Loan from the proceeds of any asset sales outside of the ordinary course of business, and, on a quarterly basis, from positive cash flow. In addition, all or any portion of the Loan may be prepaid by the Company may prepay all or any portion of the Loan at any time without premium or penalty. The proceeds of the Loan were used by the Company for working capital.

As additional consideration for making the Loan, the Augustine Fund received five-year warrants to purchase up to 6,158,381 shares of the Company's common stock at an exercise price of $0.16 per share. The Company can require that the warrants be exercised if the Company's shares of common stock trade at or above $0.60 per share for each trading day within the 30 calendar days prior to the maturity date of the Loan, trading volume of the shares equals or exceeds 100,000 shares per day during such period, and the shares of the Company's common stock underlying the warrants have been included in a registration statement filed with and declared effective by the SEC prior to the maturity date. If these conditions are not fully satisfied by the maturity date (which they were not), then the Augustine Fund may, at any time following the maturity date and so long as the warrants remain exercisable, elect to exercise all or any portion of the warrants pursuant to a "cashless exercise" provisions to "cashless exercise" provisions of the warrants.

As security for the Loan, New Millennium, an affiliate of Dennis Calvert, pledged 2.5 million shares of the Company's common stock owned by New Millennium, and the Company has granted the Augustine Fund a security interest in its 51% membership ownership interest in NuWay Sports. As a result, the Company will need to consent of the Augustine Fund to release its security interest in NuWay Sports if the Company is able to sell NuWay Sports.

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Prior to the original maturity date of the Loan, the Company spoke with representatives of Augustine and advised them that the Company was unable to pay the amount due under the Loan by the February 29, 2004 maturity date. Augustine agreed to extend the maturity date of the Loan Agreement to August 2004. In addition to the extension of the maturity date, Augustine was given to have the option of having the Loan satisfied in cash or by the conversion of any remaining principal balance and any accrued interest on the Loan to shares of the Company's common stock at a 15% discount to market, so long as Augustine's holdings do not exceed 4.9% of the total issued and outstanding shares of the Company's common stock at any time. In addition, the warrants held by Augustine to purchase 6,158,381 shares of the Company's common stock were re-priced to an exercise price of $.035 per share. Exercise of the warrants is also subject to the limit that Augustine does not hold more than 4.9% of the issued and outstanding shares of the Company's common stock. The Company recorded $344,832 of interest expense as of December 31, 2003, of which $23,210 is applied to the Augustine Note.

Since that time, the Company and Augustine have entered into negotiations to further extend the maturity date of the Loan and those negotiations are currently being finalized and the new terms documented. While the precise terms have not been finalized and are subject to change, the Company believes that the loan will be extended an additional six months.

Other Items

During 2003, the Company raised $279,661 with the sale of 559,322 of its Preferred Shares, obtained $420,000 from a term loan and $50,000 from a loan by an advisory board member. During the later part of 2003 and through 2004, the Company's President incurred costs on its behalf, which total approximately $140,000. During 2004 the Company has obtained $30,000 from the sale 5,250,000 shares of common stock and $50,000 from a loan that entitles the holder to convert the loan into 10,000,000 shares of its Series A Preferred Stock. The Company has approximately $1,000 cash on hand, which is insufficient to meet operating expenses for any extended period. Management believes that the Company will be required to raise additional capital to sustain operations for the next twelve months and is actively seeking investments through private investors and investment bankers. There is no assurance that the Company will be able to raise additional capital. It is unlikely that the Company will be able to qualify for bank debt until such time as the Company is able to demonstrate the financial strength to provide confidence for a lender.

Also during 2003, the Company issued 19,248,759 shares to approximately 37 consultants, directors, and employees. Of this total, 17,327,753 shares have been registered with the SEC, while the balance and 1,921,006 shares, were not so registered and are "restricted" securities. Of the total number of shares issued in 2003, 2,633,590 shares relate to services performed in 2002 and

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16,519,169 shares relate to 2003. The expenses related to the shares issued for 2002 services in 2003 were recorded in the Company's financial statements for the year ending December 31, 2002. In 2003, there was $1,554,700 of expenses recorded related to the issuance of these shares. Of this amount $1,045,600 related to consulting services, $394,000 related to legal services $63,000 related to Advisory and Board of Directors expense, $52,100 related to salary expense and $25,000 to reduce the outstanding debentures.

EFFECTS OF TRANSACTIONS WITH RELATED PARTIES

DUE TO PRESIDENT

In conjunction with the acquisition of the technology license from Med Wireless, Inc. on August 21, 2002, the Company assumed a $1,120,000 note with interest at 10% per annum payable by Med Wireless to Summitt Ventures, Inc., a company controlled by Mark Anderson (Anderson). The note is secured by the Company's assets and was originally due on June 15, 2003. On March 26, 2003, Summitt Ventures sold the note, together with 4,182,107 shares of the Company's common stock, to New Millennium Capital Partners LLC ("New Millennium"), a limited liability company controlled and owned by the Company's president and family, in exchange for a $900,000 promissory note issued by New Millennium in favor of Summitt Ventures. This note is secured by all of the stock of the Company owned by New Millennium and Mr. Calvert. On March 26, 2003, the Company's board of directors voted to convert the $1,120,000 note held by New Millennium into 22,400,000 shares of restricted common stock of the Company (at a conversion price discounted 37.5% to the then market price of $0.08). New Millennium agreed to this conversion. Subsequent to the vote by the board to convert the note, the Company received notification from Nasdaq's Listing Qualifications Department that converting the note without shareholder approval violated certain Nasdaq Marketplace Rules. In response to this notification, the board, with the concurrence of New Millennium, voted to amend its resolution and withhold issuance of the shares to New Millennium until the Company's shareholders approved the conversion. This shareholder vote has not taken place and the shares have not been issued to New Millennium.

New Millennium Capital Partners, LLC, a Nevada limited liability company owned and controlled by the Company's president and his family as an investment vehicle was formed in 1999. No individual, entity or party (s) associated with the Company's business has ever had any ownership interest in New Millennium and it is an independent company. Mark Anderson, a principal of those companies that sold and/or licensed certain technologies to the Company, conditioned the purchase by New Millennium on the Company converting the promissory note to common stock. The conversion of the note held by New Millennium is a matter to be brought before the NuWay shareholders at its next available shareholders meeting.

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The business purpose of the original decision to convert the note into equity was to retire $1,120,000 in debt owed by the Company thereby increasing shareholder equity by that amount and avoiding a default on the note and the insolvency and possible liquidation of the Company. In arriving at a conversion price, the board of directors determined that a 37.5% discount to market price was appropriate based on a number of factors, including that (i) with the quantity of the shares that would be issued, a block of shares that size could not be liquidated without affecting the market price of the shares, and (ii) the shares would be "restricted shares" and could therefore not be sold by New Millennium in the public markets prior to two years from the date of the conversion, and thereafter would be subject to the volume and manner of sale limitations of Rule 144 under the Securities Act of 1933.

To allow time for a shareholder vote with respect to the conversion, New Millennium agreed to extend the terms of the note, from June 15, 2003 to October 1, 2003.

At the Company's June 6, 2003 board meeting, Mr. Calvert, on behalf of New Millennium, and the Company, through the unanimous action of the Board (with Mr. Calvert abstaining), agreed that, in light of current market conditions (namely the significant increase in the trading price of the Company's common stock since March 26, 2003, the date on which the conversion of the note to equity was originally approved by the Board, from $0.08 to $0.28 as of June 6, 2003), it would be inequitable for New Millennium to convert the note at the originally agreed to $0.05 per share price. In this regard, Mr. Calvert, on behalf of New Millennium, and the Company orally agreed to rescind the agreement to convert the note. In addition, New Millennium orally agreed with the Company to extend the maturity date of the note to a first payment due October 1, 2003 in the amount of $100,000 and the balance of the principal due on April 1, 2004, with interest due according to the original terms of the note (to correspond to the payment terms of the note made by New Millennium in favor of Summitt), and furthermore to reduce the Company's obligation on the note to the extent that New Millennium is able to reduce its obligation on its note with Summitt Ventures. While the prior holder of the note, Summitt Ventures, purported to condition New Millennium's purchase on the conversion of the note, Mr. Calvert has represented to the Company that due to Mr. Anderson's actions (as previously described by the Company in its Form 10-QSB for the quarter ended March 31, 2003), Mr. Calvert now believes that conversion of the note is no longer a required term of the agreement between New Millennium and Summitt.

The Company was unable to pay the note at the due date of October 1, 2003. At the board meeting on October 15, 2003, the board determined to put the issue of conversion of the note to the Company's shareholders at a special meeting of the shareholders scheduled for December 9, 2003. On November 7, 2003, a Definitive 14a was filed by the Company with respect to that meeting. The shareholders meeting was held on December 9, 2003, but adjourned without a vote,

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as there weren't enough shareholders present to hold a vote. The meeting was rescheduled for December 30, 2003. At the December 30, 2003 shareholder meeting, the board was again advised that there was not a quorum, and therefore the vote could not be held. Because this was the second attempt to obtain a quorum, and more than 4,000,000 additional shares were required to be voted to obtain a quorum, the board voted to adjourn the meeting indefinitely. As of January 1, 2004, the loan is in default status and has not been repaid together with $114,800 in accrued but unpaid interest. The amounts due Anderson by New Millennium are also in default.

Technically, under the terms of the New Millennium Agreement, it is possible that Anderson has the right to reacquire the shares of the Company's common stock that were sold to New Millennium, if New Millennium defaults on the promissory note issued by New Millennium to Camden Holdings to purchase the shares. The New Millennium Note is purportedly secured by the purchased shares of the Company's common stock; however, New Millennium and Mr. Calvert believe that Anderson have not perfected their security interest in those shares. Moreover, the Augustine Fund is the pledgee of 2,500,000 of these shares and holds those shares as pledgee.

New Millennium has informed the Board of Directors that its intent is to fully convert the Note to stock as soon as is practical in light of the Company circumstances as they may change in the future to accommodate the conversion in light of the circumstances at that time.

ABANDONED ACQUISITION

On January 31, 2004, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Premium Medical Group, Inc., a Florida corporation ("PMG") and PMG's sole stockholders, Eduardo A. Ruiz and Luis A. Ruiz (the "PMG Stockholders"). Prior to this transaction, there was no business or other relationship between the Company and its affiliates and PMG or the PMG Stockholders.

Pursuant to the Stock Purchase Agreement, the Company agreed to acquire 100% of the shares of PMG from the PMG Stockholders in exchange for 30,000,000 shares of the Company's common stock, subject to certain adjustments. The exact number of Company Shares to be issued to the PMG Stockholders was subject to adjustment in the event certain revenue was or was not generated by PMG during one year following the closing of the transaction. PMG had been organized in June 2003 to provide medical products to hospitals and medical clinics in South America, primarily Venezuela. Luis A. Ruiz became a director of the Company in connection with the transaction.

The parties had a difference in expectations regarding who would be ultimately responsible for paying for the audit of PMG that was required in

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order for the Company to complete its disclosure obligations under the Securities Exchange Act. Additionally, the Company did not have a sufficient number of authorized and unissued shares of its common stock to both satisfy its obligations to the PMG Stockholders and to issue shares of common stock in a meaningful financing transaction, given the low price per share at which the Company's common stock trades. The Company lacked the financial resources to schedule a stockholders' meeting, prepare a proxy statement and solicit proxies for the purpose of amending its Certificate of Incorporation to increase its authorized capital stock.

As a result of these and other factors, the Company and PMG never consolidated their operations, the Company never exercised control over PMG or its operations and the parties never exchanged stock certificates evidencing their ownership in each other.

Therefore, the parties entered into discussions and concluded amicably that it was in the mutual best interest of the respective companies and their respective stockholders, to rescind the transactions provided for in the Stock Purchase Agreement and return all parties to their respective positions prior to the transactions contemplated in the Stock Purchase Agreement.

The parties entered into a Rescission Agreement on October 14, 2004 that provides, in relevant part, that (i) all transactions contemplated by the Stock Purchase Agreement shall be rescinded as if the Stock Purchase Agreement had never been executed and delivered; (ii) the parties forever waive all rights to receive stock in PMG and the Company, as the case may be; (iii) Luis A. Ruiz shall resign as a director of the Company; and (iv) the Company and PMG shall file appropriate documents with the Secretary of State of the State of Florida with respect to the rescission of the exchange of shares provided for in the Stock Purchase Agreement.

CRITICAL ACCOUNTING POLICIES

The Securities and Exchange Commission ("SEC") recently issued Financial Reporting release No. 60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies" (FRR 60"), suggesting companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Company's most critical accounting policies include: non-cash transactions and compensation valuations that affect the total expenses reported in the current period and/or values of assets received in exchange.

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The Company has established a policy relative to the methodology to determine the value assigned to each intangible acquired with or licensed by the Company and/or services or products received for non-cash consideration of the Company's common stock. The value is based on the market price of the Company's common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received, as adjusted for applicable discounts.

The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its financial statements.

ITEM 7. FINANCIAL STATEMENTS.

Our consolidated financial statements as of and for the years ended December 31, 2003 and 2002 are presented in a separate section of this report following Item 14 and begin with the index on page F-1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

As disclosed in our Current Report on Form 8-K filed on April 7, 2003, as amended on April 10, 2003, we dismissed Shubitz Rosenbloom & Co., PA ("Shubitz") as our principal accounting firm as of March 31, 2003 and we engaged Haskell & White LLP ("H&W") as our principal accounting firm. H&W was engaged to audit our consolidated financial statements for the year ended December 31, 2002. The decision to change auditors was approved by our board of directors.

In connection with the audits of the two years ended December 31, 2001, and during the subsequent period through March 31, 2003, there were no disagreements with Shubitz on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Shubitz, would have caused them to make reference to the subject matter of the disagreement in connection with its opinion.

As disclosed in our Current Report on Form 8-K filed on September 10, 2004, as amended on September 17, 2003, we dismissed H&W as our principal accounting firm as of September 9, 2004. As disclosed in our Current Report on Form 8-K filed on September 16, 2004, we engaged Jeffrey S. Gilbert, CPA ("Gilbert") as our principal accountant. Gilbert was engaged to audit our consolidated financial statements for the year ended December 31, 2003. The decision to change auditors was recommended by our audit committee and approved by our board of directors.

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During the Company's relationship with H&W, since H&W's initial engagement as the principal auditors on March 31, 2003, through September 9, 2004, there were no disagreements with H&W, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to H&W's satisfaction, would have caused it to make reference to the subject matter of the disagreement(s) in connection with its report on the consolidated financial statements for the year ended December 31, 2002.

ITEM 8A. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. Our management evaluated, with the participation of Dennis Calvert, who serves as both our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-KSB. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

(b) Changes in internal control over financial reporting. There was no change in our internal control over financial reporting that occurred during the period covered by this Annual Report on Form 10-KSB that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

DIRECTORS AND EXECUTIVE OFFICERS.

The following table sets forth information regarding our directors and the nominees as of September 30, 2004:

            NAME                  AGE         POSITION            DIRECTOR SINCE
----------------------------      ---     ----------------------  --------------
Dennis Calvert                            President, Chief
                                   41     Executive Officer and        2002
                                          Chairman of the Board
Joseph Provenzano                  34     Financial                    2002
                                          Officer, Treasurer and
                                          Director
Steven V. Harrison II (1)(2)       44     Director                     2003
Gary Cox (1)(2)                    43     Director                     2003

(1) Member of the Audit Committee.

(2) Member of the Compensation Committee.

There are no family relationships between any director and any executive officer of the Company.

DENNIS CALVERT is our President, Chief Executive Officer, Chairman of the Board, and Interim Chief Financial Officer. Dennis Calvert was appointed a director in June 2002, and has served as President and Chief Executive Officer since June 2002, Corporate Secretary from September 2002 until March 2003, and Interim Chief Financial Officer since March 2003. Mr. Calvert holds a BA degree in Economics from Wake Forest University, where he was a varsity basketball player on full scholarship. Mr. Calvert also studied at Columbia University and Harding University. He was an honor student in high school with numerous leadership awards. He is also an Eagle Scout.

Mr. Calvert has an extensive entrepreneurial background as an operator, investor and consultant. From June 2002 to September 2002 he served as president of Med Wireless, Inc. In 1998 he was a founder, president and board member of Utelecom Communications, Inc. where he led the acquisition of four companies and secured a line of credit for $7.5 million. He remains an owner and board member of that firm. He was an investor and served as a manager of Beep for Free.com, LLC beginning in the year 2000, a consumer products and technology related

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company. Mr. Calvert resigned as the manager of Beep For Free.com, LLC in June 2002 and the company ceased operations in December 2002. Mr. Calvert was a founder and chairman of ZZYZX Technologies, Inc., a company that designed and produced high tech equipment. ZZYZX was sold in 2001. From 1990 to 1996 Calvert served as head of mergers and acquisitions for Medical Asset Management, Inc., a company that acquired and managed medical-related businesses. During his tenure he participated in more than 50 acquisitions and served in numerous positions with the Company. Prior, he was a founder and officer of a medical recruiting and consulting firm named Merritt Hawkins and Associates from 1987 to 1990. Earlier, he was a top producing sales associate for a leading physician recruitment firm, Jackson and Coker, Inc. and served as a sales associate for Diamond Shamrock, Inc. from 1985 to 1986.

JOSEPH PROVENZANO was appointed a director in June 2002 and assumed the role of Corporate Secretary in March 2003.

Mr. Provenzano heads the Investor Relations effort and manages the mergers and acquisitions function for NuWay. He began his corporate career in 1988 as a Personnel Manager and Recruiter for First American Travel, a marketing company in Southern California. He then entered into an entry-level Technician position within the Commercial and Residential security industry. He left the industry as a General Manager in the mid 1990's to apply his marketing and sales training to the logistics industry. He was then employed by two major Southern California moving and storage companies as head of marketing. He formed his own marketing company called Pre-Move Marketing Services (PMSA), offering advertising and direct marketing products for the moving and storage industry, in 1996. He joined Camden Holdings, Inc., an investment holding company to manage their mergers and acquisitions department, in mid 2001, and participated in more than 50 corporate mergers and acquisitions. He was employed there until March 2003, at which time he became employed full time by the Company. Mr. Provenzano has participated in organized rodeo and motocross competitions.

STEVEN V. HARRISON II has been a director since March 2003. Mr. Harrison is the president of Empact, Inc. a consumer products based marketing company. From 1997 to 2001, he was the founder, president and CEO of In Touch Communications, Inc., a Competitive Local Exchange Carrier (CLEC), providing residential and business telephone services within the state of California, with annual revenue of more than $15 million. During 2001 and 2002 he was an investor in a number of healthcare and consumer products based companies including Beep for Free.com, LLC. Mr. Harrison was President of Beep for Free.com, LLC from June 2002 until it ceased operations in December 2002. From 1991 to 1997, Mr. Harrison was Chief Executive Officer of Resource Medical Group, Inc., providing management consultancy services to the healthcare industry assisting hospitals, Health Maintenance Organizations, clinics, and practice management firms with medical staff planning and contracting issues, feasibility studies and physician

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recruitment and retention. Mr. Harrison also played Division I football at Appalachian State University.

GARY COX has been a director since May 2003. Mr. Cox has more than 10 years in the healthcare field as consultant to hospitals and medical groups. He started his own firm in 1995 named Resource Medical International and is still active in that business. He served for more than 10 years with UK firms in sales and marketing positions prior to beginning his healthcare career. He holds a technical degree in engineering from Leicester University in England. He was also a competitive athlete and played for a number of professional soccer (football) clubs in England in his early career.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has established an Audit Committee and a Compensation Committee.

The Audit Committee meets with management and the Company's independent public accountants to review the adequacy of internal controls and other financial reporting matters. Mr. Harrison is Chairman of the Audit committee. Mr. Cox also serves on the audit committee. The board of directors has not designated an audit committee financial expert and does not believe that either member of the Audit Committee would satisfy the current definitional requirements of SEC rules and regulations to be an audit committee financial expert.

The Compensation Committee reviews the compensation for all officers and directors and affiliates of the Company. The Committee also administers the Company's stock option plan. Mr. Harrison is Chairman of the Compensation Committee and Mr. Cox serves on the Compensation Committee.

The Board has determined that each of Messrs. Harrison and Cox is independent as defined under NASDAQ Marketplace rules. In 2003, the staff of NASDAQ had questioned whether Mr. Harrison was independent, and the NASDAQ Qualifications Panel discussed those issues with the Company at a hearing held on May 16, 2003. The determination letter delivered to the Company by the NASDAQ Qualifications Panel, which resulted in the delisting of the Company's common stock from the NASDAQ SmallCap Market, stated, "While the Panel acknowledged that it appears the Company may have regained compliance with the independent directors and audit committee composition requirements based on the appointment of Messrs. Cox and Harrison, it [the Panel] determined not to make a finding on these deficiencies given that the appropriate Nasdaq background checks have not yet been completed".

The Company continues to believe that Mr. Harrison is independent, because has no business dealings with the Company other than in his role as

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board member. However, Mr. Harrison formerly was a partner of Mr. Calvert in a business named Beep For Free.com, LLC, from which Mr. Calvert resigned as the managing member in June 2002. Beep For Free.com, LLC ceased operations in December 2002.

In October 2004, the board of directors adopted a written code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's directors, certain officers and persons holding 10 % or more of the Company's common stock to file reports regarding their ownership and regarding their acquisitions and dispositions of the Company's common stock with the Securities and Exchange Commission. Such persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

To our knowledge, based solely upon review of Forms 3, 4, and 5 (and amendments thereto) and written representations provided to the Company by executive officers, directors and stockholders beneficially owning 10 % or greater of the outstanding shares, the Company believes that such persons filed pursuant to the requirements of the Securities and Exchange Commission on a timely basis, other than (i) one late report filed by Mr. Calvert, (ii) two late reports filed by Mr. Provenzano with respect to one transaction, (iii) two late reports filed by Mr. Harrison with respect to two transactions, (iv) two late reports filed by Mr. Cox with respect to one transaction and (v) two late reports filed by New Millennium with respect to one transaction.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth the cash compensation paid by the Company to the chief executive officer and the next four highest paid executive officers who received compensation in excess of $100,000 (the "Named Executive Officers") during 2002 and 2003:

45

                                Annual Compensation                        Long-term Compensation
                                                                     Awards                       Payouts
                                                                           Securities
Name and Principal                                           Restricted    Underlying                     Other
Position            Year        Salary      Compensation     Stock Awards  Options/SARs   TIP Payouts  Compensation
------------------  --------    -------     ------------     ------------  ------------   -----------  ------------
Dennis Calvert,                  14,000                      4,000,000 (3)
Chief Executive     2002 (1)     14,000
Officer             2003                         --                             --             --           --

Joseph Provenzano,                                           1,200,000
Secretary           2003 (2)     10,800          --                             --             --           --


(1) Became Chief Executive Officer in June 2002.

(2) Became Secretary in March 2003.

(3) Mr. Calvert was issued 1,000,000 shares on January 9, 2003, and subsequently returned the shares to the Company. He was also issued 3,000,000 shares on March 18, 2003, and subsequently returned the shares to the Company.

EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement with Dennis Calvert in December 2002. Mr. Calvert's employment agreement provides for him to be employed for five years at an annual salary of $168,000. The employment agreement further provides that Mr. Calvert work with the Company on a full time basis, that the office be located in Laguna Hills, California, that he receive annual increases of 10% of his base income, that bonuses will be payable based on the greater of a performance scale established by the Compensation Committee, assigned by the board of directors, or 3% of the annual increase in market capitalization value. The compensation plan includes benefits of a car allowance, insurance and a standard vacation package. The agreement has certain minimum performance standards and calls for a severance package equal to one year's base compensation, plus an additional one half year's compensation for each year of service beginning in 2003. Standard confidentiality, company ownership rights to property and assets and arbitration clauses are included in the agreement.

The Company entered into an employment agreement with Mr. Provenzano in March 2003. Mr. Provenzano's employment agreement provides for him to be employed for five years at an annual salary of $130,800. The employment agreement provides that, at the Company's discretion, the Company may choose to pay up to $4,900 of Mr. Provenzano's monthly salary in the form of stock in lieu of cash. Mr. Provenzano is also eligible to receive incentive bonuses, stock ownership participation and employee related benefits. The employment agreement further provides that Mr. Provenzano receive annual increases of 5% of his base income, that bonuses will be payable based on the greater of a performance scale established by the Compensation Committee, assigned by the board of directors, or 1.5% of the annual increase in market capitalization value. The compensation

46

plan includes those benefits of car allowance and insurance benefits and a standard vacation package. The agreement has certain minimum performance standards and calls for a severance package equal to one year's base compensation, plus an additional one half year's compensation for each year of service beginning in 2003. Standard confidentiality, company ownership rights to property and assets and arbitration clauses are included in the agreement.

OPTIONS GRANTED DURING LAST FISCAL YEAR

No options were granted to the Named Executive Officers during 2003.

EQUITY COMPENSATION PLANS

1994 STOCK OPTION PLAN

In June 1994, the board of directors adopted the 1994 Stock Option Plan (the "1994 Plan"). The maximum number of shares available for issuance under the 1994 Plan is 1,500,000 shares. The 1994 Plan terminates on June 13, 2004. The 1994 Plan is designed to provide additional incentives for directors and officers and other key employees of the Company, to promote the success of the business and to enhance the Company's ability to attract and retain the services of qualified persons. The board of directors administers the 1994 Plan. The 1994 Plan authorizes the board of directors to grant key employees selected by it, incentive stock options and non-qualified stock options. The exercise price of shares of Common Stock subject to options qualifying as incentive stock options must not be less than the fair market value of the Common Stock on the date of the grant. The exercise price of incentive options granted under the 1994 Plan to any participant who owns stock equal to more than 10% of the total combined voting power of all classes of outstanding stock of the Company must be at least equal to 100% of the fair market value on the date of grant. Fair market value has been determined to be the closing price for the Company's common stock reported by NASDAQ on the date of option grant.

The board of directors may amend the 1994 Plan at any time but may not, without stockholder approval, adopt any amendment, which would materially increase the benefits accruing to participants, or materially modify the eligibility requirements. The Company also may not, without stockholder approval, adopt any amendment, which would increase the maximum number of shares, which may be issued under the 1994 Plan, unless the increase results from a stock dividend, stock split or other change in the capital stock of the Company. In March 1999, the board of directors authorized an amendment to the 1994 Plan increasing the number of shares to be issued thereunder from 1,000,000 to 1,500,000. This amendment was submitted for stockholder approval at the 1998 Annual Meeting and was approved.

47

At December 31, 2003, no options remained outstanding and fully vested, as follows:

                                              Number of        Price Per
                                               Shares            Share
                                             ----------     ----------------
Options Outstanding at January 1, 2003          65,000        $1.00 - $1.75
Options Outstanding at December 31, 2003             0        $1.00 - $1.75
Options Expired                                (65,000)               $1.00
                                             ---------
Options Outstanding at December 31, 2003             0        $1.00 - $1.75
                                             =========

2002 CONSULTANT EQUITY PLAN

In August 2002, the Company's board of directors approved the formation of the 2002 Consultant Equity Plan (the "2002 Plan"), designed to allow consultants to be compensated with shares of Company common stock for services provided to the Company. A total of 1,500,000 shares under the 2002 Plan were registered with the SEC. The 2002 Plan was amended by the Company's board of directors in December 2002. A total of 3,500,000 additional shares were registered with the SEC on a Form S-8 registration statement on December 27, 2002. Approval of the 2002 Plan was not submitted to the vote of the stockholders. Persons eligible to receive stock awards under the 2002 Plan included "consultants" that provide bona fide consulting services to the Company, excluding any services incident to the raising of capital or promotion or maintenance of a market for the Company's securities.

The 2002 Plan expires ten years from its inception. The 2002 Plan is administered by a plan committee of two or more members of the board of directors. The plan committee can award shares or options to purchase shares at a price in its discretion, so long as the price chosen is not less than 85% of the fair market value of the underlying shares as of the date of the grant.

From August 2002 through February 2003, the Company issued all but 84,452 of the 5,000,000 shares available under the 2002 Plan to approximately 26 consultants, employees and directors. Beginning in September 2002, Mark Roy Anderson served as a consultant to the Company pursuant to a written agreement and received 1,241,884 shares (25.3%) of the 4,915,548 shares of the Company's common stock that was issued under the 2002 Plan. See "Certain Relationships and Related Transactions".

2003 STOCK COMPENSATION PLAN

In February 2003, the Company's board of directors approved the 2003 Plan as a means of providing directors, key employees and consultants additional incentive to provide services to the Company. Both stock options and stock grants may be made under the 2003 Plan. The 2003 Plan sets aside up to 15,000,000 shares of the Company's common stock for these purposes, which shares

48

were registered with the SEC on a Form S-8 registration statement on February 27, 2003. Approval of the 2003 Plan was not submitted to a vote of the stockholders. The board of directors administers the 2003 Plan. The 2003 Plan allows the Board to award grants of shares of the Company's common stock or options to purchase shares of the Company's common stock. The board of directors has discretion to set the price of the options, but in no event shall that price be less than 100% of the fair market value of the shares at the time of the grant. The board of directors may at any time amend or terminate the 2003 Plan. The 2003 Plan does not have an expiration date.

From February through September 2003, the Company issued 14,863,230 shares to 27 directors, employees and consultants under the 2003 Plan.

In March 2003, the board of directors approved, and the Company issued, 3,000,000 shares of common stock to Dennis Calvert, President and Chief Executive Officer of the Company, as consideration for his services. The board of directors subsequently modified its approval of this issuance to make it conditioned upon stockholder approval of the transaction because of NASDAQ Marketplace Rules governing change of control transactions. Mr. Calvert returned the 3,000,000 shares to the Company. On December 9, 2003, the Company attempted to conduct a stockholder meeting to approve the terms of the issuance of 3,000,000 shares of the Company's common stock to Dennis Calvert. The Company was unable to obtain a quorum at the meeting. The meeting was adjourned to December 30, 2003, but again the Company was unable to obtain a quorum. As of the date of the filing of this Annual Report, the 3,000,000 shares of the Company's common stock have not been issued to Mr. Calvert.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information regarding the beneficial ownership of shares of the Company's common stock as of December 31, 2003 by (i) all stockholders known to the Company to be beneficial owners of more than 5% of the outstanding common stock; (ii) each director and executive officer of the Company individually and (iii) all directors and executive officers of the Company as a group. The Company has chosen to present this information as of December 31, 2003, because it more accurately reflects the actual voting power of the following persons as of such date, which is substantially higher than it is as of the date of the filing of this Annual Report. During 2004, several issuances of the Company's common stock had the effect of diluting the voting strength of these persons. See "Market For Common Equity and Related Stockholder Matters".

49

--------------------------------- ------------------------ ---------------------
Name and Address of Beneficial      Amount of Beneficial     Percent of Class
Owner (1)(2)                          Ownership (3)
--------------------------------- ------------------------ ---------------------
Dennis Calvert                        4,782,107 (4)               13.1%
--------------------------------- ------------------------ ---------------------
Joseph Provenzano                       1,224,936                  3.4%
--------------------------------- ------------------------ ---------------------
Steven Harrison                          167,043                    *
--------------------------------- ------------------------ ---------------------
Gary Cox                                   -0-                     -0-
--------------------------------- ------------------------ ---------------------
All directors and officers as a         6,174,086                 17.0%
group (4 persons)
--------------------------------- ------------------------ ---------------------

* Less than 1%

(1) Except as noted in any footnotes below, each person has sole voting power and sole dispositive power as to all of the shares shown as beneficially owned by them.

(2) Unless otherwise indicated, the address for each person is 2603 Main Street, Suite 1150, Irvine, California 92615.

(3) Other than as footnoted below, none of these security holders has the right to acquire any amount of the shares within sixty days from options, warrants, rights, conversion privilege, or similar obligations. The amount owned is based on issued common stock, as well as stock options, which are currently exercisable.

(4) This amount excludes 30,869,992 shares of the Company's common stock issuable upon conversion of the NuWay Note. However, the conversion of the NuWay Note is subject to the prior approval of the Company's stockholders. In December 2003, the Company attempted to hold a stockholders' vote to approve the conversion but was unable to obtain a quorum. The shares to be issued in exchange for the conversion will not be issued until such time as the proper stockholder approvals can be obtained. New Millennium has agreed to extend the terms of the NuWay Note indefinitely until such approval is obtained.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS WITH DENNIS CALVERT

New Millennium Capital Partners, LLC Purchase of Common Stock and Promissory Note from Mark Anderson and Affiliates

In March 2003, New Millennium, which is controlled by our president Dennis Calvert, purchased the Company's promissory note in the principal amount of $1,150,000 (the "NuWay Note"), which notes was held by Summitt Ventures, Inc. ("Summitt Ventures"), and purchased an aggregate of 5,000,000 shares of the Company's common stock from Camden Holdings and Summit Healthcare, Inc. ("Summit Healthcare") in consideration of the New Millennium Note. Camden Holdings,

50

Summitt Ventures and Summit Healthcare are controlled by Mark Roy Anderson. The transaction was executed as part of a plan to remove Mr. Anderson totally from any involvement in the Company and provide a completely new focus and direction for the Company under management led by Mr. Calvert.

The New Millennium Note is secured by all the shares of the Company's common stock purchased in the transaction and is further secured by shares of the Company's common stock personally owned by Mr. Calvert, of which he currently owns none. The transaction was conditioned, among other things, on the Company's converting the NuWay Note into shares of the Company's common stock.

The sellers only delivered share certificates representing 4,182,107 shares of the Company's common stock, which certificates were delivered to Mr. Calvert on April 9, 2003. In the New Millennium Agreement, Mr. Anderson represented that he was selling 100% of his stock to New Millennium and would no longer own any of the Company's stock. Subsequent to the closing of that transaction, management learned through the Company's transfer agent that Camden Holdings still owns 340,894 shares of the Company's common stock. The Company and New Millennium believe that the existence of these 340,894 shares of the Company's common stock owned by Camden Holdings Inc. is a material breach of the New Millennium Agreement, and the Company and New Millennium are reviewing their respective legal rights with regards to this matter.

Technically, as a matter of the terms of the New Millennium Agreement, it is possible that Camden Holdings or Mr. Anderson could reacquire the shares of the Company's common stock that were sold to New Millennium, should New Millennium default on the promissory note issued by New Millennium to Camden Holdings to purchase the shares, which note is secured by the purchased shares of the Company's common stock

Conversion of NuWay Note to Common Stock

Pursuant to the NuWay Note, the Company owes New Millennium $1,120,000 plus accrued and outstanding interest. On March 26, 2003, the board of directors of the Company voted to convert the NuWay Note into 22,400,000 shares of common stock of the Company, reflecting a 37.5% discount to market price. New Millennium consented to the proposed conversion.

The business purpose of the conversion was to fulfill one of the conditions to the transaction between New Millennium and Mr. Anderson and his affiliates, and to retire $1,120,000 in debt owed by the Company with the effect increasing stockholder equity. The board of directors determined that a 37.5% discount to market price was appropriate given that (i) the shares into which the NuWay Note would be convertible would be subject to the one-year holding period provided by of Rule 144 prior to resale and (ii) even after such holding period, this large amount of shares could only be resold in the market over a

51

significant period of time in light of the volume limitations of Rule 144 that would apply to such resales.

The conversion was approved by the Company's non-interested directors. After receiving advice from the staff of NASDAQ regarding the requirements of applicable NASDAQ Marketplace Rules, the board of directors made the conversion of the NuWay Note conditional upon receiving stockholder approval of the conversion. New Millennium agreed to extend the terms of the NuWay Note from June 15, 2003 to September 15, 2003, to allow sufficient time for the Company to obtain the requisite stockholder approval.

On December 9, 2003, the Company attempted to conduct a stockholder meeting to approve the terms of the conversion of the Company's Promissory Note. The Company was unable to obtain a quorum at the meeting. The meeting was adjourned to December 30, 2003, but again the Company was unable to obtain a quorum, and the conversion has not taken place as of the date of the filing of this Annual Report.

Since that time, New Millennium has agreed to a further indefinite extension of the maturity date of the NuWay Note pending stockholder approval of the transaction. The Company has been unable to schedule such a meeting due to the delinquent status of its periodic reports with the SEC and limited resources to plan the meeting.

TRANSACTIONS WITH MARK ROY ANDERSON

During the period from approximately June 2002 through March 2003, the Company entered into several transactions with entities controlled by Mark Roy Anderson. These entities are Med Wireless, Genesis, Camden Holdings, Summit Healthcare, Summitt Ventures, Summit Oil & Gas, Inc. ("Summit Oil") and CVP. The transactions are listed in chronological order. The Company, nor any of its directors or officers, has had any communication with Mr. Anderson since May 2003.

Financing Agreement with Camden Holdings, Inc.

During June 2002, as part of a plan introduced to the Company by Mark Anderson to shift the Company's focus to the medical technology field and bring in new management, Camden Holdings purchased 1,000,000 shares of the Company's common stock for $250,000. At the time of the transaction, Camden Holdings, whose president at the time of the transaction was Mr. Anderson, owned no shares in the Company, this being the initial transaction between the Company and Mr. Anderson and his affiliates. After this purchase, the 1,000,000 shares represented approximately 12.9% of the then-issued and outstanding shares of the Company's common stock.

52

Genesis Health Tech, Inc.

On June 28, 2002, the Company purchased a database of healthcare providers in the United States from Genesis, a wholly-owned subsidiary of Camden Holdings, which was controlled by Mr. Anderson. The total purchase price of $300,000 was satisfied by the issuance of 666,667 shares of the Company's common stock. After this purchase, the 1,666,667 shares of the Company's common stock beneficially owned by Mark Anderson represented approximately 19.8% of the then-issued and outstanding shares of the Company's common stock.

Med Wireless, Inc.

By way of an agreement dated July 16, 2002 and amended August 21, 2002, the Company acquired a 15-year, fully paid license to certain technology from Med Wireless, a company whose founder and principal stockholder was Mark Roy Anderson. Pursuant to the related license agreement (i) the Company would license from Med Wireless all of its rights and interest in certain software applications relating to the movement of medical images and data over the Internet and via handheld wireless devices as well as customer lists; (ii) Med Wireless would assign its customers and distribution agreements related to the licensed intellectual property to the Company; and (iii) the Company would assume $1,120,000 of outstanding debt (see further discussions below). In return, the Company agreed to issue to the Med Wireless stockholders an aggregate of 6,600,000 shares, or approximately 44%, of the Company's common stock.

Through Camden Holdings and Summit Healthcare, Mr. Anderson received an additional 2,868,928 shares of the Company's common stock, as a result of the Med Wireless transaction, which increased Mr. Anderson's beneficial ownership to 4,535,595 shares, or approximately 28.3%, of the Company's common stock at the time this transaction was approved by the Company's stockholders. Mr. Anderson also held a minority interest in Med Wireless.

In addition, the Company's current president, Dennis Calvert, was entitled to receive approximately 9.9% of the stock of Med Wireless and 600,000 shares of the Company's common stock as a result of this transaction. Prior to this transaction, Mr. Calvert was not a stockholder of Med Wireless.

The transaction was approved by the Board of Directors and the vote of a majority of the Company's shares of common stock, including the shares held by Camden Holdings. Stockholders of the Company owning 3,930,183 shares of the 7,761,353 shares then outstanding consented to the transaction with Med Wireless, including the shares held by Mr. Anderson and his affiliates.

Sale of Casino Operations

53

The Company sold its wholly-owned casino rental subsidiaries, Latin American Casinos del Peru S.A., and Latin American Casinos of Colombia, LTDA, to CVP in October 2002. Mark. Anderson was a general partner of CVP at the time of the transaction. Although the purchase price for the stock was $300,000, less all outstanding liabilities of the two subsidiaries, the outstanding liabilities exceeded that amount and the Company received no cash in the sale. The transaction price was determined as a result of the Company's receiving no viable suitors, bidders or offers for the stock or assets of the Company's gaming businesses. The Company's Board of Directors approved this transaction, but it was not voted upon by the Company's stockholders.

Sale of Oil Operations

The Company entered into an agreement on December 15, 2002 to sell 100% of the stock of NuWay Resources, Ltd. ("NuWay Resources"), the Company's oil and gas subsidiary, for $100,000 less outstanding liabilities, to Summit Oil, whose president at the time of the transaction was Mark Anderson. The Company received no cash from the sale of the stock, but was able to insure contractually that it would not retain any liabilities, or incur new liabilities (which had been increasingly significantly), beyond October 1, 2002. The transaction price was determined as a result of the Company's receiving no other viable offers for NuWay Resources or its assets. The Company's board of directors approved the transaction, but it was not voted upon by the Company's stockholders.

Consultancy Arrangement

Beginning in September 2002, Mark Roy Anderson also served as a consultant to the Company pursuant to a written agreement and received 1,241,884 shares of the Company's common stock pursuant to the 2002 Plan. The Consultancy Agreement was terminated in December 2002.

As a result of all of the foregoing transactions, the Company believes that Mr. Anderson was the beneficial owner of an aggregate of 5,777,479 shares, or more than 30%, of the Company's common stock outstanding as of December 31, 2002, assuming Mr. Anderson beneficially owned all the shares at the same time. The Company believes that Mr. Anderson sold some of the shares which were issued pursuant to the 2002 Plan, and as such the number and percentage of the Company's common stock held by Mr. Anderson at any one time may have been less than that indicated above. In any event, Mr. Anderson failed to file any reports with the SEC on Schedules 13D or 13G, or on Forms 3 or 4, and therefore, the Company cannot confirm any of these numbers at any given point in time.

ITEM 13. EXHIBITS, REPORTS ON FORM 8-K, AND INDEX TO FINANCIAL STATEMENTS.

54

(a) Index of exhibits:

Exhibit No. Description of Exhibit

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

   3.1      Certificate of Incorporation (1)

   3.2      Certificate of Amendment of Certificate of
            Incorporation filed 11/26/1991 (9)

   3.3      Certificate of Amendment of Certificate of
            Incorporation filed 6/24/1994 (9)

   3.4      Certificate of Amendment of Certificate of
            Incorporation filed 7/22/1999 (10)

   3.5      Certificate of Amendment of Certificate of
            Incorporation filed 8/31/2001 (1)

   3.6      Certificate of Amendment of Certificate of
            Incorporation filed 10/30/2002 (2)

   3.7      Certificate of Amendment of Certificate of
            Incorporation filed 12/26/2002 (2)

   3.8      Certificate of Merger merging Repossession Auction,
            Inc. (Florida corporation) and Repossession, Inc.
            (Delaware corporation) (9)

   3.9*     Certificate of Designations creating Series A
            Preferred Stock

   3.10     Bylaws, as amended and restated (2)

   4.3      Form of Warrant Agreement (1)

   4.4      Form of Warrant dated December 12, 2000 (1)

   4.5      Form of 6% Convertible Debenture dated December 14,
            2000 (1)

   4.6*     Form of Warrant to Purchase Common Stock issued to
            Preferred Stock investors

   4.7*     Warrant to Purchase Common Stock issued to Arthur
            Lipper

55

4.8 Warrant No. AG-1 to purchase up to 6,158,381 shares of NuWay Medical, Inc. common stock held by Augustine II LLC (5)

4.9*     Amended and Restated Warrant No. AG-1 to purchase up
         to 6,158,381 shares of NuWay Medical, Inc. common
         stock held by Augustine II LLC

10.1     Employment Agreement between the Company and Todd
         Sanders dated March 2001 (1)

10.2     Employment Agreement between the Company and William
         Bossung dated March 2001 (1)

10.3     Employment Agreement between the Company and Dennis
         Calvert dated December 11, 2002 (2)

10.4.    Employment Agreement between the Company and Joseph
         Provenzano dated March 1, 2003 (2)

10.5     Joint Venture Agreement between the Company and
         Rasheed & Associates dated December 1, 2002 (2)

10.6     Lease between the Company and BJP Properties Inc.
         dated September 15, 2002 for the premises located at
         23461 South Pointe Drive, Suite 200, Laguna Hills,
         California (2)

10.7     2002 Consultant Equity Plan, as amended on December
         27, 2002. (3)

10.8     Convertible Debenture Purchase Agreement dated
         December 14, 2001 (1)

10.9     1994 Stock Option Plan (1)

10.10    Asset Purchase Agreement by and among the Company,
         Camden Holdings and Genesis Health Tech, dated June
         28, 2002 (2)

10.11    License Agreement with Med Wireless Inc. dated August
         21, 200 (2).

10.12    Amendment to License Agreement with Med Wireless Inc.
         dated September 18, 2002 (2)

56

10.13    Stock and Asset Purchase Agreement by and among the
         Company and Summit Oil & Gas, Inc. dated December 15,
         2002 (2)

10.14    Stock and Asset Purchase Agreement by and among the
         Company and Casino Ventures Partners dated December
         15, 2002 (2)

10.15    Asset Purchase Agreement by and Between New
         Millennium Capital Partners, LLC, Camden Holdings,
         Inc., Summit Healthcare, Inc., Summitt Ventures,
         Inc., and Mark Anderson dated December 31, 2002 (2)

10.16    Secured Promissory Note in the face amount of
         $1,120,000 (4)

10.17    Secured Term Promissory Note in the face amount of
         $900,000 (4)

10.18    Convertible Preferred Stock and Warrant Purchase
         Agreement (4)

10.19*   Agreement to issue warrant dated February 24, 2003
         between NuWay Medical, Inc. and Sachi International,
         Inc.

10.20    Term Loan Agreement dated as of June 10, 2003 between
         NuWay Medical, Inc. and Augustine II LLC (5)

10.21    Stock Pledge Agreement dated as of June 10, 2003,
         between New Millennium and Augustine II LLC (5)

10.22    Stock Pledge Agreement dated as of June 10, 2003,
         between NuWay Medical, Inc. and Augustine II LLC (5)

10.23*   Promissory Note dated November 20, 2003 between NuWay
         Medical, Inc. and James Seay, DDS.

10.24    Promissory Note by NuWay Medical, Inc. in favor of
         Augustine II, LLC (5)

57

                  10.25*   Amendment No. 1 to Term Loan Agreement dated as of
                           March 30, 2004 between NuWay Medical, Inc. and
                           Augustine II LLC

                  10.26*   Amended and Restated Convertible Term Note by NuWay
                           Medical, Inc. in favor of Augustine II, LLC

                  10.27*   Consulting Agreement with Mark Roy Anderson

                  10.28    2003 Stock Compensation Plan (11)

                  10.29*   Convertible Loan Agreement and Note between NuWay
                           Medical, Inc. and James Burchard

                  10.30    Conversion Agreement with New Millennium dated
                           October 16, 2003 (6)

                  10.31    Stock Purchase Agreement with Premium Medical Group,
                           Luis Ruiz and Eduardo Ruiz (7)

                  10.32    Rescission Agreement with Premium Medical Group, Luis
                           Ruiz and Eduardo Ruiz (8)

                  14.1*    Code of Ethics

                  21.1*    List of Subsidiaries of the Registrant

                  23.1*    Consent of Haskell & White LLP

                  23.2*    Consent of Jeffrey S. Gilbert, CPA

                  31.1*    Certification of Chief Executive Officer and Interim
                           Chief Financial Officer Pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and
                           15(d)-14 under the Securities Exchange Act of 1934

                  32.1*    Certification of Chief Executive Officer and Interim
                           Chief Financial Officer Pursuant to 18 U.S.C. Section
                           1350.

----------

* Filed herewith

(1) Incorporated herein by reference from the 10-KSB filed by the Company for the year ended December 31, 2001.

(2) Incorporated herein by reference from the 10-KSB filed by the Company for the year ended December 31, 2002.

58

(3) Incorporated herein by reference from the Form S-8 filed by the Company on August 8, 2002, and amended on Form S-8 filed by the Company on December 27, 2002.

(4) Incorporated herein by reference from the Form 8K filed by the Company on May 1, 2003.

(5) Incorporated herein by reference from the 10-QSB filed by the Company for the period ending March 31, 2003.

(6) Incorporated herein by reference from the Form 8-K filed by the Company on October 31, 2003.

(7) Incorporated herein by reference from the Form 8-K filed by the Company on February 17, 2004.

(8) Incorporated herein by reference from the Form 8-K filed by the Company on October 15, 2004.

(9) Incorporated herein by reference from the 10-KSB filed by the Company for the year ended December 31, 1998

(10) Incorporated herein by reference from the 10-KSB filed by the Company for the year ended December 31, 1999

(11) Incorporated herein by reference from the Form S-8 filed by the Company on February 27, 2003.

(b) Reports on Form 8-K.

On October 31, 2003, the Company filed a Current Report on Form 8-K in connection with a change of control transaction involving New Millennium.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table summarizes the fees charged by Shubitz, and H&W, for certain services rendered to the Company relating to fiscal year 2002, and Gilbert, for certain services rendered to the Company relating to fiscal year 2003.

Shubitz performed audit and audit-related services relating to the Company's Quarterly Reports on Form 10-QSB for fiscal year 2002. H&W was retained by the Company in 2003 to audit the Company's financial statements and provide audit-related services for fiscal year 2002. Gilbert was retained by the Company in September 2004 to audit the Company's financial statements and provide audit-related services for fiscal year 2003. Because of the date of Gilbert's engagement, he did not commence audit and audit-related services until September 2004. Accordingly, all of Gilbert's fees were billed and partially paid during 2004 for the audit of the 2003 fiscal year and are shown in the column below under "Fiscal Year 2003".

59

                                            AMOUNT BILLED AND PAID
                                  -----------------------------------------
  TYPE OF FEE                     FISCAL YEAR 2002         FISCAL YEAR 2003
-----------------                 ----------------         ----------------
Audit(1)                              $63,163                  $74,025
Audit-Related(2)                        3,499                    2,500
Tax(3)                                     --                       --
All Other(4)                               --                    5,705
    Total                             $66,663                  $83,230

---------

(1) This category consists of fees for the audit of our annual financial statements included in the Company's annual report on Form 10-KSB and review of the financial statements included in the Company's quarterly reports on Form 10-QSB. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements, statutory audits required by non-U.S. jurisdictions and the preparation of an annual "management letter" on internal control matters.

(2) Represents services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for those fiscal years, aggregate fees charged for assurance and related services that are reasonably related to the performance of the audit and are not reported as audit fees. These services include consultations regarding Sarbanes-Oxley Act requirements, various SEC filings and the implementation of new accounting requirements.

(3) Represents aggregate fees charged for professional services for tax compliance and preparation, tax consulting and advice, and tax planning.

(4) Represents aggregate fees charged for products and services other than those services previously reported.

60

SIGNATURES

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

Dated: November 15, 2004            NuWay Medical, Inc.

                                    By: /s/ Dennis Calvert
                                        -------------------------------
                                        Dennis Calvert, President,
                                        Chief Executive Officer and
                                        Interim Chief Financial Officer

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 Company and in the capacities and on the date indicated:

           NAME                         TITLE                       DATE
           ----                         -----                       ----

/s/ Dennis Calvert
---------------------------  Chairman of the Board, Chief      November 15, 2004
    Dennis Calvert           Executive Officer, President
                             and Interim Chief Financial
                                        Officer


/s/ Joseph Provenzano
---------------------------             Director               November 15, 2004
    Joseph Provenzano


/s/ Steven V. Harrison II
---------------------------             Director               November 15, 2004
    Steven  V. Harrison II


/s/ Gary Cox
---------------------------             Director               November 15, 2004
    Gary Cox

61

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm -
Jeffrey S. Gilbert, CPA                                                      F-2

Report of Independent Registered Public Accounting Firm -
Haskell & White LLP                                                          F-3

Consolidated Balance Sheets as of December 31, 2003 and
December 31, 2002                                                            F-4

Consolidated Statements of Operations for the years
ended December 31, 2003 and 2002                                             F-5

Consolidated Statements of Changes in Stockholders'
Deficit for the years ended December 31, 2003 and 2002                       F-6

Consolidated Statements of Cash Flows for the years
ended December 31, 2003 and 2002                                             F-8

Notes to Consolidated Financial Statements                           F-10 - F-34

             Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
NuWay Medical, Inc.

I have audited the consolidated balance sheet of NuWay Medical, Inc. and Subsidiary (the "Company") as of December 31, 2003 and the related consolidated statements of operations, changes in stockholders' deficit and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these consolidated financial statements based on my audit.

I conducted my audit in accordance with standards Of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, I express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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. I believe my audit provides a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of NuWay Medical, Inc. and Subsidiary as of December 31, 2003 and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Notes 1 and 3 to the consolidated financial statements, the Company during 2003 discontinued it remaining operations.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has limited liquid resources, recurring losses, and is seeking to implement its business plan, which requires the Company to acquire or develop a business. These matters raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also discussed in Note 1. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

                                                /s/ JEFFREY S. GILBERT

Los Angeles, California
October 26, 2004

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

NuWay Medical, Inc. (F/K/A NuWay Energy, Inc.)

We have audited the accompanying consolidated balance sheet of NuWay Medical, Inc. and subsidiaries (the "Company") as of December 31, 2002, and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of NuWay Medical, Inc. and subsidiaries as of December 31, 2002, and the results of their operations and their cash flows for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.

As discussed in notes 1 and 4 to the consolidated financial statements, the Company exited several business lines during 2002 through the sale of interests in subsidiaries and the discontinuance of operations.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in note 1 to the consolidated financial statements, the Company has limited liquid resources, recurring losses from operations and is seeking to implement its business plan with a new industry focus. These matters raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also discussed in note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

                                                /s/ HASKELL & WHITE LLP
                                                HASKELL & WHITE LLP

Irvine, California
May 12, 2003

F-3

NUWAY MEDICAL, INC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2003 AND 2002

                                     ASSETS
                                                                           2003             2002
                                                                       ------------     ------------
CURRENT ASSETS
      Cash and Cash Equivalents                                        $        671     $        521
                                                                       ------------     ------------
                     Total Current Assets                                       671              521
                                                                       ------------     ------------
PROPERTY AND EQUIPMENT, NET                                                      --           28,844
                                                                       ------------     ------------
OTHER ASSETS
      Marketing Database                                                         --          255,000
      Med Wireless License                                                       --        4,090,000
                                                                       ------------     ------------
                     Total Other Assets                                          --        4,345,000
                                                                       ------------     ------------
TOTAL ASSETS                                                           $        671     $  4,374,365
                                                                       ============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts Payable and Accrued Expenses                            $  1,256,475     $  1,131,579
      Notes Payable                                                       1,605,000        1,120,000
      Discount on Note, Net                                                 (62,131)              --
      Debentures Payable, Net                                               125,000          150,000
                                                                       ------------     ------------
                     Total Current Liabilities                            2,924,344        2,401,579
                                                                       ------------     ------------

COMMITMENTS, CONTINGENCIES AND SUBSEQUENT EVENTS

STOCKHOLDERS' EQUITY
      Convertible Preferred Series A, $.00067 Par Value, 25,000,000
           Shares Authorized, 559,322 and No Shares Issued and
           Outstanding at December 31, 2003 and 2002, respectively              375               --
      Common Stock, $.00067 Par Value, 100,000,000 Shares
           Authorized, 36,386,486 and 17,137,727 Shares Issued
           at 2003 and 2002, respectively                                    23,976           11,483
      Additional Paid-In Capital                                         23,002,818       20,289,936
      Accumulated Deficit                                               (25,823,838)     (18,201,629)
      Treasury Stock, at cost, 44,900 Shares Held as of December
           31, 2003 and 2002                                               (127,004)        (127,004)
                                                                       ------------     ------------
                     Total Stockholders' (Deficit) Equity                (2,923,673)       1,972,786
                                                                       ------------     ------------
TOTAL LIABILITIES AND STOCKHOLDERS'S EQUITY                            $        671     $  4,374,365
                                                                       ============     ============

The accompanying footnotes are an integral part of these consolidated financial statements

F-4

NUWAY MEDICAL, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                                  Year Ending December 31,
                                                                   2003             2002
                                                               ------------     ------------
Revenue
      Rental Income                                            $         --     $         --
                                                               ------------     ------------
                     Total Revenues                                      --               --
                                                               ------------     ------------
Costs and Expenses
      Selling, General and Administration                         2,339,264        2,157,289
      Depreciation, Depletion and Amortization                        8,552            9,938
      Expenses Associated With Stock Issued for Services                             987,944
      Cancellation of Prior Year Warrant Compensation                             (1,659,750)
      Impairment of Property, Plant and Equipment                    20,292               --
                                                               ------------     ------------
                     Total Costs and Expenses                     2,368,108       (1,495,421)
                                                               ------------     ------------

Loss from operations                                             (2,368,108)      (1,495,421)
                                                               ------------     ------------
Other Income and Expense
      Interest Expense                                             (344,832)         (45,026)
      Other Income                                                       --           51,767
                                                               ------------     ------------
                     Net Other Income                            (344, 832)            6,741
                                                               ------------     ------------

Loss Before Income Taxes                                         (2,712,940)      (1,488,680)

Provision for Income Taxes (Benefit)                                     --               --
                                                               ------------     ------------
Net Loss from Continuing Operations                              (2,712,940)      (1,488,680)
                                                               ------------     ------------
Loss from Discontinued Operations
(Includes $651,750 of depreciation and amortization expense
and $3,693,250 of impairment charge of intangible assets)        (4,909,269)              --
Loss from Discontinued Operations                                        --       (3,448,417)
                                                               ------------     ------------
Net Loss                                                       $ (7,622,209)    $ (4,937,097)
                                                               ============     ============
Loss Per Common Share - Basic and Diluted
      Loss per share from Continuing Operations                $      (0.09)    $      (0.15)
                                                               ============     ============
      Loss per share from Discontinued Operations              $      (0.16)    $      (0.35)
                                                               ============     ============
      Net Loss per Share                                       $      (0.25)    $      (0.50)
                                                               ============     ============
      Weighted Average Common Share Equivalents Outstanding      30,466,628        9,791,396
                                                               ============     ============

The accompanying footnotes are an integral part of these consolidated financial statements

F-5

NUWAY MEDICAL, INC AND SUBSIDIARY`
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                       Common Stock
                                -------------------------                   Accumulated
                                   Number         Par        Additional        Other          Retained                Comprehensive
                                     of          Value        Paid-In      Comprehensive      Earnings      Treasury      Income
                                   Shares       $.00067       Capital      Income (Loss)      (Deficit)       Stock       (Loss)
                                ------------  -----------   ------------   --------------  -------------- ----------- --------------
BALANCE DECEMBER 31, 2001         5,078,783     $  3,402     15,137,225     $  (544,539)   $(13,264,532)  $(127,004)        --

CONVERSION OF DEBENTURES          1,332,570          893      2,331,705

STOCK ISSUED FOR INTANGIBLES        666,667          447        254,553

STOCK ISSUED FOR LICENSE OF
MED WIRELESS SOFTWARE             6,600,000        4,422      2,965,578

REALIZED LOSS OF FOREIGN
CURRENCY TRANSACTIONS                                                           544,539                                    544,539

WARRANTS ISSUED UNDER
EMPLOYMENT AGREEMENT                                             25,000

STOCK ISSUED UNDER
    COMMON STOCK
    PURCHASE AGREEMENT            1,000,000          670        249,330

NET LOSS FOR THE YEAR
    ENDED DECEMBER 31, 2002                                                                  (4,937,097)                (4,937,097)
                                ------------  -----------   ------------   --------------  -------------- ----------- --------------
BALANCE DECEMBER 31, 2002        17,137,727       11,483     20,289,936            --       (18,201,629)   (127,004)    (4,392,558)
                                ------------  -----------   ------------   --------------  -------------- ----------- --------------

The accompanying footnotes are an integral part of these consolidated financial statements

F-6

NUWAY MEDICAL, INC AND SUBSIDIARY`
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                   Preferred Stock              Common Stock
                             -------------------------   -------------------------                   Accumulated
                                Number         Par          Number         Par        Additional        Other       Retained
                                  of          Value           of          Value        Paid-In      Comprehensive   Earnings
                                Shares       $.00067        Shares       $.00067       Capital      Income (Loss)   (Deficit)
                             ------------  -----------   ------------  -----------   ------------   -------------  ----------
SALE OF PREFFERED STOCK        559,322          375

STOCK ISSUED FOR SERVICES                                 18,623,759      12,478       2,687,898

CONVERSION OF
    DEBENTURES                                               625,000          14          24,984

NET LOSS FOR THE YEAR
  ENDED DECEMBER 31, 2003                                                                                           (7,622,209)
                              ---------    ---------     ------------  ----------    ------------   -----------   -------------
BALANCE DECEMBER 31, 2003      559,322      $   375       36,386,486   $  23,976     $23,002,818     $      --    $(25,823,838)
                              =========    =========     ============  ==========    ============   ===========   =============


                                         Comprehensive
                              Treasury       Income
                                Stock        (Loss)
                              ---------  -------------
SALE OF PREFFERED STOCK

STOCK ISSUED FOR SERVICES

CONVERSION OF
    DEBENTURES

NET LOSS FOR THE YEAR
  ENDED DECEMBER 31, 2003                   (7,622,209)
                             -----------  -------------
BALANCE DECEMBER 31, 2003     $(127,004)  $ (7,622,209)
                             ===========  =============

The accompanying footnotes are an integral part of these consolidated financial statements

F-7

NUWAY MEDICAL, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                                                   Years Ended December 31,
                                                                                 ---------------------------
                                                                                     2003            2002
                                                                                 -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                                                       $(7,622,209)    $(4,937,097)
  Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
        Depreciation, Depletion and Amortization                                     660,302           9,938
        Issuance of Stock for Services                                             2,175,459         987,944
        Cancellation of prior year warrant compensation                                   --      (1,659,750)
        Impairment of Intangible Assets                                            3,693,250              --
        Write Down of Idle Furniture, Fixtures and Office Equipment                   20,292              --
        Loss on disposal of Discontinued Operations                                       --       3,448,417

        Realized Loss of Foreign Currency Translation                                     --         544,539
        Issuance of Warrants as Compensation                                              --          25,000
        Amortization of Discount on Note                                             183,499              --
        Decrease in Prepaid Expenses and Other Current Assets                             --         163,332
        Increase in Accounts Payable and Accrued Expenses                            154,896         287,371
                                                                                 -----------     -----------
      Net Cash Used In Operating Activities                                         (734,511)
                                                                                                  (1,130,306)
                                                                                 -----------     -----------
CASH FLOWS USED IN INVESTING ACTIVITIES
      Decrease in Notes Receivable to Officers and Affiliates from
           Severance Packages                                                             --         440,000
                                                                                 -----------     -----------
      Net Cash Used In Investing Activities                                               --         440,000
                                                                                 -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds Received From Term Loans                                              470,000              --
      Proceeds from Sale of Preferred Stock                                          279,661              --
      Proceeds from Sale of Securities                                                    --         250,000
                                                                                 -----------     -----------
      Net Cash Provided By Financing Activities                                      734,661         250,000
                                                                                 -----------     -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     150        (440,306)

CASH AND CASH EQUIVALENTS - BEGINNING                                                    521         440,827
                                                                                 -----------     -----------

CASH AND CASH EQUIVALENTS - ENDING                                               $       671     $       521
                                                                                 ===========     ===========

The accompanying footnotes are an integral part of these consolidated financial statements

F-8

NUWAY MEDICAL, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 2003 AND 2002

                                                                                   Years Ended December 31,
                                                                                 ---------------------------
                                                                                     2003            2002
                                                                                 -----------     -----------
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION

Cash Paid During the Period for:
  Interest                                                                       $        --     $        --
                                                                                 ===========     ===========
  Income Taxes                                                                   $        --     $        --
                                                                                 ===========     ===========

Conversion of Debentures and Accrued Interest to Capital                         $    25,000     $ 2,332,598
                                                                                 ===========     ===========
Issuance of Stock for Capitalized Assets:

  Database Purchase in Exchange for Common Stock                                 $        --     $   255,000
                                                                                 ===========     ===========
  License Rights from Med Wireless Inc. in Exchange for Common Stock
  valued at $2,970,000 and the assumption of $1,120,000 Note Payable             $        --     $ 4,090,000
                                                                                 ===========     ===========

The accompanying footnotes are an integral part of these consolidated financial statements

F-9

NUWAY MEDICAL, INC AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

Note 1. Business and Organization

Outlook

As of December 31, 2003, the Company had no continuing business operations. Any value perceived in the Company is speculative in nature and intangible in value. The Company is operating as a public shell and its business operations consist of management seeking merger and acquisition candidates with ongoing operations.

These consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. During 2003 and as of September 30, 2004, the Company had limited liquid and capital resources while seeking acquisition opportunities.

During 2003, the Company raised $279,661 with the sale of 559,322 shares of its Preferred Stock, and obtained a $425,000 term loan and a $50,000 loan. During the latter part of 2003 and through 2004, the Company's president incurred costs on the Company's behalf, which totaled approximately $140,000. During 2004, the Company has obtained $25,000 from the sale of 5,000,000 shares of common stock, $5,000 for a note convertible into 250,000 common shares, and $50,000 for a note convertible into 10,000,000 shares of preferred stock. As of December 31, 2003, the Company had approximately $1,000 in cash, which is insufficient to meet operating expenses for any reasonable period of time. The Company will be required to raise additional capital to sustain operations for the next twelve months and is actively seeking investments from external sources. There is no assurance that the Company will be able to raise additional capital. It is unlikely that the Company will be able to qualify for bank debt until such time as the Company is able to demonstrate the financial strength to provide confidence for a lender.

The Company has relied upon its stock award plans, the 2002 Consultant Equity Plan, the 2003 Stock Compensation Plan and the Nuway Medical, Inc. 2004 Equity Plan, to compensate consultants and employees who have assisted in developing and executing the Company's business plan. The Company has significantly relied on these plans to compensate various consultants and personnel, and this reliance has significantly diluted the loss per share. During 2004, these issuances have been of questionable benefit in compensating consultants and employees, as there is little market interest for the Company's stock.

Ultimately, the Company's ability to continue as a going concern is dependent upon its ability to attract new sources of capital, establish an acquisition or reverse merger candidate with continuing operations, attain a reasonable threshold of operating efficiencies and achieve profitable operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Organization

F-10

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

NuWay Energy, Inc., a Delaware corporation (formerly known as Latin American Casinos, Inc.), changed its name to NuWay Medical Inc. (NuWay) in October 2002. The name change reflected the Company's operating focus after it acquired a 15-year licensing right to certain medical technology from Med Wireless, Inc. in July 2002. (See Note 3.) The Med Wireless software is a HIPAA (Health Insurance Portability and Accountability Act) compliant technological solution to electronically organize, store, and retrieve medical records and medical images. To market this licensing right, the Company formed NuWay Sports Medicine Ventures, LLC (subsequently renamed NuWay Sports LLC), in which it holds a 51% membership interest, in December 2002. Although formed in 2002, the subsidiary did not become begin operations until 2003. NuWay Sports developed the Player Record Library System (PRLS), which is a derivative product of the Med Wireless technology. PRLS is a secure database for athlete/patient medical data that can be acquired, displayed, analyzed, interpreted, and archived in a completely digital format, which has been customized for the sports industry. NuWay Sports generated $40,000 in revenue during the first quarter of 2003 and entered into negotiating for the possible use of the product with several professional sports leagues and individual professional sport clubs. However, these negotiations did not result in a transaction and the Company has had little success in generating ongoing revenue. As of September 2004, NuWay Sports had ceased marketing the PRLS system as a result of inadequate capital, marketing resources, and market competition. The PRLS system has not developed into a profitable operation and the Company is attempting to sell its licensing rights and PRLS product, but does not have any offers with tangible value.

In addition, the Company pursued a business opportunity related to an ultrasound machine sale-leaseback program. The business opportunity came about as a result of the Med Wireless License transaction with the Company, but no cost associated with this business opportunity was recorded on the books of the Company. Under this program, the Company attempted to arrange the purchase of ultrasound machines by investors, who would lease the machines to the Company. In turn, the Company would sub-lease the ultrasound machines to the end user. The Company secured purchase orders from both investors and prospective end-use lessees of the ultrasound machines. These purchase orders were conditioned upon the Company's ability to secure financing of its own lease obligations of the ultrasound machines from the investors. This was not accomplished because the Company lacked the financial resources and credit to obtain such financing. The Company continued to pursue attempts to arrange such financing through March 2003. After March 2003, the Company focused primarily on the Med Wireless and PRLS technologies and, after occasional attempts to pursue the sale-leaseback program through mid-2003, this ultrasound program was no longer pursued.

With the change in management in October 2002, the Company sold, or discontinued operations of, its four wholly-owned subsidiaries at October 1, 2002: (i) NuWay Resources, Ltd., which conducted oil and gas exploration activities, primarily in western Canada; (ii) Latin American Casinos del Peru, S.A., (iii).Latin American Casinos of Colombia LTDA, which were both engaged in the rental of slot machines and other gaming equipment to casino operators in Latin America and,
(iv) World's Best Rated Cigars, Inc., a marketer of premium cigars at discounted

F-11

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

prices in the United States. World's Best Rated Cigars was dissolved and the other three subsidiaries were sold in their entirety to third parties controlled by Mark Roy Anderson, a former consultant and principal stockholder of the Company. The sale of these operating segments was completed without recourse as all liabilities and remaining assets were transferred to the purchaser in lieu of any cash. The Company recorded a loss on disposal of these entities of $3,448,417. (See Note 4)

Note 2. Summary of Significant Accounting Policies

a) Principles of Consolidation

Management intends to sell NuWay Sports, LLC. Therefore as of December 31, 2003 revenues and expenses related to NuWay Sports, LLC have been reclassified from continuing operations to a Loss from Discontinued Operations. (Note 4) There are no other subsidiaries.

The consolidated balance sheet at December 31, 2002 includes the accounts of NuWay Medical, Inc. and NuWay Sports, LLC. The Company has significant influence of the business operations of NuWay Sports and operations are consolidated. All significant inter-company balances have been eliminated in consolidation. Operations for NuWay Sports LLC were not significant for the period from inception to December 31, 2002. The consolidated statements of operations and cash flows for the year ended December 31, 2002 include the results of the activities of the subsidiaries mentioned in Note 1 above up to the date of disposal. (Note 3)

b) Property and Equipment

On April 1, 2004 the Company closed its offices and has in storage its furniture, fixtures and office equipment. As these items are idle and there is no foreseeable plan of use, management recorded a write down of the remaining net book value totaling $20,292 as of December 31, 2003. Any gain from the sale of these items would not have a material affect on these financial statements. While in use during 2003, depreciation was provided on a straight-line basis over the estimated useful life of the respective asset. Maintenance and repairs are charged to expense as incurred. There were no major renewals or betterments.

c) Impairment of Long-Lived Assets

The Company periodically reviews its long-lived assets for potential impairment as required by Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." As discussed in Note 3, the Company recorded an impairment charge totaling $3,693,250, and $651,750 of depreciation and amortization charges resulting in a combined total for Loss from Discontinued Operations of $4,909,269, as reflected in its Statement of Operations for the year ended December 31, 2003.

F-12

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

d) Subsidiary and Technology Held for Sale

The Company is attempting to sell its majority-owned subsidiary, NuWay Sports and the Med Wireless technology. Thus, as of December 31, 2003 the Company has reflected on its Statement of Operations a loss from Discontinued Operations of $4,909,269 related to the Med Wireless technology and its investment in NuWay Sports, LLC. (Note 3) There are minimal future costs expected to be incurred to sell this subsidiary or the technology and, in accordance with FASB issued Statement No. 146 "Accounting for Costs associated with the exit or disposal activities", any costs will be expensed as incurred.

e) Discontinued Operations-2002

As discussed in Note 4, the Company discontinued several operations during the year ended December 31, 2002. The Company recorded a loss of $3,448,417 during the fourth quarter of 2002 when these operations were discontinued.

f) Earnings (Loss) Per Share

The Company reports basic and diluted earnings per share (EPS) for common and common share equivalents. Basic EPS is computed by dividing reported earnings by the weighted average shares outstanding. Diluted EPS is computed by adding to the weighted average shares the dilutive effect if stock options and warrants were exercised into common stock. For the years ended December 31, 2003 and 2002, the denominator in the diluted EPS computation is the same as the denominator for basic EPS due to the anti-dilutive effect of the warrants and stock options on the Company's net loss.

For the years ended December 31, 2003 and 2002, the  computation of basic
EPS is as follows:

                                            2003                2002
                                        -------------      ------------
    Numerator - net loss from
      continuing operations             $   2,712,940      $  1,488,680
    Denominator - weighted shares
      outstanding                          30,466,628         9,791,396
                                        -------------      ------------
    Loss per share                      $       (0.09)     $     (0.15)
                                        =============      ============

F-13

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

                                        2003               2002
                                    -------------      ------------
Numerator - net loss from
  discontinued operations           $   4,909,269      $  3,448,417
Denominator - weighted shares
  outstanding                          30,466,628         9,791,396
                                    -------------      ------------
Loss per share                      $       (0.16)     $     (0.35)
                                    =============      ============

                                        2003               2002
                                    -------------      ------------
Numerator - net loss                $   7,622,209      $  4,937,097
Denominator - weighted shares
  outstanding                          30,466,628         9,791,396
                                    -------------      ------------
Loss per share                      $       (0.25)     $     (0.50)
                                    =============      ============

g) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period reported. Actual results could differ from those estimates. Estimates are used when accounting for stock-based transactions, uncollectible accounts receivable, asset depreciation and amortization, and taxes, among others.

h) Stock Options and Warrants issued for Services

As permitted under the Statement of Financial Accounting Standards No.
123 (SFAS No. 123), "Accounting for Stock-Based Compensation," the Company accounts for its stock-based compensation to employees in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. The Company provides the pro forma net earnings, pro forma earnings per share, and stock based compensation plan disclosure requirements set forth in SFAS No. 123.

Had compensation cost for options issued under the 1994 Stock Option Plan, as described more fully in Note 7, been determined based upon the fair value at the grant date for options granted, consistent with the provision of SFAS 123, the Company's net loss and net loss per share would have been reduced to the pro forma amounts indicated below:

F-14

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

                                          2003              2002
                                     --------------    ---------------
Net Loss - as reported                $(7,622,209)       $(4,937,097)
Deduct: stock-based employee
compensation expenses determined
under fair value based method                  --             10,021

Net Loss - pro forma                  $(7,622,209)       $(4,947,118)
                                     --------------    ---------------
Loss per share - as reported                                      --

      Basic and Diluted                    $(0.25)            $(0.50)
                                     ==============    ===============
Loss per share - pro forma

      Basic and Diluted                    $(0.25)            $(0.51)
                                     ==============    ===============

For stock issued to consultants and other non-employees for services, the Company records the expense based on the fair market value of the securities as of the date of the stock issuance.

i) Advertising

The Company expenses all advertising costs as incurred. Included in the Statement of Operations is approximately $4,500 and $13,000 of advertising expense charged to operations for the years ended December 31, 2003 and 2002, respectively. During 2003, substantially all advertising expenses to promote the Company's PRLS product, marketed through NuWay Sports, were paid through issuance of shares of the Company's common stock.

j) Non-Cash Transactions

The Company has established a policy relative to the methodology to determine the value assigned to each intangible acquired with or licensed by the Company and/or services or products received for non-cash consideration of the Company's common stock. The value is based on the market price of the Company's common stock issued as consideration, at the date of the agreement of each transaction or when the service is rendered or product is received, as adjusted for applicable discounts.

The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results of the Company reports in its financial statements.

k) Recent Accounting Pronouncements

In July 2002, the FASB issued Statement No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." Statement No. 146 requires companies to recognize costs associated with the exit or disposal of activities as they are incurred rather than at the date a plan of disposal or commitment to exit is initiated. Types of costs covered by Statement No. 146 include lease termination costs and certain employee

F-15

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

severance costs that are associated with a restructuring, discontinued operation, facility closing, or other exit or disposal activity. Statement No. 146 will apply to all exit or disposal activities initiated after December 31, 2002.

In November 2002, the FASB issued Interpretation No. (Interpretation) 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Interpretation 45 requires certain guarantees to be recorded at fair value. In general, Interpretation 45 applies to contracts or indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an underlying that is related to an asset, liability, or an equity security of the guaranteed party. The initial recognition and measurement provisions of Interpretation 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. Interpretation 45 also requires new disclosures, even when the likelihood of making any payments under the guarantee is remote. These disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The changes required by Interpretation 45 are not expected to have a material impact on the results of operations, financial position or liquidity of the Company.

Note 3. Impairment of Intangible Assets and Discontinued Operations - 2003

During the third quarter of 2003, management conducted an impairment analysis of its two intangible assets, a marketing database purchased from Genesis Health Tech, Inc. and the Med Wireless software technology license acquired from Med Wireless, Inc. Both of those entities were controlled by Mark Roy Anderson. These two assets were listed on the Company's financial statements for the period ending June 30, 2003 at values of $229,500 and $3,681,000, respectively.

With respect to the marketing database, management had no success in its marketing efforts and its future use was uncertain and at that time it had not used the marketing database to market any product or generate any revenue for the Company, and has thus determined to record a 100% impairment of that asset in the amount of $216,750.

With respect to the Med Wireless license, management analyzed the sales prospects of its PRLS system (which is a derivative product based upon the technology licensed from Med Wireless) to the various professional and collegiate sports organizations. It evaluated the successes the Company's NuWay Sports subsidiary had in its sales efforts, and the revenue from projected future sales, and determined to record an impairment charge to the recorded value of the Med Wireless license of $1,649,594. This amount was calculated projecting sales over a three year period (calendar years 2004, 2005 and 2006), factoring in the costs of sales and the product costs, discounting projected net revenue to their present value using a 7.5% interest factor, and further discounts of the Company's projections for uncertainties relative to the timing of acceptance of this technology.

F-16

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

It was stated in the Company's Quarterly Report on Form 10-QSB for the period ended September 30, 2003 that management did not believe that further impairment of the Med Wireless license would be necessary. However, due to the lack of capital to sustain marketing, product development, and operational needs, the Company was unable to obtain significant sales and had not met any projected results. In addition, the Company is attempting to sell the NuWay Sports subsidiary that was marketing the PRLS system. In light of these circumstances, management determined that the book value of the license would not exceed the expected discounted cash flows of its sales projections. Thus management has recorded an additional impairment charge of $1,826,906 in the fourth quarter of the year ending December 31, 2003. For the fiscal year ending December 31, 2003, the Company recorded a total impairment charge of $3,693,250. Of this amount, $216,750 was related to the impairment of the marketing database and the remaining $3,476,500 related to the Med Wireless license. The Company recorded an impairment charge totaling $3,693,250, and $651,750 of depreciation and amortization charges related to the technology acquired in 2002.

The book value of the  Company's  intangible  assets as of December  31, 2003 is
zero.

The  Company  had the  following  intangible  assets at  December  31,  2002:  a

marketing database purchased from Genesis Health Tech, Inc. on June 28, 2002 and certain software technology licensed from Med Wireless, Inc. on August 21, 2002. Management had determined the value assigned to each of these intangibles based on the market price of the Company's common stock at the date of agreement of each transaction, as adjusted for applicable discounts. No amortization was recorded for these intangible assets in 2002, as the Company did not begin to utilize the database or generate sales of products derived from this technology until 2003.

F-17

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

During the quarter ended September 30, 2002, management valued the marketing database at the fair market value of shares issued. On the date of issuance, the NASDAQ closing price for the Company's common stock was $.45 per share, resulting in a valuation of $300,000 for the 666,667 shares issued. Similarly, the license agreement was valued at the value of the assumed note ($1,120,000) plus $3,500,000, or $.53 per share, which is a discount of approximately 10% to the closing price of the stock on the date of issuance ($.60). The discount of 10% was applied to the value of the stock to reflect the restricted nature of the common stock issued and the inherent lack of marketability associated with the issuance of such a significant block.

Management determined that because of the Company's limited financial resources and increased competition, it would discontinue operations of NuWay Sports and any effort to exploit the Med Wireless license, including development and marketing of the product. The Company faces increased competition from other more established companies with more human resources and capital recourses to market their competing products. While PRLS is narrowly defined in its application to the sports industry, management believes the technology related to the PRLS and the Med Wireless license could be expanded by others to serve corporate, government or health provider markets. However, the Company is unable to adequately support the continued development and marketing of the product to take advantage of those potential markets. Because NuWay Sports was able to demonstrate its application with the NFL in the past, the underlying asset and its potential for future deployment has potential value to an entity desiring and capable of exploiting the pursuit of those customers. Therefore, management is actively seeking to sell NuWay Sports.

The consolidated statement of operations for the year ended December 31, 2003 reflects a discontinued operations segments related to the abandonment of the exploitation of the Med Wireless technology after a charge to impairment in an amount equal to the remaining net book value related to 2002 acquired technology. The aggregate of impairment and depreciation and amortization was $4,345,000. Although the formal decision to discontinue the operations was made subsequent to December 31, 2003, management of the Company believes that this presentation appropriately reflects the current activity and status of the Company.

Note 4. Discontinued Operations - 2002

SALES OF ASSETS NOT IN THE ORDINARY COURSE OF BUSINESS

During 2002, the Company divested its businesses to focus on developing the PRLS technology that was developed as a derivative product from the acquisition of the Med Wireless technology. These divested businesses included a slot machine rental and remanufacturing subsidiary in South and Central America, the distribution and sale of premium brand cigars, and an oil and gas development subsidiary in Canada. The stock of both the slot machine rental subsidiaries (Latin American Casinos Del Peru S.A., a Peruvian corporation and Latin American Casinos of Colombia LTDA, a Colombian corporation), and the oil and gas subsidiary, NuWay Resources, Ltd., were sold to third parties controlled by Mark Roy Anderson, a former consultant and principal stockholder of the Company, effective October 1, 2002. The cigar business was shut down and discontinued effective November 30, 2002. A description of the discontinued operations is as follows:

F-18

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

LATIN AMERICAN CASINOS SUBSIDIARIES - HISTORY AND SALE

The Company entered the gaming and casino industry in Peru in 1994. Since January 1995, the Company had been engaged in the renting of slot machines and other gaming equipment to licensed gaming establishments in various cities through its wholly-owned subsidiaries Latin American Casinos Del Peru S.A., a Peruvian corporation and Latin American Casinos of Colombia LTDA, a Colombian corporation. In 1994, the Company formed its Peruvian subsidiary, and in late 1995 the Company formed its Colombian subsidiary.

The Company had concentrated its efforts on the rental of used five reel slot machines. These machines were purchased at a fraction of the cost of new machines and were refurbished for use in South and Central America. As of September 30, 2002, the Company had approximately 300 machines under rental contracts in Peru and Colombia.

On December 15, 2002, the Company entered into an agreement to sell 100 percent of the stock of the Latin American Casinos subsidiaries, with an effective date of October 1, 2002. The Company realized no cash from the sale of those operating units, but was able to contractually insure that the Company would retain no liabilities related to this business after October 1, 2002. As a result of the sale, the Company recorded a loss of $1,376,733 during the fourth quarter of 2002.

WORLD'S BEST RATED CIGAR COMPANY - HISTORY AND SALE

In September 1997, the Company incorporated World's Best Rated Cigar Company, as a wholly-owned subsidiary, to distribute premium cigars within the United States. During November 2002, the Company discontinued operations and disposed of the remaining inventory and other assets. A loss of $179,750 was recorded in the fourth quarter of 2002 as a result of this disposal.

NUWAY RESOURCES, LTD. - HISTORY AND SALE

Beginning in July 2001, the Company directed part of its efforts to oil and gas exploration and development in Canada. Through its wholly-owned subsidiary NuWay Resources, Ltd., a Nevada corporation, the Company purchased a 30% working interest in the Superb area of Saskatchewan, Canada and a 20% working interest in the Altares Gas project in northeast British Columbia. The subsidiary's ownership interests in the oil fields were characterized as "minority" ownership working interests. This classification meant that the controlling owners, who were parties unaffiliated with the Company, would direct future development and capital expenditures and losses. Despite that lack of control, the Company continued to be obligated to share in the costs on a pro-rata basis.

While these properties had proven reserves of oil and natural gas, the controlling owners ultimately found the extraction and processing of the natural reserves had become too difficult and too costly to continue. Neither project had generated positive cash flow to the Company after considering the cost of development and administrative and management expenses. Furthermore, neither

F-19

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

project had any expectation of generating positive cash flow to the Company for the foreseeable future, and as a working interest owner, the Company would be liable for the cost of continued development, maintenance and re-drilling efforts. The managing owners of the properties have significant ownership interests in other oil and gas projects and they had communicated to management their intent to invest their resources in other projects, rather than focus on these properties.

In September 2002, the Company publicly announced that it intended to spin off the oil and gas subsidiary, NuWay Resources, Inc. into a separate public company. At that time, the Company began negotiations with the senior ownership party in Canada to determine the value and explore the feasibility of such a plan. At the same time, the Company began a process to determine if additional energy-related assets could be acquired by the subsidiary as part and parcel to the spin-off. Management was notified during these negotiations (in the fourth quarter) that the senior management partner intended to redirect their business focus away from these assets and into more lucrative properties. The uncertainties as to the future disposition of the assets, as well as uncertainty of the potential for additional capital call provisions and thus unknown future liabilities, made the planned spin-off unworkable.

NuWay entered into an agreement on December 15, 2002 with Summit Oil and Gas, Inc., a company controlled by Mark Roy Anderson, a former consultant and principal stockholder of the Company, to sell the stock of NuWay Resources, Ltd. for $100,000 less outstanding liabilities. The Company realized no cash from the sale of these operating units, but was able to contractually insure that it would not retain any liabilities beyond October 1, 2002. In conjunction with the sale of these operations, the Company recorded a loss of $1,290,948 during the fourth quarter of 2002.

The results of operations of the Company's oil and gas, casino, and cigar distribution operations have been shown as discontinued operations. The results of operations for the discontinued operations for the years ended December 31, 2002 are as follows:

                                                           2002
                                                      -------------
        Revenues                                      $     629,415
        Operating expenses                                1,230,401
        Asset impairment charges                                 --
                                                      -------------
        Loss from discontinued operations
          prior to disposal                               (600,986)
        Loss on disposal of discontinued
          operations                                    (2,847,431)
                                                      -------------
        Loss from discontinued operations             $ (3,448,417)
                                                      =============

Note 5.     Property and Equipment

On April 1, 2004 the Company closed its offices and has in storage its furniture, fixtures and office equipment. As these items are idle and there is no foreseeable plan of use, management recorded a write down of the remaining balance net book value totaling $20,292 as of December 31, 2003.

F-20

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

During 2002, furniture, fixtures and office equipment are carried at cost and depreciated using the straight-line method over the estimated useful lives of the assets, which is five years.

See Note 3 for discussion of operations discontinued during 2002, at which time the Company's remaining assets, except for certain furniture, fixtures and office equipment in its corporate offices, were sold or disposed of in connection with the cessation of the related operations. This represents the only remaining property and equipment as of December 31, 2002.

                                                   2003            2002
                                               ------------    ------------
Furniture, Fixtures & Office Equipment         $    42,753     $    42,753
   Less:  Accumulated Depreciation                  22,461          13,909
   Less:  Write Down of Idle Equipment              20,292              --
                                               ------------    ------------
Property and Equipment, net                    $        --     $    28,844
                                               ============    ============

Note 6. Warrants

During 2003, the Company issued warrants to purchase a total of 7,011,036 shares of common stock on the following terms: (i) 120,000 shares to an investor in connection with a purchase of the Company's preferred stock, at a price of $0.20 per share, which expires March 7, 2006 (ii) 399,322 shares to investors in connection with a purchase of the Company's preferred stock, at a price of $0.20 per share, which expires April 15, 2006 (Note 9); (iii) 6,158,381 shares to an investor in connection with a loan to the Company, originally at a price of $0.16 per share, which price adjusted to $0.035 per share in connection with an extension of the loan repayment obligation, which expires June 10, 2008 (Note 10); (iv) 333,333 shares to a consultant in connection with consulting services, at a price of $0.06 per share, which expires August 29, 2008. The compensation expense related to (iv) above is immaterial.

On October 29, 2003, the Company issued an unvested warrant to an individual to purchase 2,000,000 shares of common stock at $0.05 a share. The warrant expired on October 29, 2004. The Warrant was not exercisable unless and until the Holder introduced to the Company an investor or investors which invest net proceeds in the Company of at least $250,000 within three months of the introduction. This condition was not satisfied and the warrant expired unvested.

F-21

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

In August 2002, the Company issued a warrant to purchase 100,000 shares of common stock at $0.30 per share to a former executive in connection with his resignation from the Company. The Company recorded compensation expense of $25,000 based on the difference between the exercise price and the market price at the date of issuance. These warrants expired unexercised February 23, 2004.

In December 2000, the board of directors authorized the issuance of 3,300,000 private five-year stock warrants to acquire common stock at $1.75 per share. 1,500,000 of these warrants as well as 200,000 shares of restricted stock were issued to the then existing executive officers. Compensation expense was recorded equal to the market value of the restricted stock, $350,000. The remaining warrants were issued to consultants and the executive officers for services and were valued at $1,991,700 using the Black-Scholes option pricing model using a 68.3% volatility factor and an interest-free interest factor of 5.8%. This amount was originally recorded as expense in December 2000. In February 2002, 3,000,000 of the 3,300,000 warrants issued in year 2000 were cancelled and $1,659,750 of expenses previously recorded in year 2000 was reversed in accordance with the provisions of Accounting Principles Board Opinion No. 25. The remaining 300,000 warrants expire in 2005.

Effective June 5, 1998, the Company contracted with an investment banker to provide on a non-exclusive basis to the Company assistance in possible mergers, acquisitions and capital structuring. The duration of the contract is for five years. In consideration for these services, the Company granted warrants to purchase an aggregate of 225,000 shares of common stock at the closing bid price of $1.875 as of June 5, 1998. Effective February 8, 2000, the board of directors reduced the exercise price to $1.06, which was the closing price of the stock on that date. These warrants expired unexercised in June 2003.

Note 7. Stock Compensation Plans

1994 STOCK OPTION PLAN

On June 13, 1994, the board of directors adopted the 1994 Stock Option Plan in which the aggregate number of shares for which options may be granted under the Plan shall not exceed 1,000,000 shares. In June 1999, the Company increased the shares allocated to the plan to 1,500,000. The term of each option shall not exceed ten years from the date of granting (five years for options granted to employees owning more than 10 percent of the outstanding shares of the voting stock of the Company). The 1994 Plan terminated in June 2004.

At December 31, 2003 and 2002, the Company had options outstanding and exercisable as follows:

F-22

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

                                              Number of         Price Per
                                               Shares             Share
                                             -----------     ---------------
Options Outstanding at December 31, 2001        237,500       $1.00 - $1.75
Options Issued                                       --
Options Exercised                                    --
Options Expired                               (172,500)               $1.00
                                             -----------
Options Outstanding at December 31, 2002         65,000       $1.00 - $1.75
Options Issued                                       --
Options Exercised                                    --
Options Expired                                (65,000)       $1.00 - $1.75
                                             -----------
Options Outstanding at December 31, 2003             --
                                             ===========

All outstanding stock options and warrants were fully exercisable at December 31, 2003. The following shows the years in which these options and warrants will expire:

                                                                               Employee Stock
                                                       Investment Banker         Options and
                              Private Warrants             Warrants               Warrants
                          ------------------------- ------------------------ --------------------
Range of Prices                $0.06 to $1.75                $1.06             $0.30 to $1.75
---------------

Expired in 2003                      --                     225,000                65,000
To Expire in 2004                    --                        --                 100,000(1)
To Expire in 2005                 300,000                      --                     --
------------------------- ------------------------- ------------------------ --------------------
To Expire in 2006                 559,322                      --                     --
------------------------- ------------------------- ------------------------ --------------------
To Expire in 2008               6,491,714                      --                     --
------------------------- ------------------------- ------------------------ --------------------

(1) See note 6

The Company also had 1,725,000 publicly traded warrants to purchase the Company's common stock at an exercise price of $3.00 per share which expired unexercised on December 11, 2003.

2002 CONSULTANT EQUITY PLAN

In August of 2002, the board approved the formation of the 2002 Consultant Equity Plan designed to allow consultants to be compensated with shares of Company common stock for services provided to the Company. A total of 5,000,000 shares were registered under this plan with the Securities and Exchange Commission (the "SEC") during 2002. The Board amended this plan in December 2002. Approval of this plan was not submitted to the vote of the shareholders. Persons eligible to receive stock awards under this plan included "consultants" that provide bona fide consulting services to the Company, excluding any services incident to the raising of capital or promotion or maintenance of a market for the Company's securities. The plan is set to expire 10 years from its inception. A plan committee of two or more members of the Board administers the plan. The plan committee can award shares or options to purchase shares at a

F-23

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

price in its discretion, so long as the price chosen is not less than 85% of the fair market value of the underlying shares as of the date of the grant.

At December 31, 2002, there were 2,636,000 of unrestricted shares that were issued in January 2003 for services performed in 2002. Of this amount, 1,200,000 shares were issued to executive officers and the remaining balance was issued to various individuals for consulting, legal and accounting services. Compensation and consulting expense equal to the market value of the stock at the date of issuance totaling $645,000 was accrued in December 2002.

From August 2002 through February 2003, the Company issued all but 84,452 of the 5,000,000 shares available under this plan to approximately 26 consultants, employees and directors. Part of this issuance was a grant of 1,000,000 shares to Mr. Dennis Calvert, president and CEO of the Company, as consideration for his services. Those 1,000,000 shares were issued in January of 2003, but were returned by Mr. Calvert to the Company for cancellation that same month.

2003 STOCK COMPENSATION PLAN

On February 14, 2003, the board of directors approved the Company's 2003 Stock Compensation Plan as a means of providing directors, key employees and consultants' additional incentive to provide services for the Company. Both stock options and stock grants may be made under this plan. The Plan sets aside up to 15,000,000 shares of the Company's common stock for these purposes, which were registered with the SEC. Approval of this plan was not submitted to the vote of the shareholders. The Board administers this plan. The plan allows the Board to award grants of common shares or options to purchase common shares. The board has discretion to set the price of the options, but in no event shall that price be less than 100% of the fair market value of the shares at the time of the grant. The Board may at any time amend or terminate the plan. It does not expire on its terms.

During 2003, the Company issued 19,248,759 shares to approximately 37 consultants, directors, and employees. Of this total, 17,327,753 have been registered with the SEC, while the balance of 1,921,006 shares, were not registered and are restricted securities. Of the total issued in 2003, 2,633,590 relate to services performed in 2002 and 16,519,169 relate to 2003. The expenses related to the shares issued for 2002 services in 2003 were recorded in the Company's financial statements for the year ending December 31, 2002. In 2003 there was $1,554,700 of expenses recorded related to the issuance of these shares. Of this amount $1,045,600 related to consulting services, $394,000 related to legal services, $63,000 related to Advisory and Board of Directors expense, $52,100 related to salary expense, and $25,000 related to the reduction of the outstanding debentures.

At December 31, 2003, there were 900,000 unrestricted shares held, to be issued when the Company is in compliance with its regulatory filings. All of these shares are to be issued and the consulting expense related to these share totals

F-24

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

$81,000 and is included in the Accounts Payable and Accrued Expenses as of December 31, 2003 .

The board of directors approved a grant of 3,000,000 shares of stock pursuant to the Company's 2003 Stock Compensation Plan to Mr. Dennis Calvert, president and CEO of the Company, as consideration for his services. Those 3,000,000 shares were issued in March 2003. The board of directors subsequently modified its approval of this issuance to make it conditioned upon stockholder approval of the transaction because of NASDAQ Marketplace Rules governing change of control transactions. Mr. Calvert returned those 3,000,000 shares to the Company and they are not included in the above-described issuance.

Note 8. Sale of Preferred Shares

During the year ended December 31, 2003, the Company entered into two Convertible Preferred Stock and Warrant Purchase Agreements whereby the Company sold an aggregate of 559,322 shares of a newly created series of Preferred Stock, Series A Convertible Preferred Stock, par value $.00067, for a total consideration of $279,661. Each share of the Series A Preferred Stock is convertible into one share of the Company's common stock. In addition, for each share of preferred stock sold, the purchaser received one warrant to purchase one share of common stock at a price of $0.20 per share. Using the Black-Scholes pricing model, the Company estimated the fair value of these warrants to be approximately $35,000, and such amount has been netted in additional paid in capital on the December 31, 2003 consolidated balance sheet. The Black Scholes calculation assumed a discount rate of approximately five percent, volatility of 180 percent, and no dividends. The Series A Preferred Stock may be converted by the holder, at any time after six months from the purchase date and the warrant is exercisable for a period of three years from the purchase date. These Preferred Shares shall vote with the holders of the outstanding shares of Common Stock and not as a separate class or series.

The holders of outstanding shares of Series 2003 Convertible Preferred Stock (which may be referred to as the "Series 2003 Preferred Stock") shall be entitled to receive in any fiscal year, dividends, if, when and as declared by the Board of Directors, out of any assets at the time legally available therefore in cash at a rate equal to 7% per share, per annum, of the original liquidation preference of $2.00 per share, subject to adjustment as provided herein. There have been no dividends declared by the Board of Directors of the Company.

Note 9. Convertible Debentures

In December 2000, the Company, through a private placement, issued $3,500,000 principal amount of 6 percent Convertible Debentures to several investors. These debentures were originally due June 13, 2001 and their maturity date was subsequently extended to December 13, 2001. They are convertible into common stock at a price of $1.75 per share. The interest on the debentures is payable either in cash or shares of common stock, at the discretion of the Company. During 2001, $1,100,000 of the debentures plus accrued interest was converted

F-25

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

into 666,283 shares of the Company's common stock. During 2002, $2,250,000 of the remaining debentures plus accrued interest was converted into 1,332,570 shares of common stock.

In December 2002 the Company received a notice from the remaining two debenture holders (the "Remaining Debenture Holders") requesting conversion of the remaining outstanding $150,000 of debentures. The notice provided that, as a condition to conversion, the certificates representing the shares issuable upon conversion of the debentures would need to be delivered to the Remaining Debenture Holders prior to the end of 2002. Pursuant to the request, and to complete the conversion, the Company issued to the Remaining Debenture Holders 96,006 shares of common stock and promptly notified the Remaining Debenture Holders' counsel and the Company's transfer agent of the approval and ratification of the issuance. However, the actual certificates representing the shares were not delivered to the Remaining Debenture Holders until the first quarter of 2003. The Remaining Debenture Holders then refused acceptance of the shares, claiming that because the actual certificates representing the shares were not delivered in 2002 as specified in the conversion notice, the conversion was invalid and the debentures would therefore remaining outstanding and continue to accrue interest until repaid in full. The Remaining Debenture Holders then demanded full payment on their $150,000 of debentures (plus accrued interest).

In June 2003, the Remaining Debenture Holders filed suit in the Orange County Superior Court against the Company claiming it breached the debenture agreement by failing to honor the terms of the notice of conversion. The Company and the Remaining Debenture Holders then entered into a settlement agreement in which the Remaining Debenture holders would convert the debentures into common stock equal to approximately $70,000. The settlement agreement called for conversion into stock over a period of three months. The Company had partially satisfied the obligations under this agreement as of December 31, 2003, and further satisfied its obligations in 2004.

Note 10. Loan Agreement

On June 10, 2003 the Company entered into a Term Loan Agreement ("Loan Agreement") with Augustine II, LLC ("Augustine"), pursuant to which Augustine agreed to loan the Company $420,000, payable in installments of $250,000, $100,000, and $70,000 (the "Loan"). The Company received all scheduled installments, and principal and interest (at an annual rate of 10%) were originally due in full on February 29, 2004. Augustine, however, agreed to extend the maturity date of the Loan Agreement to August 2004. In addition to the extension of the maturity date, Augustine was given the option of having the Loan satisfied in cash or by the conversion of any remaining principal balance and any accrued interest on the Loan to shares of the Company's common stock at a 15% discount to market, so long as Augustine's holdings do not exceed 4.9% of the total issued and outstanding shares of the Company's common stock at any time. Since that time, the Company and Augustine have entered into negotiations to further extend the maturity date of the Loan and those negotiations are currently being finalized and the new terms documented. While the precise terms

F-26

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

have not been finalized and are subject to change, the Company believes that the loan will be extended an additional six months. The Company recorded $23,210 of interest expense as of December 31, 2003. The Loan Agreement is subject to certain requirements that the Company make mandatory prepayments of the Loan from the proceeds of any asset sales outside of the ordinary course of business, and, on a quarterly basis, from positive cash flow. In addition, the Company may prepay all or any portion of the Loan at any time without premium or penalty. The proceeds of the Loan were used by the Company for working capital.

As additional consideration for making the Loan, Augustine received five year warrants to purchase up to 6,158,381 shares of the Company's common stock at an exercise price of $0.16 per share. The Company can require that the warrants be exercised if the Company's shares trade at or above $0.60 per share for each trading day within the 30 calendar days prior to the maturity date of the Loan, trading volume of the shares equals or exceeds 100,000 shares per day during such period, and the shares of the Company's common stock underlying the warrants have been included on a registration statement filed with and declared effective by the SEC prior to the maturity date. If these conditions are not fully satisfied by the maturity date, then Augustine may, at any time following the maturity date and so long as the warrants remain exercisable, elect to exercise all or any portion of the warrants pursuant to the "cashless exercise" provisions of the warrants. Using the Black-Scholes pricing model, the Company allocated approximately $245,000 of the Loan proceeds to the warrants and $175,000 to the note payable, which allocations were made on a pro rata basis based on the fair value of the warrants. The Black Scholes calculation assumed a discount rate of approximately four percent, volatility of 257 percent and no dividends. Given that the warrants were issued in conjunction with Loan Agreement, such fair value represents an effective discount on the debt and will be amortized over the term of the loan. Amortization of this discount for the quarter ended December 30, 2003 was approximately $183,500 and is recorded as effective interest expense in the accompanying consolidated statement of operations. In conjunction with the extension of the maturity date of the Loan from February 2004 to August 2004, the warrants held by Augustine to purchase 6,158,381 shares of the Company's common stock were re-priced to an exercise price of $.035 per share.

As security for the Loan, New Millennium (an affiliate of Mr. Calvert) pledged 2.5 million shares of the Company's common stock owned by New Millennium, and the Company has granted Augustine a security interest in its ownership interest in the Company's subsidiary, NuWay Sports, LLC.

The sale of NuWay Sports, which is being negotiated by the Company with an unrelated third party, is subject to the consent and release of the Augustine collateral held in NuWay Sports, LLC. Should the Augustine group choose to decline their approval, the proposed sale of NuWay Sports, LLC would not be able to be consummated by the Company. Discussions have occurred in which the Augustine Group has indicated that they would release the security interest in the NuWay Sports, LLC, and replace the stock held as collateral for additional collateral from Nuway as the parties agree. Those discussions cannot be concluded until the proposed sale of NuWay Sports, LLC is more definitive.

F-27

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

Note 11. Other Loan

On November 20, 2003, the Company received $50,000 in exchange for a promissory note in which it agreed to pay $65,000 to the lender 90 days from the date of the loan. The Company's president personally guaranteed the note. As of March 1, 2004, the Company, through a cash payment by the Company's president on its behalf, has paid back $25,000 to the lender. The note is currently past due.

Note 12. Provision for Income Taxes

Any deferred tax assets have been subjected to a 100% valuation allowance, as management is unable to determine that it is more likely than not that such will be realized.

Due to changes in the Company's ownership through various issuance of common stock during 2002 and 2003, the utilization net operating loss carryforwards may be subjected to annual limitations under provisions of the Internal Revenue Code. Such limitations could result in the permanent loss of a portion of the net operating loss carry forwards. The Company has not yet evaluated the status of its net operating loss carry forwards and may not do so until such time as the Company expects operating profits.

The Company has not filed its 2002 and 2003 Federal and State Income tax returns. Management of the Company does not feel that it will have a material impact on the financial condition of the Company.

Note 13. Related Party Transactions

DUE TO PRESIDENT

In conjunction with the acquisition of the technology license from Med Wireless, Inc. on August 21, 2002, the Company assumed a $1,120,000 note with interest at 10% per annum payable by Med Wireless to Summitt Ventures, Inc., a company controlled by Mark Roy Anderson. The note is secured by the Company's assets and was originally due on June 15, 2003. On March 26, 2003, Summitt Ventures sold the note, together with 4,182,107 shares of the Company's common stock, to New Millennium Capital Partners LLC ("New Millennium"), a limited liability company controlled and owned by the Company's president and family, in exchange for a $900,000 promissory note issued by New Millennium in favor of Summitt Ventures. This note is secured by all of the stock of the Company owned by New Millennium and Mr. Calvert. On March 26, 2003, the Company's board of directors voted to convert the $1,120,000 note held by New Millennium into 22,400,000 shares of restricted common stock of the Company (at a conversion price discounted 37.5% to the then market price of $0.08). New Millennium agreed to this conversion. Subsequent to the vote by the board to convert the note, the Company received notification from NASDAQ's Listing Qualifications Department that converting the note without shareholder approval violated certain NASDAQ Marketplace Rules. In

F-28

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

response to this notification, the board, with the concurrence of New Millennium, voted to amend its resolution and withhold issuance of the shares to New Millennium until the Company's shareholders approved the conversion. This shareholder vote has not taken place and the shares have not been issued to New Millennium.

New Millennium Capital Partners, LLC, a Nevada limited liability company partially owned and controlled by the Company's President and his family as an investment vehicle was formed in 1999. No individual, entity or party (s) associated with the Company's business has ever had any ownership interest in New Millennium and it is an independent company. Mark Anderson, a principal or controlling stockholder of those companies, conditioned the purchase by New Millennium on the Company converting the promissory note to common stock. The conversion of the note held by New Millennium is a matter to be brought before the NuWay shareholders at its next available shareholders meeting.

The business purpose of the original decision to convert the note into equity was to retire $1,120,000 in debt owed by the Company thereby increasing shareholder equity by that amount and avoiding a default on the note and the insolvency and possible liquidation of the Company. In arriving at a conversion price, the board of directors determined that a 37.5% discount to market price was appropriate based on a number of factors, including that (i) with the quantity of the shares that would be issued, a block of shares that size could not be liquidated without affecting the market price of the shares, and (ii) the shares would be "restricted shares" and could therefore not be sold by New Millennium (an affiliate of the Company) in the public markets prior to two years from the date of the conversion, and thereafter would be subject to the volume and manner of sale limitations of Rule 144 under the Securities Act of 1933.

To allow time for a shareholder vote with respect to the conversion, New Millennium agreed to extend the terms of the note, from June 15, 2003 to October 1, 2003.

At the Company's June 6, 2003 board meeting, Mr. Calvert, on behalf of New Millennium, and the Company, through the unanimous action of the Board (with Mr. Calvert abstaining), agreed that, in light of current market conditions (namely the significant increase in the trading price of the Company's common stock since March 26, 2003, the date on which the conversion of the note to equity was originally approved by the Board, from $0.08 to $0.28 as of June 6, 2003), it would be inequitable for New Millennium to convert the note at the originally agreed to $0.05 per share price. In this regard, Mr. Calvert, on behalf of New Millennium, and the Company orally agreed to rescind the agreement to convert the note. In addition, New Millennium orally agreed with the Company to extend the maturity date of the note to a first payment due October 1, 2003 in the amount of $100,000 and the balance of the principal due on April 1, 2004, with interest due according to the original terms of the note (to correspond to the payment terms of the note made by New Millennium in favor of Summitt), and furthermore to reduce the Company's obligation on the note to the extent that New Millennium is able to reduce its obligation on its note with Summitt Ventures. While the prior holder of the note, Summitt Ventures, purported to condition New Millennium's purchase on the conversion of the note, Mr. Calvert

F-29

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

has represented to the Company that due to Mr. Anderson's actions, Mr. Calvert now believes that conversion of the note is no longer a required term of the agreement between New Millennium and Summitt.

The Company was unable to pay the note at the due date of October 1, 2003. At the board meeting on October 15, 2003, the board determined to put the issue of conversion of the note to the Company's shareholders at a special meeting of the shareholders scheduled for December 9, 2003. On November 7, 2003, the Company with respect to that meeting filed a Definitive 14a. The shareholders meeting was held on December 9, 2003, but adjourned without a vote, as there were not enough shareholders present to hold a vote. The meeting was rescheduled for December 30, 2003. At the December 30, 2003 shareholder meeting, the board was again advised that there was not a quorum, and therefore the vote could not be held. Because this was the second attempt to obtain a quorum, and more than 4,000,000 additional shares were required to be voted to obtain a quorum, the board voted to adjourn the meeting indefinitely. As of January 1, 2004, the loan is in default status and has not been repaid together with $114,800 in accrued but unpaid interest. The amounts due to Mr. Anderson by New Millennium are also in default.

Technically, under the terms of the New Millennium Agreement, it is possible that Mr. Anderson has the right to reacquire the shares of the Company's common stock that were sold to New Millennium, if New Millennium defaults on the promissory note issued by New Millennium to Camden Holdings to purchase the shares. The New Millennium Note is purportedly secured by the purchased shares of the Company's common stock; however, New Millennium and Mr. Calvert believe that Mr. Anderson has not perfected his security interest in those shares. Moreover, the Augustine Fund is the pledgee of 2,500,000 of these shares and holds those shares as pledgee.

Note 14. Commitments and Contingencies

a) Litigation

The Company is a defendant from time to time in litigation arising out of the normal course of its business, none of which is expected to have a material adverse effect on its business, operations, financial position or corporate liquidity.

During 2002, Ms. Geraldine Lyons, the Company's former Chief Financial Officer, sued the Company for breach of her employment contract. The lawsuit was brought in the Circuit Court of the 11th Judicial Circuit in Miami-Dade County in of Florida and was initiated by the filing of the complaint in June 2002. The principal parties in the case are Ms. Lyons, the Company, and the Company's former president Todd Sanders. The amount at issue in her affirmative claim is the sum of approximately $25,000 due under the contract, and the issuance of 100,000 shares of common stock, with a guarantee that the stock could be sold by Ms. Lyons for $300,000. Ms. Lyons alleges that additional funds are due under her employment contract; that the contract requires the Company guarantee that she can sell for $300,000 the 100,000 shares of stock the Company is required to

F-30

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

issue her; and, that Mr. Sanders promised to purchase from her 100,000 shares of Company common stock held by her at the price of $4.00 per share. The Company has counter-sued Ms. Lyons for breach of fiduciary duty, fraud, violation of section 12(a)(2) of the 1933 Securities Act, violation of section 517.301 of the Florida Statutes, negligent misrepresentation, conversion, and unjust enrichment resulting from the required restatement of the Company's financial statements for the years ended December 31, 2000 and December 31, 1999. The restatements corrected the previous omission of certain material expenses related primarily to compensation expense arising from warrants issued and repriced stock options, as well as other errors. The case is ongoing at this time. The Company intends to vigorously defend its actions and pursue its affirmative claims to the fullest extent possible. Management does not expect that this case will have a material adverse effect on the Company's financial position.

In December 2002, the Company settled an outstanding lawsuit filed by Devenshire Management Corp., a company owned by the Company's former president Todd Sanders. The settlement involved no payment of cash by the Company, and resolved all issues relating to the Company's obligation to remove restrictive legends from stock owned by Devenshire. As part of this settlement the Company agreed to defend, but not indemnify, Mr. Sanders in the Lyons lawsuit described immediately above.

In May 2004, the Company was sued by Flight Options, Inc., a jet plane leasing company, in California Superior Court of Orange County California. The lawsuit alleges that the Company owes Flight Options approximately $418,300, pursuant to a five-year lease assigned to the Company by the Company's former president's corporation, Devonshire Management Corporation. Management of the Company believes that the assignment of the lease was not properly authorized or approved by the Company, and that because the former president failed to identify the lease in a December 2002 settlement agreement with the Company, he breached the terms of that settlement agreement and, pursuant to the settlement agreement, must indemnify the Company for any losses owed to Flight Options. The Company has cross-complained against Mr. Sanders for indemnity, and has added the affirmative claim of breach of fiduciary duty. The case is still in its initial discovery phase, and the Court recently set the case for trial in April 2005While the Company believes that it has meritorious positions in the litigation, given the inherent nature of litigation, it is not possible to predict the outcome of this litigation or the impact it would have on the Company.

b) Employment Agreements

In January 1997, the Company entered into a five year employment agreement with Lloyd Lyons, which provided in part that in the event of a merger, consolidation, sale or conveyance of substantially all the assets of the Company which resulted in the discharge of Mr. Lyons, he would be entitled to 200 percent of the balance of payments remaining under the contract. The contract provided salary continuation for a period of two years after his death. In January 2000, Mr. Lyons passed away and effective August 2, 2000 the Company amended its employment contract with his widow and primary beneficiary of his estate, whereby the salary continuation clause included in his contract was

F-31

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

replaced with a severance arrangement that requires the Company to pay Mrs. Lyons $100,000 over a one year period commencing on the first month following the termination of her employment with the Company. Furthermore, upon her termination she is to receive 100,000 shares of common stock pursuant to an amendment to her employment agreement. The amended employment agreement will obligate the Company to register these shares and reimburse her for the difference in the gross proceeds upon the sale of such shares and $300,000; regardless of the time she holds such shares. Effective October 29, 2001 Mrs. Lyons tendered her resignation and based upon the terms of her severance agreement, expenses of $350,000 had been recorded of which $308,000 is included in accounts payable and accrued expenses at December 31, 2002 and 2003.

In January 2000 the Company entered into employment contracts with two additional individuals, both for the duration of two years and provides that The Company be obligated for an aggregate compensation of $115,000 in year 2000 and $126,500 in year 2001. Effective August 2, 2000 both of these employment contracts were amended so that, upon the termination of employment of these individuals, they would receive nine months continuation of compensation and 35,000 shares of common stock. The Company has agreed to reimburse the respective employees the difference between the gross proceeds they receive upon sale of the stock and $105,000; regardless of the term the employees hold such shares.

In December of 2002, The Company entered into a five-year employment agreement with the Company's current president, Dennis Calvert. His agreement calls for a base monthly income of $14,000 plus performance bonuses and employee related benefits. He serves as president, Chief Executive Officer, Interim CFO and Chairman of the Board.

In March 2003, the Company entered into a five-year employment agreement with Joseph Provenzano. Mr. Provenzano serves the Company as Secretary, Board Member and Senior Executive reporting to Mr. Calvert. His agreement calls for him to receive not less than $10,900 per month in salary plus incentive bonuses, stock ownership participation and employee related benefits. At the Company's discretion, the Company may choose to pay up to $4,900 of this monthly salary with stock in lieu of cash.

c) Lease Commitment

The Company was obligated on a month-to-month office lease at its California facility. This lease required monthly rentals of $7,850. All other leases are of short duration or are on a month-to-month arrangement. Rent expense for December 31, 2002 and 2003 was $96,560 and $70,200 respectively. The lease was terminated in April 2004.

d) Stock-Based Commitments

The Company currently utilizes the services of a number of consultants who are compensated with shares of common stock. While each agreement can generally be terminated with a 15-day notice, the Company may be obligated to issue additional shares to the consultants. (Note 15).

F-32

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

Note 15. Subsequent Events

ISSUANCE OF S-8 SHARES:

NUWAY MEDICAL, INC. 2004 EQUITY PLAN

On March 10, 2004, the board of directors approved the Company's 2004 Equity Plan as a means of providing directors, key employees and consultants additional incentive to provide services for the Company. Both stock options and stock grants may be made under this plan. The Plan sets aside up to 20,000,000 shares of the Company's common stock for these purposes, which were registered with the SEC. Approval of this plan was not submitted to the vote of the shareholders. The Board administers this plan. The plan allows the Board to award grants of common shares or options to purchase common shares. As plan administrator, the board has sole discretion to set the price of the options. The Board may at any time amend or terminate the plan. It does not expire on its terms.

During 2004, the Company issued 9,780,000 shares to 16 consultants, directors, and employees. Of this total 5,680,000 have been registered with the SEC, while the balance, 3,500,000 shares were not registered and are restricted securities. Of the total issued in 2004, 1,026,000 shares relate to services performed in 2003 and 5,379,000 shares relate to 2004. The effect of the shares issued for 2003 services in 2004 was accrued in the Company's financial statements for the year ending December 31, 2003. In 2004 there was $275,400 of expenses recorded related to the issuance of these shares. Of this amount $120,000 related to consulting services, $5,400 related to legal services, $60,000 related to Board of Directors expense, and $90,000 related to salary expense. In 2004 there was also 600,000 shares issued to the debenture holders eliminating the remainder due under the Debenture Payable.

ABANDONED ACQUISITION

On January 31, 2004, the Company entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Premium Medical Group, Inc., a Florida corporation ("PMG") and PMG's sole stockholders, Eduardo A. Ruiz and Luis A. Ruiz (the "PMG Stockholders"). Prior to this transaction, there was no business or other relationship between the Company and its affiliates and PMG or the PMG Stockholders.

Pursuant to the Stock Purchase Agreement, the Company agreed to acquire 100% of the shares of PMG from the PMG Stockholders in exchange for 30,000,000 shares of the Company's common stock, subject to certain adjustments. The exact number of Company Shares to be issued to the PMG Stockholders was subject to adjustment in the event certain revenue was generated by PMG during one year following the closing of the transaction. PMG had been organized in June 2003 to provide medical products to hospitals and medical clinics in South America, primarily Venezuela. Luis A. Ruiz became a director of the Company in connection with the transaction.

F-33

NUWAY MEDICAL, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2003 AND 2002

The parties had a difference in expectations regarding who would be ultimately responsible for paying for the audit of PMG that was required in order for the Company to complete its disclosure obligations under the Securities Exchange Act. Additionally, the Company did not have a sufficient number of authorized and unissued shares of its common stock to both satisfy its obligations to the PMG Stockholders and to issue shares of common stock in a meaningful financing transaction, given the low price per share at which the Company's common stock trades. The Company lacked the financial resources to schedule a stockholders' meeting, prepare a proxy statement and solicit proxies for the purpose of amending its Certificate of Incorporation to increase its authorized capital stock.

As a result of these and other factors, the Company and PMG never consolidated their operations, the Company never exercised control over PMG or its operations and the parties never exchanged stock certificates evidencing their ownership in each other.

Therefore, the parties entered into discussions and concluded amicably that it was in the mutual best interest of the respective companies and their respective stockholders, to rescind the transactions provided for in the Stock Purchase Agreement and return all parties to their respective positions prior to the transactions contemplated in the Stock Purchase Agreement.

The parties entered into a Rescission Agreement on October 14, 2004 that provides, in relevant part, that (i) all transactions contemplated by the Stock Purchase Agreement shall be rescinded as if the Stock Purchase Agreement had never been executed and delivered; (ii) the parties forever waive all rights to receive stock in PMG and the Company, as the case may be; (iii) Luis A. Ruiz shall resign as a director of the Company; and (iv) the Company and PMG shall file appropriate documents with the Secretary of State of the State of Florida with respect to the rescission of the exchange of shares provided for in the Stock Purchase Agreement.

In September of 2004, the Company received a total of $25,000 from two individual investors in exchange for the issuance of 5,000,000 shares of its common stock.

In October 2004, the Company received a total of $50,000 from an outside investor for the purchase of a convertible note. The note can be converted into 10,000,000 shares of its Series A Preferred stock. The shares of preferred stock are convertible into common stock on a one for one basis. The Company agreed to offer Piggyback Registration rights with these common shares. In addition, the Company agreed to repurchase the preferred shares, at the investor's sole discretion, after the end of one year at a price equal to 110% of the investment amount. The Company's president further personally guaranteed the repurchase terms.

F-34

EXHIBIT INDEX

Exhibit No.          Description of Exhibit
----------           ----------------------

  3.9      Certificate of Designations creating Series A Preferred Stock

  4.6      Form of Warrant to Purchase Common Stock issued to Preferred
           Stock investors

  4.7      Warrant to Purchase Common Stock issued to Arthur Lipper

  4.9      Amended and Restated Warrant No. AG-1 to purchase up to
           6,158,381 shares of NuWay Medical, Inc. common stock held by
           Augustine II LLC

  10.19    Agreement  to issue  warrant  dated  February 24, 2003 between
           NuWay Medical, Inc. and Sachi International, Inc.


  10.23    Promissory Note dated November 20, 2003 between NuWay Medical,
           Inc. and James Seay, DDS.

  10.25    Amendment No. 1 to Term Loan Agreement dated as of March 30,
           2004 between NuWay Medical, Inc. and Augustine II LLC

  10.26    Amended and Restated Convertible Term Note by NuWay Medical,
           Inc. in favor of Augustine II, LLC

  10.27    Consulting Agreement with Mark Roy Anderson

  10.29    Convertible Loan Agreement and Note between NuWay Medical,
           Inc. and James Burchard

  14.1     Code of Ethics

  21.1     List of Subsidiaries of the Registrant

  23.1     Consent of Haskell & White LLP

  23.2     Consent of Jeffrey S. Gilbert, CPA

  31.1     Certificationof Chief Executive Officer and Interim Chief
           Financial Officer Pursuant to Section 302 of the
           Sarbanes-Oxley Act of 2002 and Rules 13(a)-14 and 15(d)-14
           under the Securities Exchange Act of 1934

  32.1     Certification of Chief Executive Officer and Interim Chief
           Financial Officer Pursuant to 18 U.S.C. Section 1350.


EX. 3.9

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A PREFERRED STOCK
OF
NUWAY MEDICAL, INC.

Pursuant to Section 151 of the General Corporation Law of the State of Delaware:

WHEREAS, NUWAY MEDICAL, INC., a corporation organized and existing under the laws of the State of Delaware (this "CORPORATION"), does hereby certify that, pursuant to the authority conferred on the Board of Directors of this Corporation by the Certificate of Incorporation, as amended, of this Corporation, in accordance with Section 151 of the General Corporation Law of the State of Delaware, the Board of Directors of this Corporation adopted the following resolution establishing a new series of preferred stock of this Corporation.

RESOLVED, that pursuant to the authority conferred on the Board of Directors of this Corporation by Article 4 of the Certificate of Incorporation, as amended, the Board of Directors of this Corporation hereby establishes a series of the authorized preferred stock of this Corporation, $0.00067 par value per share, which series will be designated as "SERIES A PREFERRED STOCK," and which will have the following rights, preferences, privileges and restrictions (capitalized terms not defined herein shall have the meaning given to such terms in the Certificate of Incorporation, as amended, of this Corporation):

1. DESIGNATION AND RANK. An amount of shares of the Preferred Stock shall be designated "Series A Preferred Stock" (the "Series A Preferred Stock"), par value $$0.00067 per share and the number of shares constituting such series shall be 25,000,000. The Series A Preferred Stock will rank junior, with respect to dividend rights and rights on liquidation, winding up and dissolution, to other classes or series of preferred stock which may be established by the Board of Directors of the Corporation from time to time and specifically designated as senior to the Series A Preferred Stock (the "Senior Preferred Stock"). The Series A Preferred Stock will rank senior to all other classes of preferred stock of the Corporation not so designated in accordance with the previous sentence and the common stock of the Corporation (collectively, "Junior Securities"), with respect to dividend rights and rights upon liquidation, winding up and dissolution.

2. NO ISSUANCE OF ADDITIONAL SHARES. The number of authorized shares of Series A Preferred Stock may be reduced or eliminated by the Board of Directors of this corporation or a duly authorized committee thereof in compliance with the General Corporation Law of the State of Delaware stating that such reduction has been authorized, and the number of authorized shares of Series A Preferred Stock shall not be increased without the consent of the holders of a majority of the outstanding shares of Series A Preferred Stock.


3. DIVIDENDS AND DISTRIBUTIONS.

(a) The holders of shares of Series A Preferred Stock will be entitled to participate with the holders of Common Stock with respect to any dividend declared on the Common Stock in proportion to the number of shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock held by them.

4. LIQUIDATION PREFERENCE.

(a) In the event of any liquidation, dissolution or winding up of this Corporation, either voluntary or involuntary, subject to the rights of the Senior Preferred Stock and the rights of series of Preferred Stock that may from time to time come into existence in accordance with and subject to the terms hereof, including, without limitation, Section 9(b) hereof, the holders of Series A Preferred Stock shall be entitled to receive after any distribution with respect to Senior Preferred Stock and, prior and in preference to any distribution of any of the assets of this corporation to the holders of any Junior Securities by reason of their ownership thereof, an amount per share (the "Liquidation Preference") equal to the sum the price paid for each outstanding share of Series A Preferred Stock (the "Original Series A Issue Price") and (ii) accrued but unpaid dividends on such share (subject to adjustment of such fixed dollar amounts for any stock splits, stock dividends, combinations, recapitalizations or the like).

(b) Upon completion of the distribution required by subsection (a) of this
Section 4, all of the remaining assets of this Corporation available for distribution to stockholders shall be distributed among the holders of all Senior Preferred Stock, Series A Preferred Stock and Junior Securities pro rata based on the number of shares of Common Stock held by each (assuming conversion of all such Series A Preferred Stock).

(c) (i) For purposes of this Section 4, a liquidation, dissolution or winding up of this Corporation shall be deemed to be occasioned by, or to include (unless the holders of at least a majority of the Series A Preferred Stock then outstanding shall determine otherwise) a transaction whereby a person or group of persons acting in concert (other than current stockholders) shall:

(A) become (whether by merger, consolidation, or transfer, redemption or issuance of capital stock or otherwise) the beneficial owners (within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended) of securities constituting more than fifty percent (50%) of the combined voting power of or the economic equity interests in the then outstanding securities of the Corporation (or any surviving or resulting person); or

2

(B) acquire assets constituting all or substantially all of the assets of the Corporation and its subsidiaries on a consolidated basis (with (A) and/or (B) constituting a "Change in Control").

(ii) In any of such events, if the consideration received by this Corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

(A) Securities not subject to an investment letter or other similar restrictions on free marketability covered by (B) below:

(1) If traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the thirty (30) day period ending three (3) days prior to the closing;

(2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing; and

(3) If there is no active public market, the value shall be the fair market value thereof, as mutually determined by this Corporation and the holders of at least a majority of the outstanding shares of Series A Preferred Stock.

(B) The method of valuation of securities subject to an investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as above in (A) (1), (2) or (3) to reflect the approximate fair market value thereof, as mutually determined by this Corporation and the holders of at least a majority of the outstanding shares of such Series A Preferred Stock.

(iii) In the event the requirements of this Section 4 are not complied with, this Corporation shall forthwith either:

(A) cause such closing to be postponed until such time as the requirements of this Section 4 have been complied with; or

(B) cancel such transaction, in which event the rights, preferences and privileges of the holders of the Series A Preferred Stock shall revert to and be the same as such rights, preferences and privileges existing immediately prior to the date of the first notice referred to in subsection 4(c)(iv) hereof.

3

(iv) This Corporation shall give each holder of record of Series A Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the stockholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending transaction and the provisions of this Section 4, and this Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after this Corporation has given the first notice provided for herein or sooner than ten (10) days after this corporation has given notice of any material changes provided for herein; provided, however, that such periods may be shortened upon the written consent of the holders of Series A Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the outstanding shares of such Series A Preferred Stock.

5. CONVERSION. The holders of the Series A Preferred Stock shall have conversion rights (the "Conversion Rights") as follows:

(a) RIGHT TO CONVERT. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such shares and on or prior to the date such shares are redeemed, at the office of this Corporation or any transfer agent for such stock, into such number of fully paid and non-assessable shares of Common Stock as is determined by multiplying (x) 1 by (y) the conversion rate for the Series A Preferred Stock that is in effect at the time of conversion (the "Conversion Rate"). The Conversion Rate for the Series A Preferred Stock initially shall be one (1). The Conversion Rate shall be subject to adjustment from time to time as provided in this Certificate of Designations. All references to the Conversion Rate herein mean the Conversion Rate as so adjusted.

(b) MECHANICS OF CONVERSION. Before any holder of Series A Preferred Stock shall be entitled to convert the same into shares of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of this Corporation or of any transfer agent for the Series A Preferred Stock, and shall give written notice to this Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. This Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series A Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series A Preferred Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. If the conversion is in connection with an underwritten offering of securities registered pursuant to the Securities Act of 1933, as amended, the conversion may, at the option of any holder tendering Series A Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event the persons entitled to receive the Common Stock upon conversion of the Series A Preferred Stock shall not be deemed to have converted such Series A Preferred Stock until immediately prior to the closing of such sale of securities.

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(c) STOCK SPLITS.

(i) In the event this corporation should at any time or from time to time fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock without payment of any consideration by such holder for the additional shares of Common Stock then, as of such record date (or the date of such dividend, distribution, split or subdivision if no record date is fixed), the Conversion Price of the Series A Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding.

(ii) If the number of shares of Common Stock outstanding at any time is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for the Series A Preferred Stock shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease of the aggregate of shares of Common Stock outstanding.

(d) RECAPITALIZATIONS. If at any time or from time to time there shall be a recapitalization or reclassification of the Common Stock (or a merger, transfer, consolidation, or exchange in respect of the Corporation's securities which does not constitute a Change in Control, other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 5 or Section 4) provision shall be made so that the holders of the Series A Preferred Stock shall thereafter be entitled to receive upon conversion of the Series A Preferred Stock the number of shares of stock or other securities or property of this Corporation or otherwise, to which a holder of Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 5 with respect to the rights of the holders of the Series A Preferred Stock after the recapitalization to the end that the provisions of this Section 5 (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the Series A Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable.

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(e) NO IMPAIRMENT. This Corporation will not, by amendment of its Certificate of Incorporation or this Certificate of Designations (except in accordance with applicable law), or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by this Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series A Preferred Stock against impairment.

(f) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.

(i) No fractional shares shall be issued upon the conversion of any share or shares of the Series A Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole share.

(ii) Upon the occurrence of each adjustment or readjustment of the Conversion Price of Series A Preferred Stock pursuant to this Section 5, this Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. This Corporation shall, upon the written request at any time of any holder of Series A Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for such series of Preferred Stock at the time in effect, and (C) the number of shares of Common Stock and the amount, if any, of other property that at the time would be received upon the conversion of a share of Series A Preferred Stock.

(g) NOTICES OF RECORD DATE. In the event of any taking by this corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, this corporation shall mail to each holder of Series A Preferred Stock, at least twenty (20) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.

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(h) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. This Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, in addition to such other remedies as shall be available to the holders of such Preferred Stock, this Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Certificate of Incorporation.

(i) NOTICES. Any notice required by the provisions of this Section 5 to be given to the holders of shares of Series A Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at their address appearing on the books of this Corporation.

(j) UNCONVERTED SHARES. If less than all of the outstanding shares of Series A Preferred Stock are converted pursuant to this Section 5, and such shares are evidenced by a certificate representing shares in excess of the shares being converted and surrendered to this Corporation in accordance with the procedures as the Board of Directors of this Corporation may determine, this Corporation shall execute and deliver to or upon the written order of the holder of such certificate, without charge to the holder, a new certificate evidencing the number of shares of Series A Preferred Stock not converted.

7. VOTING. In addition to as provided in this Certificate of Designations and as required by law, the holders of shares of Series A Preferred Stock will be entitled to participate and vote with the holders of Common Stock with respect to any vote of the shareholders in proportion to the number of shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock held by them, as if the shares had been issued.

8. REACQUIRED SHARES. Any shares of Series A Preferred Stock which have been converted or redeemed will be retired and cancelled promptly after the acquisition thereof. All such shares will upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other certificate of designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.

9. PROTECTIVE PROVISIONS. So long as any shares of Series A Preferred Stock are outstanding, this corporation shall not without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock:

(a) amend the Certificate of Incorporation (as amended) of this Corporation or the bylaws of this Corporation in any manner (including, without limitation, by means of a merger or consolidation) which adversely affects the rights of the Series A Preferred Stock; or

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(b) authorize or issue, or obligate itself to issue, any other equity security having a preference over, or being on a parity with, the Series A Preferred Stock with respect to dividends, liquidation, redemption or voting, including any other security convertible into or exercisable for any equity security other than Senior Preferred Stock shares.

RESOLVED, FURTHER, that the officers of this Corporation be, and each of them hereby is, authorized and empowered on behalf of this Corporation to execute, verify and file a certificate of designations of preferences in accordance with Delaware law.

IN WITNESS WHEREOF, NUWAY MEDICAL, INC. has caused this certificate to be duly executed by its duly authorized officers this 3 day of November, 2004.

NUWAY MEDICAL, INC.

By: _______________________
Dennis Calvert
Chairman and Chief Executive Officer

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EX. 4.6

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.

NUWAY MEDICAL, INC.

WARRANT TO PURCHASE COMMON STOCK

[Date]

WARRANT NO. ___

THIS CERTIFIES THAT, for value received, [INVESTOR], a corporation organized under the laws of the state of [STATE] (the "Holder"), is entitled to subscribe for and purchase from NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware (the "Company"), commencing at the time periods prescribed herein and ending at 5:00 p.m. pacific time on the third
(3rd) calendar anniversary of the date hereof, three hundred ninety-nine thousand, three hundred twenty-two (399,322) shares (the "Shares") of common stock, par value, $0.00067, of the Company (the "Common Stock"). The exercise price for each Share subject to this Warrant (the "Warrant Price") is equal to $0.20. The number of Shares and the Warrant Price are subject to adjustment from time to time as provided in Section 4 of this Warrant, however the number of shares that are issued or potentially issued to the Holder shall never be equal to or exceed 20% of the issued and outstanding common shares as of the date of this agreement.

This Warrant is issued in connection with and as consideration for the services provided by the Holder to the Company as set forth in the consulting agreement dated the date hereof by and between the Company and the Holder.

1. Method of Exercise; Payment; Issuance of New Warrant. The purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, subject to the limitation set forth below, and from time to time, not prior to six months after the issue date, by (i) the surrender of this Warrant (with a notice of exercise in the form attached hereto as Exhibit A, duly executed) at the principal office of the Company and (ii) the payment to the Company, by check or wire transfer of funds to an account specified in writing by the Company, of an amount equal to the aggregate Warrant Price. The Shares so purchased, representing the aggregate number of shares specified in the executed Exhibit A, shall be delivered to the Holder within a reasonable time, not exceeding ten (10) business days, after this Warrant shall have been so exercised. Upon receipt by the Company of this Warrant at the office of the Company, in proper form for exercise and accompanied by the amount equal to the aggregate Warrant Price, the Holder shall be deemed to be the holder of record of the Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares shall not then be actually delivered to the Holder.


Notwithstanding anything else herein to the contrary, the Holder shall not have the right, and the Company shall not have the obligation, to exercise all or any portion of the Warrants if and to the extent that the issuance to the Holder of shares of Common Stock upon such exercise of the Warrants would result in the Holder being deemed the "beneficial owner" of 5% or more of the then outstanding shares of Common Stock of the Company within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder.

If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of such Shares, deliver to the Holder a new Warrant evidencing the right to purchase the remaining Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or, at the request of Holder, appropriate notation may be made on this Warrant which shall then be returned to Holder.

2. Exercise. The Holder shall pay the Warrant Price to the Company for each Warrant that it exercises. The Company may "call" the Warrant in the event that the price per share of the Company's common stock has traded at or above $0.35 for ten consecutive days. In such event, the Company shall notify the Holder in writing of such event and its election to call the Warrant. The Holder shall have ten (10) business days to pay the Warrant Price to the Company. After the 10th day the Holder loses all rights under this Warrant for all shares not exercised.

3. Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all preemptive rights, taxes, liens and charges with respect to the issue thereof; provided, however, that the Company shall not be required to pay any transfer taxes with respect to the issue of shares in any name other than that of the registered holder hereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. The Company shall at all times take all such action and obtain all such permits or orders as may be necessary to enable the Company lawfully to issue such Common Stock as duly and validly issued, fully paid and nonassessable shares upon exercise in full of this Warrant.

4. Adjustment. This Warrant shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a) Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date hereof effect a subdivision of the outstanding Common Stock, the Warrant Price then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof combine the outstanding Common Stock, the Warrant Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

(b) Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Warrant Price shall be decreased as of the time of such issuance, by multiplying the Warrant Price by a fraction:

(x) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance; and

(y) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

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(c) Adjustment of Number of Shares. Upon each adjustment of the Warrant Price pursuant to either Section 4(a) or 4(b) of this Warrant, the number of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock, calculated to the nearest one hundredth of a share, obtained by multiplying the number of shares of Common Stock purchasable immediately prior to such adjustment upon the exercise of the Warrant by the Warrant Price in effect prior to such adjustment and dividing the product so obtained by the new Warrant Price.

(d) Adjustment for Reclassification, Exchange and Substitution. If the Common Stock issuable upon the exercise of this Warrant are changed into the same or different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination provided for in Section 4(a) above, a dividend or distribution provided for in Section 4(b) above, or a reorganization, merger, consolidation or sale of assets, provided for in Section 4(e) below), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of stock and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change.

(e) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there is a capital reorganization of the Common Stock (other than a subdivision or combination provided for in Section 4(a) above, a dividend or distribution provided for in Section 4(b) above, or a reclassification or exchange of shares provided for in Section 4(d) above) or a merger or consolidation of the Company with or into another entity, or a sale of all or substantially all of the Company's properties and assets to any other person or entity, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the number of shares of stock or other securities, money or property of the Company, or of the successor entity resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. The Company shall not effect any reorganization, merger, consolidation or sale unless prior to the consummation thereof each entity or person (other than the Company) that may be required to deliver any cash, securities or other property upon the exercise of this Warrant shall assume, by written instrument delivered to the Holder, the obligation to deliver to the Holder such cash, securities or other property as in accordance with the foregoing provisions the Holder may be entitled to receive. The foregoing provisions of this Section 4(e) shall similarly apply to successive reorganizations, mergers, consolidations and sales.

(f) No Impairment. The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this
Section and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon the voluntary or involuntary dissolution, liquidation or winding up of the Company.

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(g) Notice of Adjustments. Whenever this Warrant shall be adjusted pursuant to this Section 4, the Company shall make a certificate signed by an officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the new Warrant Price and the type or the number of Shares purchasable after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

5. The Company's Obligation to Make Payments.

(a) Dividends and Distributions. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution, whether payable in cash, securities or other property of the Company, with respect to any of its capital stock for which an adjustment is not made pursuant to Section 4 of this Warrant, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the amount of cash plus the fair value of any property or securities distributed by (y) the number of shares of Common Stock outstanding on the record date for such dividend or distribution and (ii) the number of Shares on such record date.

(b) Redemption of Capital Stock. In the event the Company at any time or from time to time after the date hereof shall repurchase or redeem any of its capital stock or any rights, including without limitation, options, warrants or other convertible or exchangeable securities, to acquire such capital stock, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the aggregate amount of cash and the aggregate fair value of any property paid out by the Company in connection with any such repurchase or redemption by (y) the number of shares of Common Stock outstanding on a fully diluted basis immediately after such repurchase or redemption and (2) the number of Shares.

6. Notice of Record Date. In the event:

(1) that the Company declares a dividend (or any other distribution) on any of its capital stock (including without limitation, its Common Stock);

(2) that the Company repurchases or redeems any of its capital stock (including without limitation, its Common Stock) or any rights to acquire such capital stock;

(3) that the Company subdivides or combines its outstanding shares of Common Stock;

(4) of any reclassification of the Common Stock, or of any consolidation, merger or share exchange of the Company into or with another entity, or of the sale of all or substantially all of the assets of the Company;

(5) of the involuntary or voluntary dissolution, liquidation or winding up of the Company; or

(6) of any offer of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price then in effect.

then the Company shall notify the Holder at least 30 days prior to the date specified in (A), (B) or (C) below, in writing stating:

(A) the record date of such dividend, distribution, repurchase, redemption, subdivision or combination, or, if a record is not to be taken, the date as to which the holders of Common Stock of record to be entitled to such dividend, distribution, repurchase, redemption, subdivision or combination are to be determined;

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(B) the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up; or

(C) the date on which such offering of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price is expected to become consummated.

7. Compliance with Securities Act; Disposition of Warrant or Common Stock.

(a) Compliance with Securities Act. The Holder, by acceptance hereof, agrees that this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the "Act"). All Shares issued upon exercise of this Warrant (unless registered under the Act or sold or transferred pursuant to Rule 144 promulgated under the Act) shall be stamped or imprinted with a legend in substantially the following form:

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACTS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACTS."

(b) Disposition of Warrant or Shares. Subject to the terms and conditions of this Warrant and applicable securities laws, this Warrant and the rights represented by this Warrant may be transferred, assigned or pledged, in whole or in part with prior written notice to the Company. Any transfer shall be accompanied by the Notice of Transfer form attached hereto as Exhibit B.

8. Rights as Shareholders. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

9. Representations and Warranties. The Company represents and warrants to the Holder as follows:

(a) This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;

(b) The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable;

(c) The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company's Articles of Incorporation;

(d) The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company's Articles of Incorporation or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person; and

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(e) Capitalization. As of the date of this Warrant the capitalization of the Company is as follows:

(i) Common Stock. A total of 100,000,000 authorized shares of Common Stock, of which 35,186,486 shares were issued and outstanding. All of such outstanding shares are validly issued, fully paid and non-assessable. No shares of the Common Stock are held in the Company's treasury.

(ii) Preferred Stock. A total of 25,000,000 authorized shares of Preferred Stock, of which 559,322 shares were issued and outstanding.

(iii) Options, Warrants, Reserved Shares. Except as disclosed in the Form 10-KSB for the period ended December 31, 2002 filed by the Company, or the Form 10-QSB filed by the Company (or provided to the Holder if not filed) for the period ended June 31, 2003, there are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of the Company's capital stock. No shares of the Company's outstanding capital stock, or stock issuable upon exercise, conversion or exchange of any outstanding options, warrants or rights, or other stock issuable by the Company, are subject to any rights of first refusal or other rights to purchase such stock (whether in favor of the Company or any other person), pursuant to any agreement, commitment or other obligation of the Company.

10. Registration Rights. If the Company proposes to file any registration statement under the Act (other than Form S-8), with respect to an offering of any equity securities, then the Company shall give the Holder written notice of such proposed filing as soon as practicable (but in no event less than thirty
(30) days before the anticipated initial filing date of such registration statement), and such notice shall offer the Holder the opportunity to register such number of Shares as the Holder shall request (the "Piggyback Shares"). The Company shall bear all costs of registering the Piggyback Shares, except for underwriting discounts or commissions if the registration statement relates to an underwritten offering. Any registration rights granted by this paragraph expire when shares issued pursuant to this Warrant Agreement are eligible for sale under Rule 144(k) of the Securities Act of 1933.

11. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

12. Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the applicable party at its address specified opposite its signature below, or at such other address as shall be designated by such party in a written notice to the other. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier.

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13. Descriptive Headings. The descriptive headings of the several sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

14. Governing Law. THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

15. Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise, and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder.

16. Severability. In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

17. Lost Warrants or Stock Certificates. The Company covenants to the Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and delivered by its duly authorized officer on the day and year first above written.

NUWAY MEDICAL, INC.

         /S/
By:
     -----------------------------------------
     Name:      Dennis Calvert
     Title:     President

Address:        23461 South Pointe, Suite 200
                Laguna Hills, California 92653
                Attention: President
                Facsimile: 949 454-9066

ACKNOWLEDGED AND ACCEPTED:

[INVESTOR]

/S/

----------------------------------
Address: [INVESTOR ADDRESS]

Facsimile: [FAX NUMBER]

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EXHIBIT A

NOTICE OF EXERCISE

TO: NUWAY MEDICAL, INC.

(1) The undersigned hereby elects to purchase __________ shares of Common Stock of NUWAY MEDICAL, INC. pursuant to the terms of the attached Warrant, and, unless such Warrant allows the exercise to be "cashless," tenders herewith payment of the Warrant Price for such shares in full.

(2) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:


(Name)


(Name)

(3) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:


(Name)


(Address)


(Signature)


(Date)

EXHIBIT B

NOTICE OF TRANSFER
(To be signed only upon transfer of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________________________ the right represented by the attached Warrant to purchase __________ shares of the Common Stock of NUWAY MEDICAL, INC., to which the attached Warrant relates, and appoints _____________________ as Attorney to transfer such right on the books of NUWAY MEDICAL, INC., with full power of substitution in the premises.

Dated:


(Signature must conform in all respects to the name of the Holder as specified on the face of the Warrant)



(Address)

Signed in the presence of:+

EX. 4.7

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.

NUWAY MEDICAL, INC.

WARRANT TO PURCHASE COMMON STOCK

August 29, 2003

WARRANT NO. AL-1

THIS CERTIFIES THAT, for value received, Arthur Lipper III, an individual (the "HOLDER"), is entitled to subscribe for and purchase from NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware (the "COMPANY"), commencing at the time periods prescribed herein and ending at 5:00
p.m. pacific time on the fifth (5th) calendar anniversary of the date hereof, three hundred thirty-three thousand, three hundred thirty three (333,333) shares (the "SHARES") of common stock, par value, $0.00067, of the Company (the "COMMON STOCK"). The exercise price for each Share subject to this Warrant (the "WARRANT PRICE") is equal to $0.06. The number of Shares and the Warrant Price are subject to adjustment from time to time as provided in SECTION 5 of this Warrant, however the number of shares that are issued or potentially issued to the Holder shall never be equal to or exceed 20% of the issued and outstanding common shares as of the date of this agreement.

This Warrant is issued in connection with and as consideration for the services provided by the Holder to the Company as set forth in the consulting agreement dated the date hereof by and between the Company and the Holder.

1. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT. The purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, subject to the limitation set forth below, and from time to time, by (i) the surrender of this Warrant (with a notice of exercise in the form attached hereto as EXHIBIT A, duly executed) at the principal office of the Company and
(ii) the payment to the Company, by check or wire transfer of funds to an account specified in writing by the Company, of an amount equal to the aggregate Warrant Price (provided, however, this CLAUSE (II) shall not be applicable if the Holder is making a cashless exercise pursuant to SECTION 2 of this Warrant). The Shares so purchased, representing the aggregate number of shares specified in the executed EXHIBIT A, shall be delivered to the Holder within a reasonable time, not exceeding ten (10) business days, after this Warrant shall have been so exercised. Upon receipt by the Company of this Warrant at the office of the Company, in proper form for exercise and, unless a cashless exercise is being made in accordance with SECTION 2 of this Warrant, accompanied by the amount equal to the aggregate Warrant Price, the Holder shall be deemed to be the holder of record of the Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares shall not then be actually delivered to the Holder.


Notwithstanding anything else herein to the contrary, the Holder shall not have the right, and the Company shall not have the obligation, to exercise all or any portion of the Warrants if and to the extent that the issuance to the Holder of shares of Common Stock upon such exercise of the Warrants would result in the Holder being deemed the "beneficial owner" of 5% or more of the then outstanding shares of Common Stock of the Company within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder.

If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of such Shares, deliver to the Holder a new Warrant evidencing the right to purchase the remaining Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or, at the request of Holder, appropriate notation may be made on this Warrant which shall then be returned to Holder.

2. EXERCISE. The Holder shall pay the Warrant Price to the Company for each Warrant that it exercises, or in the alternative, may elect to pay the Warrant Price by reducing the number of Shares issuable upon exercise of this Warrant in accordance with the following formula:

X = Y(A-B)

A

Where:               X    =    the number of Shares to be issued to the Holder.

                     Y    =    the number of Shares requested to be exercised
                               under this Warrant.

                     A    =    the Fair Market Value of one (1) Share of Common
                               Stock as of the date such Warrant is exercised.

                     B    =    the Warrant Price.

"Fair Market Value" of the Company's Common Stock means the average of the closing bid prices of the Common Stock as published in Bloomberg for the ten trading days prior to the date of determination of fair market value.

3. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all preemptive rights, taxes, liens and charges with respect to the issue thereof; provided, however, that the Company shall not be required to pay any transfer taxes with respect to the issue of shares in any name other than that of the registered holder hereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. The Company shall at all times take all such action and obtain all such permits or orders as may be necessary to enable the Company lawfully to issue such Common Stock as duly and validly issued, fully paid and nonassessable shares upon exercise in full of this Warrant.

4. FRACTIONAL SHARES. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Fair Market Value of such Shares.

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5. ADJUSTMENT. This Warrant shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company shall at any time or from time to time after the date hereof effect a subdivision of the outstanding Common Stock, the Warrant Price then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof combine the outstanding Common Stock, the Warrant Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

(b) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Warrant Price shall be decreased as of the time of such issuance, by multiplying the Warrant Price by a fraction:

(x) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance; and

(y) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

(c) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the Warrant Price pursuant to either SECTION 5(A) or 5(B) of this Warrant, the number of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock, calculated to the nearest one hundredth of a share, obtained by multiplying the number of shares of Common Stock purchasable immediately prior to such adjustment upon the exercise of the Warrant by the Warrant Price in effect prior to such adjustment and dividing the product so obtained by the new Warrant Price.

(d) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. If the Common Stock issuable upon the exercise of this Warrant are changed into the same or different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination provided for in SECTION 5(A) above, a dividend or distribution provided for in SECTION 5(B) above, or a reorganization, merger, consolidation or sale of assets, provided for in SECTION 5(E) below), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of stock and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change.

- 3 -

(e) REORGANIZATION, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If at any time or from time to time there is a capital reorganization of the Common Stock (other than a subdivision or combination provided for in SECTION 5(A) above, a dividend or distribution provided for in SECTION 5(B) above, or a reclassification or exchange of shares provided for in SECTION 5(D) above) or a merger or consolidation of the Company with or into another entity, or a sale of all or substantially all of the Company's properties and assets to any other person or entity, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the number of shares of stock or other securities, money or property of the Company, or of the successor entity resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. The Company shall not effect any reorganization, merger, consolidation or sale unless prior to the consummation thereof each entity or person (other than the Company) that may be required to deliver any cash, securities or other property upon the exercise of this Warrant shall assume, by written instrument delivered to the Holder, the obligation to deliver to the Holder such cash, securities or other property as in accordance with the foregoing provisions the Holder may be entitled to receive. The foregoing provisions of this SECTION 5(E) shall similarly apply to successive reorganizations, mergers, consolidations and sales.

(f) NO IMPAIRMENT. The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this
Section and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon the voluntary or involuntary dissolution, liquidation or winding up of the Company.

(g) NOTICE OF ADJUSTMENTS. Whenever this Warrant shall be adjusted pursuant to this SECTION 5, the Company shall make a certificate signed by an officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the new Warrant Price and the type or the number of Shares purchasable after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

6. THE COMPANY'S OBLIGATION TO MAKE PAYMENTS.

(a) DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution, whether payable in cash, securities or other property of the Company, with respect to any of its capital stock for which an adjustment is not made pursuant to SECTION 5 of this Warrant, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the amount of cash plus the fair value of any property or securities distributed by (y) the number of shares of Common Stock outstanding on the record date for such dividend or distribution and (ii) the number of Shares on such record date.

(b) REDEMPTION OF CAPITAL STOCK. In the event the Company at any time or from time to time after the date hereof shall repurchase or redeem any of its capital stock or any rights, including without limitation, options, warrants or other convertible or exchangeable securities, to acquire such capital stock, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the aggregate amount of cash and the aggregate fair value of any property paid out by the Company in connection with any such repurchase or redemption by (y) the number of shares of Common Stock outstanding on a fully diluted basis immediately after such repurchase or redemption and (2) the number of Shares.

7. NOTICE OF RECORD DATE. In the event:

(1) that the Company declares a dividend (or any other distribution) on any of its capital stock (including without limitation, its Common Stock);

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(2) that the Company repurchases or redeems any of its capital stock (including without limitation, its Common Stock) or any rights to acquire such capital stock;

(3) that the Company subdivides or combines its outstanding shares of Common Stock;

(4) of any reclassification of the Common Stock, or of any consolidation, merger or share exchange of the Company into or with another entity, or of the sale of all or substantially all of the assets of the Company;

(5) of the involuntary or voluntary dissolution, liquidation or winding up of the Company; or

(6) of any offer of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price then in effect.

then the Company shall notify the Holder at least 30 days prior to the date specified in (A), (B) or (C) below, in writing stating:

(A) the record date of such dividend, distribution, repurchase, redemption, subdivision or combination, or, if a record is not to be taken, the date as to which the holders of Common Stock of record to be entitled to such dividend, distribution, repurchase, redemption, subdivision or combination are to be determined;

(B) the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up; or

(C) the date on which such offering of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price is expected to become consummated.

8. COMPLIANCE WITH SECURITIES ACT; DISPOSITION OF WARRANT OR COMMON STOCK.

(a) COMPLIANCE WITH SECURITIES ACT. The Holder, by acceptance hereof, agrees that this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the "ACT"). All Shares issued upon exercise of this Warrant (unless registered under the Act or sold or transferred pursuant to Rule 144 promulgated under the Act) shall be stamped or imprinted with a legend in substantially the following form:

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACTS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACTS."

- 5 -

(b) DISPOSITION OF WARRANT OR SHARES. Subject to the terms and conditions of this Warrant and applicable securities laws, this Warrant and the rights represented by this Warrant may be transferred, assigned or pledged, in whole or in part with prior written notice to the Company. Any transfer shall be accompanied by the Notice of Transfer form attached hereto as EXHIBIT B.

9. RIGHTS AS SHAREHOLDERS. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

10. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants to the Holder as follows:

(a) This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;

(b) The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable;

(c) The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company's Articles of Incorporation;

(d) The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company's Articles of Incorporation or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person; and

(e) CAPITALIZATION. As of the date of this Warrant the capitalization of the Company is as follows:

(i) Common Stock. A total of 100,000,000 authorized shares of Common Stock, of which 36,349,751 shares were issued and outstanding. All of such outstanding shares are validly issued, fully paid and non-assessable. No shares of the Common Stock are held in the Company's treasury.

(ii) Preferred Stock. A total of 25,000,000 authorized shares of Preferred Stock, of which 559,322 shares were issued and outstanding.

(iii) Options, Warrants, Reserved Shares. Except as disclosed in the Form 10-KSB for the period ended December 31, 2002 filed by the Company, or the Form 10-QSB filed by the Company (or provided to the Holder if not filed) for the period ended June 31, 2003, there are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of the Company's capital stock. No shares of the Company's outstanding capital stock, or stock issuable upon exercise, conversion or exchange of any outstanding options, warrants or rights, or other stock issuable by the Company, are subject to any rights of first refusal or other rights to purchase such stock (whether in favor of the Company or any other person), pursuant to any agreement, commitment or other obligation of the Company.

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11. REGISTRATION RIGHTS. If the Company proposes to file any registration statement under the Act (other than Form S-8), with respect to an offering of any equity securities, then the Company shall give the Holder written notice of such proposed filing as soon as practicable (but in no event less than thirty
(30) days before the anticipated initial filing date of such registration statement), and such notice shall offer the Holder the opportunity to register such number of Shares as the Holder shall request (the "PIGGYBACK SHARES"). The Company shall bear all costs of registering the Piggyback Shares, except for underwriting discounts or commissions if the registration statement relates to an underwritten offering. Any registration rights granted by this paragraph expire when shares issued pursuant to this Warrant Agreement are eligible for sale under Rule 144(k) of the Securities Act of 1933.

12. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

13. NOTICES. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the applicable party at its address specified opposite its signature below, or at such other address as shall be designated by such party in a written notice to the other. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier.

14. DESCRIPTIVE HEADINGS. The descriptive headings of the several sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

15. GOVERNING LAW. THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

16. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise, and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder.

17. SEVERABILITY. In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

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18. LOST WARRANTS OR STOCK CERTIFICATES. The Company covenants to the Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

[Signature Page Follows]

- 8 -

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and delivered by its duly authorized officer on the day and year first above written.

NUWAY MEDICAL, INC.

By: /s/
   ----------------------------------------------
   Name:  Dennis Calvert
   Title: President

Address: 23461 South Pointe, Suite 200 Laguna Hills, California 92653 Attention:________________ Facsimile:________________

ACKNOWLEDGED AND ACCEPTED:

ARTHUR LIPPER III

/s/
--------------------------------

Address:   [INVESTOR ADDRESS]

Facsimile: [FAX NUMBER]

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EXHIBIT A

NOTICE OF EXERCISE

TO: NUWAY MEDICAL, INC.

(1) The undersigned hereby elects to purchase __________ shares of Common Stock of NUWAY MEDICAL, INC. pursuant to the terms of the attached Warrant, and, unless such Warrant allows the exercise to be "cashless," tenders herewith payment of the Warrant Price for such shares in full.

(2) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:

(Name)

(Name)

(3) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:


(Name)


(Address)


(Signature)


(Date)

EXHIBIT B

NOTICE OF TRANSFER
(To be signed only upon transfer of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________________________ the right represented by the attached Warrant to purchase __________ shares of the Common Stock of NUWAY MEDICAL, INC., to which the attached Warrant relates, and appoints _____________________ as Attorney to transfer such right on the books of NUWAY MEDICAL, INC., with full power of substitution in the premises.

Dated:


(Signature must conform in all respects to the name of the Holder as specified on the face of the Warrant)



(Address)


(Signature)

Signed in the presence of:

EX. 4.9

THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACT OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACTS.

NUWAY MEDICAL, INC.

AMENDED AND RESTATED
WARRANT TO PURCHASE COMMON STOCK

Originally Issued: June 10, 2003

Amended and Restated Effective: March 30, 2004

WARRANT NO. AG-1

THIS CERTIFIES THAT, for value received, AUGUSTINE II, LLC, a limited liability company formed under the laws of the State of Delaware (the "Holder"), is entitled to subscribe for and purchase from NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware (the "Company"), commencing at the time periods prescribed herein and ending at 5:00 p.m. Chicago, Illinois time on the fifth (5th) calendar anniversary of the date hereof, 6,158,381 shares (the "Shares") of common stock, par value, $0.00067, of the Company (the "Common Stock"). The exercise price for each Share subject to this Warrant (the "Warrant Price") is equal to $0.035. The number of Shares and the Warrant Price are subject to adjustment from time to time as provided in
Section 5 of this Warrant, subject in all cases to the Restricted Ownership Percentage as provided in Section 1 of this Warrant.

This Warrant is issued in connection with and as consideration for the funds received by the Company set forth on the face of the Term Note dated the date hereof and issued by the Company in favor of the Holder, which Term Note has been issued pursuant to that certain Term Loan Agreement dated the date hereof between the Company and the Holder. Three million six hundred sixty-five thousand seven hundred three (3,665,703) warrants are exercisable upon funding by Holder of the first installment pursuant to the Term Loan Agreement. One million four hundred sixty-six thousand two hundred eighty-one (1,466,281) shall not be exercisable unless and until the Holder funds the second installment of $100,000 pursuant to the Term Loan Agreement (it being understood that in event that the Holder fails to fund the installment required by the Term Loan Agreement within ten (10) days following the funding date prescribed therein, the right to exercise this warrant in relation to such shares is cancelled). The balance of the warrants (one million twenty-six thousand three hundred ninety-seven (1,026,397)) shall not be exercisable until the Holder funds the final installment pursuant to the Term Loan Agreement (it being understood that in event that the Holder fails to fund the installment required by the Term Loan Agreement within ten (10) days following the funding date prescribed therein, the right to exercise this warrant in relation to such shares is cancelled).


1. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF NEW WARRANT. The purchase right represented by this Warrant may be exercised by the Holder, in whole or in part, subject to the limitation set forth below, and from time to time, by (i) the surrender of this Warrant (with a notice of exercise in the form attached hereto as Exhibit A, duly executed) at the principal office of the Company and
(ii) the payment to the Company, by check or wire transfer of funds to an account specified in writing by the Company, of an amount equal to the aggregate Warrant Price (provided, however, this clause (ii) shall not be applicable if the Holder is making a cashless exercise pursuant to Section 2 of this Warrant). The Shares so purchased, representing the aggregate number of shares specified in the executed Exhibit A, shall be delivered to the Holder within a reasonable time, not exceeding five (5) business days, after this Warrant shall have been so exercised. Upon receipt by the Company of this Warrant at the office of the Company, in proper form for exercise and, unless a cashless exercise is being made in accordance with Section 2 of this Warrant, accompanied by the amount equal to the aggregate Warrant Price, the Holder shall be deemed to be the holder of record of the Shares issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Shares shall not then be actually delivered to the Holder.

Notwithstanding anything else herein to the contrary, the Holder shall not have the right, and the Company shall not have the obligation, to exercise all or any portion of this Warrant if and to the extent that the issuance to the Holder of shares of Common Stock upon such exercise would result in the total number of shares of Common Stock deemed beneficially owned by the Holder (together with all shares of Common Stock deemed beneficially owned by any of the Holder's affiliates that would be aggregated for purposes of determining a group under Section 13(d) of the Exchange Act) exceeding, when issued, 4.9% of the total issued and outstanding shares of the Company's Common Stock (the "Restricted Ownership Percentage"); provided, however, that (i) Holder shall have the right at any time and from time to time to increase or decrease its Restricted Ownership Percentage and otherwise waive in whole or in part the restrictions of this paragraph immediately upon written notice to the Company, and (ii) Holder can make subsequent adjustments pursuant to the preceding clause (i) any number of times, and provided further that nothing in the foregoing shall prevent the partial exercise of the Warrant for such number of shares of Common Stock as do not exceed the Restricted Ownership Percentage.

If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of such Shares, deliver to the Holder a new Warrant evidencing the right to purchase the remaining Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant, or, at the request of Holder, appropriate notation may be made on this Warrant which shall then be returned to Holder.

2. Exercise. The Holder shall pay the Warrant Price to the Company for each Warrant that it exercises if as of the Term Loan Maturity Date (a) the registration statement to be filed by the Company with the Securities and Exchange Commission (the "SEC") to register the Holder's re-sale of the Common Stock underlying the Warrant has been declared effective by the SEC; (b) the closing bid price of the Common Stock of the Company as published in Bloomberg for each trading day within the thirty calendar days prior to the Term Loan Maturity Date has equaled or exceeded $0.60 per share; and (c) the volume of trading of the Common Stock of the Company as published in Bloomberg for each trading day within the thirty calendar days prior to the Term Loan Maturity Date has equaled or exceeded 100,000 shares. If all of such conditions are not fully satisfied by the Term Loan Maturity Date, then in lieu of exercising this Warrant by payment in cash or check, the Holder may elect to pay the Warrant Price by reducing the number of Shares issuable upon exercise of this Warrant in accordance with the following formula:

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X = Y(A-B)

A

Where:            X   =    the number of Shares to be issued to the Holder.

                  Y   =   the number of Shares requested to be exercised under
                          this Warrant.

                  A   =   the Fair Market  Value of one (1) Share of Common
                          Stock as of the date such  Warrant is
                          exercised.

                  B   =   the Warrant Price.

"Fair Market Value" of the Company's Common Stock means the average of the closing bid prices of the Common Stock as published in Bloomberg for the ten trading days prior to the date of determination of fair market value.

3. STOCK FULLY PAID; RESERVATION OF SHARES. All Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be fully paid and nonassessable, and free from all preemptive rights, taxes, liens and charges with respect to the issue thereof; provided, however, that the Company shall not be required to pay any transfer taxes with respect to the issue of shares in any name other than that of the registered holder hereof. During the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of the issue upon exercise of the purchase rights evidenced by this Warrant, a sufficient number of shares of Common Stock to provide for the exercise of the rights represented by this Warrant. The Company shall at all times take all such action and obtain all such permits or orders as may be necessary to enable the Company lawfully to issue such Common Stock as duly and validly issued, fully paid and nonassessable shares upon exercise in full of this Warrant.

4. FRACTIONAL SHARES. No fractional shares of Common Stock will be issued in connection with any exercise hereunder, but in lieu of such fractional shares the Company shall make a cash payment therefor upon the basis of the Fair Market Value of such Shares.

5. ADJUSTMENT. This Warrant shall be subject to adjustment from time to time upon the occurrence of certain events, as follows:

(a) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the Company shall at any time or from time to time after the date hereof effect a subdivision of the outstanding Common Stock, the Warrant Price then in effect immediately before that subdivision shall be proportionately decreased. If the Company shall at any time or from time to time after the date hereof combine the outstanding Common Stock, the Warrant Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.

(b) Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Warrant Price shall be decreased as of the time of such issuance, by multiplying the Warrant Price by a fraction:

(x) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance; and

(y) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

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(c) Adjustment of Number of Shares. Upon each adjustment of the Warrant Price pursuant to either Section 5(a) or 5(b) of this Warrant, the number of shares of Common Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock, calculated to the nearest one hundredth of a share, obtained by multiplying the number of shares of Common Stock purchasable immediately prior to such adjustment upon the exercise of the Warrant by the Warrant Price in effect prior to such adjustment and dividing the product so obtained by the new Warrant Price.

(d) Adjustment for Reclassification, Exchange and Substitution. If the Common Stock issuable upon the exercise of this Warrant are changed into the same or different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination provided for in Section 5(a) above, a dividend or distribution provided for in Section 5(b) above, or a reorganization, merger, consolidation or sale of assets, provided for in Section 5(e) below), then and in any such event the Holder shall have the right thereafter to exercise this Warrant into the kind and amount of stock and other securities receivable upon such recapitalization, reclassification or other change, by holders of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such recapitalization, reclassification or change.

(e) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there is a capital reorganization of the Common Stock (other than a subdivision or combination provided for in Section 5(a) above, a dividend or distribution provided for in Section 5(b) above, or a reclassification or exchange of shares provided for in Section 5(d) above) or a merger or consolidation of the Company with or into another entity, or a sale of all or substantially all of the Company's properties and assets to any other person or entity, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the number of shares of stock or other securities, money or property of the Company, or of the successor entity resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. The Company shall not effect any reorganization, merger, consolidation or sale unless prior to the consummation thereof each entity or person (other than the Company) that may be required to deliver any cash, securities or other property upon the exercise of this Warrant shall assume, by written instrument delivered to the Holder, the obligation to deliver to the Holder such cash, securities or other property as in accordance with the foregoing provisions the Holder may be entitled to receive. The foregoing provisions of this Section 5(e) shall similarly apply to successive reorganizations, mergers, consolidations and sales.

(f) Adjustment of Warrant Price for Matching Purposes. In the event that the Company shall issue Common Stock or rights, warrants, options or convertible or exchangeable securities entitling the holder thereof to subscribe for or purchase, convert or exercise into or exchange for Common Stock, in any such case at a price (the "Dilutive Strike Price") per share less than $0.035 ("Dilutive Securities"), then the Warrant Price in effect immediately prior to such earliest date shall be adjusted so that the Warrant Price shall equal the price determined by multiplying the Warrant Price in effect immediately prior to such earliest date by the fraction:

(i) whose numerator shall be the number of shares of Common Stock outstanding on such date plus the number of shares which the aggregate offering price of the total number of shares so offered would purchase at the then applicable Warrant Price (such amount, with respect to any such Dilutive Securities determined by multiplying the total number of shares subject thereto by the Dilutive Strike Price and dividing the product so obtained by the then applicable Warrant Price), and

- 4 -

(ii) whose denominator shall be the number of shares of Common Stock outstanding on such date plus the number of additional shares of Common Stock to be issued or distributed or receivable upon exercise of any such Dilutive Securities.

Such adjustment shall be made successively whenever any such Dilutive Securities are issued or distributed. In determining whether any Dilutive Securities entitle the holders to subscribe for or purchase shares of Common Stock at less than $0.035, and in determining the aggregate offering price of shares of Common Stock so issued or distributed, there shall be taken into account any consideration received by the Company for such Dilutive Securities. If any Dilutive Securities to purchase or acquire Common Stock, the issuance of which resulted in an adjustment in the Warrant Price pursuant to this Section 5(f) shall expire and shall not have been exercised, the Warrant Price shall immediately upon such expiration be recomputed to the Warrant Price which would have been in effect had the adjustment of the Warrant Price made upon the issuance of such Dilutive Securities been made on the basis of offering for subscription, purchase or issuance, as the case may be, only of that number of shares of Common Stock actually purchased or issued upon the actual exercise of such Dilutive Securities.

(g) Exceptions to Adjustment. Notwithstanding the provisions of
Section 5(f):

(i) No adjustment in the Warrant Price shall be required unless the adjustment would require an increase or decrease of at least 1% in the Warrant Price then in effect; provided, however, that any adjustments that by reason of this subparagraph (g)(i) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this subparagraph shall be made to the nearest cent or nearest 1/100th of a share.

(ii) Upon the sale or issuance of any Dilutive Securities as compensation to officers, directors, employees or consultants of the Company other than pursuant to compensation or incentive plans existing as of the date of this Warrant, then the Warrant Price shall be automatically adjusted, for an equivalent number of Shares equal to all such compensatory Dilutive Securities, to be equal to the lowest Dilutive Strike Price of all such compensatory Dilutive Securities. By way of illustration, if compensatory Dilutive Securities to purchase 1,000 shares of Common Stock are issued to various persons at Strike Prices of $0.01, $.02 and $0.025, this Warrant shall be adjusted so as to provide the Holder with the right to purchase 1,000 shares of Common Stock at $0.01 per share.

(iii) Upon the sale or issuance of any Dilutive Securities in connection with capital investment into the Company, or debt financings or refinancings, then the Warrant Price shall be automatically adjusted to be equal to the lowest Dilutive Strike Price of all such Dilutive Securities. The parties intend that any Dilutive Securities sold or issued to placement agents, finders, brokers, underwriters and the like as compensation for their assistance with respect to any such transaction are intended to be governed by this provisions of this subparagraph (g)(iii) rather than the provisions of subparagraph 5(g)(ii).

(iv) Notwithstanding anything to the contrary set forth in this Section 5(f), no adjustment shall be made to the Warrant Price upon the issuance of Common Stock upon the conversion or exercise of the options, warrants or rights of the Company outstanding as of the date hereof.

(h) NO IMPAIRMENT. The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this
Section and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not issue any capital stock of any class which is preferred as to dividends or as to the distribution of assets upon the voluntary or involuntary dissolution, liquidation or winding up of the Company.

- 5 -

(i) NOTICE OF ADJUSTMENTS. Whenever this Warrant shall be adjusted pursuant to this Section 5, the Company shall make a certificate signed by an officer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated, and the new Warrant Price and the type or the number of Shares purchasable after giving effect to such adjustment, and shall cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder.

6. THE COMPANY'S OBLIGATION TO MAKE PAYMENTS.

(a) DIVIDENDS AND DISTRIBUTIONS. In the event the Company at any time or from time to time after the date hereof shall make or issue a dividend or other distribution, whether payable in cash, securities or other property of the Company, with respect to any of its capital stock for which an adjustment is not made pursuant to Section 5 of this Warrant, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the amount of cash plus the fair value of any property or securities distributed by (y) the number of shares of Common Stock outstanding on the record date for such dividend or distribution and (ii) the number of Shares on such record date.

(b) REDEMPTION OF CAPITAL STOCK. In the event the Company at any time or from time to time after the date hereof shall repurchase or redeem any of its capital stock or any rights, including without limitation, options, warrants or other convertible or exchangeable securities, to acquire such capital stock, then and in each such event, the Company shall concurrently make a cash payment to the Holder equal to the product of (i) the quotient obtained by dividing (x) the aggregate amount of cash and the aggregate fair value of any property paid out by the Company in connection with any such repurchase or redemption by (y) the number of shares of Common Stock outstanding on a fully diluted basis immediately after such repurchase or redemption and (2) the number of Shares.

7. Notice of Record Date. In the event:

(1) that the Company declares a dividend (or any other distribution) on any of its capital stock (including without limitation, its Common Stock);

(2) that the Company repurchases or redeems any of its capital stock (including without limitation, its Common Stock) or any rights to acquire such capital stock;

(3) that the Company subdivides or combines its outstanding shares of Common Stock;

(4) of any reclassification of the Common Stock, or of any consolidation, merger or share exchange of the Company into or with another entity, or of the sale of all or substantially all of the assets of the Company;

(5) of the involuntary or voluntary dissolution, liquidation or winding up of the Company; or

- 6 -

(6) of any offer of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price then in effect.

then the Company shall notify the Holder at least 30 days prior to the date specified in (A), (B) or (C) below, in writing stating:

(A) the record date of such dividend, distribution, repurchase, redemption, subdivision or combination, or, if a record is not to be taken, the date as to which the holders of Common Stock of record to be entitled to such dividend, distribution, repurchase, redemption, subdivision or combination are to be determined;

(B) the date on which such reclassification, consolidation, merger, share exchange, sale, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up; or

(C) the date on which such offering of its Common Stock or any rights to acquire such Common Stock for consideration paid per share of Common Stock less than the Warrant Price is expected to become consummated.

8. Compliance with Securities Act; Disposition of Warrant or Common Stock.

(a) Compliance with Securities Act. The Holder, by acceptance hereof, agrees that this Warrant and the Shares to be issued upon exercise hereof are being acquired for investment and that such Holder will not offer, sell or otherwise dispose of this Warrant or any Common Stock to be issued upon exercise hereof except under circumstances which will not result in a violation of the Securities Act of 1933, as amended (the "Act"). All Shares issued upon exercise of this Warrant (unless registered under the Act or sold or transferred pursuant to Rule 144 promulgated under the Act) shall be stamped or imprinted with a legend in substantially the following form:

"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES ACTS OF ANY STATE AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACTS COVERING THIS SECURITY OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACTS."

(b) DISPOSITION OF WARRANT OR SHARES. Subject to the terms and conditions of this Warrant and applicable securities laws, this Warrant and the rights represented by this Warrant may be transferred, assigned or pledged, in whole or in part with prior written notice to the Company. Any transfer shall be accompanied by the Notice of Transfer form attached hereto as Exhibit B.

9. RIGHTS AS SHAREHOLDERS. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or equity, and the rights of the Holder are limited to those expressed in this Warrant and are not enforceable against the Company except to the extent set forth herein.

10. Representations and Warranties. The Company represents and warrants to the Holder as follows:

- 7 -

(a)This Warrant has been duly authorized and executed by the Company and is a valid and binding obligation of the Company enforceable in accordance with its terms;

(b)The Shares have been duly authorized and reserved for issuance by the Company and, when issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable;

(c) The rights, preferences, privileges and restrictions granted to or imposed upon the Shares and the holders thereof are as set forth in the Company's Articles of Incorporation;

(d) The execution and delivery of this Warrant are not, and the issuance of the Shares upon exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the Company's Articles of Incorporation or by-laws, do not and will not contravene any law, governmental rule or regulation, judgment or order applicable to the Company, and, except for consents that have already been obtained by the Company, do not and will not conflict with or contravene any provision of, or constitute a default under, any indenture, mortgage, contract or other instrument of which the Company is a party or by which it is bound or require the consent or approval of, the giving of notice to, the registration with or the taking of any action in respect of or by, any federal, state or local government authority or agency or other person; and

(e) Capitalization. As of the date of this Warrant the capitalization of the Company is as follows:

(i) Common Stock. A total of 100,000,000 authorized shares of Common Stock, of which 30,791,911 shares were issued and outstanding. All of such outstanding shares are validly issued, fully paid and non-assessable. No shares of the Common Stock are held in the Company's treasury.

(ii) Preferred Stock. A total of 25,000,000 authorized shares of Preferred Stock, of which 559,322 shares were issued and outstanding.

(iii) Options, Warrants, Reserved Shares. Except as disclosed in the Form 10-KSB for the period ended December 31, 2002 filed by the Company, or the Form 10-QSB filed by the Company (or provided to the Holder if not filed) for the period ended March 31, 2003, there are no outstanding options, warrants, rights (including conversion or preemptive rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of the Company's capital stock. No shares of the Company's outstanding capital stock, or stock issuable upon exercise, conversion or exchange of any outstanding options, warrants or rights, or other stock issuable by the Company, are subject to any rights of first refusal or other rights to purchase such stock (whether in favor of the Company or any other person), pursuant to any agreement, commitment or other obligation of the Company.

11. Registration Rights. If the Company proposes to file any registration statement under the Act (other than Form S-8), with respect to an offering of any equity securities, then the Company shall give the Holder written notice of such proposed filing as soon as practicable (but in no event less than thirty
(30) days before the anticipated initial filing date of such registration statement), and such notice shall offer the Holder the opportunity to register such number of Shares as the Holder shall request (the "Piggyback Shares"). The Company shall bear all costs of registering the Piggyback Shares, except for underwriting discounts or commissions if the registration statement relates to an underwritten offering. Any registration rights granted by this paragraph expire when shares issued pursuant to this Warrant Agreement are eligible for sale under Rule 144(k) of the Securities Act of 1933.

- 8 -

12. Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

13. Notices. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered to the applicable party at its address specified opposite its signature below, or at such other address as shall be designated by such party in a written notice to the other. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier.

14. Descriptive Headings. The descriptive headings of the several sections of this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

15. Governing Law. THIS WARRANT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.

16. Binding Effect on Successors. This Warrant shall be binding upon any entity succeeding the Company by merger, consolidation or acquisition of all or substantially all of the Company's assets, and all of the obligations of the Company relating to the Common Stock issuable upon the exercise of this Warrant shall survive the exercise, and termination of this Warrant and all of the covenants and agreements of the Company shall inure to the benefit of the successors and assigns of the Holder.

17. Severability. In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

18. Lost Warrants or Stock Certificates. The Company covenants to the Holder that upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant or any stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or in the case of any such mutilation upon surrender and cancellation of such Warrant or stock certificate, the Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and delivered by its duly authorized officer on the day and year first above written.

NUWAY MEDICAL, INC.

By: /s/
    -------------------------
Name:  Dennis Calvert
Title: President

Address: 23461 South Pointe, Suite 200 Laguna Hills, California 92653 Attention:________________ Facsimile:________________

ACKNOWLEDGED AND ACCEPTED:

AUGUSTINE II, LLC

By: AUGUSTINE CAPITAL
MANAGEMENT, L.L.C., its manager

By: /s/
   -----------------------------------------
Name:  John T. Porter
Title:  President

Address: 141 West Jackson Boulevard, Suite 2182 Chicago, Illinois 60604
Attention: John T. Porter
Facsimile: (312) 427-5396

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EXHIBIT A

NOTICE OF EXERCISE

TO: NUWAY MEDICAL, INC.

(1) The undersigned hereby elects to purchase __________ shares of Common Stock of NUWAY MEDICAL, INC. pursuant to the terms of the attached Warrant, and, unless such Warrant allows the exercise to be "cashless," tenders herewith payment of the Warrant Price for such shares in full.

(2) Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below:


(Name)


(Name)

(3) Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified below:


(Name)


(Address)


(Signature)


(Date)

EXHIBIT B

NOTICE OF TRANSFER
(To be signed only upon transfer of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ____________________________________________ the right represented by the attached Warrant to purchase __________ shares of the Common Stock of NUWAY MEDICAL, INC., to which the attached Warrant relates, and appoints _____________________ as Attorney to transfer such right on the books of NUWAY MEDICAL, INC., with full power of substitution in the premises.

Dated:


(Signature must conform in all respects to the name of the Holder as specified on the face of the Warrant)

(Address)

Signed in the presence of:

Exhibit 10.19

AGREEMENT

Sachi International, Inc. will consult with and provide services regarding the raising of capital for Nuway Medical, Inc.

Nuway and Sachi shall work together on an ongoing basis to secure at least $500,000 in working capital for Nuway on terms that Nuway shall agree.

In exchange for services rendered, Sachi International, Inc. shall receive warrants to purchase 3,000,0000 shares of stock in Nuway, at $.04 per share, which shall be vested and released based on the successful fund raising efforts, as they occur. Shares shall be issued, as earned but held in trust by Nuway until after one year from the date of issue.

Stock shall be considered earned on a proportionate basis, based on the success of raising capital up to $500,000. For Example, should Nuway secure 25% of the $500,000 goal, then 25% of the warrants to purchase 3,000,000 shares of stock will be considered earned.

Sachi International, Inc. shall be considered as the consultant of record for all sources of capital that may come from any contact of Sachi International, Inc. or it's affiliate relationships.

Date: 2-23-04


/s/
-------------------------------------------------
Dennis Calvert


Ex. 10.23
NUWAY MEDICAL, INC.

PROMISSORY NOTE

U.S. $65,000 Dated: November 20, 2003

FOR VALUE RECEIVED, the undersigned, NuWay Medical, Inc., a Delaware corporation (the "Company"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of James Seay, DDS, an Individual (the "Holder"), the principal sum of SIXTY FIVE THOUSAND UNITED STATES DOLLARS (U.S. $65,000) in accordance with the payment schedule set forth in Section 2.1.

1. INTEREST. This Promissory Note (this "Note") shall bear no interest.

2. PAYMENT.

2.1 PAYMENT SCHEDULE. The principal shall be payable in one payment due on the 90th day (the "Maturity Date") after fifty thousand United State dollars (U.S. $50,000) is paid to the Company by the Holder, or the Holder's predecessor(s) in interest, except to the extent prepayment must be made under
Section 3.

2.2 PAYMENT LOCATION. Payment of the principal is to be made at the main office of the Holder, or at such other place as the Holder shall designate to the Company in writing, in lawful money of the United States of America.

2.3 BUSINESS DAYS. Whenever any payment hereunder shall be stated to be due or any other date specified hereunder would otherwise occur, on a day other than a Business Day (as defined below), then, except as otherwise provided herein, such payment shall be made or other date shall occur, on the next succeeding Business Day. As used herein, "Business Day" means a day (i) other than Saturday or Sunday, and (ii) on which commercial banks are open for business in Orange County, California.

3. PREPAYMENT. The Company must prepay principal outstanding hereunder to the extent, prior to the Maturity Date, the Company receives cash proceeds equal to or exceeding two hundred thousand United States dollars (U.S. $200,000) with respect to or in connection with the letter of intent entered into by the Company with CVD International, Inc. in which certain investors are to provide a bridge loan to the Company in the amount of $250,000 to $500,000 ("Prepayment Trigger"). On each occurrence of a Prepayment Trigger prior to the Maturity Date, the Company must prepay principal hereunder in an amount equal to the net cash proceeds received by the Company from the Prepayment Trigger after deducting all expenses associated therewith up to the Company's obligation pursuant to this Note.

4. EVENTS OF DEFAULT.

4.1 Any of the following events which shall occur shall constitute an "Event of Default":

(a) The Company shall fail to pay when due any amount of principal hereunder or other amount payable hereunder.

(b) The Company shall fail to perform or observe any other term, covenant or agreement contained in this Note on its part to be performed or observed and any such failure shall remain unremedied for a period of 60 days from the occurrence thereof.


(c) The Company shall admit in writing its inability to, or shall fail generally or be generally unable to, pay its debts (including its payrolls) as such debts become due, or shall make a general assignment for the benefit of creditors; or the Company shall file a voluntary petition in bankruptcy or a petition or answer seeking reorganization, to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act of 1978, as amended or recodified from time to time (the "Bankruptcy Code"); or an involuntary petition seeking any of the relief specified in this paragraph shall be filed against the Company and shall not be dismissed within 90 days.

(d) The Company shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution), or (ii) suspend its operations other than in the ordinary course of business.

4.2 If any Event of Default shall occur, the Holder may (i) by notice to the Company, declare the entire unpaid principal amount of this Note to be forthwith due and payable, whereupon all unpaid principal under this Note shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Company; and (ii) whether or not the actions referred to in clause (i) have been taken, proceed to enforce all other rights and remedies available to the Holder under applicable law.

5. MISCELLANEOUS.

5.1 NOTICES. All notices, requests, demands, and other communications under this Note shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given, or on the third day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows:

To the Holder:

To the Company:                   NuWay Medical, Inc.
                                  23461 South Pointe Drive, Suite 200
                                  Laguna Hills, CA 92653
                                  Attn: President

Any party may change his or its address for purposes of this paragraph by giving notice of the new address to each of the other parties in the manner set forth above.

5.2 DELAY. No failure on the part of the Holder to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Note are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Holder.

5.3 Severability. Whenever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Note shall be prohibited by or invalid under any such law or regulation in any

2

jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Note, or the validity or effectiveness of such provision in any other jurisdiction.

5.4 Successors and Assigns. This Note shall be binding upon, inure to the benefit of and be enforceable by the Company, the Holder and their respective successors and assigns.

5.5 Headings. The subject headings of the Articles and Sections of this Note are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

IN WITNESS WHEREOF, the Company has duly executed this Note, as of the date first above written.

NUWAY MEDICAL, INC., a
Delaware corporation

   /s/
-----------------------------
Dennis Calvert
Chief Executive Officer

3

AMENDMENT NO. 1

TO
TERM LOAN AGREEMENT

This AMENDMENT NO. 1 TO TERM LOAN AGREEMENT (this "Amendment") is dated to be effective as of March 30, 2004 and is entered into between NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware (the "Borrower"), and AUGUSTINE II, LLC, a limited liability company formed under the laws of the State of Delaware (the "Lender").

BACKGROUND:

Borrower and Lender are parties to that certain Term Loan Agreement dated as of June 10, 2003 (the "Agreement"). Pursuant to the Agreement, Borrower and Lender have also entered into that certain Pledge Agreement, and Borrower previously has delivered to Lender a Term Note and Warrant to Purchase Common Stock No. AG-1 (the "Warrant"), each dated as of June 10, 2003 (the Agreement, together with such Pledge Agreement, Term Note and Warrant, the "Loan Documents"). Borrower has requested that Lender extend the maturity date of the term loan evidenced by the Loan Documents, and in consideration of Lender's willingness to do so has agreed to reprice the Warrant.

Capitalized terms used herein shall have the meanings ascribed to such terms in Section 8 of the Agreement.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged:

1. Extension of Maturity Date. The Term Loan Maturity Date is hereby extended to August 31, 2004, and the last sentence of Section 1.2 of the Agreement is amended accordingly.

2. Remedies Upon Default. Section 7.2 of the Agreement is hereby amended and restated in its entirety to read as follows:

SECTION 7.2 REMEDIES.

(a) Upon the occurrence of any Event of Default set forth in subsections (a)-(k) of Section 7.1 and during the continuance thereof, the Lender or any other holder of the Term Note may declare the Term Note and any other amounts owed to the Lender to be immediately due and payable, whereupon the Term Note and any other amounts owed to the Lender shall forthwith become due and payable. Upon the occurrence of any Event of Default set forth in subsection (l) of Section 7.1, the Term Note and any other amounts owed to the Lender shall be immediately and automatically due and payable without action of any kind on the part of the Lender or any other holder of the Term Note. The Borrower expressly waives presentment, demand, notice or protest of any kind in


connection herewith. The Lender shall promptly give the Borrower notice of any such declaration, but failure to do so shall not impair the effect of such declaration. No delay or omission on the part of the Lender or any holder of the Term Note in exercising any power or right hereunder or under the Term Note shall impair such right or power or be construed to be a waiver of any Event of Default or any acquiescence therein, nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof, or the exercise of any other power or right.

(b) Upon and during the continuance of any Event of Default the Lender may exercise any and all remedies available to it under this Agreement or the Pledge Agreement, at law or in equity, or by statute or otherwise, including (a) exercise any rights of a secured lender under the UCC and/or any other applicable Uniform Commercial Code, and
(b) conversion of the Term Note into Common Stock of the Company as provided therein.

(c) The enumeration of Lender's rights and remedies set forth in this Agreement is not intended to be exhaustive. The exercise by Lender of any right or remedy under this Agreement or any other agreement or instrument executed and delivered in furtherance of the transactions contemplated by this Agreement does not preclude the exercise of any other rights or remedies, however existing.

3. AMENDED NOTE. The Term Note shall be replaced by an Amended and Restated Term Note in the form attached hereto as Exhibit A (the "Amended Note"), and upon delivery of the executed Amended Note to Lender, Lender shall deliver the existing Term Note to Borrower. Thereafter, all references in the Agreement to "Term Note" shall be deemed to be references to the Amended Note.

4. AMENDED WARRANT. The Warrant shall be replaced by an Amended and Restated Warrant in the form attached hereto as Exhibit B (the "Amended Warrant"), and upon delivery of the executed Amended Warrant to Lender, Lender shall deliver the existing Warrant to Borrower. Thereafter, all references in the Agreement to "Warrant" shall be deemed to be references to the Amended Warrant.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS.

(a) The representations of Borrower in the Agreement and the other Loan Documents, as amended hereby, are true and correct as of the date hereof as though each of said representations and warranties was made on the date hereof except for those representations and warranties which are made as of a specified date in the applicable Loan Document.

(b) The parties acknowledge that, as of the date of this Amendment, Borrower does not have sufficient number of shares of authorized Common Stock to issue upon full exercise of the Warrant and/or full conversion of the Amended Note. Borrower represents and warrants to Lender that effective February 11, 2004 shareholders holding a majority of the issued and outstanding Common Stock approved an amendment to Borrower's articles of incorporation that would


increase the total number of authorized shares to 200,000,000 (the "Charter Amendment"). Borrower covenants to Lender that:

(i) Borrower shall cause the Charter Amendment to become effective no later than August 31, 2004;

(ii) Borrower has, by resolution of its Board of Directors dated February 4, 2004, reserved all [13,000,000] shares of Common Stock that currently are authorized but unissued for issuance upon exercise of the Warrant and/or conversion of the Amended Note;

(iii) Beginning immediately after the Charter Amendment becomes effective, Borrower shall at all times reserve and keep available for issuance such number of shares of authorized but unissued Common Stock as will be sufficient to permit the exercise in full of the Warrant and the conversion in full of the Amended Note; and

(iv) Any failure by Borrower to observe the foregoing covenants shall be an "Event of Default" under the Agreement.

6. ADDITIONAL COVENANT OF LENDER. Lender agrees that, at any time during which the Amended Note is outstanding and until the Amended Note has been repaid, converted, or otherwise satisfied in full, it will not engage in hedging transactions (including without limitation any short sales) with respect to the Common Stock.

7. AMENDMENT SUPPLEMENTARY. This Amendment is supplementary to the Loan Documents. All of the provisions of the Loan Documents, including without limitation the right to declare principal and accrued interest due for any cause specified in the Loan Documents, shall remain in full force and effect except as herein expressly modified. The Agreement and the other Loan Documents and all rights and powers created thereby and thereunder or under such other documents are in all respects ratified and confirmed. From and after the date hereof, the Agreement and the other Loan Documents shall be deemed to be amended and modified as herein provided, but, except as so amended and modified, the Agreement and the other Loan Documents shall continue in full force and effect and the Agreement, the other Loan Documents, and this Amendment shall be read, taken and construed as one and the same instrument. On and after the date hereof, any references in the Loan Documents to the Agreement shall mean the Agreement as amended hereby.

8. WAIVER OF CLAIMS. Borrower hereby acknowledges, agrees and affirms that it possesses no claims, defenses, offsets, recoupment or counterclaims of any kind or nature against or with respect to the enforcement of the Agreement, or any other Loan Document or any amendments thereto (collectively, the "Claims"), nor does Borrower now have knowledge of any facts that would or might give rise to any Claims. If facts exist as of the date of this Amendment which would or could give rise to any Claim against or with respect to the enforcement of the Agreement, or any other Loan Document, as amended by the amendments thereto, Borrower hereby unconditionally, irrevocably and unequivocally waives and fully releases any and all such Claims as if such Claims were the subject of


a lawsuit, adjudicated to final judgment from which no appeal could be taken and therein dismissed with prejudice. In furtherance of the intention of the parties, Borrower hereby expressly waives any and all rights conferred upon it by the provisions of any applicable law which would provide that "A general release does not extend to claims which the creditor does not know or suspect to EXIST in his favor at the time of executing the release which, if known by him, must have materially affected his settlement with the debtor." Borrower hereby understands and acknowledges the significance and consequences of the foregoing release and waiver.

9. Representation by Counsel. Borrower hereby represents that it has been represented by competent counsel of its choice in the negotiation and execution of this Amendment; that it has read and fully understands the terms hereof, that Borrower and its counsel have been afforded an opportunity to review, negotiate and modify the terms of this Amendment, and that it intends to be bound hereby.

10. Counterparts. This Agreement may be executed in one or more counterparts, which counterparts, when taken together and collated shall constitute one agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

NUWAY MEDICAL, INC.

 /s/
By:
   --------------------------------------

Its: President

AUGUSTINE II, LLC

By: AUGUSTINE CAPITAL
MANAGEMENT, L.L.C., its
manager

    /s/
By:
   --------------------------------------

Its:

EX. 10.26

EXHIBIT A

AMENDED AND RESTATED CONVERTIBLE TERM NOTE

$ 420,000 Chicago, Illinois Originally Executed: June 10, 2003 Amended and Restated Effective: March 30, 2004 Maturity Date: August 31, 2004

FOR VALUE RECEIVED, NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware ("BORROWER"), promises to pay to the order of AUGUSTINE II, LLC, a limited liability company formed under the laws of the State of Delaware (hereafter, together with any subsequent holder hereof, called "LENDER"), at its office 141 West Jackson Blvd., Suite 2182, Chicago, Illinois 60604, or at such other place as Lender may direct, the principal sum of FOUR HUNDRED TWENTY THOUSAND United States Dollars ($420,000) (the "LOAN"), payable in full on August 31, 2004 or at an earlier date as provided in Section 3.2 of the Term Loan Agreement (as defined hereinafter). This Note is convertible at the Lender's option as provided below.

Borrower agrees to pay interest on the unpaid principal amount from time to time outstanding hereunder on the dates and at the rate or rates as set forth in the Term Loan Agreement.

This Note evidences borrowings under and has been issued by the Borrower in accordance with the terms of the Term Loan Agreement. This Note amends and restates in its entirety the Term Note which was previously executed and delivered by Borrower to Lender on June 10, 2003 (the "ORIGINAL NOTE"). It is the intent of the parties hereto that the Original Note, as restated hereby, shall re-evidence the Term Loan under the Loan Agreement and is in no way intended to constitute repayment or a novation of any of the indebtedness which is evidenced by the Loan Agreement or the Original Note or any of the other Loan Documents executed in connection therewith. The Lender and any holder hereof is entitled to the benefits of the Loan Agreement and the other Loan Documents, and may enforce the agreements of the Borrower contained therein, and any holder hereof may exercise the respective remedies provided for thereby or otherwise available in respect thereof, all in accordance with the respective terms thereof. All capitalized terms used in this Note and not otherwise defined herein shall have the same meanings herein as in the Loan Agreement.

Payments of both principal and interest are to be made in immediately available funds in lawful money of the United States of America, or in Common Stock of the Borrower as set forth in the Term Loan Agreement.

This Note evidences indebtedness incurred under a Term Loan Agreement dated as June 10, 2003, as amended by Amendment No. 1 to Term Loan Agreement dated as of the date hereof executed by and between Borrower and Lender (and, if amended, restated or replaced, all amendments, restatements and replacements thereto or therefor, if any) (the "TERM LOAN AGREEMENT"), to which Term Loan Agreement reference is hereby made for a statement of its terms and provisions, including without limitation those under which this Note may be paid prior to its due date or have its due date accelerated.


This Note and any document or instrument executed in connection herewith shall be governed by and construed in accordance with the internal law of the State of Illinois, and shall be deemed to have been executed in the State of Illinois. Unless the context requires otherwise, wherever used herein the singular shall include the plural and vice versa. This Term Note shall bind Borrower successors and assigns, and shall inure to the benefit of Lender, its successors and assigns, except that Borrower may not transfer or assign any of its rights or interest hereunder without the prior written consent of Lender. Borrower agrees to pay upon demand all expenses (including without limitation reasonable attorneys' fees, legal costs and expenses, and time charges of attorneys who may be employees of Lender, in each case whether in or out of court, in original or appellate proceedings or in bankruptcy) incurred or paid by Lender or any holder hereof in connection with the enforcement or preservation of its rights hereunder or under any document or instrument executed in connection herewith. Borrower expressly and irrevocably waives presentment, protest, demand and notice of any kind in connection herewith.

CONVERSION

(a) Lender may, at any time while the Note is outstanding prior to or on the Term Loan Maturity Date and thereafter during the continuance of any Event of Default, convert (a "CONVERSION EVENT") some or all of the outstanding principal and, if Lender so elects, some or all accrued and unpaid interest hereunder into Common Stock of the Borrower, par value $0.00067 (the "COMMON STOCK").

(b) To effect a Conversion Event Lender shall execute and deliver to the Company a CONVERSION NOTICE (attached hereto as Exhibit 1), and, in the event that the entire amount outstanding under this Note is converted, Lender shall also surrender this Note to the Company for cancellation.

(c) The number of shares to be received by Lender upon any Conversion Event shall be equal to the (i) the total sum of indebtedness specified in the Conversion Notice as being subject to conversion, divided by (ii) the product of 0.85 and the average of the last five closing bids for the Company's Common Stock received prior to the date of the Conversion Notice.

(d) All principal and accrued and unpaid interest that is not converted at the time of a Conversion Event, shall be paid in cash by the Company on the Term Loan Maturity Date. Interest hereunder shall cease to accrue with respect to that portion of principal then being converted to equity in connection with a Conversion Event upon the Company's receipt of a Conversion Notice.


(e) No fractional shares of Common Stock will be issued on conversion of this Note. If any conversion of this Note results in an obligation to issue a fraction of a share of Common Stock, the Company will pay the value of that fractional share in cash.

(f) All shares of Common Stock issued upon the conversion of this Note shall be duly authorized, validly issued, non-assessable and free and clear of all claims, liens or encumbrances. If the shares of Common Stock are certificated, certificates representing the shares of Common Stock issued upon conversion hereof shall be delivered to Lender. The Company shall deliver such certificates or make appropriate notations to show Lender as the record and beneficial owner of the Conversion Shares within two (2) Trading Days of receiving a Conversion Notice from Lender, with "Trading Days" defined for purposes of this Note as a day on which the Common Stock is traded.

(g) This Note does not by itself entitle Lender to any voting rights or other rights as a equity holder. In the absence of conversion of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges of Lender shall cause Lender to be an equity holder or for any purpose by virtue hereof.

(h) Notwithstanding anything to the contrary herein, Lender may not use its ability to convert this Note if such conversion would result in the total number of shares of Common Stock deemed beneficially owned by Lender (together with all shares of Common Stock deemed beneficially owned by any of Lender's affiliates that would be aggregated for purposes of determining a group under Section 13(d) of the Exchange Act) exceeding, when issued, 4.9% of the total issued and outstanding shares of the Company's Common Stock (the "RESTRICTED OWNERSHIP PERCENTAGE"); provided, however, that (i) Lender shall have the right at any time and from time to time to increase or decrease its Restricted Ownership Percentage and otherwise waive in whole or in part the restrictions of this subparagraph (h) immediately upon written notice to the Company, and (ii) Lender can make subsequent adjustments pursuant to the preceding clause (i) any number of times; and provided further that nothing in the foregoing shall prevent the partial conversion of this Note for such number of shares of Common Stock as do not exceed the Restricted Ownership Percentage.

IN WITNESS WHEREOF, the parties have caused this Note to be duly executed as of the day and year first above written.

NUWAY MEDICAL, INC.

By:

Title:

EXHIBIT 1

NOTICE OF CONVERSION

(To be executed by holder upon conversion of the Note)

TO: NUWAY MEDICAL, INC.

The undersigned, holder of that certain Amended and Restated Convertible Term Note in the original Principal Amount of $420,000, originally dated as of June 10, 2003 and amended and restated as of __________, 2004 (the "NOTE"), issued by Nuway Medical, Inc. (the "COMPANY"), hereby exercises his/her/its right to convert unpaid principal amount of the Note, equal to $_______________, and accrued but unpaid interest of the Note, equal to $_____________, into shares of Common Stock of the Company pursuant to the terms of the Note.

Please issue the shares of Common Stock as follows:


Print or Type Name of Stockholder


Social Security or Other Identifying Number


Street Address


City State Zip Code

and deliver it to the above address, unless a different address is indicated below.

Dated:
      -----------------------       ---------------------------------------
                                    Signature

                                    (Signature  must  conform in all respects to
                                    name of holder as  specified  on the face of
                                    the Note)


Ex. 10.27

CONSULTING AGREEMENT

This Consulting Agreement (this "Agreement") is made as of September 22, 2002, (the "Effective Date") by and between Nuway Energy, Inc., a Delaware Corporation (the "Company"), and, Mark Anderson ("Consultant").

RECITALS

WHEREAS, the Company is shifting its business focus toward the medical technology and healthcare services industries (the "Healthcare Industries");

WHEREAS, Consultant has expertise in the identification and acquisition of businesses in the Healthcare Industries,

WHEREAS, Consultant has previously provided the Company with services relate to the acquisition of businesses in the Healthcare Industries;

NOW, THEREFORE, in consideration of the foregoing and of the covenants, agreements, representations and warranties hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Consultant agree as follows:

1. RETENTION. The Company hereby agrees to retain Consultant and Consultant agrees to be available to serve the Company during the Consulting Period (as hereinafter defined), as a consultant and advisor, which shall include such reasonable consulting and advisory services for the Company as defined herein and as may be requested by the Company or someone acting pursuant to its authorization.

2. DUTIES OF CONSULTANT. The Consultant agrees to perform the consulting services (the "Services") set forth on Schedule A attached hereto and made a part hereof. Consultant shall perform the services and shall devote such time and attention to consulting and advising as shall be reasonably requested by the Company. Consultant may, at Consultant's own expense, use employees or other subcontractors to assist Consultant with the performance of the services.

3. TERM. The consulting period shall commence as of the effective date of this Agreement, and shall continue for a period of one year (the "Consulting Period").

4. STATUS OF CONSULTANT. Consultant understands and agrees that Consultant is not an employee of the Company and that Consultant is not entitled to receive employee benefits from the Company, including, but not limited to, sick leave, vacation, retirement, death benefits or automobile expense. Consultant shall be responsible for providing, at Consultant's expense and in Consultant's name, disability, worker's compensation or other insurance as well as licenses and permits usual or necessary for conducting the services hereunder. Furthermore, Consultant shall pay, when and as due, any and all taxes incurred as a result of Consultant's compensation hereunder, including estimated taxes, and shall provide Company with proof of said payments, upon demand. Consultant hereby agrees to indemnify the Company for any claims, losses, costs, fees, liabilities, damages or injuries suffered by the Company arising out of Consultant's breach of this Section 4.

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Consultant Initials Company Initials

5. COMPENSATION. The Company shall compensate Consultant with the payment of a fee (the "Consulting Fee") as described in the Fee Schedule attached hereto as Schedule B and made a part hereof. Payment of amounts due pursuant to the Fee Schedule shall at all times refer to cash compensation, in US dollars ("Cash Compensation"), provided, however, that the Company shall have the right, in it's sole discretion, to pay said Consulting Fees in Cash Compensation or to issue to Consultant shares of common stock of the Company of an equivalent value in lieu of Cash Compensation, which shares will be registered on Form S-9 pursuant to the Company's 2002 Consultant Equity Plan.

6. TERMINATION.

6.1 TERMINATION ON NOTICE. The Company may terminate this Agreement at any time by giving fifteen (15) days written notice to Consultant. Consultant shall have the obligation to provide services up to and until the effective date of such termination, should the Company request such services in writing.

6.2 AUTOMATIC TERMINATION. This Agreement terminates automatically on the occurrence of the death or disability of Consultant.

6.3 RETURN OF COMPANY PROPERTY. Upon the termination or expiration of this Agreement, Consultant shall immediately transfer to the Company all files (including, but not limited to, electronic files), records, documents, drawings, specifications, equipment and similar items in Consultant's possession relating to the business of the Company or its Confidential Information (as defined herein) (including the work product of Consultant created pursuant to this Agreement).

7. NONDISCLOSURE.

7.1 PROPERTY BELONGING TO COMPANY. Consultant agrees that all developments, ideas, devices, improvements, discoveries, apparatus, practices, processes, methods, concepts and products (collectively the "Inventions") developed by Consultant during the term of this Agreement are the exclusive property of the Company and shall belong to the Company. Consultant agrees to assign the Inventions to the Company, provided, however, notwithstanding the foregoing, Consultant shall not be required to assign its rights in any invention which Consultant developed entirely on Consultant's own time without using the Company's equipment, supplies, facilities or trade secret information except for those inventions that either (i) relate at the time of conception or reduction to practice of the invention to the Company's business, or actual or demonstrably anticipated research of development of the Company or (ii) result from any work performed by Consultant for the Company. Consultant understands that Consultant bears the full burden of proving to the Company that any invention qualifies under this Section 7.1.

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Consultant Initials Company Initials

7.2 ACCESS TO CONFIDENTIAL INFORMATION. Consultant agrees that during the term of the business relationship between Consultant and the Company, Consultant will have access to and become acquainted with confidential proprietary information ("Confidential Information") which is owned by the Company and is regularly used in the operation of the Company's business. Consultant agrees that the term "Confidential Information" as used in this Agreement is to be broadly interpreted and includes (i) information that has, or could have, commercial value for the business in which the Company is engaged, or in which the Company may engage at a later time, and (ii) information that, if disclosed without authorization, could be detrimental to the economic interests of the Company. Consultant agrees that the term "Confidential Information" includes, without limitation, any patent, patent application, copyright, trademark, trade name, service mark, service name, "know-how," negative "know-how," trade secrets, customer and supplier identities, characteristics and terms of agreement, details of customer or consultant contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans, science or technical information, ideas, discoveries, designs, computer programs (including source codes), financial forecasts, unpublished financial information, budgets, processes, procedures, formulae, improvements or other proprietary or intellectual property of the Company, whether or not in written or tangible form, and whether or not registered, and including all memoranda, notes, summaries, plans, reports, records, documents and other evidence thereof. Consultant acknowledges that all Confidential Information, whether prepared by Consultant or otherwise acquired by Consultant in any way, shall remain the exclusive property of the Company.

7.3 NO UNFAIR USE BY CONSULTANT. Consultant promises and agrees that Consultant (which shall include Consultant's employees and contractors) shall not misuse, misappropriate, or disclose in any way to any person or entity any of the Company's Confidential Information, either directly or indirectly, nor will Consultant use the Confidential Information in any way or at any time except as required in the course of Consultant's business relationship with the Company. Consultant agrees that the sale or unauthorized use of the Company's Confidential Information constitutes unfair competition. Consultant promises and agrees not to engage in any unfair competition with the Company and will take measures that are appropriate to prevent its employees or contractors from engaging in unfair competition with the Company.

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7.4 FURTHER ACTS. Consultant agrees that, at any time during the term of this Agreement or any extension thereof, upon the request of the Company and without further compensation, but at no expense to Consultant, Consultant shall perform any lawful acts, including the execution of papers and oaths and the giving of testimony, that in the opinion of the Company, its successors or assigns, may be necessary or desirable in order to obtain, sustain, reissue and renew, and in order to enforce perfect, record and maintain, patent applications and United States and foreign patents on the Company's inventions, and copyright registrations on the Company's inventions.

7.5 OBLIGATIONS SURVIVE AGREEMENT. Consultant's obligations under this Section 7 shall survive the expiration or termination of this Agreement for a period of five (5) years.

8. REPRESENTATIONS BY CONSULTANT. Consultant represents that Consultant has the qualifications and ability to perform the services in a professional manner, without the advice, control or supervision of the Company. Consultant shall indemnify, defend and hold harmless the Company, and the Company's officers, directors and shareholders from and against any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including, without limitation, interest, penalties and reasonable attorney fees and costs, that the Company may incur or suffer and that arise, result from or are related to any breach or failure of Consultant to perform any of the representations, warranties and agreements contained in this Agreement.

9. NO ASSIGNMENT OF RIGHTS OR DELEGATION OF DUTIES BY CONSULTANT; COMPANY'S RIGHT TO ASSIGN. Consultant's rights and benefits under this Agreement are personal to Consultant and therefore no such right or benefit shall be subject to voluntary or involuntary alienation, assignment or transfer. The Company may assign its rights and delegate its obligations under this Agreement to any other person or entity.

10. ENTIRE AGREEMENT. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to the subject matter hereof and contains all of the covenants and agreements between the parties with respect to the services to be rendered by Consultant to the Company in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid or binding on either party.

11. WAIVER. No waiver of any term or provisions of this Agreement will be valid unless such waiver is in writing signed by the party against whom enforcement of the waiver is sought. No waiver or breach of any agreement or provision of this Agreement shall be deemed a waiver of any preceding or succeeding breach thereof or a waiver or relinquishment of any other agreement or provision or right or power contained in this Agreement.

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12. NO THIRD PARTY BENEFICIARY. Nothing in this Agreement, whether expressed or implied, is intended to create any third party beneficiary obligations and the parties hereto specifically declare that no person or entity, other than as set forth in this Agreement, shall have any rights hereunder or any right of enforcement hereunder.

13. SEVERABILITY. If any term or provision of this Agreement is found to be invalid, illegal or unenforceable under present or future laws effective during the term of this Agreement, then and, in that event (i) the performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated in to this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provision as may be possible and be legal, valid and enforceable, and (ii) the remaining part of this Agreement shall not be affected thereby and shall continue in full force and effect to the fullest extent provided by law.

14. PREPARATION OF AGREEMENT. It is acknowledged by each party that such party either had separate and independent advice of counsel or the opportunity to avail itself or himself of same. In light of these facts it is acknowledged that no party shall be construed to be solely responsible for the drafting hereof, and therefore any ambiguity shall not be construed against any party as the alleged draftsman of this Agreement.

15. NOTICES. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if served personally on the party to whom notice is to be given, (ii) by private airborne/overnight delivery service or on the fifth day after mailing if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed as follows:

To Company:                     Nuway Energy, Inc.
                                23461 South Pointe Drive, Suite 200
                                Laguna Hills, CA 92653
                                Fax:  949-553-8110
                                Phone:  949-553-8002


To Consultant:                  Mark Anderson
                                c/o Camden Holdings, Inc.
                                9595 Wilshire Blvd.
                                Beverly Hills, CA 90210
                                Fax: (310) 823-4027
                                Phone: (310) 710-6425

Any party may change his/her or its address for purposes of this paragraph by giving written notice of the new address to each of the other parties in the manner set forth above.

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16. ATTORNEYS' FEES AND COSTS. In the event that any legal proceeding is brought to enforce or interpret any of the rights or obligations under this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, costs and disbursements in addition to any other relief to which the prevailing party may be entitled.

17. GOVERNING LAW; VENUE. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Venue for any legal or equitable action between the Company and Consultant which relates to this Agreement shall be in the county of Los Angeles.

18. REMEDIES. Each party acknowledges that the Company may, as a result of Consultant's breach of the covenants and obligations in Section 7 of this Agreement, sustain immediate and long-term substantial and irreparable injury and damages which cannot be reasonably or adequately compensated by damages at laws. Each party agrees that in the event of Consultant's breach or threatened breach of the covenants and obligations in Section 7, the Company shall be entitled to obtain equitable relief from a court of competent jurisdiction or arbitration without proof of any actual damages that have been, or may be caused to the Company by such breach or threatened breach and without the posting of a bond or other security in connection therewith.

19. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

[REMINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Consultant Initials Company Initials

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

COMPANY
Nuway Energy, Inc.

By: /s/
   --------------------------------------
   Name: Dennis Calvert
   Title:  President

CONSULTANT
Mark Anderson, an individual

/s/
------------------------------------

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Consultant Initials Company Initials

SCOPE OF SERVICES

SCHEDULE A

CONSULTANT HAS AGREED TO:

1. Provide advice and evaluation regarding (i) the disposal of certain assets of the Company and (ii) the review of acquisition candidates for the Company.

2. Consultant shall review financial statements, review contracts, identify potential companies which the Company may acquire and develop a business plan for the expansion of the Company.

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FEE SCHEDULE

SCHEDULE B

1. PAYMENT FOR PAST SERVICES AND IN CONSIDERATION OF ENTERING INTO THIS AGREEMENT:

Upon execution of this Agreement, Consultant shall be entitled to receive a fee of $125,000

2. PAYMENT FOR SERVICES DURING THE TERM OF THIS AGREEMENT:

$15,000 per month, payable on the first of each month.

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Consultant Initials Company Initials

FIRST AMENDMENT

TO

CONSULTING AGREEMENT

First Amendment to the following agreement

Consulting Agreement made as of September 23, 2002 (the "Effective Date") by and between Nuway Energy, Inc., a Delaware corporation (the "Company") and Mark Anderson, and individual ("Consultant").

Confirmation of Fees due but not yet paid as of

10-17-02

$42,000 as of this date

Shares to be issued:

Two Hundred Fifty Thousand (250,000)

Pursuant to Consultant's Equity Plan

Signed: /s/
       ---------------------------------------------
           Mark Anderson



Signed: /s/
       ---------------------------------------------

           Denis Calvert

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Consultant Initials Company Initials

EX. 10.29

CONVERTIBLE LOAN AGREEMENT

Dated as of October 1, 2004 ("Subscription Date")

This CONVERTIBLE LOAN AGREEMENT (this "AGREEMENT") is entered into between NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware (the "BORROWER"), and David Moon and James Burchard, the "Investor". The Investor shall be referred to herein as the "Lender". Capitalized terms used herein shall have the meanings ascribed to such terms in SECTION 8 of this Agreement.

In consideration of the mutual covenants and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby agree as follows:

SECTION 1. LOAN

SECTION 1.1. TERM LOAN. Subject to the terms and conditions of this Agreement, the Lender agrees to loan to the Borrower, and the Borrower agrees to borrow from the Lender, in the aggregate principal amount of the "Subscription Amount", (collectively, the "TERM LOAN"). The Lender hereby agrees to make such loan to the Borrower on the date so indicated, with such payment to be made in immediately available funds via wire transfer or cashier's check.

SECTION 1.2. TERM NOTE. The Term Loan shall be evidenced by a convertible promissory note (the "CONVERTIBLE TERM NOTE"), substantially in the form of EXHIBIT A, with appropriate insertions, dated the date hereof, payable to the order of the Lender and in the initial principal amount of the Subscription Amount. The Term Loan shall be due and payable one year from the "Subscription Date", , or at an earlier date as provided in SECTION 3.2 hereof (the "TERM LOAN MATURITY DATE").

SECTION 2. INTEREST AND FEES

SECTION 2.1. INTEREST. The Borrower agrees to pay interest on the unpaid principal amount of the Term Loan from time to time outstanding hereunder at the following rates per year, compounded annually:

(a) before maturity of the Term Loan, whether by acceleration or otherwise, at the rate per annum equal to ten percent (10%).

(b) after the maturity of the Term Loan, whether by acceleration or otherwise, until paid, at a rate per annum equal to fifteen percent (15%).

SECTION 2.2. INTEREST PAYMENT DATE. Accrued interest shall be paid in full on the Term Loan Maturity Date.

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SECTION 2.3. BASIS OF COMPUTATION. Interest shall be computed for the actual number of days elapsed on the basis of a year consisting of 360 days, including the date the Term Loan is made and excluding the date the Term Loan or any portion thereof is paid or prepaid.

SECTION 3. CONVERSION AND PAYMENTS

SECTION 3.1. PAYMENTS.

(a) PLACE OF PAYMENT. Cash payments required to be made under this Agreement and the Convertible Term Note of principal, interest, fees and other amounts payable hereunder, shall be made to the Lender at its office located at 8290 W. Sahara, #175, Las Vegas, NV 89117 (the "Investor's Address").

(b) FORM OF PAYMENT. All payments of principal and interest shall be made by wire transfer to the Lender.

SECTION 3.2. PREPAYMENT.

(a) OPTIONAL PREPAYMENT. The Borrower may from time to time prepay the Term Loan or any portion thereof without premium or penalty.

(b) MANDATORY PREPAYMENT.

(i) Within ten (10) days of the occurrence of any of the following events, the Borrower shall make a prepayment of the Term Loan in an amount equal to the proceeds received by the Borrower, in each case up to the total amount then due under the Term Loan, from:

(A) the sale of any of the Borrower's assets outside the ordinary course of business; and

(B) any insurance payouts or condemnation awards payable by reason of theft, loss, destruction, damage, taking or any other similar event with respect to any property or assets of the Borrower (PROVIDED, HOWEVER, so long as no Event of Default or Unmatured Event of Default has occurred and is continuing the Borrower may use such insurance payouts or condemnation awards within thirty
(30) days after receipt by the Borrower to replace any such property with property performing the same or similar function).

SECTION 3.3. CONVERSION.

(a) CONVERSION INTO PREFERRED STOCK. Pursuant to the conversion provisions set forth in the Convertible Term Note, the Term Loan may be converted into series A preferred stock of the Borrower pursuant to the terms set forth in the Convertible Term Note.

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(b) ONE YEAR BUY BACK OF PREFERRED SHARES. At the Lender's sole option, the Lender may require the Borrower to repurchase the shares of preferred stock issued to the Lender herein at the end of a one year period for a price of 110% of the Subscription Amount. If the Borrower is unable to buy back the shares upon said terms, the Borrower's president, as indicated below, will buy back the shares from the Lender upon those terms.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Lender to make the Term Loan, the Borrower represents and warrants to the Lender that (except in each case as otherwise disclosed in the Borrower's filings with the SEC):

SECTION 4.1. ORGANIZATION. The Borrower is a corporation existing and in good standing under the laws of the State of Delaware; each of its subsidiaries is a corporation, limited liability company or partnership duly existing and in good standing under the laws of the state of its formation; the Borrower and each of its subsidiaries are duly qualified, in good standing and authorized to do business in each jurisdiction where, because of the nature of their activities or properties, such qualification is required, except where the failure to be so qualified would not have a material adverse effect on the Borrower's business, financial condition or results of operations (a "Material Adverse Effect"); and the Borrower and each of its subsidiaries have the power and authority to own their properties and to carry on their businesses as now being conducted.

SECTION 4.2. AUTHORIZATION; NO CONFLICT. The borrowings hereunder, the execution and delivery of this Agreement and the Convertible Term Note, the performance by the Borrower of its obligations under this Agreement and the Convertible Term Note are within the Borrower's corporate powers, have been authorized by all necessary corporate action, have received all necessary governmental approval (if any shall be required) and do not and will not contravene or conflict with any provision of law or of the charter or by-laws of the Borrower or any subsidiary or of any agreement binding upon the Borrower or any subsidiary.

SECTION 4.3. FINANCIAL STATEMENTS. The Borrower's un-audited consolidating and consolidated financial statements as at December 31, 2003, copies of which have been made available to the Lender, have been prepared in conformity with GAAP applied on a basis consistent with that of the preceding fiscal year, and accurately present the financial condition of the Borrower and its subsidiaries as at such dates and the results of their operations for the respective periods then ended.

SECTION 4.4. LIENS. None of the assets of the Borrower or any subsidiary thereof are subject to any mortgage, pledge, title retention lien, or other lien, encumbrance or security interest.

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SECTION 4.5. ADVERSE CONTRACTS. Neither the Borrower nor any of its subsidiaries is a party to any agreement or instrument or subject to any charter or other corporate restriction, nor is it subject to any judgment, decree or order of any court or governmental body, which may have a material and adverse effect on the business, property, assets, operations, conditions or prospects of the Borrower and its subsidiaries taken as a whole or on the ability of the Borrower to perform its obligations under this Agreement and the Convertible Term Note. Neither the Borrower nor any of its subsidiaries has, nor with reasonable diligence should have had, knowledge of or notice that it is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any such agreement, instrument, restriction, judgment, decree or order.

SECTION 4.6. REGULATION U. The Borrower is not engaged principally in, nor is one of the Borrower's important activities, the business of extending credit for the purpose of purchasing or carrying "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereinafter in effect.

SECTION 4.7. LITIGATION AND CONTINGENT LIABILITIES. No litigation (including derivative actions), arbitration proceedings or governmental proceedings are pending or threatened against the Borrower or any of its subsidiaries which would (singly or in the aggregate), if adversely determined, have a material and adverse effect on the business, properties, assets, operations, conditions or prospects of the Borrower or any subsidiary.

SECTION 5. COVENANTS

Until all obligations of the Borrower hereunder and under the Convertible Term Note are paid and fulfilled in full, the Borrower agrees that it shall, and shall cause each of its subsidiaries to, comply with the following covenants, unless the Lender consents otherwise in writing:

SECTION 5.1. CORPORATE EXISTENCE, MERGERS, ETC. The Borrower and each subsidiary shall preserve and maintain its corporate existence, rights, franchises, licenses and privileges, and will not liquidate, dissolve, or merge, or consolidate with or into any other corporation, or sell, lease, transfer or otherwise dispose of all or a substantial part of its assets (except those assets sold in the ordinary course of its business), except that:

(a) Any subsidiary may merge or consolidate with or into the Borrower or any one or more wholly-owned subsidiaries; and

(b) Any subsidiary may sell, lease, transfer or otherwise dispose of any of its assets to the Borrower or one or more wholly-owned subsidiaries.

SECTION 5.2. INSPECTION. The Borrower and each subsidiary shall permit the Lender and its agents at any time during normal business hours to inspect their properties and to inspect and make copies of their books and records, provided that the Lender agrees to enter into confidentiality agreements with respect to the foregoing.

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SECTION 5.3. USE OF PROCEEDS.

(a) USE OF PROCEEDS. The Borrower shall use the proceeds from the Term Loan solely for operating costs, including but not limited to, employee salaries and costs associated with filing SEC compliance documents.

(b) MARGIN REGULATIONS. Neither the Borrower nor any subsidiary shall use or permit any proceeds of the Term Loan to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying any margin stock" within the meaning of Regulations U or X of the Board of Governors of the Federal Reserve System, as amended from time to time.

(c) TENDER OFFERS AND GOING PRIVATE. Neither the Borrower nor any subsidiary shall use (or permit to be used) any proceeds of the Term Loan to acquire any security in any transaction which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as amended, or any regulations or rulings thereunder.

SECTION 5.4. COMPLIANCE WITH LAW. The Borrower and each of its subsidiaries shall comply in all material respects with all laws and regulations (whether federal, state or local and whether statutory, administrative, judicial or otherwise) and with every lawful governmental order or similar action (whether administrative or judicial) applicable to it, except in each case as would not have a Material Adverse Effect.

SECTION 5.5. AFFILIATE TRANSACTIONS. Not enter into any transaction with an affiliate, except for transactions in the ordinary course of business pursuant to the reasonable requirements of the Borrower's or each subsidiaries' business and upon fair and reasonable terms no less favorable to the Borrower or the subsidiaries than the Borrower or the subsidiaries would obtain in a comparable arms-length transaction.

SECTION 6. CONDITIONS OF LENDING

The obligation of the Lender to make the Term Loan is subject to the following conditions precedent:

SECTION 6.1. DOCUMENTATION. In addition to the conditions precedent set forth in SECTION 6.2 and SECTION 6.3, the obligation of the Lender to make the Term Loan is subject to the conditions precedent that the Lender shall have received all of the following, each duly executed and dated a date acceptable to the Lender, in form and substance satisfactory to the Lender and its counsel, at the expense of the Borrower, and in such number of signed counterparts as the Lender may request (except for the Convertible Term Note, of which only the original shall be signed):

(a) AGREEMENT. This Agreement;

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(b) NOTE. The Convertible Term Note;

(c) RESOLUTION. A copy of a resolution of the Board of Directors of the Borrower authorizing or ratifying the execution, delivery and performance, respectively, of this Agreement, the Convertible Term Note and the other documents provided for in this Agreement, certified by the secretary or assistant secretary of the Borrower; and

(d) MISCELLANEOUS. Such other documents and certificates as the Lender may request.

SECTION 6.2. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.

(a) REPRESENTATIONS AND WARRANTIES. At the date of the Term Loan, the Borrower's representations and warranties set forth herein shall be true and correct in all material respects as at such date with the same effect as though those representations and warranties had been made on and as at such date.

(b) NO DEFAULT. At the time of the Term Loan, and immediately after giving effect to the Term Loan, the Borrower shall be in compliance with all the terms and provisions set forth herein on its part to be observed or performed, and no Event of Default or Unmatured Event of Default shall have occurred and be continuing at the time of the Term Loan, or would result from the making of the Term Loan.

SECTION 6.3. NO MATERIAL ADVERSE CHANGE. No material adverse change in, or effect on, (a) the business, assets, properties, operations, condition or prospects of the Borrower or any of its subsidiaries or (b) the ability of the Borrower to perform its obligations under this Agreement or the Convertible Term Note, in all cases whether due to a single circumstance or event or an aggregation of circumstances or events, shall have occurred.

SECTION 7. DEFAULT

SECTION 7.1. EVENTS OF DEFAULT. Each of the following occurrences is hereby defined as an "Event of Default":

(a) NONPAYMENT. The Borrower shall fail to make any payment of principal, interest, or other amounts payable hereunder when and as due; or

(b) DEFAULT UNDER RELATED DOCUMENTS. Any default, event of default, or similar event shall occur or continue under any instrument, document, note, agreement, or guaranty delivered to the Lender in connection with the Term Loan (including without limitation the Convertible Term Note), or any such instrument, document, note, agreement, or guaranty shall not be, or shall cease to be, enforceable in accordance with its terms; or

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(c) CROSS-DEFAULT. There shall occur any default or event of default, or any event which might become such with notice or the passage of time or both, or any similar event, or any event which requires the prepayment of borrowed money or the acceleration of the maturity thereof, under the terms of any evidence of indebtedness or other agreement issued or assumed or entered into by the Borrower, any of its subsidiaries or under the terms of any indenture, agreement or instrument under which any such evidence of indebtedness or other agreement is issued, assumed, secured or guaranteed, in each case in respect of an amount that exceeds $100,000, and such event shall continue beyond any applicable period of grace; or

(d) DISSOLUTIONS, ETC. The Borrower or any subsidiary shall fail to comply with any provision concerning its existence or any prohibition against dissolution, liquidation, merger, consolidation or sale of assets; or

(e) WARRANTIES. Any representation, warranty, schedule, certificate, financial statement, report, notice or other writing furnished by or on behalf of the Borrower or any of its subsidiaries to the Lender is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified; or

(f) ERISA. (i) Institution of any steps by the Borrower or any subsidiary to terminate a Plan if as a result of such termination the Borrower or such subsidiary could be required to make a contribution to such Plan, or could incur a liability or obligation to such Plan, in either case in excess of $100,000; (ii) a contribution failure occurs with respect to any plan sufficient to give rise to a lien under Section 302(f) of ERISA with respect to any Plan; (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of such withdrawal (including any outstanding withdrawal liability that the Borrower or any subsidiary and any ERISA Affiliate have incurred on the date of such withdrawal) exceeds $100,000; or (iv) any "reportable" event shall occur under ERISA in respect of any employee benefit plan maintained for employees of the Borrower or any subsidiary; or

(g) LITIGATION. Any suit, action or other proceeding (judicial or administrative) commenced against the Borrower or any of its subsidiaries, or with respect to any assets of the Borrower or such subsidiary, shall threaten to have a material and adverse effect on the asset, condition (financial or otherwise) or future operations of the Borrower or such subsidiary; or a final judgment or settlement in excess of $100,000 in excess of insurance shall be entered in, or agreed to in respect of, any such suit, action or proceeding; or

(h) NONCOMPLIANCE WITH THIS AGREEMENT. The Borrower shall fail to comply in any material respect with any provision hereof, which failure does not otherwise constitute an Event of Default, and such failure shall continue for ten (10) days after the occurrence of such failure; or

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(i) BANKRUPTCY. Any bankruptcy, insolvency, reorganization, arrangement, readjustment, liquidation, dissolution, or similar proceeding, domestic or foreign, is instituted by or against the Borrower or any of its subsidiaries, or the Borrower or any of its subsidiaries shall take any step toward, or to authorize, such a proceeding; or

(j) INSOLVENCY. The Borrower or any of its subsidiaries shall become insolvent, generally shall fail or be unable to pay its debts as they mature, shall admit in writing its inability to pay its debts as they mature, shall make a general assignment for the benefit of its creditors, shall enter into any composition or similar agreement, or shall suspend the transaction of all or a substantial portion of its usual business.

SECTION 7.2. REMEDIES. Upon the occurrence of any Event of Default set forth in SUBSECTIONS (A)-(K) of SECTION 7.1 and during the continuance thereof, the Lender or any other holder of the Convertible Term Note may declare the Convertible Term Note and any other amounts owed to the Lender to be immediately due and payable, whereupon the Convertible Term Note and any other amounts owed to the Lender shall forthwith become due and payable. Upon the occurrence of any Event of Default set forth in SUBSECTIONS (L)-(M) of SECTION 7.1, the Convertible Term Note and any other amounts owed to the Lender shall be immediately and automatically due and payable without action of any kind on the part of the Lender or any other holder of the Convertible Term Note. The Borrower expressly waives presentment, demand, notice or protest of any kind in connection herewith. The Lender shall promptly give the Borrower notice of any such declaration, but failure to do so shall not impair the effect of such declaration. No delay or omission on the part of the Lender or any holder of the Convertible Term Note in exercising any power or right hereunder or under the Convertible Term Note shall impair such right or power or be construed to be a waiver of any Event of Default or any acquiescence therein, nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof, or the exercise of any other power or right.

SECTION 8. DEFINITIONS

SECTION 8.1. GENERAL. As used herein:

(a) "AFFILIATE" of any Person means (a) any Person that, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, (b) any Person who is a director or officer (i) of such Person, (ii) of any subsidiary of such Person or (iii) of any Person described in CLAUSE (A) above or (c) in the case of a trust, its protectors or trustees, any Person who is or has been a beneficiary thereof, or any Person who is or has been able to appoint a beneficiary thereof. For purposes of this definition, control of a Person shall mean the power, direct or indirect (i) to vote 25% or more of the securities having ordinary voting power for the election of directors of such Person, whether by ownership of securities, contract, proxy or otherwise, or (ii) to direct or cause the direction of the management and policies of such Person, whether by ownership of securities, contract, proxy or otherwise.

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(b) "AGREEMENT" shall have the meaning set forth in the PREAMBLE.

(c) "BORROWER" shall have the meaning set forth in the PREAMBLE.

(d) "CODE" means the Internal Revenue Code of 1986, as amended from time to time.

(e) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.

(f) "ERISA AFFILIATE" means any corporation or trade or business which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as such Borrower or is under common control (within the meaning of Section 414(c) of the Code) with the Borrower.

(g) "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect on the date of this Agreement, consistently applied.

(h) "INVESTOR" shall have the meaning set forth in the PREAMBLE.

(i) "INVESTOR'S ADDRESS" shall have the meaning set forth in Section 3.1.

(j) "LENDER" shall have the meaning set forth in the PREAMBLE.

(k) "MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been made by the Borrower or any ERISA Affiliate as a "contributing sponsor" (within the meaning of Section 4001(a)(13) of ERISA).

(l) "PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

(m) "PERSON" shall mean any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof).

(n) "PLAN" means any plan, program or arrangement which constitutes an "employee benefit plan" within the meaning of Section 3(3) of ERISA and which is maintained or contributed to by the Borrower or its ERISA Affiliates for the benefit of their employees, including former employees.

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(o) "SUBSIDIARY" means any corporation, partnership, joint venture, trust, or other legal entity of which the Borrower owns directly or indirectly 50% or more of the outstanding voting stock or interest, or of which the Borrower has effective control, by contract or otherwise.

(p) "SUBSCRIPTION AMOUNT" shall equal $50,000.

(q) "SUBSCRIPTION DATE" shall have the meaning set forth in the PREAMBLE.

(r) "TERM LOAN MATURITY DATE" shall have the meaning set forth in
SECTION 1.2.

(s) "CONVERTIBLE TERM NOTE" shall have the meaning set forth in
SECTION 1.2.

(t) "UNMATURED EVENT OF DEFAULT" means an event or condition, which would become an Event of Default with notice or the passage of time or both.

Except as and unless otherwise specifically provided herein, all accounting terms in this Agreement shall have the meanings given to them by GAAP and shall be applied and all reports required by this Agreement shall be prepared, in a manner consistent with the audited financial statements referred to in SECTION 4.3.

SECTION 8.2. APPLICABILITY OF SUBSIDIARY AND AFFILIATE REFERENCES. Terms hereof pertaining to any subsidiary or affiliate shall apply only during such times as the Borrower has any subsidiary or affiliate.

SECTION 9. MISCELLANEOUS

SECTION 9.1. WAIVER OF DEFAULT. The Lender may, by written notice to the Borrower, at any time and from time to time, waive any Event of Default or Unmatured Event of Default, which shall be for such period and subject to such conditions as shall be specified in any such notice. In the case of any such waiver, the Lender and the Borrower shall be restored to their former position and rights hereunder and under the Convertible Term Note, respectively, and any Event of Default or Unmatured Event of Default so waived shall be deemed to be cured and not continuing; but no such waiver shall extend to or impair any right consequent thereon or to any subsequent or other Event of Default or Unmatured Event of Default.

SECTION 9.2. NOTICES. All notices, requests and demands to or upon the respective parties hereto shall be deemed to have been given or made when deposited in the mail, postage prepaid, addressed:

(a) if to the Lender to the Investor's Address,

(b) if to the Borrower to NuWay Medical, Inc., 2603 Main Street, Suite 1150, Irvine, California 92614 Attention: Chief Executive Officer.

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or to such other address as may be hereafter designated in writing by the respective parties hereto.

SECTION 9.3. NONWAIVER; CUMULATIVE REMEDIES. No failure to exercise, and no delay in exercising, on the part of the Lender of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies of the Lender herein provided are cumulative and not exclusive of any rights or remedies provided by law.

SECTION 9.4. SURVIVAL OF AGREEMENTS. All agreements, representations and warranties made herein shall survive the delivery of the Convertible Term Note and the making of the Term Loan.

SECTION 9.5. SUCCESSORS. This Agreement shall, upon execution and delivery by the Borrower and acceptance by the Lender, become effective and shall be binding upon and inure to the benefit of the Borrower, the Lender and their respective successors and assigns, except that the Borrower may not transfer or assign any of its rights or interest hereunder without the prior written consent of the Lender.

SECTION 9.6. CAPTIONS. Captions in this Agreement are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. References herein to Sections or provisions without reference to the document in which they are contained are references to this Agreement.

SECTION 9.7. SINGULAR AND PLURAL. Unless the context requires otherwise, wherever used herein the singular shall include the plural and vice versa, and the use of one gender shall also denote the others where appropriate.

SECTION 9.8. COUNTERPARTS. This Agreement may be executed by the parties on any number of separate counterparts, and by each party on separate counterparts; each counterpart shall be deemed an original instrument; and all of the counterparts taken together shall be deemed to constitute one and the same instrument.

SECTION 9.9. FEES. The Borrower agrees to pay or reimburse the Lender for all costs and expenses of enforcing this Agreement or the Convertible Term Note, or preserving its rights hereunder or under any document or instrument executed in connection herewith (including legal fees and reasonable time charges of attorneys who may be employees of the Lender, whether in or out of court, in original or appellate proceedings or in bankruptcy).

SECTION 9.10. CONSTRUCTION. This Agreement, the Convertible Term Note, and any other document or instrument executed in connection herewith shall be governed by, and construed and interpreted in accordance with, the internal laws of the State of California and shall be deemed to have been executed in the State of California.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

BORROWER

NUWAY MEDICAL, INC.

/s/
------------------------------
Dennis Calvert, President

LENDER

DAVID MOON

/S/
------------------------------

LENDER

JAMES BURCHARD

/S/
------------------------------

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EXHIBIT A
CONVERTIBLE TERM NOTE

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THERE IS AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

Subscription Amount: $50,000 Irvine, California Dated: October 1, 2004

FOR VALUE RECEIVED, NUWAY MEDICAL, INC., a corporation organized under the laws of the state of Delaware ("BORROWER"), promises to pay to the order of "Investor", as that term is defined in the Convertible Loan Agreement by and between Borrower and Investor ("CONVERTIBLE LOAN AGREEMENT") (hereafter, together with any subsequent holder hereof, called "LENDER"), at its office at "Investor's Address", as that term is defined in the Convertible Loan Agreement, or at such other place as Lender may direct, the "Subscription Amount", noted above (the "LOAN"), payable in full one year from the "Subscription Date", or at an earlier date as provided in Section 3.2 of the Convertible Loan Agreement (the "MATURITY DATE"). This Convertible Term Note is duly authorized issue of the Borrower (the "ISSUER"), issued on October 1, 2004 (the "ISSUANCE DATE"), and designated as its Convertible Term Note due one year from the Issuance Date (the "NOTE").

Borrower agrees to pay interest on the unpaid principal amount from time to time outstanding hereunder on the dates and at the rate or rates as set forth in the Convertible Loan Agreement.

Payments of both principal and interest are to be made in immediately available funds in lawful money of the United States of America, or in Preferred Stock of the Borrower as set forth below.

Accrual of interest shall commence as of the Issuance Date. Interest shall be payable by the Issuer, at the Issuer's option, in cash or in that number of shares of preferred stock of the Issuer (the "PREFERRED STOCK") (at a price per share calculated pursuant to the conversion formula contained below), upon the earlier to occur of (i) upon conversion of this Note pursuant to the conversion features set forth below, or (ii) upon an Event of Default as defined below, and if an Event of Default occurs interest due hereunder shall be payable in cash or stock as set forth herein at the option of the Holder. Unless otherwise agreed in writing by both parties hereto, the interest so payable will be paid to the person in whose name this Note (or one or more predecessor Notes) is registered on the records of the Issuer regarding registration and transfers of the Note (the "NOTE Register"), provided, however, that the Issuer's obligation to a transferee of this Note arises only if such transfer, sale or other disposition is made in accordance with the terms and conditions contained in the Agreement and this Note.

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The Note is subject to the following additional provisions:

1. The Issuer shall be entitled to withhold from all payments of principal and/or interest of this Note any amounts required to be withheld under the applicable provisions of the U.S. Internal Revenue Code of 1986, as amended, or other applicable laws at the time of such payments.

2. This Note has been issued subject to investment representations of the original Holder hereof and may be transferred or exchanged only in compliance with the Securities Act and applicable state securities laws and in compliance with the restrictions on transfer provided in the Agreement. Prior to the due presentment for such transfer of this Note, the Issuer and any agent of the Issuer may treat the person in whose name this Note is duly registered on the Issuer's Note register as the owner hereof for the purpose of receiving payment as herein provided and all other purposes, whether or not this Note is overdue, and neither the Issuer nor any such agent shall be affected by notice to the contrary. The transferee shall be bound, as the original Holder by the same representations and terms described herein and under the Agreement.

3. The Holder or Issuer may, at its option, at any time up to and including December 31, 2004, convert the principal amount of this Note or any portion thereof, and any accrued interest thereon, into 10,000,000 shares of fully paid and non assessable Series A Preferred Stock of the Issuer ("CONVERSION SHARES"). The right to convert the Note may be exercised by telecopying an executed and completed notice of conversion (the "NOTICE OF CONVERSION") to the Holder or Issuer. Each business day on which a Notice of Conversion is telecopied in accordance with the provisions hereof shall be deemed a "Conversion Date". The Issuer will transmit the certificates representing Conversion Shares issuable upon such conversion of the Note (together with the certificates representing the Note not so converted) to the Holder via express courier, by electronic transfer (if applicable) or otherwise within ten Business Days after the Conversion Date, provided, the Issuer has received the original Note being so converted from the Holder. If the Company has not received the original Note being converted within three Business Days after Conversion Date, then the Issuer shall transmit the certificates representing the Conversion Shares issuable upon such conversion of the Note (together with the certificates representing the Note not so converted) to the Holder via express courier, by electronic transfer (if applicable) or otherwise within five business days after receipt of the original Notice of Conversion and original Note being converted.

4. The principal amount of this Note, and any accrued interest thereon, shall be reduced as per that principal amount indicated on the Notice of Conversion upon the proper receipt by the Holder of such Conversion Shares due upon such Notice of Conversion.

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5. The number of Conversion Shares shall be adjusted as follows:

a. If the Issuer shall at any time subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, the number of Conversion Shares in effect immediately prior to such subdivision shall be proportionately increased, and conversely, in case the outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect immediately prior to such combination shall be proportionately reduced.

6. No provision of this Note shall alter or impair the obligation of the Issuer, which is absolute and unconditional, upon an Event of Default (as defined below), to pay the principal of, and interest on this Note at the place, time, and rate, and in the coin or currency herein prescribed.

7. The Issuer hereby expressly waives demand and presentment for payment, notice on nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.

8. If one or more "Events of Default" shall occur, as that term is used in the Convertible Loan Agreement, then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) or cured as provided herein, at the option of the Holder, and in the Holder's sole discretion, the Holder may consider this Note (and all interest through such date) immediately due and payable in cash, without presentment, demand protest or notice of any kind, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and Holder may immediately, and without expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law (including but not limited to consequential damages if any). It is agreed that in the event of such action, such Holder shall be entitled to receive all reasonable fees, costs and expenses incurred, including without limitation such reasonable fees and expenses of attorneys. The parties acknowledge that a change in control of the Issuer shall not be deemed to be an Event of Default as set forth herein.

9. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

- 3 -

10. The Holder shall have the right, if applicable, to include all of the Conversion Shares underlying this Note (the "Registrable Securities") as part of any registration of securities filed by the Issuer (other than in connection with a transaction contemplated by Rule 145(a) promulgated under the Act or pursuant to Form S-4 or S-8) and must be notified in writing of such filing as soon as reasonably practicable; PROVIDED, HOWEVER, that the Holder agrees it shall not have any piggy-back registration rights pursuant to this Note if the Conversion Shares underlying this Note may be sold in the United States pursuant to the provisions of Rule 144 without any restriction on resale. Holder shall have five business days after receipt of the aforementioned notice from the Issuer, to notify the Issuer in writing as to whether the Issuer is to include Holder or not include Holder as part of such registration; PROVIDED, HOWEVER, that if any registration pursuant to this paragraph shall be underwritten, in whole or in part, the Issuer may require that the Registrable Securities requested for inclusion pursuant to this paragraph be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. If in the good faith judgment of the underwriter evidenced in writing of such offering only a limited number of Registrable Securities should be included in such offering, or no such shares should be included, the Holder, and all other selling stockholders, shall be limited to registering such proportion of their respective shares as shall equal the proportion that the number of shares of selling stockholders permitted to be registered by the underwriter in such offering bears to the total number of all shares then held by all selling stockholders desiring to participate in such offering. All registration expenses incurred by the Issuer in complying with the terms of this Note shall be paid by the Issuer, exclusive of underwriting discounts, commissions and legal fees and expenses for counsel to the Holder.

11. This Note does not entitle the Holder hereof to any voting rights or other rights as a shareholder of the Issuer prior to the conversion into Preferred Stock thereof, except as provided by applicable law. If, however, at the time of the surrender of this Note and conversion the Holder hereof shall be entitled to convert this Note, the Conversion Shares so issued shall be and be deemed to be issued to such holder as the record owner of such shares as of the close of business on the Conversion Date.

12. Except as expressly provided herein or as required by law, so long as this Note remains outstanding, the Issuer shall not, without the approval by vote or written consent by the Holder, take any action that would adversely affect the rights, preferences or privileges of this Note.

IN WITNESS WHEREOF, the Issuer has caused this Convertible Term Note to be duly executed by an officer thereunto duly authorized.

NUWAY MEDICAL, INC.

By /s/
   ------------------------
Name: Dennis Calvert, its President

- 4 -

NOTICE OF CONVERSION

(To be Executed by the Registered Holder in order to Convert the Note)

The undersigned hereby irrevocably elects to convert ___________ of the principal amount of the above Note into ___________ Shares of Series A Preferred Stock of NuWay Medical, Inc. according to the conditions hereof, as of the date written below.

Date of Conversion:

Signature:

Name:

Address:

Date of Conversion:

Signature:

Name:

Address:

- 5 -

EX. 14.1

CODE OF ETHICS FOR SENIOR EXECUTIVE AND
FINANCIAL OFFICERS
NUWAY MEDICAL, INC.

CODE OF ETHICS
FOR SENIOR EXECUTIVE AND FINANCIAL OFFICERS
OCTOBER 2004

PURPOSE

The purpose of this Code of Ethics is to promote the honest and ethical conduct of the Senior Officers (as defined below) of NuWay Medical, Inc. (the "Company"), including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in periodic reports filed by the Company and compliance with all applicable rules and regulations applicable to the Company and its officers.

APPLICABILITY

This Code of Ethics is applicable to the Company's chief executive officer, chief financial officer and principal accounting officer (or persons performing similar functions), together, "Senior Officers."

While we expect honest and ethical conduct in all aspects of our business from all of our employees, we expect the highest possible honest and ethical conduct from our Senior Officers. As a Senior Officer, you are an example for other employees and we expect you, through your leadership role, to foster a culture of transparency, integrity and honesty. Your responsibilities include maintaining a culture of high ethical standards and commitment to compliance and a work environment that encourages employees to raise concerns, and promptly addresses employee compliance concerns.

The Company's Code of Business Conduct, which this Code of Ethics for Senior Executive and Financial Officers supplements, sets forth the fundamental principles and key policies and procedures that govern the conduct of all employees, officers and directors of the Company. You are bound by the requirements and standards set forth in the Code of Business Conduct, as well as those set forth in this Code of Ethics and other applicable policies and procedures. In the event of any conflict between the Code of Business Conduct and this Code of Ethics, this Code of Ethics shall govern your behavior or any required approvals or waivers. Compliance with this Code of Ethics is a condition of your employment and any violations of this Code may result in disciplinary action, up to and including termination of your employment.

Waivers of this Code of Ethics may be made only by the board of directors of the Company or a committee of the board of directors comprised solely of independent directors. Any waivers of this Code of Ethics will be disclosed in accordance with applicable law, regulation or the requirements of any listing criteria of an exchange upon which the Company's stock may be traded.

1

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

You are expected to comply with both the letter and spirit of all applicable laws, rules and regulations governing the conduct of our business and to report any suspected violations of all applicable laws, rules and regulations to either the Chair of the Audit Committee or the Chair of the Corporate Governance Committee. You will not be subject to retaliation because of a good faith report of a suspected violation of this Code of Ethics.

FRAUD, THEFT, BRIBERY AND SIMILAR CONDUCT

Any act that involves theft, fraud, embezzlement, or misappropriation of any property, including that of the Company or any of its employees, suppliers or customers, is prohibited. Offering or accepting kickbacks or bribes are forbidden.

AUDITORS

Fraudulently influencing, misleading, coercing or manipulating the auditor of the Company's financial statements for the purpose of rendering those financial statements materially misleading is prohibited.

REVENUE RECOGNITION

Senior Officers must ensure that all revenue transactions are completed, to the best of the Senior Officer's knowledge, in accordance with the Company's revenue recognition policies.

All commitments or representations made to customers or distributors or potential customers or distributors must be included in the final contract with the customer or distributor or related documentation submitted with customer or distributor orders. Employees must not make any commitments to the customer or distributor, orally or in writing, which have not been documented in the agreement or submitted to the the Company's finance and/or contract departments. The Company prohibits side-letters or kickbacks with customers or distributors or potential customers or distributors.

ACCURATE PERIODIC REPORTING AND DISCLOSURE

As a public company, the Company is required to file periodic and other reports with the Securities and Exchange Commission ("SEC"). The Company's policy is to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that the Company files with, or submits to, the SEC and in all other public communications made by the Company. As a Senior Officer, you are required to promote compliance with this policy and to abide by all Company standards, policies and procedures designed to promote compliance with this policy.

2

ACCURATE RECORD KEEPING

Every Senior Officer must maintain accurate and complete records, including providing accurate and complete information to the accounting and the finance departments. No false, misleading or artificial entries may be made on, or be provided for entry on, the Company's books and records. No funds or assets may be maintained by the Company for any illegal or improper purposes. All transactions must be fully and completely documented and recorded in the Company's accounting records. It is against Company policy to make entries that intentionally conceal or disguise the true nature of any transaction.

CONFLICTS OF INTEREST

It is the Company's policy that you should avoid transactions, commitments, and other activities which are not in the Company's best interests or which could involve an actual conflict, or the appearance of a conflict, between your interests and those of the Company.

It is not possible to define all situations that could involve a conflict of interest; in most instances, however, sound business judgment should be sufficient to evaluate a situation.

A conflict of interest exists when your loyalties are divided between the Company's interests and your own interests, those of your family, or those of a customer, supplier or competitor. You are expected to avoid both the fact and appearance of conflicts of interest.

The prohibition against acting in a dual capacity in transacting Company business, and from acquiring interests adverse to the Company, is applicable irrespective of your intentions and without regard to whether the action caused, or has the potential to cause, injury to the Company.

The following is presented as a guide in determining circumstances that might create conflicts of interest; they are not intended, however, to cover all possible situations.

o Representing the Company in any transaction if your personal interests might affect your ability to represent the Company's interests fairly and impartially. You must not knowingly or voluntarily permit yourself to be placed in a position where your interests may become adverse to the Company's interests. You must not allow personal relationships with current or prospective customers or suppliers to influence business decisions.

3

o Investment by you or a member of your immediate family in a customer, supplier, or competitor (or any company/partnership affiliated with a customer, supplier, or competitor) of the Company is prohibited if you have or would have the opportunity to influence business transactions between the Company and the customer, supplier, or competitor. Passive investments in publicly traded companies shall not be a violation if you or a member of your immediate family owns less than 1% of such company's outstanding stock.

o You must not take for yourself nor direct to others any existing business or any opportunities for prospective business that could be considered by the Company.

o It is a conflict of interest to serve as a director of any company that competes with the Company. You may not serve as a director of a private company that is a supplier, customer, developer, or other business partner without first obtaining the approval of the Chair of the Corporate Governance Committee. You also may not become a director of any public company, without first obtaining the approval of the Chair of the Corporate Governance Committee.

o You must not speculate or deal in materials, supplies, equipment or products that the Company buys or sells, or in property rights in which the Company may be interested.

o Solicitation or acceptance by you or a member of your immediate family of any personal loan or guarantee from a customer, supplier or competitor.

Before acting in a manner that creates or appears to create a conflict of interest, you must make full disclosure to and obtain written approval of either the Chair of the Audit Committee or the Chair of the Corporate Governance Committee.

COMPLIANCE WITH THE CODE; REPORTING OF VIOLATIONS

If you have questions about this Code of Ethics for Senior Executive and Financial Officers, you should seek guidance from the Company's legal counsel. If you know of or suspect a violation of applicable laws or regulations or this Code of Ethics for Senior Executive and Financial Officers, you must immediately report that information to either the Chair of the Audit Committee or the Chair of the Corporate Governance Committee. No one will be subject to retaliation because of a good faith report of a suspected violation.

4

NO RIGHTS CREATED

This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern the Company's Senior Officers in the conduct of the Company's business. It is not intended to and does not create any rights in any employee, customer, supplier, competitor, stockholder or any other person or entity.

ACKNOWLEDGMENT

I have received and read the Code of Ethics for Senior Executive and Financial Officers, and I understand its contents. I agree to comply fully with the standards contained in the Code of Ethics and the Company's related policies and procedures. I understand that I have an obligation to promptly report to either the Chair of the Audit Committee or the Chair of the Corporate Governance Committee any suspected violation of the Code of Ethics for Senior Executive and Financial Officers.


Print Name


Signature

Date_____________________________

5

Exhibit 21.1

List of Subsidiaries of the Registrant

Name Jurisdiction Names under which it does business

NuWay Sports, LLC (1) California (same)

(1) Joint venture company formed December 2003 but not active until January 2003


Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement of NuWay Medical, Inc. and subsidiaries (the "Company") on Form S-8 (registration statement No. 333-113443), as filed on March 10, 2004, of our report dated May 12, 2003, relating to the consolidated balance sheet of the Company as of December 31, 2002, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended, appearing in the Annual Report of Form 10-KSB of the Company for the year ended December 31, 2003.

Our report dated May 12, 2003 contains an explanatory paragraph that states that the Company exited several business lines during 2002 through the sale of interests in subsidiaries and the discontinuance of operations.

Our report dated May 12, 2003 contains an additional explanatory paragraph that states the Company has limited liquid resources, recurring losses from operations and is seeking to implement its business plan with a new industry focus which raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

                                                /s/ HASKELL & WHITE LLP
                                                HASKELL & WHITE LLP

Irvine, California
November 12, 2004


Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

To the Board of Directors
NuWay Medical, Inc.

I consent to the incorporation by reference in the Registration Statement of NuWay Medical, Inc. and subsidiary on Form S-8 (registration statement No. 333-113443), as filed on March 15, 2004, of our report dated October 26, 2004 relating to the consolidated balance sheet of NuWay Medical, Inc. as of December 31, 2003, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended, which report appears in the December 31, 2003 annual report on Form 10-KSB of NuWay Medical, Inc.

My report dated October 26, 2004 contains an explanatory paragraph that states NuWay Medical, Inc. has discontinued its remaining operations.

My report dated October 26, 2004 contains an explanatory paragraph that states NuWay Medical, Inc. has limited liquid resources, recurring losses from operations, and is seeking to implement its business plan, which requires the Company to acquire or develop a business which raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

                                                /s/ Jeffrey S. Gilbert

                                                Jeffrey S. Gilbert, CPA



Los Angeles, California
November 15, 2004


EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 AND
RULES 13A-14 AND 15D-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Dennis Calvert, Chief Executive Officer and Interim Chief Financial Officer, certify that:

1. I have reviewed this 10-KSB of NuWay Medical, Inc. (the "Company");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company's as of, and for, the periods presented ire this report;

4. The Company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company's and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company's, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

Date: November 15, 2004                        /s/ Dennis Calvert
                                               --------------------------------
                                               Dennis Calvert


EXHIBIT 32.1

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, Dennis Calvert, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of NuWay, Inc. on Form 10-KSB for the fiscal year ended December 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-KSB fairly presents in all material respects the financial condition and results of operations of NuWay Medical, Inc.

Dated:   November 15, 2004             By: /s/ Dennis Calvert
                                           ---------------------------------
                                           Dennis Calvert
                                           President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to NuWay Medical, Inc. and will be retained by NuWay Medical, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

I, Dennis Calvert, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of NuWay Medical, Inc. on Form 10-KSB for the fiscal year ended December 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Annual Report on Form 10-KSB fairly presents in all material respects the financial condition and results of operations of NuWay Medical, Inc.

Dated:   November 15, 2004                   By: /s/ Dennis Calvert
                                                 -------------------------------
                                                 Dennis Calvert
                                                 Interim Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to NuWay Medical, Inc. and will be retained by NuWay Medical, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.