Edgar Filing: WARP TECHNOLOGY HOLDINGS INC

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

FORM 10-QSB

[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the Fiscal Quarter Ended December 31, 2003

[ ] Transition report under Section 13 or 15(d) of the Exchange Act

Commission File No. 000-33197

WARP TECHNOLOGY HOLDINGS, INC.
------------------------------
(Name of Small Business Issuer in its Charter)

Nevada 88-0467845
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State or other jurisdiction of I.R.S. Employer Identification Number
incorporation or organization

708 3rd Avenue, 6th Floor, New York, N.Y. 10017
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(Address of principal executive office)

Issuer's telephone number: (212) 962-9277
--------------

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 ninety (90) days.
Yes X No
--- ---

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of February 2, 2004, there were
72,262,586 shares of Common Stock, par value $.00001 per share, outstanding

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

PART I

FINANCIAL INFORMATION

Forward-Looking Information

Certain statements in this Form 10-QSB of WARP Technology Holdings, Inc.
(the "Company") may constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include those relating to future opportunities, the outlook of
customers, the reception of new products and technologies, and the success of
new initiatives. In addition, such forward-looking statements involve known and
unknown risks, uncertainties, and other factors which may cause the actual
results, performance or achievements of the Company to be materially different
from any future results expressed or implied by such forward-looking statements.
Such factors include: (i) demand for the Company's products; (ii) the actions of
current and potential new competitors; (iii) changes in technology; (iv) the
nature and amount of the Company's revenues and expenses; and (v) overall
economic conditions and other risks detailed from time to time in the Company's
periodic earnings releases and reports filed with the Securities and Exchange
Commission (the "Commission"), as well as the risks and uncertainties discussed
in the Company's Annual Report on Form 10-KSB filed with the Commission on
October 14, 2003 (the "Form 10-KSB").

ITEM 1. Financial Statements.

Table of Contents Page

Consolidated Balance Sheets 3

Consolidated Statements of Operations 4

Consolidated Statements of Cash Flows 5

Notes to Consolidated Financial Statements 6

WARP Technology Holdings, Inc.
Consolidated Balance Sheets

December 31, June 30,
2003 2003
----------------------------
(Unaudited) (Audited)

Assets
Current assets:
Cash and cash equivalents $ 556,062 $ 360,064
Accounts receivable 6,620 7,692
Inventory 345,207 207,000
Prepaid expenses and other 18,609 63,723
Deferred product cost 46,435 14,556
----------------------------
Total current assets 972,933 653,035

Property and equipment, net 49,448 83,936
Intangible assets, net 347,917 442,917
Goodwill 3,893,294 3,893,294
Other assets 8,722 28,111
----------------------------
Total assets $ 5,272,314 $ 5,101,293
============================

Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 454,293 $ 358,024
Accrued expenses 231,726 580,462
Prepaid subscription -- 490,000
Note payable -- 120,000
Deferred revenue 358,012 94,712
Accrued compensation payable 662,000 694,000
----------------------------
Total current liabilities 1,706,031 2,337,198

Stockholders' equity:

Cumulative convertible preferred stock,
Series A; $.00001 par value; 0 shares
issued and outstanding at December 31, 2003 -- --
Cumulative convertible preferred stock,
Series B; $.00001 par value; 3,624 shares
issued and outstanding at December 31, 2003 3,623,720 --
Preferred stock 15 15
Common stock, $.00001 par value; 500,000,000
shares authorized, and 72,262,586 and 67,262,586
shares issued and outstanding at December 31,
2003 and June 30, 2003, respectively 723 673
Additional paid-in capital 39,381,882 37,658,978
Deferred compensation (5,551,834) (7,911,000)
Foreign currency translation (16,163) 18,773
Accumulated deficit (33,872,060) (27,003,344)
----------------------------
Total stockholders' equity 3,566,283 2,764,095
----------------------------
Total liabilities and stockholders' equity $ 5,272,314 $ 5,101,293
============================

See accompanying notes.

WARP Technology Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)

Three Months Ended Six Months Ended
December 31, December 31,
2003 2002 2003 2002
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Revenue $ 308,715 $ 86,731 $ 363,911 $ 146,398
Cost of Sales 33,987 354 42,365 32,951
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Gross Profit 274,728 86,377 321,546 113,447

Expenses
Product development 256,442 115,095 325,137 252,326
Sales and marketing 630,204 129,525 1,262,119 336,256
General and administrative 730,780 616,477 1,259,207 1,183,301
Non-cash compensation,
consulting fees and other 2,075,165 5,133,333 3,397,746 5,133,333
--------------------------------------------------------
Loss before interest income (3,417,863) (5,908,053) (5,922,663) (6,791,769)
--------------------------------------------------------

Interest and other income 60,161 3,621 60,542 8,868
--------------------------------------------------------
Net loss $(3,357,702) $(5,904,432) $(5,862,121) $(6,782,901)
========================================================

Computation of loss Applicable to Common Shareholders

Net loss before
beneficial conversion
Preferred dividend $(3,357,702) $(5,904,432) $(5,862,121) $(6,782,901)

Beneficial conversion -
Preferred dividend (1,006,595) -- (1,006,595) --
--------------------------------------------------------
Loss attributable
to common stockholders $(4,364,297) $(5,904,432) $(6,868,716) $(6,782,901)
========================================================
Basic and diluted
net loss per share attributable
to common stockholders $ (0.06) $ (0.10) $ (0.10) $ (0.11)
========================================================

Weighted-average number common
shares--basic and diluted 68,186,499 61,361,556 67,724,543 60,471,882
========================================================

See accompanying notes.

WARP Technology Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

Six Months Ended
December 31,
2003 2002
--------------------------

Operating activities
Net loss $(5,862,121) $(6,782,901)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 134,609 38,265
Non cash compensation 3,397,746 5,133,333
Changes in operating assets and
liabilities:
Accounts receivable 1,176 (511,422)
Inventory and prepaid expenses (93,091) (30,869)
Accounts payable and accrued expenses (292,433) (98,299)
Deferred revenue 248,483 689,025
Deferred product cost (31,879) (82,066)
--------------------------
Net cash used in operating activities (2,497,510) (1,644,934)
--------------------------

Investing activities
Other assets 19,393 (3,565)
Purchase of property and equipment (3,179) (13,191)
Advances on acquisition -- (250,000)
--------------------------
Net cash provided by (used in) investing
activities 16,214 (266,756)
--------------------------

Financing activities
Collection of stockholder loan -- 19,000
Repayment of Bridge loan (120,000) --
Proceeds from issuance of common stock, net of
issuance costs 2,811,543 1,272,000
--------------------------
Net cash provided by financing activities 2,691,543 1,291,000
--------------------------

Net decrease in cash 210,247 (620,690)
Effects of exchange rates on cash (14,249)
Cash--beginning of period 360,064 1,184,652
--------------------------
Cash--end of period $ 556,062 $ 563,962
==========================

See accompanying notes.

Notes To Consolidated Financial Statements

Note 1. Organization Merger and Description of Business

On May 24, 2002 ("the Closing Date") Abbott Mines, Ltd. ("the Company"), a
Nevada corporation, acquired the outstanding common stock of WARP Solutions, Inc
("WARP") in a Share Exchange transaction (the "Share Exchange"). For financial
reporting purposes, the transaction was accounted for as a reverse acquisition,
and WARP was treated as the acquiring entity for accounting purposes.

Although the Company was the surviving legal entity in the Share Exchange, the
transaction was accounted for as an issuance of equity by WARP, and a
recapitalization of WARP under the capital structure of the Company in exchange
for $690 in net assets. Under the purchase method of accounting, the historical
results of WARP have been carried forward and the Company's operations have been
included in the financial statements commencing on the Closing Date.
Accordingly, all the historical results included are those of WARP only.

On August 12, 2002, the Company's Board of Directors authorized and approved the
establishment of a subsidiary in the state of Nevada with the name WARP
Technology Holdings, Inc. In addition, the Company's Board of Directors
authorized and approved the issuance of 100,000 shares of the Company's common
stock to its attorneys for legal services.

On August 15, 2002, the Company's Board of Directors authorized and approved the
upstream merger of WARP Technology Holdings, Inc., the Company's wholly-owned
subsidiary, with and into the Company ("the Upstream Merger"). The Upstream
Merger became effective on August 21, 2002, and the Company changed its name
from Abbott Mines, Ltd. to WARP Technology Holdings, Inc.

6043577 Canada, Inc., a wholly-owned subsidiary of the Company, was established
in January 2003 to acquire SpiderSoftware, Inc. ("Spider"), a Canadian
corporation. On January 13, 2003, the Company completed its acquisition of
Spider.

The Company is an information technology company that produces a series of
application acceleration products that improve the speed and efficiency of
transactions and information requests that are processed over the internet and
intranet network systems. The Company's GTEN suite of hardware and software
products and technologies are designed to accelerate network applications,
reduce network congestion, and reduce the cost of expensive server deployments
for enterprises engaged in high volume network activities.

Note 1. Organization Merger and Description of Business (continued)

Basis of Presentation

The accompanying unaudited consolidated financial statements of Warp Technology
Holdings, Inc. and its subsidiaries (collectively the "Company") have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six months ended December 31, 2003 are
not necessarily indicative of the results that may be expected for the fiscal
year ended June 30, 2004. For further information, refer to the financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-KSB for the year ended June 30, 2003.

The Company has incurred recurring operating losses since its inception, as of
December 31, 2003 had an accumulated deficit of approximately $33,872,000 and at
December 31, 2003 had insufficient capital to fund all of its obligations. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments to
reflect the possible future effect of the recoverability and classification of
assets or the amounts and classifications of liabilities that may result from
the outcome of this uncertainty.

The Company's continuation as a going concern is dependant upon receiving
additional financing. The Company anticipates that during its 2004 fiscal year
it will need to raise at least $6,000,000 to support its working capital needs
and to continue to execute the requirements of its business plan. In November
2003 the Company completed an offering of 2,647.78 shares of Series B 10%
Cumulative Convertible Preferred Stock for approximately $2,647,780. On
September 30, 2003, the Company completed an offering of 975,940 shares of its
Series A 8% Cumulative Convertible Preferred Stock (subsequently converted into
Series B 10% Cumulative Convertible Preferred Stock) with gross proceeds to the
Company from the sale equaling $975,940. There can be no assurance that the
Company will have sufficient capital to support its working capital needs
through its 2004 fiscal year.

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of WARP
and its wholly-owned subsidiaries (collectively the "Company"). All
inter-company transactions and balances have been eliminated in consolidation.

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

amounts of assets and liabilities and disclosure of contingent assets and
liabilities as of the date of financial statements and the reported amount of
revenue and expenses during the period. Actual results could differ from those
estimates.

Revenue Recognition

Pursuant to AICPA Statement of Position ("SOP") 97-2, Software Revenue
Recognition, the Company recognizes revenues from the sale of the WARP 2063e
product when persuasive evidence of a contractual arrangement exists, delivery
has occurred, the fee is fixed or determinable and collection is probable. The
Company's software licenses generally are marketed with certain post-contract
customer support ("PCS") and other obligations, which may include maintenance,
delivery of unspecified upgrades, and warranties regarding service response
times. Revenue under PCS agreements are recognized ratably over the term of the
agreement. Under SOP 97-2, the Company must allocate revenue to each element
based on vendor specific objective evidence ("VSOE") of each element's fair
value. Since the Company has just begun to market its WARP 2063e products, VSOE
of the fair value of each element has not been clearly established. Accordingly,
revenue from license agreements is being recognized ratably over the term of the
PCS agreement.

Note 2. Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

Licensing revenues from Spider are recognized upon product delivery, provided
persuasive evidence of an arrangement exists, fees are fixed or determinable and
the resulting receivable is deemed collectible by management.

Inventory

Inventory consists of finished goods and is valued at the lower of cost or
market using the specific identification method.

Intangible Assets and Goodwill

Intangible assets are primarily comprised of trademark, software, non-compete
agreements and workforce assembly. Goodwill represents acquisition costs in
excess of the net assets of businesses acquired. In accordance with SFAS 142,
"Goodwill and Other Intangible Assets." No amortization is necessary and
goodwill is tested for impairment on an annual basis. All other intangibles are
being amortized over their estimated useful life of two to three years.

Comprehensive Loss

Comprehensive loss for the twelve months ended June 30, 2003 was approximately
$13,034,000.

Loss Per Share

Basic and diluted net loss per share information for all periods is presented
under the requirements of SFAS No. 128, Earnings Per Share. Basic loss per share
is calculated by dividing the net loss attributable to common stockholders by
the weighted-average common shares outstanding during the period. Diluted loss
per share is calculated by dividing net loss attributable to common stockholders
by the weighted-average common shares outstanding. The dilutive effect of
preferred stock, warrants and options aggregating approximately 39,398,000 as of
December 31, 2003 of common shares are not included as the inclusion of such
would be anti-dilutive for all periods presented.

Stock-Based Compensation

Stock-based compensation is accounted for by using the intrinsic value-based
method in accordance with the provisions of Accounting Principles Board ("APB")
Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations.

Note 2. Summary of Significant Accounting Policies (continued)

Stock-Based Compensation (continued)

The following table details the effect on net loss and loss per share had
stock-based compensation expense been recorded based on the fair value method
under SFAS No. 123, as amended.

Three Months Ended December 31, Six Months Ended December 31,
------------------------------- -----------------------------
2003 2002 2003 2002
---------------------------------------------------------------------------------------------------------------

Net loss, as reported $(3,357,702) $(5,904,432) $(5,862,121) $(6,782,901)
Add: Total stock-based employee
compensation expense included in
reported net loss 1,172,833 5,133,333 2,359,167 5,133,333
Deduct: Total stock-based employee
compensation expense determined
under fair value method for all awards (1,203,428) (5,261,667) (2,421,671) (5,261,667)
----------- ----------- ----------- -----------

Net loss, pro forma $(3,388,297) $(6,032,776) $(5,924,625) $(6,911,235)
Beneficial conversion - Preferred dividend (1,006,595) -- (1,006,595) --
Net Loss attributable to common stockholders-
Pro forma $(4,394,892) $(6,032,776) $(6,931,220) $(6,911,235)

Basic and diluted net loss per share, as reported $ (.06) $ (.10) $ (.10) $ (.11)
Basic and diluted net loss per share, pro forma $ (.06) $ (.10) $ (.10) $ (.11)
---------------------------------------------------------------------------------------------------------------

Recent Accounting Pronouncements

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No. 133 on
Derivative Instruments and Hedging Activities." This statement amends and
clarifies accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities under SFAS
No. 133. This statement is effective for contracts entered into or modified
after June 30, 2003, except as for provisions that relate to SFAS No. 133
implementation issues that have been effective for fiscal quarters that began
prior to June 30, 2003, which should continue to be applied in accordance with
their respective dates. The adoption of SFAS No. 149 has not and is not expected
to have a material impact on the Company's financial condition, results of
operations, and cash flows.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity". This statement
requires that certain financial instruments that, under previous guidance,
issuers could account for as equity be classified as liabilities in statements
of financial position. Most of the guidance in SFAS No. 150 is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period beginning after June
15, 2003. The adoption of SFAS No. 150 has not and is not expected to have a
material impact on the Company's financial condition, results of operations, and
cash flows.

In January 2003, the FASB issued FASB interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN46"). FIN46 requires that a variable interest
entity be consolidated by a company if that

company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
return or both. The consolidation requirements apply to the first fiscal or
interim period ending after March 15, 2004. The adoption of FIN46 is not
expected to have a material impact on the Company's financial condition, results
of operations, and cash flows.

Segment Information

The Company operates in one segment.

Note 3. Stockholders Equity

In December 2003, the Company issued 5,000,000 shares of common stock to Blue &
Gold Enterprises LLC ("Blue & Gold") as consideration for financial consulting
services provided by Mr. Steven Antebi pursuant to the Consulting Agreement
dated December 2003 between the Company and Mr. Antebi (the "Consulting
Agreement"). The shares issued to Blue & Gold are restricted shares and were
issued in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of that Act and Rule 506 of Regulation D
thereunder. The shares issued to Blue & Gold are subject to the provisions of
Rule 144 of the Securities Act and therefore generally cannot be resold for a
period of twelve months from the date of receipt. A copy of the Consulting
Agreement is attached hereto as Exhibit 10.13 and the reader is referred to that
exhibit for the full text of that agreement.

On November 4, 2003, the Company completed an offering of 2,647.78 shares of
Series B 10% Cumulative Convertible Preferred Stock (the "B Shares") with gross
proceeds to the Company from the sale equaling $2,647,780. The B Shares had a
purchase price of $1,000.00 per share. The purchase price of the B Shares was
paid in cash. The B Shares have a cumulative dividend of 10% per year, which is
payable in cash or stock at the time of conversion. Each B Share is convertible
into approximately 5,556 shares of the common stock of the Company. The
conversion to common stock of all the B Shares sold in the offering will result
in the Company issuing approximately 14,710,000 shares of common stock to the B
Share subscribers. The B Share subscribers also received warrants to purchase a
number of common shares equal to 50% of the common shares such subscriber would
receive upon the conversion of their B Shares to common shares. The exercise
price of the warrants is $.33 per share of common stock and the exercise price
is only payable with cash. Exercise of all the warrants held by the B Share
subscribers would result in the issuance of approximately 7,355,000 shares of
common stock and would raise approximately $2,427,000 if exercised by all
warrant holders. The Company recorded approximately $736,000 as beneficial
conversion relating to this transaction because the fair market value of the
common stock was greater than the conversion price. All of the B Shares sold in
this offering were offered and sold to accredited investors (as defined in Rule
501 of Regulation D). The B Shares and the common stock underlying the B Shares
and warrants are restricted securities and were issued in a transaction exempt
from the registration requirements of the Securities Act, pursuant to Section
4(2) of that Act. The B Shares and the common stock underlying the B Shares and
warrants are subject to Rule 144 under the Securities Act and therefore
generally cannot be resold for a period of twelve months from the date of
purchase. No general solicitations were made in connection with the sale of the
B Shares. The Company was required to file a registration statement within 45
days of the closing date. As of December 31, 2003 the Company did not file the
registration statement as such the Company is required to pay a penalty
equivalent to 2% of shares purchased. The Company has recorded a charge of
approximately

$89,000 relating to this penalty. The Company paid approximately $322,000 in
finders' fees relating to this private placement.

On September 30, 2003, the Company completed an offering of 975,940 shares of
its Series A 8% Cumulative Convertible Preferred Stock (the "A Shares") with
gross proceeds to the Company from the sale equaling $975,940. The A Shares had
a purchase price of $1.00 per share. The A Shares had a cumulative dividend of
8% per year, which was payable in cash or stock at the time of conversion.
During the first twelve months from the date of issuance each A Share was
convertible into four shares of the common stock of the Company. Thereafter, the
A Shares were convertible to common stock based upon the average market price of
the Company's common stock over the five-day period immediately preceding the
conversion date, subject to a minimum conversion price of $.75 per share of
common stock. The purchase price of the A Shares was paid in cash. All of the A
Shares sold in this offering were offered and sold to accredited investors (as
defined in Rule 501 of Regulation D). No general solicitations were made in
connection with the sale of the A Shares. Pursuant to a "most favored nation"
provision of the A Shares offering, the holders of the A Shares were entitled to
receive the better terms of any offering that was completed subsequent to the
closing of the A Shares offering. In order to efficiently comply with the terms
of this "most favored nation" provision, the Company and the holders of the A
Shares agreed to exchange the A Shares for B Shares on a dollar for dollar basis
upon the completion of the B Shares offering in November 2003. As a result, the
Company has cancelled all 975,940 A Shares which were to be issued and has
instead issued 975.94 B Shares to the A Share subscribers. The A Share
subscribers also received warrants with the same terms as the B Share
subscribers. The conversion to common stock of all the B Shares issued to the A
Share subscribers will result in the Company issuing approximately 5,422,000
shares of common stock to the A Share subscribers. Exercise of all the warrants
held by the A Share subscribers will result in the issuance of approximately
2,711,000 shares of common stock to the A Share subscribers and would raise
approximately $894,600 if exercised by all holders. The Company recorded
approximately $271,000 as beneficial conversion relating to this transaction
because the fair market value of the common stock was greater than the
conversion price. The Company recorded approximately $60,000 for fees relating
to this private placement.

In fiscal 2003, the Board of Directors issued 7,098,000 options to certain
employees of the Company under its 2002 Stock Incentive Plan. Of those options,
1,833,333 vested on the date of grant and the remainder vest over a two to three
year period. Such options have a term of ten years and have an exercise price of
$.25 per share. For financial statement purposes the Company recorded deferred
compensation of $18,996,000, representing the difference between the market
price of the Company's stock and $.25 on the date of grant. Deferred
compensation is being amortized for financial reporting purposes over the
vesting period of the options. The amount recognized as expense for the six
month period ending December 31, 2003 was $2,359,167.

In fiscal 2003, the Company granted 420,000 options to employees at an exercise
price of $.25 per share. Under the terms of employment the Company has agreed to
compensate employees holding these options upon exercise, the difference between
one dollar and cash realized from the exercise of each option up to one dollar
in cash or stock. As of December 31, 2003, 400,000 options remain outstanding
and accordingly, the Company has recorded a $400,000 liability. All 400,000
options were fully vested and exercisable as of December 31, 2003. All 400,000
options expire in December 2004.

In fiscal 2003 the Company's Board of Directors granted 1,500,000 options to
consultants at an exercise price of $.25 per share. Under the terms of
engagement the Company agreed to compensate certain consultants upon exercise
the difference between one dollar and cash realized from the exercise of each
option up to one dollar in cash or stock up to a maximum of $262,000, and
accordingly, the Company has recorded a $262,000 liability at December 31, 2003.
At December 31, 2003, 1,438,000 options were outstanding, fully vested and
exercisable and expire in December 2004.

Note 4. SpiderSoftware, Inc. Acquisition

On August 13, 2002 the Company entered into a memorandum of understanding (the
"MOU") to enter into a business combination transaction with SpiderSoftware,
Inc. ("Spider"), a Canadian corporation. On January 10, 2003 the Company
completed the acquisition by issuing one million five hundred thousand shares of
its common stock, stock options valued at $178,328 and assumed debt of $335,766
(including advances made by WARP) for all of the outstanding capital shares of
Spider. The acquisition was valued at $4,514,621 based upon an independent
valuation.

The acquisition has been accounted for using the purchase method of accounting,
and accordingly the purchase price has been allocated to the assets acquired and
the liabilities assumed based on their fair values at the date of acquisition.
The excess of the purchase price over the estimated fair values of net assets
acquired has been recorded as goodwill.

Note 5. iMimic Letter of Intent

In April 2003 the Company signed a letter of intent to acquire iMimic
Networking, Inc. ("iMimic"), a Texas corporation, by July 2003. In July the
companies agreed to extend this letter of intent through November 30, 2003. As
consideration for the extension the Company agreed to pay iMimic's operating
expenses through November 30, 2003. The Company advanced approximately $279,000
to iMimic, which was expensed on the Company's financial statements in the
quarter ending December 31, 2003, since on November 30, 2003 the letter of
intent expired and iMimic has no obligation to repay the Company. To date, the
two parties have not been able to reach an agreement on new acquisition terms
and as such there is currently no letter of intent in place between the Company
and iMimic. The Company and iMimic are continuing to work together under the
terms of an OEM license between them and the Company will continue to
incorporate iMimic's technology into its products and software.

Note 6. Note Payable

On June 12, 2003 a shareholder loaned the Company $120,000 on an unsecured
basis. Such amount bears interest at 1% per month and was due on June 30, 2003.
The Company repaid $75,000 of the loan in September 2003 and the remaining
balance was repaid in November 2003.

Note 7. Subsequent Events

In January 2004, the Board of Directors authorized the issuance of 1,500,000
warrants to Mr. Ray Musson and Killick & Co as a result of previous unregistered
shares. The warrants have a (5) five-year term, an exercise price of $.36 per
share and no cashless exercise provision.

ITEM 2. Management's Discussion And Analysis Or Plan Of Operation.

The following discussion and analysis provides information that the
Company's management believes is relevant to an assessment and understanding of
the Company's results of operations and financial condition. This discussion
should be read together with the Company's financial statements and the notes to
financial statements, which are included in this report, and with the Company's
Form 10-KSB.

Plan of Operations

The Company's plan of operation is to develop, manage and market the
products of its subsidiaries, which have developed unique and proprietary
technologies which accelerate the processing speed of dynamic content requests
and improve the efficiency of an internet or intranet network's infrastructure.
The Company refers to this activity as Application Acceleration. The Company's
product offerings are marketed as components of its GTEN (Global Transaction
Enabled Network) application acceleration framework. This includes the WARP
2063e, SpiderSoftware's Enterprise and Spider Professional and iMimic's
DataReactor and StreamReactor software products. The Company's technology moves
the processing of dynamic and static content requests away from the core of an
enterprises' network infrastructure to the edge of that infrastructure. By doing
so, the Company's technology and products enable an enterprise to improve the
efficiency of its network infrastructure resulting in:

o The elimination of complex transaction-processing bottlenecks,
o Improved response times,
o Lower hardware costs, and
o Lower wide area network costs.

Strategic Initiatives to Strengthen the Company's Operational Effectiveness

Having completed an initial six months of "validation sales" from June 30,
2002 through December 31, 2002, the Company elected to undertake a strategy to
improve the effectiveness of its sales and marketing strategy. As part of its
strategy the Company acquired Spider in January 2003 and in April 2003 the
Company entered into an OEM Software License Agreement with iMimic Networking,
Inc.

Increase Product Range:

The Company has initiated a strategy to broaden the scope of the
technologies that it delivers to its customers and channel partners through a
series of acquisitions and licensing strategies. A significant portion of that
plan is underway, as the combination of Spider, iMimic and WARP technologies has
significantly increased the overall product offerings of the Company. Management
expects the further broadened product coverage to promote enhanced customer
traction. Dynamic caching is a relatively new technology with an undefined
market size. By incorporating iMimic's DataReactor into its technology, the
Company is seeking to increase the target market for its products to cover the
static caching market, which analysts estimate ranges from $250 million to $450
million per year.

Increase Sales Effectiveness:

The Company reorganized its sales organization during the third quarter of
fiscal 2003. The nature of new technology launches requires a consultative
selling approach, since customers are typically unfamiliar with new techniques
such as dynamic caching. In order to promote a consultative approach, the
Company has formed what it believes to be a capable sales engineering team.
Essentially, the Company's strategy is to have the salesperson focus on moving
the customer through the sales process from "prospect" status to "closure",
while the sales engineering team handles any technical details required by the
customer. This approach is intended to shorten the sales cycle and promote the
image of the Company.

Direct Sales:

The Company uses its direct sales team to create base level traction with
potential customers. Direct sales is used as the foundation to promote channel
sales. Essentially, the strategy is to show the channel, i.e. VARs and
resellers, the benefits of selling the Company's technology. In the third
quarter of fiscal 2003, the Company increased its direct sales representatives
from five to ten. Seven of the sales staff were newly recruited from leading
technology firms in related markets. In order to promote increased visibility
into the sales process, the Company instituted Company wide use of an integrated
sales management system. As a result, new account opportunities are closely
monitored and tracked across five development stages: Prospect, Proposal, Pilot,
Negotiation, and Won/Lost. Additionally, the Company has instituted an incentive
based compensation plan for all sales staff.

Channel Sales:

Channel Sales are active in Japan and Europe. In Japan, Macnica Networks is
the Company's master reseller. The Company's United Kingdom office (the "UK
Office") has been effective in developing VAR relationships. To date the UK
Office has developed three VAR relationships with Morse, Estafet and European
Management Group. There have been no channel sales in North America to date. The
Company has engaged an experienced channel sales consultant to develop the
channel in North America. The focus of the Company's initial channel effort in
North America will be on small integrators and resellers that focus on web
performance.

Results of Operations

During the three months ending December 31, 2003 the Company recognized
approximately $309,000 of revenues compared to approximately $87,000 for the
three months ended December 31, 2002. The increase in revenue was due to the
Company selling more software products where revenue is recognized upon delivery
in 2003 compared with 2002.

During the six months ending December 31, 2003 the Company recognized
approximately $364,000 of revenues compared to approximately $146,000 for the
six months ended December 31, 2002. The increase in revenue was due to the
Company selling more software products where revenue is recognized upon delivery
in 2003 versus 2002 where revenues were all from hardware sales.

Cost of sales for three months ended December 31, 2003 was $33,987 as compared
to $354 for the three months ended December 31, 2002. The increase in cost of
sales was due to the Company increase in sales and change in product mix.

Cost of sales for six months ended December 31, 2003 was $42,365 as compared to
$32,951 for the six months ended December 31, 2002. The increase in cost of
sales was due to the Company increase in sales and change in product mix.

Product development costs were approximately $256,000 for the three months ended
December 31, 2003 as compared to approximately $115,000 for the three months
ended December 31, 2002. The increase was due to the Company's acquisition of
Spider Software in 2003.

Product development costs were approximately $325,000 for the six months ended
December 31, 2003 as compared to approximately $252,000 for the six months ended
December 31, 2002. The increase was due to the Company's acquisition of Spider
Software in 2003.

Sales and marketing costs were approximately $630,000 for the three months ended
December 31, 2003 as compared to approximately $130,000 for the three months
ended December 31, 2002. The increase represents the Company's focus on selling
its products by increasing its sales force and marketing efforts.

Sales and marketing costs were approximately $1,262,000 for the six months ended
December 31, 2003 as compared to approximately $336,000 for the six months ended
December 31, 2002. The increase represents the Company's focus on selling its
products by increasing its sales force and marketing efforts.

General and administrative expense was approximately $731,000 for the three
months ended December 31, 2003 as compared to approximately $616,000 for the
three months ended December 31, 2002. The increase was due primarily to advances
made to iMimic that will not be repaid that were partially offset by cost
cutting of corporate overhead expenses.

General and administrative expense was approximately $1,259,000 for the six
months ended December 31, 2003 as compared to approximately $1,183,000 for the
six months ended December 31, 2002. The increase was due primarily to advances
made to iMimic that will not be repaid that were partially offset by cost
cutting of corporate overhead expenses.

Non-cash compensation, consulting fees and others for the three months ended
December 31, 2003 was approximately $2,075,000 as compared to approximately
$5,133,000 for the three months ended December 31, 2002. The decrease in
non-cash compensation primarily relates to a portion of prior year employee
stock options of $5,133,000 vesting immediately as compared to $1,172,000
expensed for the three months ended December 31, 2003, and a reduction of
$136,000 for previous non-cash compensation reclassed to salary expense. In
addition, the Company recognized non-cash compensation of approximately $950,000
relating to 5,000,000 shares of common stock issued to a consultant and
approximately $89,000 relating to penalty provision of the B Shares in December
2003.

Non-cash compensation for the six months ended December 31, 2003 was
approximately $3,398,000 as compared to approximately $5,133,000 six months
ended December 31, 2002. The decrease in non-cash

compensation primarily relates to a portion of prior year employee stock options
of $5,133,000 vesting immediately as compared with $2,359,166 expensed for the
six months ended December 31, 2003, and a reduction of $136,000 for previous
non-cash compensation reclassed to salary expense. In addition, the Company
recognized non-cash compensation of approximately $950,000 relating to 5,000,000
shares of common stock issued to a consultant and approximately $89,000 relating
to penalty provision of the B Shares in December 2003.

Net interest and other income for the three months ended December 31, 2003 was
approximately $60,000 as compared to $4,000 for the three months ended December
31, 2002. The increase was due primarily to a research and development refund
relating to Spider Software from the Canadian government.

Net interest and other income for the six months ended December 31, 2003 was
approximately $61,000 as compared to $9,000 for the six months ended December
31, 2002. The increase was due primarily to a research and development refund
relating to Spider Software from the Canadian government.

Net Operating Loss Carryforwards

At December 31, 2003, the Company has net operating loss carryforwards of
approximately $20,100,000, which may be used to reduce taxable income in future
years through the year 2023. Due to uncertainty surrounding the realization of
the favorable tax attributes in future returns, WARP has placed a full valuation
allowance against its net deferred tax asset. At such time as it is determined
that it is more likely than not that the deferred tax asset is realizable, the
valuation allowance will be reduced. Furthermore, the net operating loss
carryforward may be subject to further limitation pursuant to Section 382 of the
Internal Revenue Code.

Liquidity and Capital Resources

To date, the Company has financed its operations primarily through the sale of
equity securities and debt. As of December 31, 2003, the Company had
approximately $556,000 in cash. The Company has never been profitable and
expects to continue to incur operating losses in the future. The Company will
need to generate significant revenues to achieve profitability and to be able to
continue to operate. The Company's consolidated financial statements for June
30, 2003 had been prepared on the assumption that the Company will continue as a
going concern. The Company's previous independent auditors issued their audit
report for the June 30, 2003 financial statements dated October 9, 2003 that
includes an explanatory paragraph stating that the Company's recurring losses
and accumulated deficit, among other things, raise substantial doubt about the
Company's ability to continue as a going concern. The Company's historical sales
have never been sufficient to cover its expenses and it has been necessary to
rely upon financing from the sale of equity securities and debt to sustain
operations.

The Company's ultimate future capital requirements will depend on many factors,
including cash flow from operations, customer acquisition, continued progress in
research and development programs, competing technological and market
developments, and the Company's ability to successfully market its products. The
Company has no firm commitments from any sources to provide additional equity or
debt financing. As such, there can be no assurance that sufficient funds will be
raised to finance the operations

of the Company through fiscal 2004. Moreover, any equity financing could result
in dilution to the existing shareholders and any debt financing would result in
higher interest expenses.

The Company anticipates that during its 2004 fiscal year it will need to raise
at least $6,000,000 to support its working capital needs and to continue to
execute the requirements of its business plan. In November 2003, the Company
completed an offering of 2,647.78 shares of Series B 10% Cumulative Convertible
Preferred Stock for gross proceeds to the Company of approximately $2,647,780.
On September 30, 2003, the Company completed an offering of 975,940 shares of
its Series A 8% Cumulative Convertible Preferred Stock (subsequently converted
into Series B 10% Cumulative Convertible Preferred Stock) with gross proceeds to
the Company from the sale equaling $975,940. There can be no assurance that the
Company will succeed in raising sufficient capital to continue operations or
that any such capital will be available on favorable terms.

Subsequent Events

In February 2004, the Company sent an Offer to Exchange to certain holders of
eligible warrants for Common Stock. The Offer to Exchange allows certain warrant
holders the opportunity to exchange the eligible warrants for new warrants,
which new warrants have a lower exercise price of $0.15 per share and are
immediately exercisable for Common Stock. The Offer to Exchange will expire on
March 5, 2004. On February 4, 2004 the Company filed a Schedule TO with the SEC
describing the terms of the Offer to Exchange.

Critical Accounting Policies

Revenue Recognition

Pursuant to AICPA Statement of Position ("SOP") 97-2, Software Revenue
Recognition, the Company recognizes revenues from software licenses when
persuasive evidence indicates a contractual arrangement exists, delivery has
occurred, the fee is fixed or determinable and collection is probable. The
Company's software licenses generally are marketed with certain post contract
customer support ("PCS") and other obligations, which may include maintenance,
delivery of unspecified upgrades, and warranties regarding service response
times. Revenue under PCS agreements is recognized ratably over the term of the
agreement. Under SOP 97-2, the Company must allocate revenue to each element
based on vendor specific objective evidence ("VSOE") of each element's fair
value. Since the Company has just begun to market its products, VSOE of the fair
value of each element has not been clearly established. Accordingly, revenue
from license agreements is being recognized ratably over the term of the PCS
agreement.

Licensing revenue from Spider Software and Data Reactor is recognized upon
product delivery provided persuasive evidence of an arrangement exists, fees are
fixed or determinable and the resulting receivable is deemed collectible by
management.

Goodwill and Impairment

The Company reviews goodwill when events or changes in circumstances indicate
that the carrying amount of goodwill may not be recoverable. We also review
goodwill as required by SFAS No. 142, "Goodwill and Other Intangible Assets",
which requires that goodwill be tested annually using a two-step process. The
first is to identify any potential impairment by comparing the carrying value of
the company to the fair market value. If a potential impairment is identified,
the second step is to compare the implied fair value of goodwill with its
carrying amount to measure the impairment loss. The Company's fair value is
determined by the price in the public market. A significant decrease in the
market price could result in an unexpected impairment charge to goodwill, which
could have a negative impact on our operating results. We will complete our
annual testing in the quarter ending June 30, 2004. The annual impairment test
completed during the fourth quarter of fiscal year ended June 30, 2003 indicated
that our goodwill is not impaired.

Controls And Procedures

Within 90 days prior to the date of this Quarterly Report on Form 10-QSB for the
fiscal quarter ended December 31, 2003, the Company carried out an evaluation,
under the supervision and with the participation of the Company's management,
including the Company's Chief Executive Officer and President, the principal
executive officer, and the Company's principal financial officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934 (the "Exchange Act"). Based upon that evaluation, the
principal executive and principal financial officer concluded that the Company's
disclosure controls and procedures are effective to ensure that information
required to be disclosed by the Company in reports that it files under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
There were no significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

PART II
OTHER INFORMATION

ITEM 1. Legal Proceedings.

In October 2003, the Company received a summons and complaint filed in
the Supreme Court of the State of New York on October 1, 2003 on behalf of a
former consultant to the Company. The consultant provided services to the
Company from March 2003 until August 2003, when he severed his ties with the
Company to pursue other professional opportunities. The consultant claimed that
the Company owed him additional compensation in the amount of $60,000 for
services he rendered to the Company during the period of his engagement as a
consultant. The damages claimed by the consultant in this action were $60,000
plus reasonable attorney's fees and unspecified liquidated damages. In December
2003, the Company settled this action with the consultant and paid him $50,000
in cash. Pursuant to the settlement agreement the consultant withdrew his
action.

ITEM 2. Changes In Securities And Small Business Issuer Purchases of Equity
Securities

The following information relates to sales of unregistered securities
by the Company during the second quarter of fiscal 2004 ended December 31, 2003.
All of these sales of securities were made in reliance upon the exemption from
the registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), set forth in Sections 4(2) thereof and the rules and
regulations under the Securities Act, including Regulation D, as transactions by
an issuer not involving any public offering and/or sales to a limited number of
purchasers who were acquiring such securities for their own account for
investment purposes and not with a view to the resale or distribution thereof.

On November 4, 2003, the Company completed an offering of 2,647.78 shares of
Series B 10% Cumulative Convertible Preferred Stock (the "B Shares") with gross
proceeds to the Company from the sale equaling $2,647,780. The B Shares had a
purchase price of $1000.00 per share. The purchase price of the B Shares was
paid in cash. The B Shares have a cumulative dividend of 10% per year, which is
payable in cash or stock at the time of conversion. Each B Share is convertible
into approximately 5,556 shares of the common stock of the Company. The
conversion to common stock of all the B Shares sold in this offering will result
in the Company issuing approximately 14,710,000 shares of common stock to the B
Share subscribers. The B Share subscribers also received warrants to purchase a
number of common shares equal to 50% of the common shares such subscriber would
receive upon the conversion of their B Shares to common shares. The exercise
price of the warrants is $.33 per share of common stock and the exercise price
is only payable with cash. Exercise of all the warrants held by the B Share
subscribers would result in the issuance of approximately 7,355,000 shares of
common stock and would raise approximately $2,427,000 if exercised by all
holders. The Company recorded approximately $736,000 as beneficial conversion
preferred dividends relating to this transaction because the fair market value
of the common stock was greater than the conversion price. The Company was
required to file a registration statement within 45 days of the closing date. As
of December 31, 2003, the Company did not file the registration statement as
such the Company is required to pay a penalty equivalent to 2% of shares
purchased. The Company has recorded a charge of approximately $89,000 relating
to this penalty. The Company paid approximately $322,000 in finders' fees
relating to this private placement. All of the B Shares sold in this offering
were offered and sold to accredited investors (as defined in Rule 501 of
Regulation D). The B Shares and the common stock underlying the B Shares and
warrants are restricted securities and were issued in a transaction exempt from
the registration requirements of the Securities Act, pursuant to Section 4(2) of
that Act. The B Shares and the common stock underlying the B Shares and warrants
are subject to Rule 144 under the Securities Act and therefore generally cannot
be resold if not in compliance with the limitations set forth in Rule 144 of the
Securities Act. No general solicitations were made in connection with the sale
of the B Shares.

was completed subsequent to the closing of the A Shares offering. In order to
efficiently comply with the terms of this "most favored nation" provision, the
Company and the holders of the A Shares agreed to exchange the A Shares for B
Shares on a dollar for dollar basis. As a result, the Company has cancelled all
975,940 A Shares which were to be issued and has instead issued 975.94 B Shares
to the A Share subscribers. The A Share subscribers also received warrants with
the same terms as the B Share subscribers. The conversion to common stock of all
the B Shares issued to the A Share subscribers will result in the Company
issuing approximately 5,421,900 shares of common stock to the A Share
subscribers. Exercise of all the warrants held by the A Share subscribers would
result in the issuance of approximately 2,711,000 shares of common stock to the
A Share subscribers and would raise approximately $894,600 if exercised by all
holders. The Company recorded approximately $271,000 as beneficial conversion
preferred dividends relating to this transaction because the fair market value
of the common stock was greater than the conversion price. The Company recorded
approximately $60,000 for fees relating to this private placement.

In December 2003, the Company issued 5,000,000 shares of common stock to
Blue & Gold Enterprises LLC ("Blue & Gold") as consideration for financial
consulting services provided by Mr. Steven Antebi pursuant to the Consulting
Agreement dated December 2003 between the Company and Mr. Antebi (the
"Consulting Agreement"). The shares issued to Blue & Gold are restricted shares
and were issued in a transaction exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) of that Act and Rule 506 of
Regulation D there under. The shares issued to Blue & Gold are subject to the
provisions of Rule 144 of the Securities Act and therefore generally cannot be
resold for a period of twelve months from the date of receipt. A copy of the
Consulting Agreement is attached hereto as Exhibit 10.13 and the reader is
referred to that exhibit for the full text of that agreement.

ITEM 3. Defaults Upon Senior Securities.

None

ITEM 4. Submission Of Matters To A Vote Of Security Holders.

None

ITEM 5. Other Information.

On November 30, 2003, the letter of intent between the Company and iMimic
Networking Inc. ("iMimic") which outlined the terms of a proposed acquisition of
iMimic by the Company expired. To date, the two parties have not been able to
reach an agreement on new acquisition terms and as such there is currently no
letter of intent in place between the Company and iMimic. The Company and iMimic
are continuing to work together under the terms of an OEM license between them
and the Company will continue to incorporate iMimic's technology into its
products and software.

On January 28, 2004, Mr. Karl Douglas resigned from his position on the
Board of Directors and the Audit Committee of the Board of Directors of the
Company. Mr. Douglas wished to commit more

time to other business interests and did not have any disagreements with the
Company or the Board of Directors, on any matter relating to the Company's
operations, policies or practices.

On January 28, 2004, Mr. Gus Bottazzi was appointed to the Board of
Directors of the Company to fill the vacancy created by Mr. Douglas'
resignation. On that same date, Mr. Bottazzi was promoted by the Board of
Directors to the positions of President and Chief Executive Officer of the
Company. Mr. Malcolm Coster resigned from his position as the interim President
and Chief Executive Officer but retained his position as the Company's Chairman
of the Board of Directors and principal financial officer. Mr. Coster had been
acting as the interim President and Chief Executive Officer since August 2003
under the terms of an Employment Agreement between himself and the Company
executed in November 2003. The terms of Mr. Coster's Employment Agreement
applied retroactively to the date of his appointment as interim President and
Chief Executive Officer. A copy of Mr. Coster's Employment Agreement is attached
hereto as Exhibit 10.14 and the reader is referred to that exhibit for the full
text of that agreement.

In January 2004, the Board of Directors authorized the issuance of
1,500,000 warrants to Mr. Ray Musson and Killick & Co as a result of previous
unregistered shares. The warrants have a (5) five-year term, an exercise price
of $.36 per share and no cashless exercise provision.

In February 2004, the Company sent an Offer to Exchange to certain holders
of eligible warrants for Common Stock. The Offer to Exchange allows certain
warrant holders the opportunity to exchange the eligible warrants for new
warrants, which new warrants have a lower exercise price of $0.15 per share and
are immediately exercisable for Common Stock. The Offer to Exchange will expire
on March 5, 2004. On February 4, 2004 the Company filed a Schedule TO with the
SEC describing the terms of the Offer to Exchange.

ITEM 6. Exhibits And Reports On Form 8-K.

(a) Exhibits:

The following documents heretofore filed by the Company with the Securities
and Exchange Commission are hereby incorporated by reference:

Exhibit
Number Description Of Document
------ -----------------------

2.1* Form of Share Exchange Agreement dated as of May 16, 2002 by
and among Abbott Mines, Ltd., Carlo Civelli, Mike Muzylowski,
WARP Solutions, Inc., Karl Douglas, John Gnip and the Persons
Identified on Schedule A thereto. Incorporated by reference to
Exhibit 2.1 to the Current Report on Form 8-K filed by the
Company on June 10, 2002.

3.1* Articles of Incorporation of WARP Technology Holdings, Inc.
Incorporated by reference to Exhibit 3.1 to the Registration
Statement on Form SB-2 (Registration No. 333-46884) filed by
the Company on August 28, 2000 as amended (the "Registration
Statement").

3.2* By-laws of WARP Technology Holdings, Inc. Incorporated by
reference to Exhibit 3.2 to the Registration Statement.

3.3* The form of the Articles of Merger of Abbott Mines Limited and
WARP Technology Holdings, Inc. Incorporated by reference to
Exhibit 3.3 to the Current Report on Form 8-K filed by the
Company on September 3, 2002.

3.4* Form of Certificate of Amendment to Articles of Incorporation
of WARP Technology Holdings, Inc. filed with the Secretary
of State of the State of Nevada on September 12, 2003.
Incorporated by reference to Exhibit 3.4 to the Annual Report
on Form 10-KSB filed by the Company on October 14, 2003.

3.5* Form of Charter of the Audit Committee of the Board of
Directors of WARP Technology Holdings, Inc. as adopted by the
Unanimous Consent of the Board of Directors of the Company in
May 2003 which governs the make-up, powers and
responsibilities of the Audit Committee of the Board of
Directors. Incorporated by reference to Exhibit 3.5 to the
Annual Report on Form 10-KSB filed by the Company on October
14, 2003.

3.6* Form of Certificate Of Designations, Preferences And Rights Of
Series A 8% Cumulative Convertible Preferred Stock Of Warp
Technology Holdings, Inc. as filed with the Secretary of State
of the State of Nevada on October 1, 2003. Incorporated by
reference to Exhibit 3.6 to the Quarterly Report on Form
10-QSB filed by the Company on November 14, 2003.

3.7* Form of Certificate Of Designations, Preferences And Rights Of
Series B 10% Cumulative Convertible Preferred Stock Of Warp
Technology Holdings, Inc. as filed with the Secretary of State
of the State of Nevada on October 1, 2003. Incorporated by
reference to Exhibit 3.7 to the Quarterly Report on Form
10-QSB filed by the Company on November 14, 2003.

10.13# Form of Consulting Agreement between WARP Technology Holdings,
Inc. and Mr. Steven Antebi which was executed by the parties
thereto on December 23, 2003.

10.14# Form of Employment Agreement between WARP Technology
Holdings, Inc. and Mr. Malcolm Coster which was executed by
the parties thereto on November 17, 2003.

31.1# Certification of Chief Executive Officer required by Exchange
Act Rules 13a-14(a) (Section 302)

31.2# Certification of Pricipal Financial Officer requires by
Exchange Act Rules 13a-14(a) (Section 302)

32.1# Certification required by 18 U.S.C.Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2# Certification required by 18 U.S.C.Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
---------------------
* Incorporated herein by reference.
# Filed herewith.

(b) Reports on Form 8-K:

The following reports on Form 8-K have been filed during the time period
covered by this report:

On December 19, 2003, the Company filed a Current Report on Form 8-K which
disclosed that on December 16, 2003 it had changed its independent accountant
from Ernst & Young LLP to Mahoney Cohen & Company, CPA, P.C.

SIGNATURES

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

February __, 2004
WARP TECHNOLOGY HOLDINGS INC

By: /s/ Gus Bottazzi
-------------------------------
Gus Bottazzi, CEO and President
and Principal Executive Officer

EXHIBIT INDEX

The following Exhibits are filed herewith:

Exhibit
Number Description of Document
------ -----------------------

10.13 Form of Consulting Agreement between WARP Technology Holdings,
Inc. and Mr. Steven Antebi which was executed by the parties
thereto on December 23, 2003.

10.14 Form of Employment Agreement between WARP Technology Holdings,
Inc. and Mr. Malcolm Coster which was executed by the
parties thereto on November 17, 2003.

31.1 Certification of Chief Executive Officer required by Exchange
Act Rules 13a-14(a) (Section 302)

31.2 Certification of Pricipal Financial Officer requires by
Exchange Act Rules 13a-14(a) (Section 302)

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

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