Item 6.  Management's Discussion and Analysis or Plan of Operation

Critical Accounting Policies

Results of Operations

Recent Accounting Pronouncements

Factors that May Affect Future Results of Operations

Quantitative and Qualitative Disclosures About Market Risks

Item 7.  Financial Statements and Supplementary Data

Item 8.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

REPORT OF INDEPENDENT AUDITORS

Cytation Corporation
Notes to Financial Statements

1.  Business

Until June 20, 2001, (the "Company") provided an extensive range of in-school and online services directed at high school students and their parents, high school guidance counselors, college admissions officers and corporations which targeted the teen marketplace. On June 20, 2001, the Company sold all of its assets associated with these activities to TMP Worldwide Inc. for approximately $7.2 million in cash and debt assumed.

Since the fourth quarter of 2002, the Company has engaged in the business of providing consulting and related services to private companies that wish to become reporting companies under the Securities Exchange Act of 1934.

2.  Summary of Significant Accounting Policies

a.  Use of Estimates - The preparation of financial statements in accordance with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

b.  Property and Equipment - Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets ranging from three to seven years for equipment, auto and furniture. Leasehold improvements are amortized over the term of the lease or the estimated life of the improvement, whichever is shorter. Whenever assets are sold or retired, their cost and related accumulated depreciation are removed from the appropriate accounts. Any gains and losses on dispositions are recorded in current operations.

c.  Fair Value of Financial Instruments - The carrying amounts reported in the balance sheet for cash, short-term loan, accounts payable and accrued expenses approximate fair value based on the short-term maturity of these instruments.

d.  Income Taxes - The Company utilizes the liability method of accounting for income taxes as set forth in SFAS 109, "Accounting for Income Taxes." Under the liability method, deferred taxes are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

e.  Revenue Recognition - Revenues were recognized when services are performed and the earnings process is completed.

f.  Employee Stock Options and Shares Issued for Services - The Company accounts for employee stock transactions in accordance with APB Opinion No. 25, "Accounting for Stock Issued to Employees." The Company has adopted the proforma disclosure requirements of SFAS 123, "Accounting for Stock-Based Compensation." Accordingly, any excess of fair market value of stock issued to employees over exercise prices has been recorded as compensation expense and additional paid in capital.

g.  Earning (Loss) Per Share - The Company adopted the provision of SFAS No. 128, "Earnings per Share". SFAS No. 128 eliminates the presentation of primary and fully dilutive earnings per share ("EPS") and requires presentation of basic and diluted EPS. Basic EPS is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding for the period. Common stock equivalents.

h.  Reporting of Segments - The Company adopted No. 131, "Disclosures about Segments of an Enterprise and Related Information". SFAS No. 131 establishes the criteria for determining an operating segment and establishes the disclosure requirements for reporting information about operating segments. The Company had determined that under SFAS No. 131, it operated in one segment of service.

i.  Cash and Cash Equivalents - For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. The Company may have cash balances in the bank in excess of the maximum amount insured by the FDIC through the period.

3.  Notes Receivable, Stockholders and Others

4. Property and Equipment

Property and Equipment at December 31, 2003 and 2002 consist of the following:

Depreciation expense for the years ended December 31, 2003 and 2002 was $13,614 and $13,920, respectively.

5.  Stockholders' Equity

a.  Authorized Shares

The Company's authorized shares consisted of 110,000,000 shares, divided into 100,000,000 shares of common stock, par value $.001 per share and 10,000,000 shares of preferred stock, par value $.01 per share. In November 2002, the Company amended its certificate of incorporation in connection with the reverse stock split (see b. below). The Company's authorized shares now consists of 3,140,000 shares, divided into 2,000,000 shares of common stock, par value $.001 per share and 1,140,000 shares of preferred stock, par value $.01 per share.

b.  Reverse Stock Split

I n September 2002, the stockholders and the board of directors approved and authorized a 1-for-150 reverse stock split of the Company's common stock. In November 2002, the Company's certificate of incorporation was amended to provide for this reverse split. Stockholders' equity (deficit) has been restated to give retroactive recognition to the stock split for all periods presented. In addition, all references to number of shares, per share amounts, stock option data, and market prices of common stock have been restated to reflect the reverse stock split.

c.  Series A Convertible Preferred Stock

In April 1999, the Company received $3,100,000 in exchange for 775,000 shares of 6% cumulative preferred stock designated as "Series A Convertible Preferred Stock" ("Preferred A") from two investors. "Preferred A" has a stated value of $4.00 per share, a par value of $.01 per share and dividends payable quarterly when and if declared by the Company's board of directors. The Company subsequently issued an additional 365,000 shares of Preferred A to other investors on the same terms. Prior to its redemption (see below), any holder of Preferred A could at any time convert stock into the common stock of the Company at a ratio of one share of common stock for each share of Preferred A. The Company could require conversion on or after the first anniversary of the initial purchase if the closing bid price for its common shares exceeded $6.00 for twenty consecutive trading days. If a special event occured, as defined, the holders of the issued and outstanding Preferred A were entitled to receive $4.00 for each share of Preferred A before any distribution of the assets of the Company could be made to the holders of any other capital stock.

On November 2, 2001, a related entity (the "Related Entity") acquired 1,025,000 shares of Preferred A from three holders (the "Holders") for an aggregate purchase price of $10,250. In connection with this transaction, the Company issued to the Holders two-year warrants (the "Company Warrants") to purchase 6,833 shares of the Company's common stock at an exercise price of $1.50 per share. The Company Warrants were valued under the Black-Scholes method at $1.50 per share. The Related Entity also issued to the Company a two-year warrant to purchase 6,833 shares of the Company's common stock from it at an exercise price of $1.50 per share (the "Related Entity Warrant") so that if the Company Warrants were exercised by the Holders, the Company could acquire the shares from the Related Entity at the same price through the exercise by the Company of the Related Entity Warrant.

On September 30, 2002, the Company redeemed all 1,140,000 shares of Preferred A for an aggregate purchase price of $11,400. In connection with this transaction, the Company issued to the preferred stockholders, except the Related Entity, two-year warrants to purchase 767 shares of the Company's common stock at an exercise price of $1.50 per share. These warrants ware in all respects (other than the issue and expiration dates) the same as the Company Warrants and were valued under the Black-Scholes method at $1.50 per share. The Related Entity Warrant was canceled in connection with this transaction. The holders of Preferred A waived their right to any unpaid dividends.

d.  Series C Convertible Preferred Stock

In September 1999, the Company received $4,000,000 in exchange for 1,000,000 shares of 6% cumulative preferred stock designated as "Series C Convertible Preferred Stock" ("Preferred C") from PNC Bank Corp. Prior to its redemption (see below), the Preferred C had a stated value of $4.00 per share, a par value of $0.01 per share and dividends payable quarterly. The Preferred C holder had similar preferences to the preferences of the Preferred A (see c. above).

During the year ended December 31, 2001, the Company redeemed all 1,000,000 shares of the Preferred C for an aggregate purchase price of $20,000. The holder of the Preferred C waived its right to any unpaid dividends.

e.  Issuance of Common Stock

In the first quarter of 2003, the Company issued 9,667 shares of its common stock to non-affiliates in exchange for services rendered or to be rendered to the Company. In the first quarter of 2003, the Company also redeemed 1,978 shares of common stock from a former consultant to the Company in connection with an arbitration settlement in December 2002 and cancelled 333 shares of common stock issued to and subsequently forfeited by a former employee.

On September 9, 2003, the Company issued 12,500 common shares to each of two consultants who serve as executive officers of the Company and 2,500 common shares to each of the two directors for services provided. These shares are valued at $0.20 per share.

In September 2003, the Company sold 5,000 restricted common shares to an accredited investor for $15,000 through a private offering.

f.  Options and Warrants

On December 15, 2003, the Company granted a consultant who serves as an executive officer of the Company a 10-year option to purchase 25,000 shares of its common stock at an exercise price $0.001 per share. Accordingly, the Company recorded consulting expenses of $14,987 using the Black-Scholes option-pricing model.

Weighted average exercise price for options outstanding at December 31, 2003 was $0.001. None of these options were exercisable options at December 31, 2003.

The following table summarizes the changes in options outstanding and the related exercise price ranges for shares of the Company's common stock:

On November 2, 2001, in connection with the purchase of Preferred A by the Related Entity, the Company issued to the Holders two-year warrants to purchase 6,833 shares of the Company's common stock at an exercise price of $1.50 per share (see c. above). These warrants are valued at $10,250 under the Black-Scholes option-pricing model. On September 30, 2002, the Company acquired all Preferred A from all holders. In connection with the acquisition, the Company issued to all holders, except the Related Entity, two-year warrants to purchase 767 shares of the Company's common stock at an exercise price of $1.50 per share (see c. above). These warrants are valued at $1,150 under the Black-Scholes option-pricing model.

The changes in warrants outstanding and related price ranges are as follows:

For disclosure purposes in accordance with SFAS No. 123, the fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for stock options granted during the periods:

No options have been granted to employees during the year ended December 31, 2003 and 2003. Therefore, if the Company had recognized compensation cost for the employee stock options in accordance with SFAS No. 123, the Company's pro forma net income (loss) and earning (loss) per share would have been the same as the net income (loss) and earning (loss) per share as reported on the accompanying statements of operations.

6.  Commitments and Contingencies

a.  The Company had a two-year lease agreement that expired on December 31, 2002. The Company currently rents its office on a month-to-month basis. Rent expense was approximately $19,000 and $23,000 for the years ended December 31, 2003 and 2002, respectively.

b.  Effective July 1, 2001, the Company entered into three-year employment agreements with two officers who are principal stockholders of the Company. On October 15, 2001, the Company advanced to two officers $375,000 and $225,000, respectively, as an inducement for the officers to remain with the Company through at least January 2, 2003. These advances were converted to a continuation bonus on January 2, 2003. Such advances have been recorded as deferred compensation and amortized over fifteen months. These agreements were terminated by mutual consent of the Company and the two officers effective December 31, 2002 and they continued to provide service to the Company as consultants. In connection with an option granted to one of the consultants in December 2003, this consultant agreed to repay $275,000 of the $375,000 bonus if he ceased providing services before March 31, 2004.

c.  On March 20, 2000, the Company entered into a forty-two (42) month agreement with a consultant to provide services as requested by the Company. The Company agreed to pay the consultant $133,000 a year through September 1, 2000 and $54,000 annually through September 1, 2003, plus stock option and other benefits. In February 2002, the consultant filed a demand for arbitration arising under his termination of the consulting agreement and other matters, in which he claimed that the Company owed him $239,059 plus interest. In December 2002, the Company and the consultant had resolved this matter and all payments made by the Company were included in general and administrative expenses.

7.  Income Taxes

The Company accounts for its income taxes under SFAS No. 109, "Accounting for Income Taxes" which requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. At , the Company had net operating loss carryforwards of approximately $19,000,000 and $20,000,000, expiring 2011 through 2023. SFAS No. 109 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. At , a valuation allowance for the full amount of the deferred tax asset was recorded because of operating losses incurred and the uncertainties as to the amount of taxable income that would be generated in the future years. In addition, the utilization of such net operating losses is subject to certain limitations under Federal income tax laws.

The components of the net deferred tax asset consist of the following at :

The provision for income taxes differs from the amount computed applying the statutory federal income tax rate to income before income taxes as follows as of December 31, 2003 and 2002:

8.  Investment/Non-Cash Income:

In the second quarter of 2003, the Company received 663,089 (post-1-for-2 stock split) restricted shares of common stock and warrants of an unrelated entity, Solomon Technologies, Inc. ("Solomon"), constituting approximately 13% of the total outstanding shares of Solomon, as compensation for consulting services provided. Solomon develops, manufactures, sells and installs the patented "Electric Wheel" motor system as well as a full line of high torque electric propulsion systems for marine and other applications. The investment is valued at $1,326,178 and recorded as consulting revenue on the accompanying financial statements. Such investment is carried on a cost basis.

9.  Accounting Developments:

In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest Entities," which addresses consolidation by business enterprises of VIEs that either: (i) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (ii) have equity investors that lack an essential characteristic of a controlling financial interest.

Throughout 2003, the FASB released numerous proposed and final FASB Staff Positions (FSPs) regarding FIN 46, which both clarified and modified FIN 46's provisions.  In December 2003, the FASB issued Interpretation No. 46 (FIN 46-R), which will replace FIN 46 upon its effective date.  FIN 46-R retains many of the basic concepts introduced in FIN 46; however, it also introduces a new scope exception for certain types of entities that qualify as a "business" as defined in FIN 46-R, revises the method of calculating expected losses and residual returns for determination of the primary beneficiary, includes new guidance for assessing variable interests, and codifies certain FSPs on FIN 46. FIN 46-R does not have a material impact on the Company's Financial Statements.

In 2003, the Emerging Issues Task Force (EITF) reached a consensus on two issues relating to the accounting for multiple-element arrangements: Issue No. 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables," and Issue No. 03-05, "Applicability of AICPA SOP 97-2 to Non- Software Deliverables in an Arrangement Containing More Than Incidental Software." The consensus opinion in EITF No. 03-05 clarifies the scope of both EITF 00-21 and Statement of Financial Position (SOP) 97-2, "Software Revenue Recognition," and was reached on July 31, 2003.  The transition provisions allow either prospective application or a cumulative effect adjustment upon adoption.  EITF Nos. 00-21 and 03-05 did not have a material impact on the Company's Financial Statements.

In December 2003, the FASB revised SFAS No.132, "Employers' Disclosures about Pensions and other Post-retirement Benefits, an amendment of FASB Statements No. 87, 88 and 106." This new SFAS No. 132 retains all of the disclosure requirements of SFAS No. 132; however, it also requires additional annual disclosures describing types of plan assets, investment strategy, measurement date(s), expected employer contributions, plan obligations, and expected benefit payments of defined benefit pension plans and other defined benefit postretirement plans.  SFAS No. 132 does not have a material impact on the Company's Financial Statements.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses significant issues relating to the implementation of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," and develops a single accounting model, based on the framework established in SFAS No.  121 for long-lived assets to be disposed of by sale, whether such assets are or are not deemed to be a business.  SFAS No. 144 also modifies the accounting and disclosure rules for discontinued operations.  The standard was adopted on January 1, 2003, and did not have a material impact on the Company's Financial Statements. 

In April 2003, the FASB issued SFAS No.149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 clarifies under what circumstances a contract with an initial net investment meets the characteristics of a derivative as discussed in SFAS No. 133.  It also specifies when a derivative contains a financing component that requires special reporting in the Consolidated Statement of Cash Flows.  SFAS No. 149 amends certain other existing pronouncements in order to improve consistency in reporting these types of transactions.  The new guidance is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. SFAS No. 149 did not have a material effect on the Financial Statements.

In May 2003, the FASB issued SFAS No.150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. It establishes classification and measurement standards for three types of freestanding financial instruments that have characteristics of both liabilities and equity.  The provisions of SFAS No. 150 are effective for (i) instruments entered into or modified after May 31, 2003, and (ii) pre-existing instruments as of July 1, 2003. In November 2003, through the issuance of FSP 150-3, the FASB indefinitely deferred the effective date of certain provisions of SFAS No. 150, including mandatory redeemable instruments as they relate to minority interests in consolidated finite-lived entities.  The adoption of SFAS No. 150, as modified by FSP 150-3, did not have a material effect on the Company's Financial Statements.

PART III

Item 9.  Directors and Executive Officers of the Registrant

We will furnish to the SEC a definitive Proxy Statement not later than 120 days after the close of the fiscal year ended December 31, 2003. Certain information required by this item is incorporated herein by reference to the Proxy Statement.

Item 10.  Executive Compensation

The information required by this item is incorporated herein by reference to the Proxy Statement.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to the Proxy Statement.

Item 12.  Certain Relationships and Related Transactions

The information required by this item is incorporated herein by reference to the Proxy Statement.

Item 13.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

      (a) The following documents are filed as part of the Report.

          1.  Financial Statements (see index to financial statements)
          2.  Financial Statement Schedule - None

     (b) Reports on Form 8-K

1. Form 8K, Other Events, filed on March 25, 2003.

                                                                       
(1)  Incorporated by reference from the Company's Form 8-K, Current Report, filed March 18, 1999, and later amended on April 2, 1999.

(2)  Filed as Exhibit to the Company's Registration Statement No. 333-85079 on Form SB-2 and incorporated herein by reference.

(3)  Filed as an Exhibit to the Company's Proxy Statement filed May 25, 2001 and incorporated herein by reference.

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 on Form 10-KSB to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: