QualTek Services Inc (fka QTEKQ)

[thepennyking]

Defaults Upon Senior Securities

During the three month period ended March 31, 2003, we made offers to all
holders of our promissory notes and convertible bonds to convert their bond
principal and accrued interest into Preferred stock. As of December 31, 2003, we
received commitments to convert $198,268 of debt ($159,000 in principal +
$39,268 in accumulated interest) into 724,077 shares of Series A Preferred stock
and 648,256 shares of Series B Preferred stock. During October 2003, a
convertible bond with a principal amount of $89,200 and accumulated interest of
$17,222 was converted into 1,773,695 shares of common stock. The balance of
related debt, consisting of $82,495 in principal and $26,768 in accrued
interest, still remains outstanding. Interest continues to accrue against the
principal of all outstanding bonds. The convertible bonds are unsecured, general
obligations of the Company which are convertible into common stock at the option
of the holders. The holders of the bonds that are in default have indicated that
they do not want to convert their debt to stock and wish to be repaid in cash.
At present we do not have funds to repay the indebtedness. We do not know
whether we will be able to repay or renegotiate the debt. If we are unable to
cure the default or renegotiate our debt, we may not be able to continue as a
going concern.

http://www.sec.gov/Archives/edgar/data/1107714/000093173104000036/quintek-10qsb123103.txt