USIP.COM.INC. AND SUBSIDIARIES

Pro forma Consolidated Financial Statements

(Unaudited)

The following unaudited pro forma consolidated balance sheet includes the balance sheet of USIP.com, Inc. and Subsidiaries (“USIP”) as of June 30, 2004 and as adjusted for (i) the proposed sale of our telecom subsidiaries; (ii) the proposed merger with Cornerstone Services Group, Inc. and Subsidiaries (“Cornerstone”); (iii) the proposed change in our capital structure; (iv) the conversion of Cornerstone’s convertible notes; and (v) the effect of our proposed 1-for-2 reverse stock-split, all as if these transactions had occurred as of June 30, 2004.

The following unaudited pro forma consolidated statements of operations for the year ended December 31, 2003 and the six months ended June 30, 2004 include the results of operations of USIP and, as adjusted for (i) the proposed sale of our telecom subsidiaries; (ii) the proposed merger with Cornerstone; (iii) the conversion of Cornerstone’s convertible notes; and (iv) the effect of our proposed 1-for-2 reverse stock-split, all as if these transactions had occurred as of the beginning periods.

The pro forma consolidated financial statements should be read in conjunction with the separate historical financial statements of USIP and the historical financial statements of Cornerstone appearing elsewhere herein. These pro forma financial statements are not necessarily indicative of the consolidated financial position, had the acquisition occurred on the date indicated above, or the consolidated results of operations which might have existed for the periods indicated or the results of operations as they may be in the future.

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USIP.Com, INC. and Subsidiaries
Unaudited Proforma Consolidated Balance Sheet
6/30/2004

	USIP.COM, INC.			Cornerstone Services Group, Inc. and Subsidiaries			Pro forma Adjustments				Pro forma
ASSETS
CURRENT ASSETS
Cash	$	10,649		$	16,407		$	(10,649	)	(1)	$	16,407
Accounts receivable, net		56,791			354,236			(56,791	)	(1)		354,236
Inventory		20,289			387,463			(20,289	)	(1)		387,463
Current portion of notes receivable		—			30,600			—				30,600
Other current assets		4,802			24,011			(4,802	)	(1)		24,011
TOTAL CURRENT ASSETS		92,531			812,717			(92,531	)			812,717
PROPERTY AND EQUIPMENT, Net		498,623			113,808			(498,623	)	(1)		113,808
DEFERRED DEBT OFFERING COSTS		—			200,000			—				200,000
NOTES RECEIVABLE, Net of current portion		—			23,700			—				23,700
GOODWILL		—			88,058			—				88,058
INTANGIBLE ASSETS, Net		—			211,247			—				211,247
TOTAL ASSETS	$	591,154		$	1,449,530		$	(591,154	)		$	1,449,530
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Convertible promissory notes	$	—		$	476,500		$	(476,500	)	(4)	$	—
Convertible promissory notes - related parties		—			152,400			(152,400	)	(4)		—
Accounts payable		171,114			1,039,204			(171,114	)	(1)		1,039,204
Line of credit		619,499			—			(519,499	)	(1)		100,000
Accrued expenses and other current liabilities		10,879			614,375			(10,879	)	(1)		614,375
Current portion of long-term debt		36,301			194,036			(36,301	)	(1)		194,036
Notes payable - related parties		—			107,528			—				107,528
TOTAL CURRENT LIABILITIES		837,793			2,584,043			(1,366,693	)			2,055,143
LONG-TERM DEBT, Less current portion		86,621			180,850			(86,621	)	(1)		180,850
NOTES PAYABLE - RELATED PARTIES, Less current portion		—			400,000			—				400,000
TOTAL LIABILITIES		924,414			3,164,893			(1,453,314	)			2,635,993
STOCKHOLDERS’ EQUITY
Common stock		178,044			47,594			(222,098	)	(1)(4)(5)		3,540
Additional paid-in capital		1,462,558			457,314			(889,604	)	(1)(4)(5)		1,030,268
Accumulated deficit		(1,973,862	)		(2,220,271	)		1,973,862		(1)		(2,220,271	)
TOTAL STOCKHOLDERS’ DEFICIENCY		(333,260	)		(1,715,363	)		862,160				(1,186,463	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY	$	591,154		$	1,449,530		$	(591,154	)		$	1,449,530
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USIP.Com, INC. and Subsidiaries
Unaudited Proforma Consolidated Statement of Operations
For the Six Months Ended June 30, 2004

	USIP.COM, INC.			Cornerstone Services Group, Inc. and Subsidiaries			Pro forma Adjustments				Pro forma
					(1)
NET SALES	$	207,631		$	2,385,119		$	(207,631	)	(1)	$	2,385,119
COST OF SALES		218,102			1,577,643			(218,102	)	(1)		1,577,643
GROSS PROFIT		(10,471	)		807,476			10,471				807,476
OPERATING EXPENSES
Compensation costs and related benefits		95,236			1,117,412			(95,236	)	(1)		1,117,412
Compensatory element of stock issuances		—			77,513			—				77,513
Occupancy costs		34,006			187,592			(34,006	)	(1)		187,592
Professional fees		37,559			170,014			(37,559	)	(1)		170,014
Depreciation and amortization		—			48,341			—				48,341
Other operating costs		42,398			217,647			(42,398	)	(1)		217,647
Loss on store closing and business casualty		—			201,567			—				201,567
Total Operating Expenses		209,199			2,020,086			(209,199	)			2,020,086
OPERATING (LOSS)		(219,670	)		(1,212,610	)		219,670				(1,212,610	)
OTHER INCOME (EXPENSE)
Other income		5,544			—			(5,544	)	(1)		—
Interest expense		(25,195	)		(54,045	)		20,195		(1)(2)		(31,045	)
								28,000		(4)
Total Other (Expense)		(19,651	)		(54,045	)		14,651				(31,045	)
NET LOSS	$	(239,321	)	$	(1,266,655	)	$	234,321			$	(1,243,655	)
Pro forma Basic and Diluted Net Loss per Common Share	$	(0.03	)								$	(0.04	)
Proforma Weighted Average Number of Common Shares
Outstanding		8,902,194										35,402,194

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USIP.Com, INC. and Subsidiaries
Unaudited Pro forma Consolidated Statement of Operations
For the Year Ended December 31, 2003

	USIP.COM, INC.			Cornerstone Services Group, Inc. and Subsidiaries			Carepharm, Inc. and Diversacare, Inc.			LaPorte Apothecary, Inc.			Other Pro forma Adjustments					Pro forma
							(Six Months Ended 6/30/03)				(Six Months Ended 6/30/03)
					(1)			(1) (3)			(1) (3)
NET SALES	$	670,381		$	2,556,902		$	1,574,121		$	870,334		$	(670,381	)	(1)	$	5,001,357
COST OF SALES		509,311			1,586,691			922,728			493,054			(509,311	)	(1)		3,002,473
GROSS PROFIT		161,070			970,211			651,393			377,280			(161,070	)			1,998,884
OPERATING EXPENSES
Compensation costs and related benefits		200,200			1,161,236			430,358			263,917			(200,200	)	(1)		1,855,511
Occupancy costs		69,595			154,304			69,762			64,445			(69,595	)	(1)		288,511
Professional fees		55,466			148,780			—			—			(55,466	)	(1)		148,780
Depreciation and amortization		—			53,145			18,582			5,546			26,406		(3)		103,679
Other operating costs		93,465			62,578			179,934			78,153			(93,465	)	(1)		320,665
Impairment loss		—			—			113,197			—			—				113,197
Total Operating Expenses		418,726			1,580,043			811,833			412,061			(392,320	)			2,830,343
OPERATING (LOSS)		(257,656	)		(609,832	)		(160,440	)		(34,781	)		231,250				(831,459	)
OTHER INCOME (EXPENSE)
Other income		6,871			—			2,742			—			(6,871	)	(1)		2,742
Interest expense		(49,288	)		(84,977	)		(9,965	)		(12,022	)		39,288		(1)(2)		(78,964	)
														38,000		(4)
Other expenses		—			(10,100	)		—			—			—				(10,100	)
Total Other (Expense)		(42,417	)		(95,077	)		(7,223	)		(12,022	)		70,417				(86,322	)
NET LOSS BEFORE INCOME TAXES		(300,073	)		(704,909	)		(167,663	)		(46,803	)		301,667				(917,781	)
Income tax expense (benefit)		8,187			—			(15,000	)		—			6,813		(1)		—
NET LOSS	$	(308,260	)	$	(704,909	)	$	(152,663	)	$	(46,803	)	$	294,854			$	(917,781	)
Pro forma Basic and Diluted Net Loss per
Common Share	$	(0.03	)														$	(0.03	)
Pro forma Weighted Average Number of Common
Shares Outstanding		8,902,194																35,402,194

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USIP.COM.INC. AND SUBSIDIARIES

Notes to Unaudited Pro forma Consolidated Financial Statements

Overview

The unaudited pro forma consolidated financial statements presented assume that all of the matters included in this proxy filing are approved by our shareholders.

NOTE 1 - Merger of Cornerstone

1. Effective with the approval of our shareholders and the filing of our amended articles of incorporation:

a)	We will sell our telecom subsidiaries for a purchase price equal to all of our liabilities, except for $100,000. The carrying value of our telecom assets totals $591,154 as of June 30, 2004 and our liabilities total $924,414 as of June 30, 2004. As a result of this proposed sale, our pro forma gain will amount to $233,260 [($924,414 - $100,000) = $824,414 - $591,154]. Accordingly, our pro forma balance sheet and pro forma statements of operations have been adjusted to remove the assets and liabilities, revenues and expenses related to the telecom subsidiaries.
b)	Cornerstone will merge with us and we will issue to the shareholders of Cornerstone 26,500,000 of our post-split common shares, or approximately 75% of our equity interests. After this merger, the shareholders of Cornerstone will control us, including controlling our board of directors. This merger will be accounted for as a reverse merger, under which Cornerstone will be deemed to have acquired us after our sale of our telecom subsidiaries.
c)	We will change our name to Cornerstone Services Group, Inc.

2.	As discussed in pro forma Note 1a, $100,000 of our interest-bearing debt will remain with us after the sale of our telecom subsidiaries. Accordingly, the pro forma interest expense related to this debt for the year ended December 31, 2003 and the six months ended June 30, 2004 amounts to $10,000 and $5,000, respectively.
3.	Effective July 1, 2003, Cornerstone acquired LaPorte and the Diversacare/Carepharm Group. The consolidated financial statements of Cornerstone for the year ended December 31, 2003 include the results of LaPorte and Diversacare/Carepharm for the six month-period ended December 31, 2003. Accordingly, we added the operating results of LaPorte and Diversacare/Carepharm for the six-month period ended June 30, 2003 to arrive at the combined pro forma operating results for the year ended December 31, 2003.
	In addition, our pro forma statement of operations for the year ended December 31, 2003 includes a $26,406 increase in the amortization expense related to the intangible assets acquired in the LaPorte and Diversacare/Carepharm acquisitions.
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4.	Concurrent with the Cornerstone merger, Cornerstone’s convertible debentures of $628,900 and related accrued interest will be automatically converted to shares of our common stock. These shares are included in the 26,500,000 post-split shares to be issued pursuant to the Cornerstone merger.
	Interest expense related to the convertible debentures included in Cornerstone’s statements of operations for the year ended December 31, 2003 and the six months ended June 30, 2004 was $38,000 and $28,000, respectively.
5.	Our articles of incorporation will be amended to: (i) increase our authorized common shares to 250,000,000 and our par value will be changed to $.0001 per share; (ii) to authorize 250,000,000 shares of preferred stock and (iii) to authorize a 1-for-2 reverse-split of our common stock.
	Our pro forma common shares outstanding after our merger with Cornerstone will total 35,402,194 after our reverse stock-split.
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