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

                                    FORM 10-K

               [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                            PAVING STONE CORPORATION
             (Exact name of registrant as specified in its charter)

         NEVADA                     000-30051                  88-0443120
(State of incorporation)      (Commission File No.)     (I.R.S. Employer ID No.)

                  1760 N.W. 22ND COURT, POMPANO BEACH, FL 33069
                    (Address of principal executive offices)

                                 (954) 971-3235
                         (Registrant's telephone number)

                            COTTAGE INVESTMENTS, INC.
                           (Registrant's Former Name)

Securities registered pursuant to Section 12(b) of the Act:

            TITLE OF EACH CLASS    NAME OF EACH EXCHANGE ON WHICH REGISTERED
---------------------------------- -----------------------------------------
                    None                             None

Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $0.0001 PER SHARE
                   ------------------------------------------
                                (Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of the Registrant's  knowledge,  in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [ ] No [X]

State issuer's revenues for its most recent fiscal year (year ended December 31,
2002): $13,080,344.

Based on the final  closing  price on December 31, 2002,  the  aggregate  market
value of the voting and non-voting  common equity held by  non-affiliates of the
Registrant was approximately $13,874,012.

At May 1, 2003,  28,726,082 shares of the Registrant's  common stock were issued
and outstanding.

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act.)  [] Yes [X] No

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                                     PART I


                           FORWARD LOOKING STATEMENTS

         THIS FILING CONTAINS FORWARD-LOOKING  STATEMENTS,  INCLUDING STATEMENTS
REGARDING,  AMONG OTHER THINGS: (A) OUR PROJECTED SALES AND  PROFITABILITY,  (B)
OUR GROWTH STRATEGIES,  (C) ANTICIPATED  TRENDS IN OUR INDUSTRY,  (D) OUR FUTURE
FINANCING PLANS, AND (E) OUR ANTICIPATED NEEDS FOR WORKING CAPITAL. IN ADDITION,
WHEN USED IN THIS FILING,  THE WORDS "BELIEVES,"  "ANTICIPATES,"  "INTENDS," "IN
ANTICIPATION  OF," "EXPECTS," AND SIMILAR WORDS ARE INTENDED TO IDENTIFY CERTAIN
FORWARD-LOOKING  STATEMENTS.  THESE FORWARD-LOOKING STATEMENTS ARE BASED LARGELY
ON OUR EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES, MANY
OF WHICH ARE BEYOND OUR CONTROL.  ACTUAL  RESULTS COULD DIFFER  MATERIALLY  FROM
THESE  FORWARD-LOOKING  STATEMENTS  AS A RESULT OF VARIOUS  FACTORS,  INCLUDING,
WITHOUT LIMITATION, THE RISKS OUTLINED UNDER "CERTAIN BUSINESS RISK FACTORS" AND
MATTERS  DESCRIBED  IN THIS  FILING  GENERALLY.  IN  LIGHT OF  THESE  RISKS  AND
UNCERTAINTIES,  THERE CAN BE NO ASSURANCE  THAT THE  FORWARD-LOOKING  STATEMENTS
CONTAINED IN THIS FILING WILL IN FACT OCCUR.


ITEM 1.  DESCRIPTION OF BUSINESS

         On July 22, 1999,  the Company was  incorporated  under the laws of the
State of Nevada  under the name Power  Save  International,  Inc.  On August 26,
1999, the Company changed its name to Interactive Music, Inc.

         In the  Fall of  1999,  the  Company  decided  to  focus on the sale of
consumer goods through the Internet.  On December 15, 1999, the Company acquired
zebramart.com,  Inc., a Georgia  corporation,  for 300,000,000  shares of common
stock in a pooling of interests  transaction.  On December 22, 1999, the Company
changed its name to zebramart.com, Inc.

         On March 6, 2000,  the Company  acquired  Royal  Acquisitions,  Inc., a
Nevada  Corporation,  for $200,000  and  2,000,000  restricted  shares of common
stock. The transaction was recorded as a purchase.

         On May 24, 2000, the Company acquired MyFavoriteShoe.com, Inc. ("MFS"),
an Internet shoe company,  for 60,232,519 shares of common stock in a pooling of
interests  transaction.  On  September  8,  2000,  MFS  sold its  Internet  shoe
operations  for  consideration  that included cash and the assumption of certain
liabilities.  Assets that were sold  included  inventory and various MFS records
and intellectual property.

         On September 13, 2000, the Company  purchased a 30% interest in Cottage
Ventures, LLC, for 30,000,000 reverse split adjusted shares of common stock. The
Company  remained in the  development  stage since its activities from inception
were  primarily  start-up  operations in nature,  with no  significant  revenues
generated.  The  development  strategy  was  focused on  acquiring  and  growing
companies that had the potential to become leaders in their respective fields.

         During 2001,  the Company  announced that it had changed its core focus
from  Internet  related  ventures  to  become  a  communications  infrastructure
company.  To  accomplish  this end,  the Company  divested  itself of all of its
operating subsidiaries.  The Company had no business operations remaining by the
Fall of 2001.

         On October 11, 2001, the Company entered into an Agreement and Plan of
Reorganization  (the  "Agreement")  to acquire  (the  "Acquisition")  all of the
issued and  outstanding  common stock of five  companies  in the concrete  paver
installation,  design and marketing  industry.  The five companies  included The
Paving Stone Co.,  Inc.,  a Florida  corporation,  The Paving  Stone  Company of
California, Inc., a California corporation, The Paving Stone Company of Arizona,
Inc.,  an  Arizona   corporation,   Paving  Stone  of  Nevada,  Inc.,  a  Nevada
corporation,  and Paving Stone Company of Atlanta,  Inc., a Georgia  corporation
(collectively, the "Paving Stone Companies").

         Each of the  entities  comprising  the Paving  Stone  Companies  had
its headquarters in Pompano Beach,  Florida,  and was solely owned by Maurice F.
Sigouin.  Mr.  Sigouin  founded the first of the five  companies,  which was The
Paving Stone Co., Inc. of Florida,  in Pompano Beach,  Florida in 1990. By 2001,
the five companies had seventeen offices in eight states.


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         Under the  Agreement,  the  Company  was to acquire  the  Paving  Stone
Companies  for a total  of  20,000,000  shares  of its  common  stock,  of which
16,040,000  shares would be issued to Mr. Sigouin,  the sole  shareholder of the
Paving Stone  Companies;  1,320,000  shares would be issued to Jace Simmons,  an
officer of the Paving Stone  Companies;  and 2,640,000 shares would be issued to
consultants  providing  services to the Paving Stone Companies  before and after
the  transaction.  In exchange,  Mr.  Sigouin  exchanged all of the  outstanding
common  shares of the five Paving Stone  Companies.  The Paving Stone  Companies
also were required to pay cash in the amount of $30,000, which was to be used to
pay off existing liabilities of the Company.

         The Acquisition was contingent a number of events,  including,  without
limitation,  the  successful  completion  of due  diligence  by both sides,  the
settlement or  satisfaction  of all  liabilities of COTF, the  effectuation of a
reverse stock split of the common stock of the Company's common stock sufficient
to reduce  the  number  of  issued  and  outstanding  shares of common  stock to
approximately 2,000,000, and the receipt of all necessary approvals to amend the
Articles of Incorporation to increase the number of authorized  shares of common
stock  to  150,000,000,  and to  change  the  Company's  name to  "Paving  Stone
Corporation."  The  Company  obtained  the  necessary  approvals,  and  filed an
information  statement with the  Securities and Exchange  Commission on Schedule
14C in November 2001. On December 17, 2001, the  Acquisition  closed,  causing a
change in control of the  Company.  After the  Company's  charter was amended to
change the Company's  name to Paving Stone  Corporation,  the trading symbol for
the Company's common stock was changed from "COTF" to "PVNG."

         In connection with the Acquisition,  Daniel J. Mackell and Sean M. Daly
resigned  from the Board of  Directors.  Mr.  Sigouin was elected a director and
Chairman of the Board of Directors  and Mr.  Simmons was elected a director.  In
August 2002,  Jack Hight,  John Zeeman and Richard  Tilghman  were  appointed as
outside  members of the Board of  Directors,  bringing the total  members of the
Board of Directors to five.

         The  Acquisition  was  treated  for  accounting  purposes as a purchase
by  the  Paving  Stone  Companies  and  a reverse merger and recapitalization of
Paving  Stone  Corporation.  The  Company acts as a holding company. Each of the
Paving  Stone  Companies is a wholly-owned, operating subsidiary of Paving Stone
Corporation.

         The Paving Stone Corporation, through its subsidiaries,  engages in the
business of marketing and installing  concrete,  interlocking pavers. It designs
and  installs  pavers in both commercial and residential markets. Competition is
fragmented  and  largely  made  of  small  local  installers.

         Pavers are interlocking bricks used in driveways,  pool decks, gardens,
and retaining walls.  Larger commercial  applications  include office buildings,
high-rises, hotels, ports, sports complexes, streets, and even airport runways.
Pavers are manufactured all over the country by primarily a limited number of
suppliers.

         Made  in  a  range  of  styles,   designs  and  colors,  pavers  create
decorative,  appealing,  durable,  and  environmentally  sound ground coverings.
Pavers offer many pragmatic,  economic, and aesthetic benefits,  especially when
compared with  alternative  landscape  architecture  products,  such as concrete
pavement,  clay, asphalt,  stone, or traditional bricks. Able to bear tremendous
weight and pressure,  pavers are strong, durable, and weather resistant.  Pavers
have  wide-ranging   decorative  uses,  creating   beautifully  designed  homes,
landscapes,  and commercial areas. Environmental advantages can be obtained from
the use of pavers,  as they permit  water  drainage and  recycling.  If desired,
paving  systems can be installed in a manner that permits  perculation  of water
between pavers, allowing water to return to the ground.

         The  Company  has won  awards  for the  quality  of its  work  from the
nonprofit  trade   organization,   Interlocking   Concrete  Pavement  Institute.
Manufacturing  companies,  home improvement resellers,  and large, publicly held
general  contractors,  have  recommended  the Company for  installation of large
commercial and individual residential projects involving interlocking pavers.

         Established a decade ago with two  employees,  the Company has grown to
approximately  sixty employees located in ten offices  nationwide.  The Company
operates in Alabama,  Arizona,  California,  Georgia,  Nevada,  South  Carolina,
Tennessee and Texas.

         Beginning in December 2002,  after careful  evaluation of  year-to-date
results,  the Company decided to cease operations in Florida and New England, as
it  believes  these  to  be  unprofitable  markets at this time. This downsizing
occurred throughout the first quarter of 2003. The Company also consolidated its
three  California  expansion  offices  into one central office, to reduce costs.

         Going  forward, the Company intends to focus on our more  profitable
markets around the country and  intends  to  continue to expand in selected
areas.

         The  Company  does  not  intend  to  send  an  annual   report  to  its
shareholders  for the year ended  December 31,  2002.  It has filed all required
reports on Forms 10-Q and 8-K for the years ended  December 31,  2000,  2001 and
2002.  The public may read and copy any materials  filed with the Securities and
Exchange  Commission at the agency's Public  Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. The public may obtain information on the operation
of the Public  Reference Room by calling the Securities and Exchange  Commission
at  1-800-SEC-0330.  The SEC  maintains  an  Internet  site  that  contains  the
Company's  reports,  proxy  and  information   statements,   filings  and  other
information at http://www.sec.gov.

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RISK FACTORS

         The  Company  is subject  to  various  risks  which may have a material
adverse effect on its business,  financial  condition and results of operations,
and may  result in a decline in our stock  price.  Certain  risks are  discussed
below:


         THE COMPANY HAS BEEN AND CONTINUES TO BE SUBJECT TO A WORKING CAPITAL
DEFICIT AND ACCUMULATED DEFICIT.

     The  Company had a working capital deficit of approximately $4.9 million at
December 31, 2002. The Company had an accumulated deficit of approximately $12.2
million  and  approximately  $5.2  million  at  December  31,  2002  and  2001,
respectively.  The Company's ability to obtain additional funding will determine
its  ability  to  continue  as  a  going  concern.  Accordingly, the Company may
experience  significant  liquidity  and  cash flow problems if it is not able to
raise additional capital as needed and on acceptable terms. No assurances can be
given  that the Company will be successful in reaching or maintaining profitable
operations.

         THE COMPANY HAS BEEN THE SUBJECT OF A GOING CONCERN OPINION FROM OUR
INDEPENDENT AUDITORS.

         The Company's  independent auditors have added an explanatory paragraph
to their audit opinion issued in connection  with the 2002 financial  statements
which  states that our Company is  dependent  on outside  financing  and has had
losses in prior years that raise substantial doubt about its ability to continue
as a going  concern.  The  Company's  financial  statements  do not  include any
adjustments that might result from the outcome of this uncertainty.


         THE COMPANY HAS HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE
FUTURE.

         The Company has  historically  lost money in prior years.  For the year
ended  December  31,  2002,  the  Company  had  a net loss of approximately $6.9
million.  For  the year ended December 31, 2001, the Company sustained losses of
approximately  $5.7  million.  Future  losses are likely to occur. The Company's
independent  auditors  have noted that our Company may not have significant cash
or  other  material  assets  to  cover  its  operating  costs and to allow it to
continue  as a going concern. The Company's ability to obtain additional funding
will  determine  its  ability  to  continue as a going concern. Accordingly, the
Company may experience significant liquidity and cash flow problems if it is not
able  to  raise  additional  capital  as  needed  and  on  acceptable  terms. No
assurances  can  be  given  that  the  Company will be successful in reaching or
maintaining  profitable  operations.


         THE COMPANY FACES THE RISK OF DEFAULT OF DEBT OBLIGATIONS AND NEGATIVE
IMPACTS OF RESTRICTIVE COVENANTS.

         The Company  has  certain  debt  obligations.  These  include a line of
credit with a major  institutional  lender and loans from the senior  officer of
the Company, in addition to vendor financing and accounts payable.  Certain debt
obligations  may not  permit  subordination  to  other  obligations,  and  other
creditors may not be  subordinate  to any debt or equity offered by the Company.
In the event the  Company is unable to repay its debt  obligations,  the Company
may be forced to reduce or cease operations.


         THE COMPANY'S LIMITED NATIONWIDE OPERATING HISTORY MAKES EVALUATION OF
BUSINESS AND PROSPECTS DIFFICULT.

         The Company has been in business for more than a decade, but has only a
limited  operating  history on a  nationwide  basis.  This  limits the amount of
information  upon which  investors  can  evaluate  the  Company's  business  and
prospects.  The Company  also has limited  experience  operating  outside of its
initial,  core  markets in  Florida,  which make the  experience  to date a poor
indicator  of  future   performance   or  the  ability  to  evaluate   expansion
opportunities  or new markets.  The Company  cannot give  assurance that it will
generate  sufficient  revenues  to  fund  its  operations  or  that  it  will be
profitable at such level of  operations.  The  Company's  business and prospects
must  be  considered  in  light  of  the  risks,  uncertainties,   expenses  and
difficulties  frequently  encountered  by  companies  in their  early  stages of
development, particularly companies in new and rapidly evolving markets.


         THE COMPANY WILL NEED ADDITIONAL FINANCING FOR FUTURE CAPITAL NEEDS,
WHICH MAY NOT BE AVAILABLE ON FAVORABLE TERMS, IF AT ALL.

         The Company's  capital  requirements  in connection with conducting its
business,  as well as its growth and marketing activities,  are significant.  To
date, the Company has experienced cash flow difficulties. These result primarily
from the industry wide practice of long delays in receiving payment from general
contractors  who contract  with  installers as  subcontractors  on commercial or
residential home building projects.


                                       4
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         If financing  does not become  available on favorable  terms,  then the
Company will not have adequate funds to fulfill its long-term  strategic  plans.
The Company may conduct  placements of its securities to fund its business plan,
including the  satisfaction  of outstanding  debt and  establishing a merger and
acquisition  program.  There  can be no  assurance  that any  offerings  will be
successful or that the Company may not in the future require  additional funding
to continue  operations.  As a result, the Company may be required to modify its
strategic plan, curtail operations, limit expansion, or obtain funds by entering
into unfavorable  arrangements  with  collaborative  partners or others that may
require it to  relinquish  rights,  including,  without  limitation,  to certain
assets or to  control  over the  Company's  management  or  stock.  Furthermore,
additional  financing  efforts  may result in dilution  of equity  positions  or
subordination of debt positions and increased  numbers of creditors in the event
of  liquidation.  The Company cannot grant assurance that it will have access to
the capital markets in the future,  or that financing will be available to it on
acceptable terms to satisfy its cash requirements. If it cannot obtain necessary
capital,  its business and financial  condition will be materially and adversely
affected.


         THE COMPANY MAY NOT BE ABLE TO MANAGE ITS EXPANSION GROWTH PLAN.

         For the Company to meet its strategic and business plans, it would need
to experience  growth in the size and  geographic  scope of its  operations  and
business and would need to develop a substantially  larger customer base.  These
activities  can be  expected  to place a  significant  strain  on the  Company's
current management,  operations and capital resources. The Company's growth will
require it to attract, motivate and retain highly skilled managerial,  sales and
marketing  personnel,  or to  outsource  such  needs.  It will also  require the
Company to enhance its financial and managerial  controls and reporting systems.
There is no  assurance  that  the  Company  will be able to  manage  its  growth
effectively or be able to attract and retain the necessary personnel to meet its
business challenges.


         THE COMPANY MAY NOT BE ABLE TO MANAGE ITS EXPANDING OPERATIONS
EFFECTIVELY.

         The  Company  has  recently  experienced,  and  hopes  to  continue  to
experience,  rapid geographic  expansion.  However, it has limited experience in
deploying  its  services  in new  geographic  or vertical  markets to date.  The
Company  can  give no  assurance  that it will  have  the  ability  to  manage a
substantially   larger  number  of  customers,   employees  and   operations  in
geographically expansive areas and vertically  differentiated industries or that
it will be able to maintain adequate operational controls or experience positive
financial  results.  In  addition,  rapid  growth is likely to place a strain on
managerial, operational and financial resources.

         To attempt to accommodate this growth,  the Company must accomplish the
following, among other things: implement new or upgraded operating and financial
systems, procedures and controls in multiple locations; expand customer service,
billing and other related support systems;  devise and implement new advertising
and marketing campaigns; and obtain sufficient resources and additional capital.
This is not a  comprehensive  list.  The  Company  may not  succeed  with  these
efforts.  Its failure to  accomplish  these goals in an  efficient  manner could
cause  expenses  to grow and  revenues  to  decline  or grow  more  slowly  than
expected,  and could  otherwise have a material  adverse effect on the Company's
business, financial condition and results of operations.


         THE COMPANY MAY HAVE DIFFICULTY IDENTIFYING AND FINANCING SUITABLE
ACQUISITIONS,  MERGERS, JOINT VENTURES,  STRATEGIC ALLIANCES,  OR OTHER BUSINESS
COMBINATIONS, WHICH MAY ADVERSELY AFFECT OPERATING AND FINANCIAL RESULTS.

         As  part  of its  business  strategy,  the  Company  reviews  potential
business  combinations,  acquisitions,  mergers,  joint  ventures and  strategic
alliances, which may complement or expand existing business,  increase revenues,
create operational  efficiencies,  or open new markets for sale of the Company's
products and  services.  To date,  the Company has not entered into any business
combinations   (other  than  the  acquisition,   in  which  the  five  operating
subsidiaries  were  acquired in December  2001).  Therefore,  the Company  lacks
experience in conducting business combinations,  including,  without limitation,
mergers and acquisitions.

         Furthermore,  the  Company  may  not be able  to  identify  appropriate
business  combinations,  acquisitions,  mergers,  joint  ventures,  or strategic
alliances. It also may not be able to finance proposed transactions successfully
once  identified.  There  can be no  assurance  that the  Company  will have the
experience or capability to assess  potential  acquisition or merger  candidates
properly, negotiate effectively with acquisition or merger targets, complete any
proposed business  combinations,  or integrate  acquisition or merger candidates
effectively.  Any failure to identify,  finance, close or successfully integrate
future  transactions may impede the Company's growth and have a material adverse
effect on the Company's business, financial condition and results of operations.

         Any  acquisitions,  if  completed,  will  likely  encounter  the  risks
commonly  experienced  during  business  combinations,  such as:  difficulty  in

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integrating operations and personnel, potential business disruption;  assumption
of unexpected  liabilities;  the imposition and maintenance of common standards,
controls,  procedures  and policies;  and the impairment of  relationships  with
employees and customers as a result of difficulties  arising out of integration.
Furthermore, the value of any business acquired may be less than the amount paid
for it if, for example,  there is a decline in the position of that  business in
the  relevant  market in which it  operates or there is a decline in that market
generally.

         The Company may encounter  difficulties  in  implementing  its business
strategy of growth through expansion and business combinations. It also seeks to
continue to shift its mix of products and services from commercial  installation
of pavers in Florida to the installation of pavers in other  geographic  regions
and  marketplaces,  with a greater  concentration  on residential  services.  In
addition, the Company may eventually engage in a vertical integration within its
industry.  Implementation  of this  strategy  will  depend in large  part on the
Company's  ability to finance and manage  growth,  identify  and  integrate  new
markets and acquisition targets properly,  and market the Company's products and
services  successfully.  It will need to: establish a significant  customer base
and maintain  favorable  relationships  with those  customers,  obtain  adequate
financing on favorable  terms;  establish and maintain  appropriate  procedures,
policies,  and systems;  hire or engage, train, and retain skilled employees and
laborers;  and  foresee  and  implement  strategies  to  deal  effectively  with
competition.  If the Company is unable to achieve any or all of these goals,  it
will not be able to implement its business strategy, which would have a material
adverse effect on its results of operations and financial condition.


         THE COMPANY DEPENDS HEAVILY ON ITS KEY PERSONNEL, AND THE INABILITY TO
RETAIN THEM WILL ADVERSELY AFFECT THE BUSINESS OF THE COMPANY.

         The  Company's  success  depends on the continued  availability  of its
senior management team,  particularly  Maurice Sigouin,  the Company's  Founder,
President,  Chief Executive Officer, and Chairman of the Board of Directors. The
Company has an employment agreement with Mr. Sigouin. The loss of Mr. Sigouin or
any other key employees  would have a material  adverse  effect on the Company's
business  and  prospects.  During the  pendency  of any  search to  replace  key
employees,  the Company will likely suffer  operationally  and financially.  The
Company does not maintain  reserves to protect against any financial loss in the
event of the loss of a key employee.  Furthermore, the Company does not maintain
key man life insurance with respect to any of its executive employees.


         THE COMPANY MAY NOT BE ABLE TO ATTRACT A SUFFICIENT NUMBER OF
PROFICIENT PAVER INSTALLERS AND OTHER SKILLED LABORERS.

         For the Company to meet is strategic and business  plans,  it will need
to experience  growth in the size and  geographic  scope of its  operations  and
business.  The Company's growth will require it to attract,  motivate and retain
highly  skilled  laborers to install  pavers,  or to engage  sufficient  outside
contractors  to meet these needs.  Many  competitors  have faced and continue to
experience  a lack of  sufficient  skilled  laborers.  The Company  cannot grant
assurance  that it will have access to sufficient  skilled  laborers in a timely
fashion,  or at an  acceptable  price,  if at all.  While  the  Company  has not
experienced any such difficulties to date, the lack of sufficient  skilled labor
would  impede the  ability of the  Company to conduct  operations  and  generate
revenues.


         THE COMPANY MAY BE UNABLE TO OBTAIN PRODUCT FOR INSTALLATION WORK FROM
SUPPLIERS, CAUSING AN INABILITY TO PRODUCE REVENUE AND POTENTIAL CLIENT
LITIGATION.

         The  Company  requires  a high  volume  of  quality  products  that are
procured from, and assembled by, third party suppliers.  The Company's  reliance
on suppliers,  as well as industry supply conditions generally,  involves risks,
including the possibility of defective product,  shortage of product,  increases
in costs and reduced control over delivery schedules,  any or all of which could
adversely affect the Company's financial results.  Freight costs for heavy paver
materials  also impact the choice of  supplier.  Occasionally,  products  may be
subject to allocations  and the Company may  experience  difficulty in obtaining
sufficient  quantities of such products.  In some cases,  alternative sources of
supply  may  not  be  readily  available.  Where  alternative  sources  are  not
available,  qualification  of the  alternative  suppliers and  establishment  of
reliable supplies could result in delays. The lack of availability of timely and
reliable  supply of  products  from these  sources  could  adversely  affect the
Company's  business.  In other  cases,  the  Company  may  establish  a  working
relationship with a single source,  even when multiple  suppliers are available,
if it believes it is advantageous to do so due to performance, quality, support,
delivery,  capacity,  location,  or price  considerations.  The  Company,  where
applicable, relies on one supplier of certain product lines, based upon location
and contractual obligations.

         Based on these  factors,  there can be no assurance  that all necessary
products will be readily available or available at suitable prices.  The Company
can provide no  assurance  it will not suffer any  business  disruption  from an
inability to obtain  necessary  supplies in a cost  efficient and timely manner.
The interruption in supply  availability could have a material adverse effect on
the Company's reputation, financial condition and operations.


                                       6
<PAGE>

         THE COMPANY MAY NOT BE ABLE TO COLLECT ACCOUNTS RECEIVABLE OR MAY
RETAIN INADEQUATE RESERVES FOR BAD DEBT.

         The  Company  faces a risk that it will be unable to  collect  accounts
receivable from its clients.  Certain  receivables  from general  contractors on
commercial  projects  occasionally  become  difficult to collect due to industry
wide delays that filter down to the  subcontractor  level. The Company faces the
risk  that  its  reserves  for bad  debt  will not be  sufficient,  which  would
negatively  impact  its  financial  condition.  In the  past,  the  Company  has
experienced  a need to adjust bad debt  reserves and  institute  collection  and
reserve  policies.  There can be no  assurance  that the Company will be able to
collect  its  accounts   receivable   or  predict   accurately   the  levels  of
uncollectible receivables to permit it to reserve adequately, which could have a
material  adverse  impact  on the  financial  statements  and  condition  of the
Company.


         THE COMPANY AND ITS SHAREHOLDERS FACE RISKS ASSOCIATED WITH
CONCENTRATION OF OWNERSHIP BY MANAGEMENT.

         Control of the common stock of the Company and associated voting rights
are concentrated in the hands of Maurice  Sigouin,  the Chairman of the Board of
Directors, Chief Executive Officer, and President of the Company. Management and
the  majority  of the  directors  of the  Company  may face the risk of having a
conflict of interest. There can be no assurance that shareholders of the Company
will  not be  negatively  affected  by the  concentration  of  ownership  of the
Company's common stock by the management and directors of the Company.


         THE COMPANY HAS NOT AND MAY NOT PAY DIVIDENDS TO SHAREHOLDERS.

         The Company has not paid  dividends to  shareholders  in the past.  The
Company intends to retain future earnings,  if any, for corporate purposes,  and
does not anticipate  declaring or paying any cash  dividends in the  foreseeable
future. Accordingly,  there is no assurance that any dividends will ever be paid
by the Company.


         THE COMPANY COULD FACE CLAIMS OF PRODUCT LIABILITY, PERSONAL INJURY OR
OTHER LEGAL CLAIMS.

         In  conducting  its  business,  the  Company  faces the  typical  risks
involved in construction-oriented  businesses.  These risks include, but are not
limited  to, the  potential  for product  damage,  personal  injury,  automobile
accidents,  breaches of contract,  and other legal issues. The Company maintains
product liability and automobile  insurance.  There can be no assurance that the
Company will be able to obtain or maintain  insurance on  acceptable  terms such
that any insurance will provide adequate coverage against potential liabilities.
A loss of insurance coverage or the assertion of a product liability claim would
likely materially  adversely affect the Company's business,  financial condition
and results of operations.


         COMPETITION COULD IMPAIR THE COMPANY'S FINANCIAL CONDITION AND
OPERATIONS.

         Competition in the construction  industry is intense.  Within the paver
installation  business,  the  Company  has  experienced  intense  competition,
affecting margins negatively. Competition may become more intense as a result of
the  introduction  of  new  competitors,  consolidation,  price discounting, and
possibly  weakening  demand.  Furthermore,  to compete successfully, the Company
must  attract  and retain a sufficient number of management, sales and technical
personnel  with  high levels of relevant skills and meaningful experience. There
can  be  no  assurance  that  the  Company  will  be  able to attract and retain
sufficient  numbers  of  personnel as the need for such employees increases with
the  Company's  anticipated  growth, or maintain or improve its current position
with  respect  to  any  of  these  or  other  competitive  factors.

         In addition,  many potential  competitors  have  significantly  greater
financial,  technical,  marketing  and  other  resources  than the  Company.  No
assurance can be made that current  and/or future  competitors  will not provide
products or  services  that could be more  attractive  to  consumers  than those
provided  by the  Company  or that  the  Company  we  will  be  able to  respond
adequately  to  competitive  challenges.  If the  Company  is unable to  respond
adequately to  competitive  challenges  or establish a  sustainable  competitive
advantage, it may lose market share or be forced to lower prices to unprofitable
levels.


         NEW LAWS AND REGULATIONS COULD NEGATIVELY IMPACT THE INDUSTRY, CAUSING
INCREASED COSTS AND DECREASED OPPORTUNITIES TO EARN REVENUE.

         The Company may face limits on its ability to conduct its  business due
to  legal  and  regulatory  constraints.   These  include,  without  limitation,
securities,  environmental,  labor,  and  antitrust  regulation.  The  impact of
regulatory  scrutiny or constraints  could negatively  impair existing or future
business.


                                       7
<PAGE>


         THE COMPANY'S STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY
FLUCTUATE SIGNIFICANTLY.

         The  market  price  for  the  Company's   common  stock  may  fluctuate
significantly  in  response  to a  variety  of  influences,  including,  without
limitation:  variations  in quarterly  operating  results;  changes in financial
estimates by securities analysts;  changes in market valuation of competitors or
perceived competitors;  changes in market valuation of companies in the concrete
paver  or  architectural  landscape  and  design  industries;  announcements  of
significant contracts,  acquisitions,  strategic partnerships, joint ventures or
capital  commitments;  additions or  departures of key  personnel;  sales of the
Company's  securities,  including  short sales, or termination of stock transfer
restrictions;  and fluctuations in trading volume, which are particularly common
among companies  listed on the  Over-the-Counter  Bulletin Board.  These factors
have a negative impact on the liquidity and sales price of the Company's  common
stock.  The Company  cannot grant any  assurance  that its common stock will not
suffer  extreme  price  fluctuations,  or steep  declines in  liquidity or stock
price,  nor can there be  assurance  that the  Company's  stock will achieve the
necessary volume or liquidity to permit ready sales at acceptable price levels.


         SALES OF THE COMPANY'S COMMON STOCK IN THE PUBLIC MARKET COULD IMPAIR
THE ABILITY TO COMPLETE SUCCESSFUL FINANCING EFFORTS.

         The sale of shares of the  Company's  common stock in the public market
could cause a reduction  in the market price of its common  stock.  In addition,
there is a limited  trading  market  for the  Company's  common  stock,  and the
Company has traded under the current name only since December 17, 2001. Eventual
sales by  stockholders  of the Company's  common stock in the public market once
transfer   restrictions  are  lifted  could  materially   adversely  affect  the
prevailing market price for the Company's common stock. The sale or availability
for sale of substantial  amounts of the Company's  common stock could  adversely
affect the market  demand and price for the common  stock.  In  addition  to the
number of shares of common stock currently  outstanding,  which may be available
for  future  resale,  the  existence  of  a  substantial  number  of  derivative
securities,  such as options or warrants,  may also adversely  affect the market
demand and price for the Company's common stock.


         AN INVESTMENT IN THE COMPANY IS SPECULATIVE AND INVESTORS COULD LOSE
THEIR ENTIRE INVESTMENT IN THE COMPANY.

         An investment in the Company must be  considered to be  speculative  in
nature.  The Company  cannot give assurance that investors will realize a return
on their investment or that its  stockholders  will not lose a portion or all of
their  investments  in the  Company.  In the event that the Company is forced to
dissolve or commence insolvency  proceedings,  any proceeds from the liquidation
of assets will be distributed to stockholders only after the satisfaction of the
claims of creditors.  The ability to recover all or any portion of an investment
in the Company's  capital stock would depend upon the amount of the  dissolution
proceeds.


         THE COMPANY'S COMMON STOCK IS DEEMED TO BE "PENNY STOCK," WHICH MAY IT
MORE DIFFICULT FOR INVESTORS TO RESELL THEIR SHARES DUE TO SUITABILITY
REQUIREMENTS.

         The  Company's  common stock is deemed to be "penny stock" as that term
is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934.
Penny stocks are stock:

o                 With a price of less than $5.00 per share;

o                 That are not traded on a "recognized" national exchange;

o                 Whose prices are not quoted on the Nasdaq automated  quotation
                  system  (Nasdaq  listed  stock  must still have a price of not
                  less than $5.00 per share); or

o                 In issuers with net tangible assets less than $2.0 million (if
                  the issuer has been in continuous operation for at least three
                  years) or $5.0 million (if in  continuous  operation  for less
                  than three years),  or with average revenues of less than $6.0
                  million for the last three years.

         Broker/dealers   dealing  in  penny  stocks  are  required  to  provide
potential  investors  with a  document  disclosing  the  risks of penny  stocks.
Moreover,  broker/dealers  are required to determine  whether an investment in a


                                       8
<PAGE>

penny  stock  is  a  suitable  investment  for  a  prospective  investor.  These
requirements  may reduce the potential  market for the Company's common stock by
reducing the number of potential investors.  This may make it more difficult for
investors  in our common  stock to sell shares to third  parties or to otherwise
dispose of them. This could cause the Company's stock price to decline.


ITEM 2.  DESCRIPTION OF PROPERTIES

         The Company's  main office is located in Pompano  Beach,  Florida.  The
office  is  occupied  pursuant  to  a  lease  with  monthly  lease  payments  of
approximately  $7,000.  The  Company is party to an  additional  nine leases for
office  space in each of the  primary  branch  locations  in  which it  conducts
operations.


ITEM 3.  LEGAL PROCEEDINGS

         The officers and directors of the Company  believe that, to the best of
their  knowledge,  neither the Company nor any of its officers and/or  directors
are parties to any legal proceeding or litigation.


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

         None.





                                       9
<PAGE>


                                     PART II


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The common stock of the Company has been traded in the Over-the-Counter
Bulletin Board ("OTCBB")  market since September 1999 and is quoted on the OTCBB
maintained by the National  Quotation Bureau,  Inc. under the symbol "PVNG". The
high and low sales prices of the common stock, as traded in the OTCBB market, on
December 31, 2002, were both  approximately  $0.53.  The quarterly range of high
and low prices for the past three years were as follows:

         CALENDAR YEAR                   HIGH BID              LOW BID
         ---------------------------  --------------     --------------
         ENDED DECEMBER 31, 2001*
         1st Quarter                        3.99                  0.93
         2nd Quarter                        1.20                  0.27
         3rd Quarter                        3.86                  0.28
         4th Quarter                        8.65                  0.93
         ENDED DECEMBER 31, 2002
         1st Quarter                        1.20                  0.20
         2nd Quarter                        0.60                  0.20
         3rd Quarter                        0.88                  0.18
         4th Quarter                        0.95                  0.51


*Adjusted  for 133:1  reverse  stock split  effected at the close of business on
December 17, 2001.


         These  prices  are  based  upon  quotations  between  dealers,  without
adjustments for retail mark-ups, markdowns or commissions, and therefore may not
represent actual transactions.

         The Company  paid no  dividends  on its common stock as of December 31,
2002.  The  Company  intends  to retain  earnings  and does not  intend to pay a
dividend on its common stock for the foreseeable  future.  On December 17, 2001,
the  Company  effected a reverse  stock  split in which  every one  hundred  and
thirty-three  (133) shares of common stock was to be exchanged for one (1) share
of common stock of the Company.  Any fractional  shares were to be rounded up to
the nearest whole share.

         Between June 2000 and October 2000, the Company sold in private sales a
total of  5,452,598  shares of common  stock for  total  cash  consideration  of
$327,500.  In the fourth quarter of 2000,  the Company sold 1,021,034  shares of
common  stock  for the  settlement  of debts  and the  purchase  of debts of our
subsidiaries  totaling $207,800.  The Company believed that the stock was exempt
from registration under the Securities Act of 1933, as amended.

         Between June 2000 and October 2000, the Company sold in private sales a
total of 5,452,598  shares of the common stock for total cash  consideration  of
$327,500.  In the fourth quarter of 2000,  the Company sold 1,021,034  shares of
common  stock  for the  settlement  of debts  and the  purchase  of debts of our
subsidiaries  totaling $207,800.  The Company believed that the stock was exempt
from registration under the Securities Act of 1933, as amended.

         During  the  first  quarter  of  2001,  the  Company  issued  8,760,000
pre-split   shares  of  common  stock  to  purchase   $306,929.10   in  debt  of
MyFavoriteShoe.com. The Company also issued 119,953 pre-split shares to settle a
dispute with a former consultant. During the second quarter of 2001, the Company
issued 5,338,933  pre-split shares of common stock to settle accounts payable of
$32,034.  On September 30, 2001 the Company sold 1,700,000  pre-split  shares of
common stock to Stony Point Capital,  LLC, a party unrelated to the Company, for
$50.00 and advisory services. On October 17, 2001, the Company issued 10,107,500
pre-split  shares of common  stock to Joseph J.T.  Carter in a  conversion  of a
convertible  note for $9,000.  Between  November  2001 and  December  2001,  the
Company sold 26,343,483  pre-split  shares of common stock for the settlement of
debts and the purchase of debts totaling $271,852. The Company believed that the
stock was exempt from registration under the Securities Act of 1933, as amended.

                                       10
<PAGE>

         On April 12, 2002, the Company sold four million  (4,000,000) shares of
common  stock  and  warrants  to  purchase  one  and  one  half  million  shares
(1,500,000)  of common  stock,  to an investor,  in exchange  for  consideration
equivalent to one million dollars  ($1,000,000 U.S.D.) The Company believes that
the sale of the common stock was exempt from registration  under Section 4(2) of
the Securities Act of 1933, as amended,  and Rule 506 promulgated  thereunder by
the Securities and Exchange Commission.

         From January to June 2002,  the Company issued 456,500 shares of common
 stock to a  consultant.  These  shares  were  valued  at $292,800.

         On July 15, 2002, the Company issued 35,000 shares as employee bonuses,
and  cancelled  500 of these  shares on September  19,  2002.  These shares were
valued at $0.21 per share for a total of $7,244.

         On November 6, 2002, the Company issued 1,000,000  commitment shares to
an underwriter  pursuant to a stock purchase  agreement  dated November 4, 2002.
These shares were valued at $0.68 per share for a total of $680,000.

         Subsequent  to the fiscal year ended  December 31, 2002,  the following
shares were issued:

o                 From  January 21st through  January 28, 2003,  260,000  shares
                  were  issued to  consultants  for  services  performed.  These
                  shares were valued at $135,500.

o                 From  February 28th through  April 1, 2003,  1,888,700  shares
                  were  issued  pursuant to shares  registered  in an S-8 for an
                  Employee  common stock Plan and a Director  common stock Plan.
                  These shares were valued at $585,870.

o                 From March 20,  2003 to March 27,  2003,  400,000  shares were
                  issued  to  outside  vendors.  These  shares  were  valued  at
                  $74,000.


ITEM 6.  SELECTED FINANCIAL DATA

         The following  data should be read in  conjunction  with  "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
the consolidated financial statements and the related notes appearing in Item 8.
<TABLE>
<CAPTION>
                                 SELECTED FINANCIAL DATA
                                 -----------------------
                                                             RESULTS FOR THE YEAR ENDED DECEMBER 31,
                                         -------------------------------------------------------------------------------
                                           2002              2001             2000              1999             1998
                                         (ACTUAL)           (ACTUAL)           (ACTUAL)        (ACTUAL)        (ACTUAL)
-----------------------------------      --------------   ---------------- ----------------- -------------- ------------
<S>                                         <C>                 <C>              <C>             <C>            <C>
CONSOLIDATED STATEMENTS OF
  OPERATIONS DATA:

Net Sales                                 $13,080,344        $8,114,553       $3,435,249            $8,874     N/A
Cost of Sales                              10,075,109         5,912,677        2,429,973             8,205     N/A
Gross Profit                                3,005,235         2,201,876        1,005,276               669     N/A
Operating Expenses                          5,987,272         7,637,034          898,522         2,830,623     N/A
Interest Expense                            (200,552)         (171,860)        (101,397)          (26,674)     N/A
Other Expense                                (58,773)                --            (905)                --     N/A
(Loss)Income from Continuing
  Expenses                                (3,272,157)       (5,607,018)            4,452        (2,850,093)    N/A
Discontinued Operations                   (3,661,205)          (93,662)          220,448                --     N/A
Net (Loss)Income                          (6,933,362)       (5,700,680)          224,900        (2,850,093)    N/A



                                       11
<PAGE>
                                                             RESULTS FOR THE YEAR ENDED DECEMBER 31,
                                         -------------------------------------------------------------------------------
                                           2002              2001             2000              1999             1998
                                         (ACTUAL)           (ACTUAL)           (ACTUAL)        (ACTUAL)        (ACTUAL)
-----------------------------------      --------------   ---------------- ----------------- -------------- ------------

(LOSS) PER SHARE DATA:
(Loss)Income from Continuing
  Operations                                  $(0.13)           $(0.35)            $0.00           $(0.02)        N/A
(Loss)Income from Discontinued
  Operations                                   (0.15)            (0.00)           (0.01)                --        N/A
Weighted Average Shares Outstanding
  (Basic and Diluted)                      24,915,135        16,268,686       16,040,000        99,066,558        N/A


CONSOLIDATED BALANCE SHEET DATA:
Total Assets                                4,088,860         6,940,390                                           N/A
Long-Term Liabilities                         904,861           140,354                                           N/A

</TABLE>
<TABLE>
<CAPTION>
SELECTED QUARTERLY FINANCIAL DATA


                      Year ended December31             First             Second           Third        Fourth          Total
                                                       Quarter            Quarter         Quarter      Quarter           Year
                      ---------------------       ----------------   --------------- -------------- -------------   -------------
<S>                                                      <C>                <C>             <C>            <C>             <C>
                      2002
                      Net sales                   $      2,533,872   $     4,084,667 $    4,019,566 $   2,442,239   $ 13,080,344
                      Gross profit                         763,415         1,417,663        557,637       266,520      3,005,235
                      Earnings before income
                         taxes                            -266,716           599,763       -891,009    -2,683,400     -3,241,362
                      Net earnings                        -266,716           599,763       -891,009    -2,714,195     -3,272,157
                      Earnings per share
                            Basic                  $          -.01   $           .01 $         -.03 $        -.10   $       -.13
                                                   ----------------   --------------- -------------- -------------   -------------
                            Diluted                $          -.01   $           .01 $         -.03 $        -.10   $       -.13
                                                   ----------------   --------------- -------------- -------------   -------------

                      2001
                      Net sales                    $      1,141,087  $     2,041,754 $    2,217,961 $   2,713,751   $  8,114,553
                      Gross profit                          180,023          661,076        586,607       774,170      2,201,876
                      Earnings before income
                         taxes                             -204,294          -98,083       -157,060    -5,147,581     -5,607,018
                      Net earnings                         -204,294          -98,083       -157,060    -5,147,581     -5,607,018

                      Earnings per share
                            Basic                  $           -.01  $          -.01 $        -.01  $        -.32   $       -.35
                                                   ----------------   --------------- -------------- -------------   -------------

                            Diluted                $           -.01  $          -.01 $        -.01  $        -.32   $       -.35
                                                   ----------------   --------------- -------------- -------------   -------------
</TABLE>

<PAGE>
ITEM 7A:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Market risk is the  potential  loss  arising  from  adverse  changes in
market rates and prices, such as foreign currency exchange, interest rates and a
decline in the stock  market.  The Company  does not enter into  derivatives  or
other financial instruments for trading or speculative purposes. The Company has
limited  exposure  to market  risks  related to changes  in  interest  rates and
foreign currency exchange rates. The Company does not currently invest in equity
instruments of public or private companies for business or strategic purposes.

         The Company  generally  conducts  business,  including sales to foreign
customers,  in U.S.  dollars  and,  as a result,  has limited  foreign  currency
exchange  rate risk.  The effect of an  immediate  10 percent  change in foreign
exchange  rates  would not have a  material  impact on the  Company's  financial
condition or results of operations.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following  discussion  and analysis  should be read in  conjunction
with the Selected  Consolidated  Financial Data and the  Consolidated  Financial
Statements and Notes thereto included elsewhere herein.

         We began in 1990 in our first office in Florida,  and by mid 2002, grew
to multiple offices in several states. Our objective, especially during the last
few years of this growth period, was to expand  aggressively  outside of Florida
and create a national  footprint.  By 2002,  we had  successfully  achieved this
objective and became an authorized  installer for a national retailer in certain
markets.

         Beginning in December 2002,  after careful  evaluation of  year-to-date
results,  we  decided to cease  operations  in Florida  and New  England,  as we
believe  these to be unprofitable markets at this time. This downsizing occurred
throughout  the first quarter of 2003. We also consolidated our three California
expansion  offices  into  one central office, to reduce costs. Losses from these
markets  in  2002  exceeded  $5  million.

         Going  forward,  we  intend to focus on our more  profitable  markets
around the country and  intend  to  continue to expand in selected  areas.  We
remain an authorized  installer for a national  retailer in certain  areas,  and
currently operate 10 offices in 8 states.

         The following explanations reflect continuing operations.

                                       12
<PAGE>


FINANCIAL CONDITION

         Total  assets as of  December  31, 2002 were  $1,575,240  a decrease of
25.9%,  or $551,727,  from total assets of $2,126,967 at December 31, 2001.  The
decrease is primarily attributable to a reduction in net receivables of $542,583
as a result of stronger collections efforts in all of our offices.

         Current liabilities increased by $1,390,523 from $3,784,251 at December
31,  2001 to  $5,174,774  at  December  31,  2002.  The  increase  is  primarily
attributable to increased  accounts  payable and accrued  expenses of $1,261,997
and increased billings in excess of costs on uncompleted  contracts of $174,435.
These  increases  were due to the continued  growth and expansion in California,
Arizona and Nevada.

         Stockholder's  equity  decreased  from  $14,368 at December 31, 2001 to
$(5,663,225)  at December 31, 2002,  a decrease of  $5,677,593.  The decrease is
primarily attributable to a net operating loss including discontinued operations
of $6,933,362 in 2002.


RESULTS OF OPERATIONS

         Net sales for the year ended  December  31,  2002 was $13.1  million as
compared to $8.1 million for the year ended  December  31, 2001,  an increase of
$5.0 million or 61.2%. This increase was primarily attributable to the Company's
growth and expansion in California, Arizona and Nevada.

         Net sales for the year ended December 31, 2001 was $8.1 million as
compared  to  $3.4  million for the year ended December 31, 2000, an increase of
$4.7  million  or 136%. The increase was due to expansion and growth in Arizona,
Nevada  and  Georgia.

         Cost of sales for the year ended December 31, 2002 was $10.1 million as
compared to $5.9 million for the year ended  December  31, 2001,  an increase of
$4.2  million or 70.4%. This increase is primarily attributable to the Company's
increased selling efforts and expansion in California, Arizona and Nevada. Gross
margins  decreased  from 27% to 23% largely due to increased labor and materials
in  California  and  Georgia.

          Cost  of  sales  for  the  year ended December 31, 2001 was $5.9
million  as  compared  to  $2.4 million for the year ended December 31, 2000, an
increase  of  $3.5 million or 143%. The increase parallels the revenue increase.

         Selling,  general  and  administrative  expresses  for the  year  ended
December  31, 2002 was $5.7  million as  compared  to $2.5  million for the year
ended  December 31, 2001, an increase of $3.2 million or 134%.  This increase is
primarily  attributable  to the Company's  growth and  expansion in  California,
Arizona and Nevada. This included increases in personnel, facilities and vehicle
expenses.

         Selling, general and administrative expenses for the year ended
December  31,  2001  was  $2.4  million as compared to $0.9 million for the year
ended  December  31,  2000, an increase of $1.5 million or 173%. The increase is
due  to  expansion and growth in Arizona, Nevada and Georgia including increased
personnel,  vehicle  and  facility  expenses.

         We incurred a net loss from  continuing  operations  of $3.3 million
for  the  year ended December 31, 2002 as compared to a net loss of $5.6 million
for  the year ended December 31, 2001, a decrease of $2.3 million or 41.6%. This
decrease  was  primarily attributable to a one-time charge of $5,187,600 in 2001
pertaining  to stock to be issued to advisors and a director. This was offset by
increased  losses  in  the  expansion  markets  of  California,  Nevada  and
Georgia/Mid-Atlantic.

     We  incurred  a  net  loss from continuing operations of $5,607,018 for the
twelve  months  ended  December 31, 2001, compared with net income of $4,452 for
the  twelve  months  ended  December  31,  2000.  The decrease of $5,611,470 was
primarily  due  to  the  one time non-cash charge of $5,187,600 described above.


LIQUIDITY AND CAPITAL RESOURCES


         CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2002

         Our total assets at December  31, 2002 were  $4,088,860  compared  with
$6,940,390  at December  31,  2001,  a decrease of  $2,851,530  or 41.6%.  These
balances  include net assets  from  discontinued  operations  of  $2,513,620  at
December 31, 2002 and $4,813,423 at December  31,2001,  a decrease of $2,299,803
or 47.8%, primarily the result of a reduction in our Florida business. Our total
assets  excluding  discontinued   operations  were  $1,575,240  and  $2,126,967,
respectively, at December 31, 2002 and December 31, 2001, a decrease of $551,727
or 25.9%. This decrease was primarily due to a reduction in accounts  receivable
of $542,583,  which was a result of increased collections efforts.  Total assets
at December 31, 2002 were comprised mainly of $1,261,801 of accounts receivable,
$159,335 of cost in excess of billings on uncompleted  contracts and $108,111 of
property  and  equipment.  Total  assets at  December  31,  2001 were  comprised
principally of $1,804,384 of accounts receivable,  $151,929 of cost in excess of
billings on uncompleted  contracts and $73,039 of property and equipment.  Total
current assets at December 31, 2002 and December 31, 2001 amounted to $3,955,133
and  $6,841,551,  respectively,  while total current  liabilities for those same
periods amounted to $8,847,224 and $6,785,668  respectively,  creating a working
capital deficit of $4,892,091 at December 31, 2002 and a working capital surplus
of $55,883 at December 31,  2001.  The working  capital  deficit at December 31,
2002 is principally  attributable to operating losses in 2002. Total liabilities
at December  31, 2002 and  December  31, 2001 were  $9,752,085  and  $6,926,022,
respectively,  representing an increase of 2,826,063 or 40.8%.  This increase is
primarily due to increased  accounts  payable and accrued  expenses as described
above of $1,261,997, increased borrowings under a line of credit of $262,317 and

                                       13
<PAGE>

borrowings  under a note payable from a related party of $700,000.  In addition,
net liabilities from discontinued  operations  increased by $671,033,  primarily
the  result  of  accrued  liabilities  resulting  from  discontinued operations.
Shareholders'  equity  (capital  deficit)  at December 31, 2002 and December 31,
2001  was  ($5,663,225)  and  $14,368,  respectively, representing a decrease of
$5,677,593.  The  decrease  is  due  to  current  year  losses.

         During 2002,  we relied  principally  upon the proceeds of a $1,000,000
private  equity  financing,  proceeds  from a $700,000 note payable to a related
party and increased  borrowings  of $262,317  under a line of credit to fund our
working capital  requirements and capital  expenditures.  Our Company's net cash
used  in  operating  activities  for  the  year  ended  December  31,  2002  was
$1,583,086,  compared to cash used in operating  activities  of $531,700 for the
year ended December 31, 2001, an increase of $1,051,386.  This increase resulted
from operating losses incurred in 2002.

         Our Company's net investing  activities for the year ended December 31,
2002 used cash of $3,094.

         Our Company's net cash  provided by financing  activities  for the year
ended December 31, 2002 was  $1,567,080  compared to $609,603 for the year ended
December 31,  2001,  an increase of $957,477 or 157.1%.  The primary  sources of
financing in 2002 were  proceeds  from the sale of common  stock of  $1,000,000,
proceeds  from a note payable from a related party of $700,000 and proceeds from
a line of credit of  $262,317.  These were offset by  payments on a  shareholder
loan,  payments  on notes  payable  and  capital  lease  payments  all  totaling
$395,237.

         Our Company has no assured  available  financial  resources to meet its
December 31, 2002 working  capital  deficit of $4,892,091  and future  operating
costs.  If our Company is unable to fund its working  capital deficit and future
operating  costs through  operating  activities,  the Company may be required to
change its proposed  business  plan and decrease its planned  operations,  which
could have a material adverse effect upon its business,  financial condition, or
results of operations.

         To improve our cash flow,  beginning in December 2002, we  discontinued
our operations in Florida and New England, and consolidated our three California
offices  into one central office. These markets accounted for over $5 million of
losses  in  2002.  In addition, we substantially reduced administrative costs at
our  headquarters  through the elimination of several personnel. We continue our
efforts  to  raise  capital  through  the  sale  of  stock  and are currently in
discussions  with  several  institutions.

         On November 4, 2002, we entered into a common stock purchase  agreement
with a private  equity  fund to sell up to $15  million  of common  stock over a
period  of  30  months,  after  an  applicable   registration  statement  became
effective.  In the  agreement,  the equity fund had the option to terminate  the
agreement if the applicable  registration  statement had not become effective as
of February 1, 2003.  In April 2003,  the equity fund  exercised  its option and
terminated  the agreement.  We currently are in discussions  with other funds to
set up a similar financing instrument.


         Going Concern Qualification

         Our auditors stated in their report to our financial statements for the
years ended December 31, 2002, and 2001, that our losses in 2002 and our working
capital and stockholder  deficiency at December 31, 2002 raise substantial doubt
about our ability to continue as a going  concern.  For the years ended December
31,  2002  and  2001,  we  incurred   losses  of  $6,933,362   and   $5,700,680,
respectively,  and had an  accumulated  deficit of $12,161,817  and  $5,228,455,
respectively. We believe that our ongoing operations will generate adequate cash
flow to continue in the paver installation business. The financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and  classification of liabilities that might be
necessary in the event the Company cannot continue in existence.

CRITICAL ACCOUTING POLICIES AND ESTIMATES

We have identified critical accounting policies that, as a result of judgements,
uncertainties,  uniqueness  and  complexities  of  the  underlying  accounting
standards  and  operation  involved,  could  result  in  material changes to our
consolidated  financial  position  or  results  of  operations  under  different
conditions or using different assumptions. The most critical accounting policies
and  estimates  are:

- Estimated allowance for uncollectible accounts receivable;

- Estimates regarding percentage of completion on uncompleted contracts

Details  regarding  our  use  of  these  policies  and the related estimates are
described  in  the accompanying consolidated financial statements as of December
31,  2002  and 2001 for the years ended December 31, 2002, 2001 and 2000. During
the  year  ended  December  31, 2002, there have been no material changes to our
critical  accounting policies that impacted our consolidated financial condition
or  results  of  operations.


ITEM 8.  FINANCIAL STATEMENTS

         The financial statements and audit report of the Company's  independent
auditors  are  attached as an exhibit to this Report (see Item 13). In addition,
the managements'  discussion and analysis  discusses the financial  condition of
the Company (see Item 6).


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

         On December 17, 2001,  after the Acquisition (see Item 2), the Board of
Directors of the Company dismissed the Company's independent auditors,  Tauber &
Balser, P.C.  ("Tauber").  Tauber did not have any disagreement with the Company
which  caused the  dismissal  of Tauber or the change in  independent  auditors.


                                       14
<PAGE>

Tauber's report on the financial statement of the Company for either of the past
two years did not contain any adverse opinion or any disclaimer of opinion,  nor
was any such report  qualified or modified as to  uncertainty,  audit scope,  or
accounting principles,  except that the reports for the years ended December 31,
2000 and December 31, 1999 each  contained a  qualification  as to the Company's
ability to continue as a going concern. Such qualification had no bearing on the
decision of the Board of  Directors of the  Company's  to dismiss  Tauber as its
independent  auditor on December 17, 2001.  During the Company's two most recent
fiscal years and the subsequent interim period preceding the dismissal of Tauber
as independent  auditors,  there were no disagreements with Tauber on any matter
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing scope; accordingly,  there was no disagreement,  which, if not resolved
to the  satisfaction  of the former  accountant,  would  have  caused it to make
reference to the subject  matter of the  disagreements  in  connection  with its
audit report for such periods, or which would have caused the Board of Directors
of the Company to discuss any disagreements with the former auditors.

         The  newly  elected  Board  of  Directors  of  the  Company,  upon  the
Acquisition (see Item 1), recommended the retention of the new auditors. The new
auditors,  Weinberg & Company, P.A.  ("Weinberg"),  were engaged on December 18,
2001.  Weinberg had previously  been the auditors of the Paving Stone  Companies
(see Item 1), which are now the  subsidiaries of Paving Stone  Corporation,  for
the years ended  December 31, 1999 and  December 31, 2000.  The new auditors are
authorized to discuss any matters with the old auditors,  without any limitation
whatsoever,  and the Company has authorized the former auditors to respond fully
to any inquiry of the successor auditors.  The Board of Directors of the Company
does  not  have an audit  committee.  The  Board  of  Directors  of the  Company
recommended and approved the decision to dismiss Tauber as independent  auditors
of the Company and to engage Weinberg as independent auditors of the Company.

         During the Company's  two most recent  fiscal years and any  subsequent
interim period preceding the dismissal of Tauber as independent  auditors, at no
point did the former auditors advise the Company that (a) the internal  controls
necessary  for the  Company to develop  reliable  financial  statements  did not
exist;  (b)  information  had come to the auditors'  attention that led it to no
longer  be able to rely on  management's  representations,  or that  has made it
unwilling to be associated with the financial statements prepared by management;
(c) (1) of the need to  expand  significantly  the scope of its  audit,  or that
information has come to the auditor's  attention  during the time period covered
by Item  304(a)(1)(iv),  that if further  investigated may (i) materially impact
the fairness or reliability of either:  a previously  issued audit report or the
underlying  financial  statements;  or the financial  statements issued or to be
issued covering the fiscal  period(s)  subsequent to the date of the most recent
financial statements covered by an audit report (including  information that may
prevent  it from  rendering  an  unqualified  audit  report  on those  financial
statements),  or  (ii)  cause  it  to  be  unwilling  to  rely  on  management's
representations or be associated with the Company's  financial  statements,  and
(2) due to the auditors' dismissal, or for any other reason, the auditor did not
so expand the scope of its audit or conduct such further  investigation;  or (d)
(i)  information  had  come to the  auditors'  attention  that it has  concluded
materially impacts the fairness or reliability of either (i) a previously issued
audit  report or the  underlying  financial  statements,  or (ii) the  financial
statements  issued or to be issued covering the fiscal  period(s)  subsequent to
the date of the most  recent  financial  statements  covered by an audit  report
(including  information that, unless resolved to the accountant's  satisfaction,
would prevent it from rendering an unqualified  audit report on those  financial
statements),  and (2) due to the auditors'  dismissal,  or for any other reason,
the issue  has not been  resolved  to the  auditors'  satisfaction  prior to its
dismissal.


                                       15
<PAGE>

                          PART III


ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

         Upon  consummation  of the Acquisition on December 17, 2001 (see Item 1
above),  all of the directors of the Company resigned.  The resignations did not
result from any disagreement with PVNG or its management. In accordance with the
Acquisition  Agreement  (see Item 1 above),  Maurice F.  Sigouin  was  appointed
Chairman of the Board of  Directors,  and Jace Simmons was appointed a director.
On August 27, 2002, Jack Hight,  John Zeeman and Richard Tilghman were appointed
as outside directors.

         Terms  for the  following  directors  of the  Company  last  until  the
Company's next stockholders'  meeting and until their successors are elected and
qualify, subject to their prior death, resignation or removal. Officers serve at
the  discretion  of the  Board  of  Directors.  Below  is a  description  of the
Company's directors and officers.

         MAURICE F.  SIGOUIN,  52, was the sole  shareholder  and founder of the
Paving  Stone  Companies,  where he served  as their  Chief  Executive  Officer,
President, and Chairman of the Board of Directors. Born in Montreal,  Canada, in
1951,  Mr.  Sigouin  graduated from the University of Quebec at Montreal in 1972
with a degree in Physical  Education.  Since 1975, Mr. Sigouin has been employed
in the construction  industry.  In 1990, Mr. Sigouin  organized the Paving Stone
Company of Florida,  Inc. During the 1990s, Mr. Sigouin expanded the business to
new locations in Florida,  and later added  additional  offices in other states.
Upon  consummation  of the  Acquisition,  Mr.  Sigouin was appointed to serve as
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company and received 16,040,000 shares of the common stock of the Registrant.

         JACE  SIMMONS,  46, served as the Vice  President  and Chief  Financial
Officer of the Paving  Stone  Companies  of Florida.  Upon  consummation  of the
Acquisition,  he was appointed the Executive  Vice  President,  Chief  Financial
Officer,  and a Director of the Company. In 1978, Mr. Simmons graduated from the
University  of Texas at Austin with a Bachelors  of Business  Administration  in
Accounting.   He  earned  his  certified  public   accounting   license  shortly
thereafter. Upon graduating from college, Mr. Simmons joined Arthur Andersen and
Company,  a then-nationally  recognized,  "Big 5" accounting firm. He spent five
years working as a public auditor,  during which time he participated in several
SEC engagements and developed auditing and accounting  expertise.  From May 1983
to March 2000, Mr. Simmons served as Chief  Financial  Officer at three separate
divisions of Coldwell Banker Real Estate Company, a subsidiary of Cendant.  From
April 2000 to May 2000, Mr. Simmons acted as an independent consultant.  In June
2000,  Mr.  Simmons  joined the Paving Stone  Companies  as its Chief  Financial
Officer.  In connection with the  Acquisition,  Mr. Simmons  received  1,320,000
shares of common stock of the Registrant.

         JOHN  ZEEMAN,  74, was  appointed  a director on August 27,  2002.  Mr.
Zeeman, one of the founding  shareholders and an original member of the Board of
Directors of MCI  Communications,  Inc.  (which  later  merged with  WorldCom to
become  MCI-WorldCom)  has more  than 35 years of  experience  in many  areas of
business  operations,  including  management,  corporate  finance,  working with
venture capital for small and medium sized companies and the hands-on management
of small emerging  companies.  He currently  serves on the Board of Directors of
Oncure  Technologies  Corp., a leading  national  provider of outpatient  cancer
care,  where he is chairman of the Audit  Committee.  He is also on the Board of
Directors of Priva  Technologies,  Inc., a developer of unique security  systems
for financial  transactions and on the Board of Enzybiotics Inc., a developer of
enzyme platform  technology  providing  solutions against pathogens resistant to
antibiotics as well as against bio warfare  agents.  Since 1973 he has served as
chairman of Mariner  Financial  Corporation,  Inc., a financial  consulting firm
that provides  strategic  planning and financing through its investment  banking
work.  In this  capacity,  he has served since 1989 as chairman of the Executive
Committee  of  Teklicon,  Inc.,  a high  technology  consulting  firm company in
Mountain View,  California.  He has held numerous leadership  positions in small
companies throughout his illustrious career.

         JACK HIGHT,  77, was appointed a director on August 27, 2002. Mr. Hight
has more than 40 years experience in creating and leading information technology
companies,   including   some  34  years  as  president  and  chairman  of  four
corporations, three of which were eventually merged into companies listed on the
New York Stock Exchange.  He is chairman of the board at Modus  Operandi,  Inc.,
and was founder and chairman of the board at Intec Systems, Inc. Mr. Hight was a
co-founder and president of Electronic Data Systems Federal  Corporation,  which
merged with  Electronic  Data Systems (EDS) in 1968. He currently is chairman of
Seisint,  an information  products and services  company that provides real time
access to billions of data  records  that are used to support  mission  critical
business  decisions.  He previously  served as an assistant to two U.S. Senators
and  has  also  served  as CEO,  president  or  chairman  of  eight  information
technology  based  companies,  two of which merged into New York Stock  Exchange
listed companies.

                                       16
<PAGE>

         RICHARD K.  TILGHMAN,  53, was appointed a director on August 27, 2002.
Mr.  Tilghman,  attended  Boston  University  following  his service in the U.S.
Marine Corp. He was formerly a member of the sales  department of Alco Standard,
and founded a successful  Sacramento,  California-based  copy and print  company
that he  operated  for 13  years.  Since  2000  he has  focused  on real  estate
investments and currently operates a family-owned investment company and a yacht
charter company.

         None of the  Company's  directors or officers  have had any  bankruptcy
petition  filed by or against  any  business  of which such person was a general
partner or executive  officer either at the time of the bankruptcy or within two
years prior to that time. None of the Company's  directors or officers have been
convicted  in any  criminal  proceeding,  nor are they  subject  to any  pending
criminal proceeding.  None of the Company's directors or officers are subject to
any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent  jurisdiction,  permanently or temporarily  enjoining,
barring,  suspending  or  otherwise  limiting  his  involvement  in any  type of
business,  securities or banking activities.  None of the Company's directors or
officers have been found by a court of competent jurisdiction in a civil action,
the  Securities  and  Exchange  Commission,  or the  Commodity  Futures  Trading
Commission,  to have violated a federal or state  securities or commodities law,
and the judgment has not been reversed, suspended, or vacated.


ITEM 11.  EXECUTIVE COMPENSATION

         The following table contains information regarding the compensation for
services  rendered  by the  current  officers  and  directors  of  the  Company.
Currently, the Company has two officers and five directors.
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                          ANNUAL COMPENSATION                     LONG - TERM COMPENSATION
                                         ----------------------                 ---------------------------
                                                                                          PAYOUTS
                                                                                ---------------------------
                                                                                 RESTRICTED
                                                                 OTHER ANNUAL    UNDER-LYING    SECURITIES      ALL OTHER
NAME AND PRINCIPAL POSITION     YEAR       SALARY       BONUS    COMPENSATION   OPTIONS/SAR'S  LTIP PAYOUTS   COMPENSATION
-----------------------------   ------- ------------ --------- -----------   ---------------- ------------ ---------------
<S>                               <C>         <C>         <C>        <C>           <C>              <C>             <C>

Maurice Sigouin                   2002    $  221,000     $    0  $       0                  0              0              0
CEO, Chairman, President          2001    $ 180,000(1)   $    0  $  44,000 (2)              0              0              0
                                  2000    $ 180,000(1)   $    0  $  44,000 (2)              0              0              0

Jace Simmons                      2002    $  141,550     $    0  $      0                   0              0              0
CFO, Director                     2001    $  130,000     $    0  $      0                   0              0     $1,729,200(11)
                                  2000    $   75,833 (3) $    0  $      0                   0              0              0

Daniel J. Mackell                 2002           N/A        N/A       N/A                 N/A            N/A              0
Former CEO                        2001    $        0     $    0  $       0 (4)      $  77,500 (5)          0              0
                                  2000    $        0     $    0  $ 100,000 (6)              0       4,000,000(7)          0

David W. Kenner                   2002           N/A        N/A       N/A                 N/A            N/A              0
Former CEO                        2001    $        0     $    0  $       0          $       0              0              0
                                  2000    $   42,000     $    0  $       0          $       0     24,970,087(7)           0

William G. Head                   2002           N/A        N/A        N/A                N/A            N/A              0
Former CEO                        2001    $        0     $    0  $       0                  0              0              0
                                  2000    $   60,000     $    0  $       0                  0        125,000(8)           0

Sean W. Daly                      2002           N/A        N/A        N/A                N/A            N/A              0
Former Secretary                  2001    $        0     $    0  $       0                  0         85,500(9)           0
                                  2000    $        0     $    0  $       0                  0     10,300,000(7)           0

William Stilley                   2002           N/A        N/A        N/A                N/A            N/A              0
Former Interim CFO                2001    $   24,000(10) $    0  $       0                  0              0              0
                                  2000    $   30,000     $    0  $       0                  0              0              0

</TABLE>
(1)  Prior to the Acquisition, Mr. Sigouin received wages of $36,000 per year on
     a W2 and capital distributions from the "S" corporations of $144,000.


(2)  Mr.  Sigouin  received   reimbursement  of  certain   expenses,   including
     automobile expenditures and travel related expenses.


(3)  Mr. Simmons joined the Company in June 2000.


                                       17
<PAGE>


(4)      Mr. Mackell served as Chief Executive  Officer of the Registrant  prior
         to the Acquisition  (see Item 1). Mr. Mackell forgave his deferred cash
         salary of $100,000  for the year ended  December  31, 2001 prior to the
         Acquisition.


(5)      Mr.  Mackell  was  awarded  77,500  shares of common  stock on or about
         December  14, 2001 prior to the  Acquisition  (see Item 1). This amount
         takes into account the 133:1 reverse  stock split  effected on December
         17, 2001.


(6)      This constitutes deferred salary for a partial year of employment.


(7)      These  options  were  subsequently   canceled.  The  amount  of  shares
         exercisable  takes  into  account  the 2:1  reverse  stock  split  that
         occurred on August 16, 2000, but not the 133:1 reverse stock split that
         became effective on December 17, 2001.


(8)      These subsequently expired unexecuted. The amount of shares exercisable
         takes into account the 2:1 reverse  stock split that occurred on August
         16, 2000,  but not the 133:1 reverse stock split that became  effective
         on December 17, 2001.


(9)      Tower Hill Holdings,  Inc., a corporation  for which Mr. Daly serves as
         President,  was  awarded  85,500  shares  of  common  stock on or about
         December  14, 2001 prior to the  Acquisition  (see Item 1). This amount
         takes into account the 133:1 reverse  stock split  effected on December
         17, 2001.


(10)     Mr.  Stilley served as Interim Chief  Financial  Officer of the Company
         until he resigned on May 1, 2001. A corporation that is wholly owned by
         Mr.  Stilley  and his  wife  was  engaged  by the  Company  to  provide
         consulting services between May 1, 2001 and December 17, 2001.

(11)     Restricted stock issued as a result of the acquisition.

         The Company has entered  into  employment  agreements  with each of the
officers of the Company. The agreements call for the payment of set salaries, in
addition to cash  bonuses and certain  benefits,  as well as options to purchase
additional shares of the common stock of the Company.
<TABLE>
<CAPTION>


                        AGGREGATED OPTIONS/SAR EXERCISES

                             IN LAST FISCAL YEAR AND
                      FISCAL YEAR END OPTIONS/SAR VALUES(1)

                                                                                NUMBER OF SECURITIES      VALUE OF UNEXERCISED
                                         SHARES                                UNDERLYING UNEXERCISED         IN-THE-MONEY
                                       ACQUIRED ON              VALUE              OPTIONS/SAR'S             OPTIONS/SAR'S
NAME                                    EXERCISE            REALIZED ($)       AT FISCAL YEAR END(1)     AT FISCAL YEAR END(2)

<S>                                         <C>                 <C>              <C>              <C>            <C>

Maurice Sigouin                             -0-                  -0-          Exercisable:           0         $ 0
                                            -0-                  -0-          Unexercisable:         0           0

Jace Simmons                                -0-                  -0-          Exercisable:           0         $ 0
                                            -0-                  -0-          Unexercisable:         0           0


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

(1)      These grants represent  options to purchase common stock. No SAR's have
         been granted.


(2)      The value of the  unexercised  in-the-money  options were calculated by
         determining the difference  between the fair market value of the common
         stock  underlying  the options and the exercise price of the options as
         of December 31, 2002.


         The following  table  contains  information  regarding  grants of stock
options made during the year ended December 31, 2002 to our Company's  executive
officers.


OPTION/SAR GRANTS TABLE

                                                               % TOTAL
                                    NO. OF SECURITIES       OPTIONS/SAR'S
                                        UNDERLYING           GRANTED TO
                                      OPTIONS/SAR'S         EMPLOYEES IN       EXERCISE OR BASE PRICE
              NAME                     GRANTED (#)         FISCAL YEAR (%)         ($ PER SHARE)            EXPIRATION DATE

Maurice Sigouin                             0                   0%                     $  0                   N/A
                                          -----               -----                    -----                 -----

Jace Simmons                                0                    0%                    $  0                   N/A
                                          -----               -----                    -----                 -----
</TABLE>


                                       18
<PAGE>

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  our
directors  and  executive  officers,  and  persons  who own  more  than 10% of a
registered  class of our  equity  securities  to file  with the  Securities  and
Exchange  commission  initial  reports of  ownership  and  reports of changes in
ownership  of  Common  Stock  and  other  of our  equity  securities.  Officers,
directors and greater than 10%  shareholders  are required by SEC regulations to
furnish us copies of all Section 16(a) forms they file.

         To our  knowledge,  based  solely  on a review  of the  copies  of such
reports furnished to us and written  representations  that no other reports were
required  during the fiscal year ended  December  31,  2002,  all Section  16(a)
filing requirements  applicable to our officers,  directors and greater than 10%
beneficial owners were complied with.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

         The  following  table sets forth  certain  information  with respect to
beneficial  ownership  of our  common  stock as of May 1,  2003,  as to (i) each
person (or group of affiliated  persons)  known by us to own  beneficially  more
than 5% of our outstanding common stock, (ii) each of our directors,  (iii) each
of our executive officers,  and (iv) all directors and executive officers of our
Company as a group.

         For the purpose of this table,  beneficial  ownership is  determined in
accordance with the rules of the Securities and Exchange Commission.  The number
of shares beneficially owned by a person includes shares of common stock subject
to options held by that person that are  currently  exercisable  or  exercisable
within 60 days of May 1, 2003.  Shares  issuable  pursuant  to such  options are
deemed outstanding for computing the percentage  ownership of the person holding
such options,  but are not deemed  outstanding for the purposes of computing the
percentage ownership of each other person.
<TABLE>
<CAPTION>

                                                                                       AMOUNT AND
                                          NAME AND ADDRESS OF                          NATURE OF
TITLE                                     BENEFICIAL OWNER                          BENEFICIAL OWNER      PERCENT OF CLASS
-------------------                    -------------------------                  ----------------------   ----------------
<S>                                            <C>                                       <C>                     <C>

Common Stock                              Maurice F. Sigouin                           16,040,000               61.27
                                          1760 N.W. 22nd Court,
                                          Pompano Beach, FL  33069

Common Stock                              Paver Installation LP                         4,000,000                14.7

Common Stock                              Jace Simmons                                  1,320,000                 5.0
                                          1760 N.W. 22nd Court,
                                          Pompano Beach, FL  33069

</TABLE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         (a)   The Company is party to two lease  agreements  for  offices
located  in  Pompano  Beach,  Florida  and Vero Beach, Florida with Paving Stone
Properties,  Inc.,  of  which  Maurice  F.  Sigouin  is the sole shareholder. In
addition,  the Company is a co-borrower with Paving Stone Properties, Inc., on a
loan  secured  by  the  real property constituting the aforementioned offices in
Pompano  Beach  and  Vero  Beach.

         (b)      REPORTS ON FORM 8-K.

         During the first quarter of 2002, the Company filed with the Securities
and Exchange  Commission  the  following  current  reports on Form 8-K regarding
events that occurred during the fiscal year ended December 31, 2001:

         Form 8-K, filed on January 4, 2002, regarding the change in control and
change of  outside  auditors  in  connection  with the  Acquisition  (see Item 1
above).


                                       19
<PAGE>

         Form 8-K/A, filed on January 22, 2002,  regarding the change in control
and change of outside  auditors in connection with the  Acquisition  (see Item 1
above).

         Form 8-K/A2,  filed on March 28, 2002,  regarding the change in control
and change of outside  auditors in connection with the  Acquisition  (see Item 1
above).

         During  the  fourth  quarter  of  2002,  the  Company  filed  with  the
Securities and Exchange Commission the following current reports on Form 8-K:

         Form 8-K,  filed on  November 8, 2002,  regarding a $15 million  common
stock purchase agreement dated November 5, 2002.

         Form 8-K, filed on December 31, 2002,  regarding a  clarification  with
respect to statements made in a telephone conference call about the common stock
purchase agreement dated November 5, 2002.


ITEM 14.  CONTROLS AND PROCEDURES

         QUARTERLY  EVALUATION OF THE COMPANY'S DISCLOSURE CONTROLS AND INTERNAL
CONTROLS.  Within  the 90 days prior to the date of this  Annual  Report on Form
10-K, the Company evaluated the effectiveness of the design and operation of its
"disclosure controls and procedures"  (Disclosure  Controls),  and its "internal
controls and  procedures  for financial  reporting"  (Internal  Controls).  This
evaluation (the Controls Evaluation) was done under the supervision and with the
participation  of management,  including our Chief  Executive  Officer (CEO) and
Chief  Financial  Officer  (CFO).  Rules adopted by the SEC require that in this
section of the Quarterly  Report we present the  conclusions  of the CEO and the
CFO about the  effectiveness  of our Disclosure  Controls and Internal  Controls
based on and as of the date of the Controls Evaluation.

         CEO  AND  CFO  CERTIFICATIONS.   Appearing  immediately  following  the
Signatures  section  of this  Annual  Report  there  are two  separate  forms of
"Certifications"  of the CEO and the CFO.  The first  form of  Certification  is
required  in accord  with  Section  302 of the  Sarbanes-Oxley  Act of 2002 (the
Section 302  Certification).  This  section of the Annual  Report  which you are
currently reading is the information concerning the Controls Evaluation referred
to in the  Section 302  Certifications  and this  information  should be read in
conjunction   with  the  Section  302   Certifications   for  a  more   complete
understanding of the topics presented.

         DISCLOSURE  CONTROLS AND  INTERNAL  CONTROLS.  Disclosure  Controls are
procedures  that are designed with the  objective of ensuring  that  information
required to be disclosed in our reports filed under the Securities  Exchange Act
of 1934  (Exchange  Act),  such as this Annual Report,  is recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  (SEC)  rules and  forms.  Disclosure  Controls  are also
designed with the objective of ensuring that such information is accumulated and
communicated  to our  management,  including the CEO and CFO, as  appropriate to
allow timely decisions  regarding  required  disclosure.  Internal  Controls are
procedures  which  are  designed  with the  objective  of  providing  reasonable
assurance that (1) our transactions are properly authorized;  (2) our assets are
safeguarded  against  unauthorized or improper use; and (3) our transactions are
properly  recorded and reported,  all to permit the preparation of our financial
statements in conformity with generally accepted accounting principles.

         LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS. The Company's management,
including the CEO and CFO, does not expect that our  Disclosure  Controls or our
Internal  Controls will prevent all error and all fraud.  A control  system,  no
matter how well  conceived  and  operated,  can  provide  only  reasonable,  not
absolute,  assurance that the objectives of the control system are met. Further,
the design of a control  system must  reflect  the fact that there are  resource
constraints,  and the benefits of controls must be considered  relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud,  if any,  within  the  Company  have  been  detected.  These  inherent
limitations  include the  realities  that  judgments in  decision-making  can be
faulty,  and that  breakdowns  can occur  because  of simple  error or  mistake.
Additionally,  controls  can be  circumvented  by the  individual  acts  of some
persons,  by collusion of two or more people,  or by management  override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future  conditions;  over time, control may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.  Because of the inherent  limitations in a  cost-effective  control
system, misstatements due to error or fraud may occur and not be detected.


                                       20
<PAGE>

         SCOPE  OF  THE  CONTROLS  EVALUATION.  The  CEO/CFO  evaluation  of our
Disclosure Controls and our Internal Controls included a review of the controls'
objectives  and  design,  the  controls'  implementation  by the Company and the
effect of the  controls  on the  information  generated  for use in this  Annual
Report.  In the course of the Controls  Evaluation,  we sought to identify  data
errors,  controls  problems  or acts of fraud and to  confirm  that  appropriate
corrective action, including process improvements,  were being undertaken.  This
type of  evaluation  will be done on a quarterly  basis so that the  conclusions
concerning  controls  effectiveness  can be reported in our Quarterly Reports on
Form  10-QSB and Annual  Report on Form 10-K.  Our  Internal  Controls  are also
evaluated on an ongoing basis by our  independent  auditors in  connection  with
their audit and review activities. The overall goals of these various evaluation
activities are to monitor our Disclosure  Controls and our Internal Controls and
to make  modifications  as  necessary;  our  intent  in this  regard is that the
Disclosure  Controls and the Internal  Controls  will be  maintained  as dynamic
systems that change  (including with improvements and corrections) as conditions
warrant.

         Among other matters,  we sought in our evaluation to determine  whether
there  were any  "significant  deficiencies"  or  "material  weaknesses"  in the
Company's Internal  Controls,  or whether the Company had identified any acts of
fraud involving  personnel who have a significant role in the Company's Internal
Controls.  This  information  was  important  both for the  Controls  Evaluation
generally and because items 5 and 6 in the Section 302 Certifications of the CEO
and CFO require that the CEO and CFO disclose  that  information  to our Board's
Audit Committee and to our independent auditors and to report on related matters
in  this  section  of  the  Quarterly  Report.  In  the  professional   auditing
literature,   "significant   deficiencies"   are  referred  to  as   "reportable
conditions";  these are  control  issues that could have a  significant  adverse
effect on the ability to record, process, summarize and report financial data in
the  financial  statements.  A "material  weakness"  is defined in the  auditing
literature as a particularly  serious  reportable  condition  where the internal
control  does not reduce to a relatively  low level the risk that  misstatements
caused by error or fraud may occur in amounts that would be material in relation
to the  financial  statements  and not be  detected  within a timely  period  by
employees in the normal course of performing their assigned  functions.  We also
sought to deal with other controls  matters in the Controls  Evaluation,  and in
each case if a problem was identified, we considered what revision,  improvement
and/or correction to make in accord with our on-going procedures.

         In accord with SEC  requirements,  the CEO and CFO note that, since the
date of the Controls  Evaluation to the date of this Annual  Report,  there have
been no significant  changes in Internal Controls or in other factors that could
significantly  affect Internal  Controls,  including any corrective actions with
regard to significant deficiencies and material weaknesses.

         CONCLUSIONS.  Based upon the Controls Evaluation,  our CEO and CFO have
concluded that, subject to the limitations noted above, our Disclosure  Controls
are  effective  to ensure that  material  information  relating to Intel and its
consolidated  subsidiaries  is made known to  management,  including the CEO and
CFO,  particularly  during  the  period  when our  periodic  reports  are  being
prepared,  and that our Internal  Controls are  effective to provide  reasonable
assurance that our financial  statements are fairly presented in conformity with
generally accepted accounting principles.


ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

         (A)      EXHIBITS.


Exhibit  2          Acquisition  Agreement  (see Item 1):  See Report on Form
                    8-K, filed with the  Securities  and Exchange  Commission on
                    October   17,   2001  and   exhibits   thereto,   which  are
                    incorporated herein by reference.

Exhibit 16          Letter  regarding  change in  accountants  (see Item 8): See
                    Reports  on Forms 8-K,  8-K/A,  and  8-K/A2,  filed with the
                    Securities and Exchange Commission on January 4, January 22,
                    and March 28,  2002,  respectively,  and  exhibits  thereto,
                    which are incorporated herein by reference.  Forms 10Q dated
                    M ay, 15, 2002, August 14, 2002, and November 14, 2002.

Exhibit 22          Report on matters submitted to vote (see Item 4):  See Form
                    14C,  filed  with the  Securities  and  Exchange  Commission
                    October 25, 2001, and amendments thereto,  filed on November
                    15, 19, 21 and 26, 2001,  which are  incorporated  herein by
                    reference.

Exhibit 99          Audit Report and Financial Statements, annexed hereto.



                                       21
<PAGE>


ITEM 16.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees paid to Weinberg & Co. P.A. for audit services in 2002 were $89,754.
There were no other services provided by this firm.


                                       22
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                  PAVING STONE CORPORATION



Dated:   May 6, 2003             By:      /S/ MAURICE F. SIGOUIN
                                           ---------------------------
                                           Maurice F. Sigouin, Chairman of
                                           the Board of Directors, Chief
                                           Executive Officer and President


Dated:   May 6, 2003             By:      /S/ JACE SIMMONS
                                           ----------------------
                                           Jace Simmons, Executive Vice
                                           President-Finance, Chief Financial
                                           Officer, and Director








                                       23
<PAGE>


                                  CERTIFICATION
                             PURSUANT TO SECTION 302


         I, Maurice P. Sigouin, certify that:

         1. I have  reviewed  this  Annual  Report on Form 10-K of Paving  Stone
Corporation;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                  a) designed such disclosure  controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

                  b) evaluated the effectiveness of the registrant's  disclosure
controls and  procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  c) presented in this quarterly  report our  conclusions  about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

                  a) all significant  deficiencies in the design or operation of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  b)  any  fraud,   whether  or  not  material,   that  involves
management or other  employees who have a significant  role in the  registrant's
internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were 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.


Date:    May 6, 2003              By:      /S/ MAURICE P. SIGOUIN
                                           ----------------------------
                                            Chief Executive Officer


                                       A-1
<PAGE>

                                  CERTIFICATION
                             PURSUANT TO SECTION 302


         I, Jace Simmons, certify that:

         1. I have  reviewed  this  Annual  Report on Form 10-K of Paving  Stone
Corporation;

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

                  a) designed such disclosure  controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

                  b) evaluated the effectiveness of the registrant's  disclosure
controls and  procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  c) presented in this quarterly  report our  conclusions  about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

         5. The  registrant's  other  certifying  officers and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

                  a) all significant  deficiencies in the design or operation of
internal  controls  which could  adversely  affect the  registrant's  ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

                  b)  any  fraud,   whether  or  not  material,   that  involves
management or other  employees who have a significant  role in the  registrant's
internal controls; and

         6. The registrant's  other certifying  officers and I have indicated in
this quarterly report whether or not there were 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.

Date:    May 6, 2003                  By:  /S/ JACE SIMMONS
                                          -----------------------
                                           Chief Financial Officer

                                      B-1

<PAGE>


                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002

         In connection with the Annual Report of Paving Stone  Corporation  (the
"Company") on Form 10-K for the period ended December 31, 2002 as filed with the
Securities and Exchange  Commission on the date hereof (the  "Report"),  each of
the  undersigned,  in the capacities and on the dates  indicated  below,  hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:

         1. The Report fully complies with the  requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         2. The  information  contained in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of  operation of the
Company.


                                                    /S/ MAURICE P. SIGOUIN
                                                    ------------------------
                                                    Maurice P. Sigouin
                                                    Chief Executive Officer



                                      C-1

<PAGE>


                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Annual Report of Paving Stone  Corporation  (the
"Company") on Form 10-K for the period ended December 31, 2002 as filed with the
Securities and Exchange  Commission on the date hereof (the  "Report"),  each of
the  undersigned,  in the capacities and on the dates  indicated  below,  hereby
certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that to his knowledge:

         1. The Report fully complies with the  requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         2. The  information  contained in the Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of  operation of the
Company.


                                                        /S/ JACE SIMMONS
                                                        ------------------------
                                                        Jace Simmons
                                                        Chief Financial Officer



                                      D-1




<PAGE>
                            PAVING STONE CORPORATION
                                AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001




<PAGE>

<TABLE>
<CAPTION>

                    PAVING STONE CORPORATION AND SUBSIDIARIES

                                    CONTENTS
                                    --------


<S>                  <C>            <C>
PAGE                 1         INDEPENDENT AUDITORS' REPORT

PAGE                 2         CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2002 AND 2001

PAGE                 3         STATEMENTS  OF  OPERATIONS   FOR  THE  YEARS  ENDED   DECEMBER  31,  2002  AND  2001
                               (CONSOLIDATED) AND 2000 (COMBINED)

PAGES              4 - 5       STATEMENTS  OF  CHANGES IN  STOCKHOLDERS'  (DEFICIENCY)  EQUITY FOR THE YEARS  ENDED
                               DECEMBER 31, 2002 AND 2001 (CONSOLIDATED) AND 2000 (COMBINED)

PAGES              6 - 7       STATEMENTS  OF  CASH  FLOWS  FOR  THE  YEARS  ENDED   DECEMBER  31,  2002  AND  2001
                               (CONSOLIDATED) AND 2000 (COMBINED)

PAGES              8 - 22      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002 AND 2001



</TABLE>
<PAGE>

                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

TO THE BOARD OF DIRECTORS OF:
PAVING STONE CORPORATION AND SUBSIDIARIES

WE HAVE AUDITED THE ACCOMPANYING CONSOLIDATED BALANCE SHEETS OF THE PAVING STONE
COMPANY  AND  SUBSIDIARIES  AS OF  DECEMBER  31,  2002 AND 2001 AND THE  RELATED
STATEMENTS  OF INCOME,  CHANGES IN  STOCKHOLDERS'  EQUITY AND CASH FLOWS FOR THE
YEARS ENDED DECEMBER 31, 2002 AND 2001 (CONSOLIDATED) AND 2000 (COMBINED). THESE
FINANCIAL  STATEMENTS ARE THE  RESPONSIBILITY OF THE COMPANY'S  MANAGEMENT.  OUR
RESPONSIBILITY  IS TO EXPRESS AN OPINION ON THESE FINANCIAL  STATEMENTS BASED ON
OUR AUDIT.

WE CONDUCTED OUR AUDITS IN ACCORDANCE WITH AUDITING STANDARDS GENERALLY ACCEPTED
IN THE  UNITED  STATES OF  AMERICA.  THESE  STANDARDS  REQUIRE  THAT WE PLAN AND
PERFORM THE AUDITS TO OBTAIN  REASONABLE  ASSURANCE  ABOUT WHETHER THE FINANCIAL
STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT.  AN AUDIT INCLUDES EXAMINING, ON A
TEST BASIS,  EVIDENCE  SUPPORTING  THE AMOUNTS AND  DISCLOSURES IN THE FINANCIAL
STATEMENTS.  AN AUDIT ALSO INCLUDES ASSESSING THE ACCOUNTING PRINCIPLES USED AND
SIGNIFICANT  ESTIMATES  MADE BY  MANAGEMENT,  AS WELL AS EVALUATING  THE OVERALL
FINANCIAL  STATEMENT  PRESENTATION.   WE  BELIEVE  THAT  OUR  AUDITS  PROVIDE  A
REASONABLE BASIS FOR OUR OPINION.

IN OUR OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT FAIRLY IN ALL
MATERIAL  RESPECTS,  THE  FINANCIAL  POSITION OF PAVING  STONE  CORPORATION  AND
SUBSIDIARIES  AS OF  DECEMBER  31,  2002  AND  2001,  AND THE  RESULTS  OF THEIR
OPERATIONS  AND THEIR CASH FLOWS FOR THE YEARS ENDED  DECEMBER 31, 2002 AND 2001
(CONSOLIDATED)  AND 2000  (COMBINED),  IN CONFORMITY WITH ACCOUNTING  PRINCIPLES
GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA.

THE  ACCOMPANYING  FINANCIAL  STATEMENTS  HAVE BEEN  PREPARED  ASSUMING THAT THE
COMPANY  WILL  CONTINUE  AS A  GOING  CONCERN.  AS  DISCUSSED  IN NOTE 16 TO THE
FINANCIAL STATEMENTS,  THE COMPANY HAS A NET LOSS OF $6,933,362, A NEGATIVE CASH
FLOW FROM  OPERATIONS OF $1,583,086 A WORKING  CAPITAL  DEFICIENCY OF $4,892,091
AND A STOCKHOLDERS'  DEFICIENCY OF $5,663,225.  THESE FACTORS RAISE  SUBSTANTIAL
DOUBT  ABOUT ITS  ABILITY TO CONTINUE  AS A GOING  CONCERN.  MANAGEMENT'S  PLANS
CONCERNING THIS MATTER ARE ALSO DESCRIBED IN NOTE 16. THE ACCOMPANYING FINANCIAL
STATEMENTS DO NOT INCLUDE ANY ADJUSTMENTS  THAT MIGHT RESULT FROM THE OUTCOME OF
THIS UNCERTAINTY.



WEINBERG & COMPANY, P.A.

BOCA RATON, FLORIDA

<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2002 AND 2001


<TABLE>
<CAPTION>

                                      ASSETS
                                     --------
                                                                                             2002                    2001
                                                                                       ------------------      -----------------
<S>     <C>                                                                                  <C>                   <C>
CURRENT ASSETS
 CASH                                                                               $            15,639     $           34,739
 ACCOUNTS RECEIVABLE - NET OF ALLOWANCES                                                      1,261,801              1,804,384
 COSTS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS                                           159,335                151,929
 PREPAID EXPENSES                                                                                 4,738                 37,076
 NET ASSETS OF DISCONTINUED OPERATIONS                                                        2,513,620              4,813,423
                                                                                       ------------------      -----------------
        TOTAL CURRENT ASSETS                                                                  3,955,133              6,841,551
                                                                                       ------------------      -----------------


PROPERTY AND EQUIPMENT - NET                                                                    108,111                 73,039
                                                                                       ------------------      -----------------


OTHER ASSETS
 SECURITY DEPOSITS AND OTHER ASSETS - NET OF AMORTIZATION                                        23,225                 19,800
 OTHER LOANS / ADVANCES RECEIVABLE                                                                2,391                  6,000
                                                                                       ------------------      -----------------
        TOTAL OTHER ASSETS                                                                       25,616                 25,800
                                                                                       ------------------      -----------------


TOTAL ASSETS                                                                        $         4,088,860     $        6,940,390
                                                                                       ==================      =================


                LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
                -------------------------------------------------
CURRENT LIABILITIES
 CASH OVERDRAFT                                                                     $            78,393     $           60,221
 LINES OF CREDIT                                                                              2,502,588              2,240,271
 ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                        2,235,023                973,026
 ACCRUED STOCK COMPENSATION                                                                     102,123                   -
 CUSTOMER DEPOSITS PAYABLE                                                                         -                    38,047
 BILLINGS IN EXCESS OF COST ON UNCOMPLETED CONTRACTS                                            218,317                 43,882
 NOTE AND CAPITAL LEASE OBLIGATION PAYABLE - CURRENT PORTION                                     38,330                 33,111
 NOTES PAYABLE - STOCKHOLDER                                                                       -                   395,693
 NET LIABILITIES OF DISCONTINUED OPERATIONS                                                   3,672,450              3,001,417
                                                                                       ------------------      -----------------
        TOTAL CURRENT LIABILITIES                                                             8,847,224              6,785,668
                                                                                       ------------------      -----------------


LONG TERM LIABILITIES
 NOTE AND CAPITAL LEASE OBLIGATION PAYABLE                                                       61,814                 76,001
 NOTES PAYABLE - STOCKHOLDER                                                                    143,047                 64,353
 NOTE PAYABLE - RELATED PARTY                                                                   700,000                   -
                                                                                       ------------------      -----------------

        TOTAL LONG-TERM LIABILITIES                                                             904,861                140,354
                                                                                       ------------------      -----------------

TOTAL LIABILITIES                                                                             9,752,085              6,926,022
                                                                                       ------------------      -----------------


STOCKHOLDERS' (DEFICIENCY) EQUITY
 COMMON STOCK, $.00001 PAR VALUE, 150,000,000 SHARES AUTHORIZED, 26,177,382, AND
  2,260,083 SHARES ISSUED AND OUTSTANDING, RESPECTIVELY                                             262                     23
 COMMON STOCK TO BE ISSUED, 779,300 AND 19,742,099 SHARES, RESPECTIVELY                               8                    197
 ADDITIONAL PAID-IN CAPITAL                                                                   6,498,322              5,242,603
 ACCUMULATED DEFICIT                                                                        (12,161,817)            (5,228,455)
                                                                                       ------------------      -----------------


TOTAL STOCKHOLDERS' (DEFICIENCY) EQUITY                                                      (5,663,225)                14,368
                                                                                       ------------------      -----------------


TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY                             $         4,088,860     $        6,940,390
-------------------------------------------------------
                                                                                       ==================      =================

</TABLE>
          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                        2
<PAGE>

<TABLE>
<CAPTION>
                   PAVING STONE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND
                     2001 (CONSOLIDATED) AND 2000 (COMBINED)


                                                                                   2002                 2001              2000
                                                                              (CONSOLIDATED)       (CONSOLIDATED)      (COMBINED)
                                                                            -------------------    -------------    -------------
<S>                                                                                 <C>                   <C>              <C>

NET SALES                                                                $         13,080,344   $    8,114,553   $    3,435,249

COST OF SALES                                                                      10,075,109        5,912,677        2,429,973
                                                                            -------------------    -------------    -------------

GROSS PROFIT                                                                        3,005,235        2,201,876        1,005,276

OPERATING EXPENSES
 SELLING, GENERAL AND ADMINISTRATIVE                                                5,731,503        2,449,434          898,522
 STOCK ISSUED FOR SERVICES                                                            980,044        5,187,600             -
 STOCK NOT ISSUED IN SETTLEMENT OF CONSULTING AGREEMENT                              (724,275)            -                -
                                                                            -------------------    -------------    -------------
       TOTAL OPERATING EXPENSES                                                     5,987,272        7,637,034          898,522
                                                                            -------------------    -------------    -------------

(LOSS) INCOME FROM CONTINUING OPERATIONS                                           (2,982,037)      (5,435,158)         106,754

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


OTHER EXPENSES
 INTEREST EXPENSE                                                                    (200,552)        (171,860)        (101,397)
 OTHER EXPENSE                                                                        (58,773)            -                (905)
                                                                            -------------------    -------------    -------------
       TOTAL OTHER EXPENSE                                                           (259,325)        (171,860)        (102,302)
                                                                            -------------------    -------------    -------------

(LOSS) INCOME FROM CONTINUING OPERATIONS                                           (3,241,362)      (5,607,018)           4,452

INCOME TAX EXPENSE                                                                    (30,795)            -                -
                                                                           -------------------    -------------    -------------

(LOSS) INCOME FROM CONTINUING OPERATIONS                                           (3,272,157)      (5,607,018)           4,452

DISCONTINUED OPERATIONS
 (LOSS) INCOME FROM DISCONTINUED OPERATIONS                                        (3,661,205)         (93,662)         220,448
                                                                            -------------------    -------------    -------------

NET (LOSS) INCOME                                                        $         (6,933,362)  $   (5,700,680)  $      224,900
-----------------
                                                                            ===================    =============    ============

NET (LOSS) INCOME PER SHARE: - BASIC AND DILUTED
 (LOSS) FROM CONTINUING OPERATIONS                                       $              (0.13)  $        (0.35)  $         0.00
 (LOSS) INCOME FROM DISCONTINUED OPERATIONS                                             (0.15)           (0.00)            0.01
                                                                            -------------------    -------------    -------------
                                                                         $              (0.28)  $        (0.35)  $         0.01
                                                                            ===================    =============    =============

WEIGHTED AVERAGE SHARES OUTSTANDING DURING THE PERIOD - BASIC AND DILUTED          24,915,135       16,268,686       16,040,000
                                                                            ===================    =============    =============

</TABLE>
     SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                        3
<PAGE>


<TABLE>
<CAPTION>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
     FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 (CONSOLIDATED) AND 2000
                                   (COMBINED)




                                    COMMON        COMMON    COMMON COMMON STOCK    ADDITIONAL               RETAINED  STOCKHOLDERS'
                                    STOCK         STOCK      STOCK  TO BE ISSUED    PAID-IN   SUBSCRIPTION  EARNINGS      EQUITY
                                OUTSTANDING    TO BE ISSUED   PAR       PAR         CAPITAL    RECEIVABLE   (DEFICIT)  (DEFICIENCY)
                                ------------- ------------- -------- --------- ------------- ------------ ------------   ----------
<S>                                   <C>            <C>       <C>      <C>         <C>            <C>        <C>          <C>

BALANCE, DECEMBER 31, 1999             -       16,040,000   $   -    $   160   $    50,739   $ (1,203)  $    798,045    $   847,741

IN-KIND CONTRIBUTION OF SERVICES       -             -          -        -          49,596       -              -            49,596

DISTRIBUTIONS TO STOCKHOLDERS          -             -          -        -             -         -          (196,528)     (196,528)

NET INCOME, 2000                       -             -          -        -             -         -           224,900        224,900
                                ------------- -------------   ------   -------  ------------  ---------   ------------   ----------


BALANCE, DECEMBER 31, 2000             -       16,040,000       -        160       100,335     (1,203)       826,417        925,709

CASH PAID FOR SUBSCRIPTION
 RECEIVABLE                            -             -          -        -             -        1,203           -             1,203

STOCK ISSUED FOR
 REORGANIZATION OF
 COTTAGE INVESTMENT, INC.         1,883,146       235,599      19        2         (45,293)      -              -          (45,272)

STOCK ISSUED FOR SERVICES           376,937     3,466,500       4       35        5,187,561      -              -         5,187,600

DISTRIBUTIONS TO STOCKHOLDERS          -             -          -        -             -         -          (354,192)     (354,192)

NET LOSS, 2001                         -             -          -        -             -         -        (5,700,680)   (5,700,680)
                                ------------- -------------   ------   -------  ------------  ---------   ------------   ----------

BALANCE, DECEMBER 31, 2001        2,260,083    19,742,099      23       197      5,242,603       -        (5,228,455)        14,368

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
                                        4
</TABLE>
<PAGE>
                    PAVING STONE CORPORATION AND SUBSIDIARIES
           STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
     FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 (CONSOLIDATED) AND 2000
                                   (COMBINED)
7
<TABLE>

<CAPTION>



                                                                          Common    Common
                                    Common                               Stock To    Stock    Additional    Retained  Stockholders'
                                    Stock       Common Stock    Common   Be Issued  Paid-In   Subscription  Earnings     Equity
                                 Outstanding    To Be Issued   Stock Par   Par      Capital  Receivable    (Deficit)  (Deficiency)
                                 -------------  --------------  -----  --------  ----------- ------------  -----------  -----------
<S>                                  <C>             <C>           <C>       <C>        <C>        <C>         <C>            <C>

Stock issued                       18,426,299     (18,426,299)    184     (184)        -        -             -              -

Stock issued for services             456,500            -          4     -         292,796     -             -           292,800

Stock issued to employees
 for services                          34,500            -          1     -           7,243     -             -             7,244

Stock not issued in
 settlement of
 consulting agreement                    -           (536,500)      -     (5)      (724,270)    -             -          (724,275)

Stock issued for stock advisory
 services                           1,000,000            -         10     -         679,990     -             -           680,000

Stock and warrants issued
 for cash                           4,000,000            -         40     -         999,960     -             -         1,000,000

Net Loss, 2002                           -               -       -        -            -        -       (6,933,362)    (6,933,362)
                                 -------------  --------------   -----  -------   ----------   -----   ------------    -----------

BALANCE, DECEMBER 31, 2002         26,177,382         779,300   $ 262  $     8   $6,498,322   $ -    $ (12,161,817)   $(5,663,225)
--------------------------
                                  =============  ==============  =====  ========  ===========  =====   =============   ============

          See accompanying notes to consolidated financial statements.
</TABLE>
                                        5
<PAGE>

<TABLE>
<CAPTION>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND
                     2001 (CONSOLIDATED) AND 2000 (COMBINED)



                                                                   2002                    2001                   2000
                                                             ------------------      ------------------     ------------------
<S>                                                               <C>                         <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
 (Loss) income from continuing operations                 $        (3,272,157)    $        (5,607,018)                 4,452
 Adjustments to reconcile net (loss) income to net cash
    used in operating activities:
  (Loss) income from discontinued operations                       (3,661,205)                (93,662)               220,448
  Depreciation and amortization                                       124,054                  80,545                 39,754
  Provision for doubtful accounts                                     342,850                  57,845                   -
  Contributed capital                                                    -                       -                    49,596
  Collection on accounts previously written off                          -                       -                   (16,704)
  Stock issued for services                                           980,044               5,187,600                   -
  Stock not issued in settlement of consulting agreement             (724,275)                   -                      -
  Loss on disposal of property and equipment                           21,018                    -                      -
  Changes in operating assets and liabilities:
  (Increase) decrease in:
    Accounts receivable                                             1,968,584                (789,810)            (1,626,635)
    Inventories                                                        19,565                  17,899                (54,964)
    Prepaid expense                                                    56,840                 (77,707)                (6,238)
    Rebate receivable                                                 330,438                 (33,364)              (189,725)
    Security deposits and other assets                                (13,472)                (32,084)               (25,099)
    Costs in excess of billings on uncompleted contracts               56,373                (281,389)                12,586
  Increase (decrease) in:
    Accounts payable and accrued expenses                           1,497,688                 483,088                487,711
    Cash overdraft                                                       (381)                326,236                   -
    Billings in excess of cost on uncompleted contracts               774,591                 161,980                (25,770)
    Customer deposits payable                                         (83,641)                 68,141                (54,397)
                                                             ------------------      ------------------     ------------------
         Net Cash Used In Operating Activities                     (1,583,086)               (531,700)            (1,184,985)
                                                             ------------------      ------------------     ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Proceeds from sale of property and equipment                          37,755                    -                      -
 Repayment from (advances to) related party                            18,736                 (18,736)                92,323
 Purchase of property and equipment                                   (72,014)                (67,126)              (101,296)
 Other loans / advances receivable                                     12,429                    -                    (2,000)
                                                             ------------------      ------------------     ------------------
         Net Cash Used In Investing Activities                         (3,094)                (85,862)               (10,973)
                                                             ------------------      ------------------     ------------------


</TABLE>
          See accompanying notes to consolidated financial statements.
                                        6
<PAGE>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE YEARS ENDED DECEMBER 31, 2002 AND
                     2001 (CONSOLIDATED) AND 2000 (COMBINED)

<TABLE>
<CAPTION>
                                                               2002                   2001                    2000
                                                       ------------------      ------------------     ------------------
<S>                                                               <C>                      <C>                   <C>

 Proceeds from sale of common stock                           1,000,000                   1,203                   -
 Payments on capital lease obligation                           (66,822)                 (8,950)                (9,234)
 Payments on note payable                                       (11,416)                 (8,045)                  -
 Proceeds from note payable - related party                     700,000                    -                      -
 Proceeds from (payments of) stockholder loan                  (316,999)                146,316                313,730
 Proceeds from lines of credit                                  262,317                 833,271              1,043,000
 Distributions to stockholders                                     -                   (354,192)              (196,528)
                                                       ------------------      ------------------     ------------------
         Net Cash Provided By Financing Activities            1,567,080                 609,603              1,150,968
                                                       ------------------      ------------------     ------------------

NET DECREASE IN CASH                                            (19,100)                 (7,959)               (44,990)

CASH - BEGINNING OF YEAR                                         34,739                  42,698                 87,688
                                                       ------------------      ------------------     ------------------

CASH - END OF YEAR                                  $            15,639     $            34,739    $            42,698
------------------
                                                       ==================      ==================     ==================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
------------------------------------------------
Cash paid for interest                              $           114,909     $           171,860    $           101,397
                                                       ==================      ==================     ==================

NON-CASH INVESTING AND FINANCING ACTIVITIES:
-------------------------------------------

Equipment acquired by capital lease                 $            69,270     $            52,669    $            55,808
                                                       ==================      ==================     ==================

</TABLE>
          See accompanying notes to consolidated financial statements.
                                        7

<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001




NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

       (A) DESCRIPTION OF BUSINESS

       Paving Stone Corporation,  formerly known as Cottage  Investments,  Inc.,
       and Subsidiaries  install interlocking pavers on driveways and patios for
       residential and commercial use. Paving Stone Corporation was incorporated
       in the State of Nevada on July 22, 1999.

       The original  structure of the business included The Paving Stone Company
       which was  incorporated  in the state of  Florida  in 1990,  and its five
       affiliates located in Atlanta, Arizona,  California,  Georgia and Nevada,
       all incorporated in their respective states from 1999 to 2000.

       Under  a  share  exchange  agreement  (the  "Agreement")  consummated  on
       December 17, 2001, Cottage Investments  ("Cottage")  acquired 100% of the
       issued and  outstanding  common stock of The Paving Stone Company and its
       affiliates for 16,040,000 shares of common stock of Cottage.  As a result
       of the  exchange,  The Paving  Stone  Company and its  affiliates  became
       wholly owned  subsidiaries  of Cottage and the  stockholder of The Paving
       Stone  Company  became  stockholder  of  approximately  73%  of  Cottage.
       Generally accepted  accounting  principles require that the company whose
       stockholders  retain a majority  interest  in a business  combination  be
       treated  as the  acquirer  for  accounting  purposes.  As a  result,  the
       exchange  was treated as an  acquisition  of Cottage by The Paving  Stone
       Company, and a recapitalization of The Paving Stone Company. During 2001,
       Cottage  Investments  changed its name to Paving Stone  Corporation  (the
       "Company").

       Accordingly, the financial statements include the following:

          (1)  The balance sheets  consists of the net assets of the acquirer at
               historical  cost and the net assets of the acquiree at historical
               cost.

          (2)  The  statements  of  operations  include  the  operations  of the
               acquirer  for the periods  presented  and the  operations  of the
               acquiree from the date of the merger.

       (B) PRINCIPLES OF CONSOLIDATION

       The accompanying  consolidated  financial statements include the accounts
       of the  Company  and  its  wholly  owned  subsidiaries.  All  significant
       intercompany   transactions   and  balances   have  been   eliminated  in
       consolidation.

       (C) PRINCIPLES OF COMBINATION

       The 2000 financial statements are presented on a combined basis, which
       represents  The Paving Stone Company and its  affiliates  Paving Stone
       Company of Atlanta,  Inc., The Paving Stone Company of Arizona,  Inc.,
       Paving  Stone  of  Nevada,  Inc.,  and The  Paving  Stone  Company  of
       California,  Inc.,  all of which  were owned by one  stockholder.  All
       significant  intercompany balances and transactions were eliminated in
       the combination.


                                       8
<PAGE>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


       (D) USE OF ESTIMATES

       In  preparing   financial   statements  in  conformity   with  accounting
       principles generally accepted in the United States of America, management
       is required to make  estimates and  assumptions  that affect the reported
       amounts of assets and liabilities and the disclosure of contingent assets
       and liabilities at the date of the financial  statements and revenues and
       expenses  during the reported  period.  Actual  results could differ from
       those estimates.

       (E) CASH

       Cash includes cash on deposit at financial institutions.

       (F) INVENTORIES

       Inventories consist of brick pavers.  Inventories are stated at the lower
       of cost or market  value,  as  determined  using the first in,  first out
       method.

       (G) PROPERTY AND EQUIPMENT

       Property and equipment are stated at cost, less accumulated depreciation.
       Expenditures  for  maintenance  and  repairs  are  charged  to expense as
       incurred.   Depreciation   is  provided  using  the   straight-line   and
       accelerated methods over the estimated useful life of the assets of three
       to thirty-nine years.

       (H) IMPAIRMENT OF LONG-LIVED ASSETS

       The Company reviews  long-lived  assets for impairment under Statement of
       Financial Accounting Standards No. 144, "Accounting for the Impairment or
       Disposal of Long-Lived Assets." Long-lived assets to be held and used are
       reviewed  for  impairment  whenever  events or changes  in  circumstances
       indicate that the carrying amount of an asset may not be recoverable. The
       carrying  amount of a long-lived  asset is not  recoverable if it exceeds
       the sum of the  undiscounted  cash flows  expected to result from the use
       and eventual  disposition of the asset.  Long-lived assets to be disposed
       of are  reported at the lower of carrying  amount or fair value less cost
       to sell.

       (I) INCOME TAXES

       Prior to the  recapitalization  of the Company on December  17, 2001 (See
       Note 1(A)),  the Company  and its  affiliates,  with the consent of their
       stockholder,  had  elected  under the  Internal  Revenue  Code to be an S
       Corporation. In lieu of corporation income taxes, the stockholder of an S
       Corporation  is  taxed  on their  proportionate  share  of the  Company's
       taxable income.  Therefore,  no provision or liability for federal income
       taxes had been  included in the financial  statements  for the year ended
       December  31,  2000 and for the  period  from  January  1,  2001  through
       December 17, 2001.


                                       9
<PAGE>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001



       For the period  subsequent  to the merger,  December 18, 2001 to December
       31, 2001, and for the year ended December 31, 2002, the Company  accounts
       for income taxes under the Financial Accounting Standards Board Statement
       of Financial  Accounting  Standards No. 109 "Accounting for Income Taxes"
       ("Statement   109").   Under  Statement  109,  deferred  tax  assets  and
       liabilities are recognized for the future tax  consequences  attributable
       to  differences  between  the  financial  statement  carrying  amounts of
       existing assets and liabilities and their respective tax bases.  Deferred
       tax assets and  liabilities are measured using enacted tax rates expected
       to  apply to  taxable  income  in the  years  in  which  those  temporary
       differences are expected to be recovered or settled. Under Statement 109,
       the effect on  deferred  tax assets  and  liabilities  of a change in tax
       rates is  recognized  in income in the period that includes the enactment
       date.

       (J) REVENUE AND COST RECOGNITION

       The  Company   recognizes   construction   contract  revenues  using  the
       percentage-of-completion  method, based primarily on labor costs incurred
       to date compared with total estimated labor costs.  Direct  materials and
       subcontractor  materials,  labor and equipment,  are included in revenues
       and  cost of  revenues  when  management  believes  that the  Company  is
       responsible for the ultimate  acceptability of the project.  Gross margin
       related to each job is recognized  as services are  rendered.  Changes to
       total estimated  contract costs or losses,  if any, are recognized in the
       period  in which  they are  determined.  Costs  recognized  in  excess of
       amounts  billed are classified as current assets under costs in excess of
       billings on uncompleted contracts. Amounts billed to clients in excess of
       revenues  recognized to date are classified as current  liabilities under
       billings  in  excess  of  cost  on  uncompleted  contracts.  The  Company
       anticipates  that   substantially  all  incurred  costs  associated  with
       contract  work in  progress  at  December  31,  2002 will be  billed  and
       collected  by 2003.  Deposits  received  upon  signing of  contracts  are
       recorded as customer  deposits  payable and are  reclassified  to revenue
       upon completion of the job.

       (K) EARNINGS (LOSS) PER SHARE

       Net income (loss) per common share for the years ended December 31, 2002,
       2001 and 2000 is required to be computed  based on the  weighted  average
       common stock and dilutive common stock equivalents outstanding during the
       year as defined by Statement of Financial Accounting Standards,  No. 128;
       "Earnings Per Share". The effect of common stock equivalents was not used
       in the  calculation of net income (loss) per share since the effect would
       be anti-dilutive.

       (L) FAIR VALUE OF FINANCIAL INSTRUMENTS

       Statement of Financial Accounting  Standards No. 107,  "Disclosures about
       Fair Value of Financial Instruments", requires disclosures of information
       about the fair value of  certain  financial  instruments  for which it is
       practicable to estimate that value. For purposes of this disclosure,  the
       fair  value  of a  financial  instrument  is  the  amount  at  which  the
       instrument  could be exchanged in a current  transaction  between willing
       parties, other than in a forced sale or liquidation.


                                       10
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001

       The carrying  amount of the Company's  financial  instruments,  including
       cash, accounts receivable,  other receivables,  lines of credit, accounts
       payable  and  accrued   expenses,   customer   deposits,   capital  lease
       obligation, notes payable and loans payable,  approximates fair value due
       to the relatively short period to maturity for these instruments.

       (M) ADVERTISING COSTS

       In accordance with the Accounting Standards Executive Committee Statement
       of  Position  93-7  ("SOP  93-7"),   costs  incurred  for  producing  and
       communicating  advertising  of the Company are charged to  operations  as
       incurred.  Advertising  expenses for the period ended  December 31, 2002,
       2001 and 2000 were $276,232, $103,907 and $36,458, respectively.

       (N) DEFERRED OFFERING COSTS

       The costs related to the issuance of debt are  capitalized  and amortized
       to interest expense over the lives of the related debt.

       (O) SEGMENT ACCOUNTING

       Statement of Financial Accounting  Standards No. 131,  "Disclosures about
       Segments  of  an  Enterprise  and  Related  Information",  ("SFAS  131"),
       requires that a public  business  enterprise  report a measure of segment
       profit or loss,  certain  specific revenue and expense items, and segment
       assets.  It requires  reconciliations  of total segment  revenues,  total
       segment profit or loss, total segment assets, and other amounts disclosed
       for segments to corresponding amounts in the enterprise's general-purpose
       financial  statements.  It requires that all public business  enterprises
       report  information  about the  revenues  derived  from the  enterprise's
       products or services (or groups of similar products and services),  about
       the geographic  segments in which the enterprise earns revenues and holds
       assets, and about major customers  regardless of whether that information
       is used in making operating decisions.  However,  this Statement does not
       require an  enterprise  to report  information  that is not  prepared for
       internal use if reporting it would be impracticable. The Company has five
       geographical  reportable segments and segment information is presented in
       Note 15. See Note 10 for information  relating to discontinued  operating
       segments.

       (P) RECENT ACCOUNTING PRONOUNCEMENTS

       In April  2002,  the FASB issued  SFAS No.  145,  "Rescission  of FASB
       Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and
       Technical  Corrections."  SFAS No. 145 rescinds the provisions of SFAS
       No. 4, which requires  companies to classify  certain gains and losses
       from debt  extinguishments  as  extraordinary  items,  eliminates  the
       provisions  of SFAS No. 44 regarding  transition  to the Motor Carrier
       Act of 1980 and amends the  provisions  of SFAS No. 13 to require that
       certain lease modifications be treated as sale leaseback transactions.
       The  provisions  of SFAS No.  145  related to  classification  of debt
       extinguishments are effective for fiscal years beginning after May 15,
       2002, with earlier application encouraged.


                                       11
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


       In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
       Costs." SFAS No. 146 applies to costs  associated  with an exit  activity
       (including  restructuring) or with a disposal of long-lived assets. Those
       activities can include eliminating or reducing product lines, terminating
       employees  and contracts and  relocating  plant  facilities or personnel.
       Under SFAS No.  146,  the  Company  will  record a  liability  for a cost
       associated  with an exit or  disposal  activity  when that  liability  is
       incurred and can be measured at fair value. SFAS No. 146 will require the
       Company to disclose  information about its exit and disposal  activities,
       the related costs, and changes in those costs in the notes to the interim
       and annual financial  statements that include the period in which an exit
       activity is initiated and in any subsequent  period until the activity is
       completed.  SFAS No. 146 is effective  prospectively for exit or disposal
       activities  initiated  after  December  31, 2002,  with earlier  adoption
       encouraged.  Under SFAS No. 146, a company cannot restate it's previously
       issued  financial  statements  and the  new  statement  grandfathers  the
       accounting for liabilities  that a company had previously  recorded under
       Emerging Issues Task Force Issue 94-3.

       In  December  2002,  the  FASB  issued  SFAS  No.  148,  "Accounting  for
       Stock-Based Compensation-Transition and Disclosure - an amendment of FASB
       Statement  No.  123." SFAS No. 148 amends SFAS No. 123,  "Accounting  for
       Stock Based Compensation" and provides alternative methods for accounting
       for a change by  registrants  to the fair value method of accounting  for
       stock-based   compensation.   Additionally,   SFAS  No.  148  amends  the
       disclosure  requirements  of SFAS No.  123 to require  disclosure  in the
       significant  accounting  policy  footnote  of  both  annual  and  interim
       financial   statements   of  the   method   of   accounting   for   stock
       based-compensation   and  the  related  pro-forma  disclosures  when  the
       intrinsic  value method  continues to be used. The statement is effective
       for fiscal years  beginning  after December 15, 2002, and disclosures are
       effective for the first fiscal quarter beginning after December 15, 2002.

       Management does not expect the impact from these pronouncements to have a
       material  impact on the  Company's  consolidated  financial  position  or
       results of operations.

NOTE 2 ACCOUNTS RECEIVABLE

       Accounts  receivable  at  December  31,  2002 and 2001  consisted  of the
following:
<TABLE>
<CAPTION>

                                                      2002                 2001
                                                 ----------------     ----------------
<S>     <C>                                          <C>                  <C>
       Accounts receivable                    $       1,698,441            1,917,711
       Less allowance for doubtful accounts             (57,095)             (28,154)
       Less allowance for sales discounts              (379,545)             (85,173)
                                                 ----------------     ----------------

                                              $       1,261,801    $       1,804,384
                                                 ================     ================
</TABLE>

       For the  years  ended  December  31,  2002,  2001 and 2000,  the  Company
       recorded bad debt expense of $837,022, $86,000 and $34,583, respectively.


                                       12
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


NOTE 3 REBATE RECEIVABLE

       On July 8,  1998,  the  Company  entered  into a trade  agreement  with a
       manufacturer  whereby  the  Company  shall  receive a 3% rebate on pavers
       supplied by the  manufacturer.  After the total rebate exceeds  $550,000,
       the rebate shall be reduced to 1%.  Through  December 31, 2001, the total
       amount of rebates  earned  was  $538,954  and at  December  31,  2001 the
       Company was owed $330,438 under this agreement.

       During 2002, the  manufacturer  contended  that the Company  violated its
       trade  agreement by modifying  the pavers in a process known as tumbling.
       The Company successfully defended its position in binding arbitration and
       the Company has collected full payment of all amounts previously owed and
       as of December 31, 2002, the agreement was terminated.

NOTE 4 PROPERTY AND EQUIPMENT

       Property and  equipment  at December  31, 2002 and 2001  consisted of the
       following:

                                                2002                 2001
                                            ----------------     --------------

       Data processing equipment        $           4,607    $           3,945
       Furniture and fixtures                      10,022               12,174
       Leasehold improvements                       8,737                3,949
       Machinery and equipment                     63,877               62,384
       Office equipment                            16,591               10,078
       Vehicles                                    30,575                    -
       Less accumulated depreciation              (26,298)             (19,491)
                                            ----------------     --------------

                                        $         108,111    $          73,039
                                           ================     ===============

       Depreciation expense for the years ended December 31, 2002, 2001 and 2000
was $95,626, $58,598 and $34,549, respectively.

NOTE 5 NOTE AND CAPITAL LEASE OBLIGATION PAYABLE

       Note and capital lease obligation  payable  consisted of the following at
December 31, 2002 and 2001:
<TABLE>
<CAPTION>

                                                                                       2002                 2001
                                                                                  ----------------     ----------------
<S>     <C>                                                                               <C>               <C>

       4.90%  installment  loan payable  through July 2003 in sixty monthly    $           4,803    $          12,724
        installments   of   $697   including    principal   and   interest,
        collateralized by a van



                                       13
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


       8.54% capital lease  obligation  payable through  September 2005  in
        monthly  sixty  installments  of  $1,136  including  principal  and
        interest, collateralized by a loader and trailer                                    -                  43,719

       3.90%  installment  loan  payable  through  May  2007  in  sixty  monthly
        installments of $778 including principal and interest,
        collateralized by a loader and trailer                                            37,849                 -

       4.43% capital  lease  obligation  payable  through  October 2004  in
        thirty-six  monthly  installments  of $423 including  principal and
        interest, collateralized by all property owned by the Company                     35,220               52,669

       8.25% capital lease obligation payable through June 2005 in sixty monthly
        installments of $335 including principal and interest,
        collateralized by a trailer                                                       15,284                 -

       Loan payable through December 20, 2002 in monthly installments of $1,747,
        collateralized by a smooth roller. At December 31, 2002,
        the note is currently in default                                                   6,988                 -
                                                                                  ----------------     ----------------

       Total long-term debt                                                              100,144              109,112
       Less current maturities                                                           (38,330)             (33,111)
                                                                                  ----------------     ----------------


       Long-term debt                                                          $          61,814    $          76,001
                                                                                  ================     ================

       Scheduled  maturities  of  long-term  debt at  December  31,  2002 are as
follows:

                                         2003                                                       $          42,054
                                         2004                                                                  33,370
                                         2005                                                                  13,358
                                         2006                                                                  13,358
                                      Thereafter                                                                6,236
                                                                                                       ----------------

       Total future minimum note and lease payments                                                           108,376
        Less: interest                                                                                         (8,232)
                                                                                                      ----------------
       Present value of future minimum note and lease payments                                                100,144
        Less: current portion                                                                                 (38,330)
                                                                                                       ----------------

       Long-term obligation under note and capital lease obligation                                 $          61,814
                                                                                                       ================

</TABLE>


                                       14
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


NOTE 6 NOTES PAYABLE - STOCKHOLDER

       During 2000,  the Company  received  advances from a  stockholder  in the
       aggregate  amount of  $335,693.  The  stockholder  provided  funding  for
       working capital  requirements.  The loan bears interest at 7% and was due
       on June 30, 2002 and included in a new note payable in 2002.

       During 2001, the Company  received  advances from the same stockholder in
       the aggregate  amount of $64,353 to satisfy related party  balances.  The
       loan bears interest at the rate of 6% and is due on January 31, 2003. The
       advances were included in a new note payable in 2002.

       During 2001, the Company  received  advances from the same stockholder of
       $50,000 and $10,000 to fund consulting fees related to the acquisition of
       Cottage  Investments  (See Note 1(A)). The loans bear interest at 13% and
       7%,  respectively.  The advances  were  included in a new note payable in
       2002.

       During 2002, the Company made  repayments to the  stockholder of $316,999
       including  accrued  interest of $35,460.  The Company entered into a note
       payable of $143,047, interest of 7%, due January 2004 and unsecured.

NOTE 7 NOTE PAYABLE - RELATED PARTY

       On November 13, 2002, the Company  received a loan from a director of the
       Company in the amount of $700,000. The loan bears interest at the rate of
       10%, payable semi-annually, and is due on January 31, 2004 (See Note 12).

NOTE 8 LINE OF CREDIT
<TABLE>
<CAPTION>

                                                                                        2002                2001
                                                                                   ---------------     ----------------
<S>                             <C>                                                       <C>               <C>

        Revolving  line  of  credit  with  a  financial  institution  with a
        maximum  line of  $2,500,000.  The line of  credit  is  payable  on
        demand with interest charged at the 30-day dealer  commercial paper
        rate plus 2.55%.  It is secured by all of the assets of the Company
        and  Paving  Stone  Industries,  Inc.  a  corporation  owned by our
        majority stockholder (See Notes 11(C) and 12).                           $      2,502,588    $       2,240,271
                                                                                   ===============     ================
</TABLE>

        The line of credit  is due for  renewal  on April 30,  2003 and  has
        not been renegotiated for renewal as of such date.



                                       15
<PAGE>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001




NOTE 9 STOCKHOLDERS' EQUITY

       (A) AMENDMENT TO ARTICLES OF INCORPORATION

       During December 2001, the Board of Directors approved an amendment to the
       Articles  of   Incorporation   to  change  the  shares   authorized  from
       350,000,000 to 150,000,000 (See Reverse Stock Split Note 9(B)).

       (B) REVERSE STOCK SPLIT

       During  December  2001,  the Board of  Directors  authorized  a 133 for 1
       reverse  stock split.  All capital stock shares and amounts and per share
       data have been retroactively restated to reflect the reverse stock split.

       (C) COMMON STOCK ISSUANCES

       During 2001,  the Company  issued  376,937 shares of common stock and had
       3,466,500 shares of common stock to be issued to consultants for services
       rendered having an aggregate fair value of $5,187,600.

       In 2002,  536,500  shares of common  stock that were to be issued under a
       consulting  agreement  executed in 2001 were not issued per a  settlement
       agreement. The shares were valued at $724,275, the fair value on the date
       of grant.

       During 2002, the Company issued 4,000,000 shares of common stock for cash
       proceeds of  $1,000,000  and  1,500,000  warrants  to purchase  shares of
       common  stock  of the  Company,  $0.00001  par  value,  at a share  price
       determined by taking a thirty percent discount to the average closing bid
       price on the ten trading  days prior to the  exercise  date.  At no point
       shall the exercise price exceed $1.00.

       During  2002,  the  Company  issued  456,000  shares of  common  stock to
       consultants  for services.  The shares were valued at $292,800,  the fair
       value on the dates of grants.

       During  2002,  the Company  issued  34,500  shares of common stock to its
       employees,  as consideration  for serviced  rendered to the Company.  The
       shares were valued at $7,244, the fair value on the dates of grants.

       During 2002,  the Company  issued  1,000,000  shares of common stock to a
       private equity fund as  consideration  for stock advisory  services.  The
       shares were valued at $680,000,  the fair value on the date of grant.  As
       stated in the agreement,  the equity fund had the option to terminate the
       agreement  in the event the  applicable  registration  statement  had not
       become  effective by February 1, 2003  (Commencement  Date). On April 10,
       2003,  the equity fund  exercised  its option to terminate  the agreement
       based on the above provision. The 1,000,000 shares were expensed in 2002.



                                       16
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


NOTE 10  DISCONTINUED OPERATIONS

       During December 2002, the Company made the decision to  discontinued  its
       Florida and New England  operations.  Both operations have been accounted
       for as discontinued operations and accordingly,  amounts in the financial
       statements and related notes for all periods shown,  reflect discontinued
       operations   accounting.   In  connection  with  the  Company's   planned
       discontinuance,  the  Company  recorded  $872,000  related to the planned
       discontinuance  of the operations,  including asset impairments and lease
       termination costs. Concurrently, the Company entered into an agreement to
       assist a contractor in acquiring all the  Company's  former  customers in
       various Florida markets. The agreement calls for the Company to receive a
       commission of 5% of the actual gross margin earned during 2003.

       Information  relating to the Florida and New England  operations  for the
       years ended December 31, 2002, 2001 and 2000 are as follows:
<TABLE>
<CAPTION>

                                                                2002                  2001                  2000
                                                          -----------------     -----------------     -----------------
<S>                                                              <C>                  <C>                     <C>

       Revenues                                        $       18,347,205    $       23,640,422    $       22,040,663
       Costs and expenses                                      22,008,410            23,734,084            21,820,215
                                                          -----------------     -----------------     -----------------

           Net (Loss) Income                           $       (3,661,205)   $          (93,662)   $          220,448
                                                          =================     =================     =================

                                                                                        2002                2001
                                                                                  ---------------     ----------------
       ASSETS
        Accounts receivable, net                                                $      1,995,086    $       3,763,937
        Cost in excess of billings                                                       288,828              352,607
        Rebate receivable                                                                   -                 330,438
        Inventories                                                                       17,500               37,065
        Property and equipment                                                           184,816              233,001
        Other assets                                                                      27,390               96,375
                                                                                   ---------------     ----------------

           Total Assets                                                         $      2,513,620    $       4,813,423
                                                                                   ===============     ================

       LIABILITIES
        Cash overdraft                                                          $        249,618    $         266,715
        Billing in excess of cost                                                        735,250              135,094
        Accounts payable and accrued expenses                                          2,687,582            2,554,014
        Other liabilities                                                                   -                  45,594
                                                                                     ---------------     ----------------

           Total Liabilities                                                    $      3,672,450    $       3,001,417
                                                                                   ===============     ================

</TABLE>


                                       17
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


NOTE 11  COMMITMENTS AND CONTINGENCIES

       (A) OPERATING LEASES

       The Company  leases  office,  showroom and warehouse  space under various
       related party (See Note 11(C)) and third party operating lease agreements
       some of which provide for minimum  annual rental  payments plus a portion
       of real  estate  taxes and  operating  costs.  The  Company  also  leases
       equipment under an operating lease agreement.

       Future minimum lease payments for the operating  leases are as follows at
December 31, 2002:

                     2003                     $          287,023
                     2004                                252,469
                     2005                                208,685
                     2006                                137,365
              2007 and thereafter                      2,051,809
                                                 -----------------

                                              $        2,937,351
                                                 =================

       Rent expense on operating leases existing during the years ended December
       31,  2002,  2001 and 2000  amounted to $678,191,  $325,720 and  $248,338,
       respectively.

       (B) LEGAL ACTIONS

       The Company is party to certain  legal  actions  occurring  in the normal
       course of  business.  During  2002,  the Company  prematurely  terminated
       several operating leases and vacated premises they occupied.  The Company
       estimates  that the  settlement  costs of  terminating  these leases will
       approximate  $122,000.  This amount has been accrued at December 31, 2002
       and is included in accounts payable and accrued expenses.

       (C) CONTINGENCIES

       The  Company is a  co-borrower  with  Paving  Stone  Properties,  Inc. (a
       company owned by the Company's  majority  stockholder)  on two properties
       that are currently being occupied by the Company under 25-year  operating
       leases (See Notes 11(A) and 12). The Company is  contingently  liable for
       the mortgages in the event of default by Paving Stone Properties, Inc. in
       the  amount of  approximately  $681,900  as of  December  31,  2002.  The
       Company's subsidiaries are also guarantors of said mortgages.

       (D) CONSULTING AGREEMENT

       On December 6, 2002,  the Company  entered into an agreement with a third
       party and  terminated  their prior  agreement  dated  April 5, 2002.  The
       agreement  provides for consulting  services to be rendered in connection
       with securing equity capital. The Company agreed to make a payment to the
       consultant an aggregate amount of $61,123 consisting of services rendered


                                       18
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001

       for the period June 1, 2002  through  November  13, 2002 (See Note 9). At
       December 31, 2002,  $14,000 has been paid in cash and the Company accrued
       stock compensation in the amount of $47,123,  representing  65,629 shares
       of common  stock for services  rendered to the  Company.  The shares were
       valued for  financial  accounting  purposes at $0.75 per share,  the fair
       value at the date of  grant.  Additionally,  subject  to the terms of the
       agreement,  the  Company  accrued  stock  compensation  in the  amount of
       $15,000, representing 25,000 shares of common stock for services rendered
       to the Company.  The shares were valued for financial  accounting purpose
       at $0.60 per share,  the fair value at the date of grant.  The  agreement
       provides for additional  compensation  to the consultant  with regards to
       the  consummation  of  various  equity  or  debt  financing  transactions
       subsequent to the  previously  mentioned  date whereby the consultant has
       materially  participated  in  the  negotiation  and  structuring  of  the
       transaction.  The  consultant  shall be  compensated a fee of 2% for debt
       financing  transactions  and 5% for equity  financing  transactions.  The
       agreement  may be  terminated at any time without any liability to either
       party by providing written notice of such termination to the other party.

       (E) BOARD OF DIRECTORS FEES

       On December 30, 2002, the Company  approved the issuance of 25,000 shares
       of common stock to three board  members plus  175,000  stock  options per
       member with an exercise price equal to the market value on a future date.
       At December 31,  2002,  the Company  accrued  stock  compensation  in the
       amount  of  $40,000,  representing  75,000  shares  of  common  stock for
       services  rendered to the Company.  The shares were valued for  financial
       accounting  purposes  at $0.53 per  share,  the fair value on the date of
       grant.  The stock  options  were equal to the market value on the date of
       grant and no compensation expense was recorded.

       (F) CONSULTING AGREEMENT

       During 2003, the Company  entered into an agreement with a third party to
       provide  business  and  financial  consulting  services  with  particular
       expertise in the areas of business  development and strategic  alliances.
       The term of the  agreement  is for a period of six  months.  The  Company
       shall  have  the  right  to  terminate  the   agreement  for  cause.   As
       compensation,  the  consultant  shall receive an engagement fee of 90,000
       shares of common stock; 58,000 shares upon execution of the agreement and
       32,000  shares  ninety days from the date of  execution.  The Company has
       agreed to file a  Registration  Statement  covering  the shares of common
       stock issued pursuant to the agreement.

NOTE 12  RELATED PARTY TRANSACTIONS

       The  Company  is  co-borrower  with  Paving  Stone  Properties,  Inc.  in
       connection with the financing of two facilities currently occupied by the
       Company.  The  majority  shareholder  of the  Company  is also  the  sole
       shareholder of Paving Stone Properties, Inc. (See Notes 10 and 11(A)).


                                       19
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001


       The Company leased  administrative  offices from Paving Stone Properties,
       Inc. on a  month-to-month  basis and paid rent in the amount of $103,831,
       $107,196  and $36,000 for the years ended  December  31,  2002,  2001 and
       2000, respectively (See Note 11(A) and (C)).

       See Notes 6 and 7 for additional related party transactions.

NOTE 13  CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

       During 2002, 2001 and 2000,  7.9%, 19.8% and 22.3% of the Company's total
       revenues were derived from sales to two customers.  During 2002 and 2001,
       no single customer owed the Company over 10% of accounts  receivable (See
       Note 2).

       Financial   instruments,   which  potentially   subject  the  Company  to
       concentrations  of credit  risk,  consist  of  accounts  receivable.  The
       Company's  allowance  for  doubtful  accounts is based upon  management's
       estimates and historical experience.  The Company performs ongoing credit
       evaluations of its customers (See Note 2).

NOTE 14  INCOME TAXES

       Income tax expense (benefit) for the years ended December 31, 2002 and
       2001 is summarized as follows:
<TABLE>
<CAPTION>


                                                                                      2002                  2001
                                                                                -----------------     -----------------
<S>                                                                                  <C>                     <C>

       Current:
        Federal                                                              $           30,795    $             -
        State                                                                              -                     -
        Deferred - Federal and State                                                       -                     -
        Change in valuation allowance                                                      -                     -
                                                                                -----------------     -----------------

       Income tax expense (benefit)                                          $           30,795    $             -
                                                                                =================     =================

       The Company's tax expense differs from the "expected" tax expense for the
years ended December 31, 2002 and 2001, as follows:

                                                                                      2002                  2001
                                                                                -----------------     -----------------

        U.S. Federal income tax provision (benefit)                          $       (2,346,900)   $             -
        Effect of unused net operating loss carryforward                              2,346,900                  -
                                                                                -----------------     -----------------


                                                                             $             -       $             -
                                                                                =================     =================

       The tax effects of temporary  differences  that gave rise to  significant
       portions of deferred tax assets and  liabilities at December 31, 2002 and
       2001 are as follows:


                                       20
<PAGE>


                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001

                                                                                      2002                  2001
                                                                               -----------------     -----------------
        Deferred tax assets:
        Net operating loss carryforward                                      $        2,346,900    $             -
                                                                                -----------------     -----------------

         Total gross deferred tax assets                                              2,346,900                  -
        Less valuation allowance                                                     (2,346,900)                 -
                                                                                -----------------     -----------------


       Net deferred tax assets                                               $             -       $             -
                                                                                =================     =================

</TABLE>

       Because the Company  underwent an ownership change, as defined in Section
       382 of the Internal  Revenue Code,  the Company's net tax operating  loss
       carryforwards  generated prior to the ownership  change may be subject to
       annual  limitation  which could reduce or defer the  utilization of those
       losses.

       At December 31, 2002, the Company had a net operating  loss  carryforward
       of  approximately   $6,902,600  for  U.S.  Federal  Income  tax  purposes
       available to offset future taxable income  expiring  beginning  2021. The
       Company recorded a valuation allowance of $2,346,900 at December 31, 2002
       to fully offset the deferred tax asset benefit.

NOTE 15  SEGMENT REPORTING

       The Company has six geographic  reportable  segments:  Florida,  Arizona,
       Atlanta,  Nevada,   California  and  Corporate.   Each  segment  installs
       interlocking   pavers  on  driveways  and  patios  for   residential  and
       commercial  use. The accounting  policies of the segments are the same as
       described in the summary of significant  accounting policies. The Company
       evaluates segment performance based on income from operations.  Sales for
       each segment are based on the location of the third-party  customer.  All
       intercompany  transactions  between  segments have been  eliminated.  The
       Company's selling,  general and  administrative  expenses and engineering
       expenses  are  charged  to each  segment  based on the  region  where the
       expenses are incurred.  As a result,  the components of operating  income
       for one segment may not be comparable to another segment. Segment results
       for 2002, 2001 and 2000 are as follows:

<TABLE>
<CAPTION>

                              Arizona/         Georgia/
                                Texas        Mid-Atlantic       Nevada         California        Corporate          Total
                          ---------------------------------------------------------------------------------------------------
<S>                              <C>            <C>                 <C>         <C>                   <C>           <C>

2002
----

Net sales                 $   4,934,638   $     3,015,005   $   1,730,699   $     3,337,238   $      62,764   $    13,080,344

Net income (loss) from
 operations                     (20,364)         (325,946)       (266,044)       (1,495,829)     (1,163,974)       (3,272,157)

Depreciation and
 amortization                     3,544            11,347           1,868             5,657               5            22,416

Assets                          625,370           475,625         184,619           289,626            -            1,575,240

Capital expenditures             10,013            42,378            -               42,157            -               94,548
                          ---------------------------------------------------------------------------------------------------



                                       21
<PAGE>

                    PAVING STONE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001

2001
----
Net sales                 $   2,816,978   $     2,922,190   $   1,016,628   $     1,358,757   $        -      $     8,114,553

Net income (loss) from
 operations                      16,568            46,995           3,595          (475,676)     (5,198,500)       (5,607,018)

Depreciation and
 amortization                     2,321            11,196           1,862               358            -               15,737

Assets                          559,073           855,859         295,264           436,771         (20,000)        2,126,967

Capital expenditures              6,666             3,021            -                6,150            -               15,837
                          ---------------------------------------------------------------------------------------------------


2000
----
Net sales                 $   1,106,322   $     1,888,267   $     440,660   $          -      $        -      $     3,4352249

Net income (loss) from
 operations                     (58,150)          135,858         (82,160)             -               -               (4,452)

Depreciation and
 amortization                       805             2,741             922              -               -                4,468

Assets                          102,816           301,279          15,247               100            -              419,442

Capital expenditures              6,693            60,188           7,812              -               -               74,693
                          ---------------------------------------------------------------------------------------------------


</TABLE>

NOTE 16  GOING CONCERN

       As reflected in the accompanying financial statements,  the Company has a
       net  loss  of  $6,933,362  a  negative  cash  flow  from   operations  of
       $1,583,086,   a  working   capital   deficiency  of   $4,892,091   and  a
       stockholders'  deficiency of $5,663,225.  These factors raise substantial
       doubt about its ability to  continue as a going  concern.  The ability of
       the Company to continue as a going  concern is dependent on the Company's
       ability to raise  additional  funds and implement its business  plan. The
       financial  statements  do not  include  any  adjustments  that  might  be
       necessary if the Company is unable to continue as a going concern.

       Management has  discontinued  its Florida and New England  operations and
       has consolidated its California operations into one central office. These
       operations  accounted  for a  significant  portion of the losses in 2002.
       Management  has  also  reduced  other  operating   expenses  during  2003
       throughout the Company to return to profitable operations during 2003.

       Management's future plans also include obtaining additional financing for
       which they are currently in active  negotiations  with several  financing
       institutions.

NOTE 17  SUBSEQUENT EVENTS

       (A) COMMON STOCK ISSUANCE

       During 2003,  2,548,700 shares of common stock were issued to consultants
       for  services  performed.  The shares were valued at  $795,370,  the fair
       value on the date of grants.

                                       22
<PAGE>