OMB APPROVAL

                                                           OMB Number: 3235-0420

                                                         Expires: March 31, 2005

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

                                   Form 10-KSB/A

|X|   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934

      For the fiscal year ended December 31, 2002

|_|   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the transition period from _______________________ to _____________

                         Commission file number: 0-30463

                               R-TEC HOLDING, INC.
                 (Name of small business issuer in its charter)

             IDAHO                                               82-0515707
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

1471 E. Commercial Ave., Meridian, Idaho                            83642
(Address of principal executive offices)                          (Zip Code)

Issuer's telephone number: (208) 887-0953 FAX: (208) 888-1757

Securities registered under Section 12(b) of the Exchange Act:

       Title of each class             Name of each exchange on which registered

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

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

Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock $1.00 par value
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant

<PAGE>

was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

Registrants revenues for the fiscal year ended December 31, 2002 were $
2,672,237.

As of December 31, 2002, there were 21,742,189 shares of the registrant's no par
value common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

As referenced in the Exhibit List attached hereto.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

R-Tec Holding, Inc. (the "Company")

R-Tec Holding, Inc., through its subsidiaries (collectively "the Company")
develops custom automation solutions to the high-tech industry through its
consulting services, prototype development, tooling and manufacturing. The
Company also designs and manufacturers high performance test sockets, burn-in
sockets and IC interconnect devices for the IC chip industry.

Although R-Tec Holding, Inc., was initially formed as a wholly owned subsidiary
of Biogan International, Inc. (Biogan), R-Tec Holding, Inc., has operated as a
totally independent and separate entity from Biogan since its formation in
August, 1999.

R-Tec Corporation (R-Tec) has been in existence since 1995. On September 27,
1999, R-Tec Holding, Inc. and R-Tec Corporation entered into a definitive
agreement under which the shareholders of R-Tec transferred 80% of their common
stock holdings of R-Tec Corporation in exchange for 4,266,797 shares of R-Tec
Holding, Inc. R-Tec Holding also agreed to contribute its investment of
IntorCorp to R-Tec Corporation (IntorCorp was dissolved prior to year end 2002).
The transaction closed on November 3, 1999. On November 4, 1999, R-Tec
Corporation redeemed the remaining 20% ownership from the shareholders. The
redemption resulted in recording a $100,000 note payable to the former
shareholders. The stock redemption resulted in R-Tec Corporation being a wholly
owned subsidiary of R-Tec Holding, Inc.

The financial statements for the Company have been prepared in accordance with
reverse purchase accounting. The newly formed holding company, R-Tec Holding,
Inc. had no activity prior to the acquisition, and accordingly, is considered to
be the acquired entity. R-Tec

<PAGE>

Holding was formed to posture itself to effect a business combination. R-Tec
Holding had no tangible assets, liabilities, or earnings process prior to the
combination. The only assets of R-Tec Holding at the date of the combination
were the in-process research and development assets.

On December 1, 1999, the Company formed a new, wholly owned subsidiary, R-Tec
Interconnect, Inc. (hereinafter referred to as "Interconnect") to focus on its
IC Testing Interface products. The Company has been developing testing interface
products since 1998 believing that product development and maturity were at a
stage to justify a separate divisional focus. However, effective September 1,
2001, Interconnect was merged into R-Tec Corporation to create one operational
company under the umbrella ownership of R-Tec Holding, Inc. The merger was also
effected to reduce common overhead expenses; both Interconnect and R-Tec Corp
are located in the same facilities and receive managerial support from the same
individuals.

R-Tec Corporation, a subsidiary of the Company.

R-Tec Corporation was initially organized in 1995 as a small individually
operated company in a modified garage for the purpose of developing and
fabricating High-Tech custom manufacturing equipment, primarily for a single
customer. Most of the contracts during the first 18 months were for the
duplication of High-Tech manufacturing tools going overseas for Hewlett Packard.
Presently R-Tec Corporation, under contracts with various customers, develops,
engineers and fabricates High-Tech custom manufacturing equipment and parts to
be incorporated into customer owned and operated manufacturing equipment and
manufactured products. R-Tec Corporation's expertise includes engineering,
development of controls, machine design and tooling, consulting services,
prototype development, tooling and manufacturing. Typical production includes:
mechanical fixtures; "mech-op stations" (devices for testing mechanical
operations and performance of equipment); "servo-writers" and "transfer
stations"(devices that write code instructions for reading disc drives in
manufacturing stations); "sub-assemblies" (an assembly of electrical components
as a unit to be integrated with other units to complete a device or product);
"automatic robot work stations" (a machine that automatically constructs part of
a manufactured product); and electronic testing devices. Essentially all of the
products and services incorporate one or more complete disciplines of
mechanical, electrical, software, machine visions (a vision camera that
digitizes information for testing purposes) and controls.

Developed technology currently includes CAD-based software (computer aided
design software), electro-mechanical devices, tool design, PC Board Layout
(printed circuit board layout technology from concept to manufactured product),
International CE-Marked products (a quality designation in Europe similar to
"UL" marked products in the US) Machine Vision, Specialty Tooling, Engineering
Design, Motion Control, Robotics, Software Development, PLC Programming
(programmable logic controller which is a low level computer for controlling
functions).

Significant clients of R-Tec Corporation include Iomega Corporation, Hewlett
Packard, Pro- Precision Machining, Steelhead Metals, SCP Global Technologies,
System Integration

<PAGE>

(Division of Micron), Intel, TECHNIT Interconnection Products, 3Com Corporation,
Preco, Inc., Motorola, Micron Communications, Inc., Palm, Raytheon, Ford
Microelectronics, Inc., and Anadigics.

From 1998 through July 16, 2001, distribution of products and services was
primarily made through Browand, LaMeire & Associates (B.L.& A.), a
Manufacturer's Representative firm who maintained sales representative agents in
the US, Europe and Asia. B.L.& A. had four representative firms in the U.S. with
twelve sales persons, three European agents for Germany, France and England, and
five Asian agents for Singapore, Malaysia, Taiwan and Japan. In December of
2000, the principals of B.L.&A. were hired as management employees to oversee
the internal development of marketing efforts. Effective July 17, 2001, the
Company acquired certain assets of B.L.&A. , primarily customers contact lists,
in exchange for 380,000 shares of R-Tec Holding, Inc. stock valued at $1.00 per
share, and continued to solidify its position of bringing the marketing and
distribution expertise of B.L.&A. in-house.

See additional discussion in the following section, "R-Tec Interconnect Inc., a
subsidiary of the Company."

Prior to July 3, 2001, certain functions of some projects were, when needed,
contracted to R-Tec Machine Tools, Inc., an Idaho corporation, in which Doug
Hastings and Gary Clayton owned a combined 50% interest. R-Tec Machine Tools,
Inc conducted business as a machine shop in the same building as R-Tec
Corporation (See "Certain Relationships and Related Transactions "). However,
some machine work was also contracted with other machine shops depending on time
of delivery constraints. R- Tec Machine Tools, Inc. exclusively machined raw
metal into custom parts on contract with its customers, one of which was R-Tec
Corporation. Effective July 3, 2001, R-Tec Machine Tools, Inc. was acquired by
R-Tec Corporation in a stock for stock acquisition. Joe Hawkins, Walter Hinkle,
Gary Clayton, and Doug Hastings, each 25% owners of R-Tec Machine Tools, Inc.,
received an aggregate 291,248 shares of R-Tec Holding, Inc. stock valued at
$1.00 per share.

The custom-parts manufacturing industry is vast with many major competitors who
are larger and financially stronger than R-Tec Corporation, such as Wright
Industries, Technistar, and Acufab. Major companies such as Motorola and Micron
frequently have their own internal tooling development groups to develop their
own equipment requirements and who on occasion will "out source" their over-load
demands to companies like R-Tec Corporation. Management is not aware of any
information to estimate a market share of the industry, but is confident that
R-Tec Corporation has a very small share of the overall market. Management of
R-Tec Corporation primarily relies on it manufacturer's representative to sell
its products and services.

Materials for products, such as aluminum, bar stock, plate stock, wire and
plastics are provided by several subcontractors who bid to provide supplies
according to contract specifications. To the best knowledge of Management the
required materials are of a generic nature with ample availability from several
sources, and therefore there is no dependence on a source of raw materials.

<PAGE>

During 1999 R-Tec Corporation had approximately 43 customers with material
contractual agreements, four of the customers provided in excess of 10% of
annual revenues, i.e. 3COM Corporation, Micron System Integration, Palm
Computing, Inc., and Performance Design, Inc., for a combined total of 52.2%
from the four. During 2000, R-Tec Corporation had approximately 30 customers
with material contractual agreements, two of the customers provided in excess of
10% of annual revenues, i.e., MSL Salt Lake and Palm Computing. During 2001,
R-Tec Corporation and merged entities had approximately 18 customers with
material contractual agreements, 3 of the customers provided in excess of 10% of
annual revenue, i.e., 3com, MSL Salt Lake, and Palm Computing. During 2002,
R-Tec Corporation had approximately 24 customers with material contractual
agreements, two of the customers, i.e., 3Comm Corporation and Palm Computing,
Inc., provided in excess of 10% of annual revenues, for a combined total of
34.54% of total revenues.

The nature of the "custom parts" engineering business is such that customers
producing material revenues generally change from year to year and no dependence
on any specific customers develops.

Prior to 1999 R-Tec Corporation did not have any patents or other proprietary
property interests. In 1999 it had in application stage two patents, one of
which was issued for a "Test Probe Positioning Device, and one of which has been
re-applied. The patent issued is #6,064,195 dated May 16, 2000, and will expire
on May 15, 2017. The patent is for a self-aligning device for positioning a test
probe in a socket of a printed circuit board to be tested.

Neither the products nor services provided by R-Tec Corporation presently
require any governmental approval. Management is not currently aware of any
existing or probable governmental regulation on any part of the business.

Excluding the $190,000 of R&D expenses associated with the initial merger,
during 1999 R-Tec Corporation did not expend material funds on research and
development. Any significant activity that may be considered as research and
development has been only in connection with the performance under a contract
with a customer for services and/or products the cost of which has been paid by
the customer as part of the contract terms. In 2000 and 2001, material funds
spent on research and development were not generally accounted for on the income
statement; strictly as R&D, as these efforts were directed for customers'
benefits on a contractual basis. In 2002, R&D accounted for $64,525 in expenses;
these expenses were not part of a contractual basis.

Presently, there are no material costs or effects of compliance with
environmental laws for R-Tec Corporation. Management is aware however, that with
the implementation of its production facility for the GCI(TM) product group, it
will be incumbent upon the Company to ensure strict compliance with any
environmental laws. The GCI(TM) production line became operational in January,
2003.

<PAGE>

R-Tec Corporation currently employs 28 full time employees and 8 part time
employees in the Boise office and 2 full time employees in the Utah office. See
discussion of Utah office and employees under Item 2 "Description of Property."

R-Tec Interconnect, Inc. a subsidiary of the Company

R-Tec Interconnect, the newly formed subsidiary of R-Tec Holding, Inc., as
previously discussed, was merged into R-Tec Corporation effective September 1,
2001. The products and product group previously contained within R-Tec
Interconnect, will continue in R-Tec Corporation. Common resources are being
utilized to help develop the IC products and to focus on minimizing overhead
costs.

The product group transferred into R-Tec Corporation will be the continued
engineered design and manufacture of testing sockets and related testing
interface products to existing customers. Testing sockets for the IC industry
include a variety of custom designs and technical requirements as determined by
customer's specifications. The Company will also focus on developing a
standardized, lower cost, testing solution for its existing customer base.

Testing devices include test sockets with probe contacts and a new proprietary
interface device engineered by the Company called GCI(TM). This new technology
can be incorporated into existing design structure for socket testing devices
with minimal design adjustments. The GCI(TM) presents new opportunities to the
Company due to its favorable characteristics and responses to issues regarding,
co-planarity, inductance, and durability.

During 2001, customers received shipments of R-Tec Corporation's proprietary
technology and began testing the new interconnect products. Product introduction
has taken longer than originally projected and the Company continues to work on
enhancing its products to meet specific customers' technological needs.

Significant customers for R-Tec Corporation's testing products include Maxim,
Amkor, RF Micro Devices, Gamma Technology, Anadigics, Micron System Integration,
Celeritek, Teradyne, Cisco Systems, Inc., Transmeta, P.T. Products & Services,
3Com, and Motorola. It is anticipated that customer usage will become broad
based and that the Company will not become dependent or at risk for a
concentration of its interconnect products within one or several customers.

Competitors for the testing product interface market include the following
companies: 3M, Aries Electronics, Cerprobe, ECT, Gold Tech, John Tech, Loranger
International, Primeyield, and Tecknit. Among these competitors, which it is
believed by management represent a combined market share of approximately 75% to
80% of the $247,000,000 testing product interface market, four utilize spring
probe technology. The remainder utilize various testing technologies. It is
believed by management that the new R-Tec Corporation GCI(TM) products represent
a leading edge challenge to other competitors in this same market.

<PAGE>

Production for the testing devices is accomplished by using existing engineering
resources within R-Tec Corporation's personnel group and by outsourcing some
facets of the production needs. All assembly of manufactured products is
accomplished within the Company's current facilities. With the addition of the
GCI(TM) production facility, it is anticipated that the Company will become more
competitive, have faster response time to customers, and be able to better
control product quality.

Sources of raw materials for production are represented by commonly used
materials available to the outsourced manufacturers previously mentioned and
management does not foresee any limitations or interruptions in the availability
of materials for production. These common raw materials include aluminum, steel,
gold, plastics, solder, and copper.

Management is not aware of any governmental approvals or legislative impacts
that would affect its current product lines. As previously indicated, some
compliance and necessary expense will be effected with the addition of the
GCI(TM) production line. However, current estimates for permits and hazardous
material handling for ongoing operations through outsourcing are nominal and not
material.

ITEM 2. DESCRIPTION OF PROPERTY.

Description of Property of R-Tec Corporation (Subsidiary)

R-Tec Corporation is a tenant in a single purpose industrial building located at
1471 E. Commercial Avenue, in Meridian, Idaho. The building is owned by H2C2 &
Associates, LLC, an Idaho limited liability company (owned by Mr. and Mrs.
Hastings and Mr. and Mrs. Clayton, shareholders of R-Tec Corporation) and leased
100% to R-Tec Corporation under a 5 year lease expiring December 30, 2004. See,
"Certain Relationships and Related Transactions" under ITEM 12. The building was
constructed in 1998 according to the applicable commercial building code
requirements, on approximately 1.36 acres of land, and includes a parking area
of 20 spaces.

R-Tec Corporation office space consists of approximately 2,000 square feet, and
includes a reception area, conference room, and 6 individual offices. The
assembly and manufacturing areas consist of approximately 4,000 square feet. The
rent is at the rate of $4,365 per month, subject to Cost of Living Index
increases on an annual basis. The Company leased in 2001 an additional office
trailer, approximate size of 12 feet by 50 feet. In December 2002, the Company
discontinued its lease of the office trailer and consolidated personnel in the
main office building.

In December of 2000, R-Tec Corporation entered into a lease agreement for office
and production space for a satellite division of R-Tec Corporation, i.e.,
Creative Test Solutions, in North Salt Lake, Utah. The Creative Test Solutions
division houses the software engineering support group for R-Tec Corporation.
Creative Test Solutions is not a separate legal entity but is recognized as a
part of the R-Tec Corporation structure. The office space in Utah consists of
approximately, 2,400 square feet of combined office and warehouse space with
monthly lease payments of $1,320 per month and additional expenses as per a
triple net lease agreement. All operating expenses including employment
reimbursement and taxes are

<PAGE>

paid directly from the Corporate offices in Meridian, Idaho and are included in
the expense structure of R-Tec Corporation. Currently, two employees, Alan
Ashcroft and Nyle Stewart, work at the Utah office under the supervision of Gary
Clayton.

In March 2002, the Company entered into a one year lease agreement, with the
option to renew for one year, for office and manufacturing space for the
interconnect products manufacturing facility. The facility is within the
proximity of several blocks of the corporate office and is located at 703 and
705 N. Ralstin, in Meridian, Idaho. Monthly rent is $1,550 triple net.

R-Tec Holding, Inc. does not have any separate corporate offices, but uses, when
required, the offices of R-Tec Corporation for its purposes, without the payment
of any rent or other obligation, until such time as independent offices may be
required.

Except for the described leasehold interest in the occupied premises by R-Tec
Corporation, R-Tec Holding does not have any investments in real estate, nor
interests in real estate, real estate mortgages, nor securities of or interests
in persons primarily engaged in real estate, activities.

Holding's New Interconnect Manufacturing Facility

R-Tec Holding, Inc., through its subsidiary R-Tec Corporation, completed
construction of a new 3,000 sq. ft. manufacturing facility late in the fourth
quarter of 2002. This state of the art interconnect manufacturing facility
started shipping customer orders and expects to see substantial orders and
revenue growth throughout 2003.

The facility will enable R-Tec to manufacture all GCI(TM) products locally.
Expected results of R-Tec's latest expansion include reduced production costs,
greater quality control, handling of larger product volumes and faster product
shipments. The in-house manufacturing process will also enable R-Tec to continue
providing additional product niches within the interconnect sectors, including
silicone wafer testing, known good die testing and flex circuit manufacturing.

ITEM 3.  LEGAL PROCEEDINGS

There were no material legal proceedings to report at fiscal year end 2002.

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

      a)    An annual meeting of shareholders was held on the 19th day of
            November, 2002.

      b)    The following directors received a plurality of votes:

                              Douglas G. Hastings
                              Gary A. Clayton
                              Rulon L. Tolman
                              David R. Stewart

<PAGE>

      c)    Amendment to the Articles of Incorporation approved to increase the
            authorized shares of voting common stock from 30,000,000 to
            60,000,000 shares.

                       Votes For          Votes Against
                       --------------------------------
                       14,919,806         1,578,960


      c)    Other matters of voting included:

            ratification of Balukoff, Lindstrom, & Co., P.A. as the company's
            independent auditors. Voting was tabulated and the results were as
            follows:

                       Votes For          Against or Abstaining
                       ----------------------------------------
                       14,919,806         1,578,960

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

Market Information

The Registrant's stock is publicly traded on the OTC BB under the symbol RTHG.
Public trading was initiated July 2, 2001.

Quarterly prices for the stock are as follows:

Year 2001                        Stock price High                Stock price Low
--------------------------------------------------------------------------------

3rd quarter 2001                 $ 7.25                          $ 0.01
4th quarter 2001                 $ 0.85                          $ 0.31

Year 2002                        Stock price High                Stock price Low
--------------------------------------------------------------------------------

1st quarter 2002                 $ 0.70                          $ 0.20
2nd quarter 2002                 $ 0.40                          $ 0.10
3rd quarter 2002                 $ 0.30                          $ 0.12
4th quarter 2002                 $ 0.23                          $ 0.10

Holders of Record of Each Class of Common Equity.

Class                                  Date of Reporting       No.of Shares Held
--------------------------------------------------------------------------------
Series A Convertible Preferred         12-31-02                2,781,564
Common Stock                           12-31-02                21,742,189

<PAGE>

Unregistered Equity Securities Sold by Registrant During 2002.

Series "A" Preferred Stock

During 2002, the Company received no subscriptions from Series "A" Preferred
Stock sold to existing shareholders of such stock.

Common Stock

During 2002 Registrant issued 2,732,984 shares of common stock of Registrant
without registration under the Securities Act in private transactions to the
class of persons indicated, for consideration of cancellation of debt, services
rendered, and cash.

The described stock transactions were exempt from registration under the
provisions of Section 4(2) of the Securities Act of 1933, as amended.

Convertible Debentures

During 2002, the Company issued convertible debentures without registration
under the Securities Act in private transactions in the amount of $895,000. The
convertible debt contain a conversion feature that allows for payment of
interest only until 30 days prior to the maturity date, at which time principal
and accrued interest may be converted to stock, at the option of the holder,
into shares of common stock of the Company. The conversion price equals 75% of
the fair market value of the Company's common stock, determined as of the date
of the conversion notice. See Note I in "notes to financial statements" herein
attached for additional information.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND/OR PLAN OF OPERATION.

The following discussion contains forward-looking statements that involve known
and unknown risks and uncertainties which may cause actual results in future
periods to differ materially from those indicated herein as a result of a number
of factors. When the Company uses words like "may," "believes," "expects,"
"anticipates," "should," "estimate," "project," "plan," their opposites and
similar expressions, the Company is making forward-looking statements. These
expressions are most often used in statements relating to business plans,
strategies, anticipated benefits or projections about the anticipated revenues,
earnings or other aspects of our operating results. We make these statements in
an effort to keep stockholders and the public informed about our business, and
have based them on our current expectations about future events. Such statements
should be viewed with caution. These statements are not guarantees of future
performance or events. As noted elsewhere in this report, all phases of our
business are subject to uncertainties, risks and other influences,

<PAGE>

many of which the Company has no control over. Additionally, any of these
factors, either alone or taken together, could have a material adverse effect on
the Company and could change whether any forward-looking statement ultimately
turns out to be true. The Company undertakes no obligation to publicly release
updates or revisions to these statements. The following discussion should be
read in conjunction with audited consolidated financial statements and the notes
thereto for the year ending December 31, 2002, included elsewhere in this Form
10-KSB.

Corporate Structure

The Company did not undergo any significant restructuring changes during 2002.
Product groups remained consolidated into one operating entity, R-Tec
Corporation. The product groups include: 1) the custom engineered automation
group, 2) the interconnect devices group, 3) the retail machine shop sales
group, and 4) the software solutions product group. The custom engineered
automation group and the retail machine shop sales group are located within the
Company's main location, the software solutions product group is located at the
Utah office location, and the interconnect devices group is located in the
Company's new plant in Meridian, Idaho, at 703 and 705 N. Ralstin St.

IntorCorp, which was a separately owned corporation of R-Tec Corporation, was
dissolved prior to the end of 2002. The motor technology from IntorCorp has been
transferred into R-Tec Corporation for possible future development. There were
no operating activities within IntorCorp during 2002.

Performance Overview

Revenues:

The Company recognized revenues of $2,672,237 for year end 2002, compared with
$2,209,826 for year end 2001, an increase of $462,411, or 21%.

Within the product groups, custom engineered sales decreased from $2,046,049 to
$1,797,877, interconnect sales increased from $107,689 to $619,558, software
solution sales decreased from $22,476 to $16,142, retail machine shop sales
increased from $5,669 to $44,606, and other sales increased from $27,943 to
$194,054, respectively year 2001 to 2002. Of the product groups, custom
engineered sales and interconnect sales accounted for the majority of sales.

Custom engineered sales are dependent primarily upon the availability of and
spending of funds for capital acquisitions from the Company's primary customers.
With the continued sluggish economic conditions, especially within the Company's
primary sector for this product group, i.e., high technology, new product orders
were difficult to find. Several of the large projects were continuations from
efforts initiated in a prior year. It is not anticipated that this product group
will experience any significant growth within year 2003 arising solely from
economic expansion. In order to augment sales within this product group, the
Company is seeking to expand its customer base into new areas where variations
of its existing

<PAGE>

products and technologies might be adaptable. For example, with its vision
inspection applications, the Company's sales personnel and engineers are
researching the viability of adapting existing technologies for use within the
wood products sector.

For the interconnect products group, sales continued to grow in 2002 as the
Company introduced its products to a broadening customer base. Within this
product group, sales are expected to continue to grow in 2003 as new customers
are added and as new product variations are designed and introduced into the
market to meet existing customer needs. With the on-line capability of the
Company's new plant for the manufacture of interconnect products, the Company
expects its quality and capacity to support anticipated growth. The Company
feels its proprietary interconnect products are positioned for growth in
revenues due to the technological changes in the IC testing industry.
Particularly, as the size of IC chips decreases, creating tighter tolerance
issues, and the speed of the chips increases, creating challenging electrical
testing parameters, the Company feels its products are positioned to capture
market share as other competitive products suffer from technological
obsolescence.

The other product groups only accounted for approximately 10% of sales. It is
not anticipated that significant growth will occur within these other product
groups. The Company does seek opportunities within these other groups to fill in
excess capacity when available.

Profitability:

The Company recognized losses of ($1,566,370) in year 2002, compared to
($1,439,903) in year 2001. The increase in losses of $126,467, representing an
increase of 9%, resulted from several factors. The primary contribution came
from a one-time impairment of intangible assets. Specifically, goodwill and
customer lists were written down by $429,952. In addition, research and
development increased from $3,150 in 2001 to $64,525 in 2002 and interest
expense increased from $38,303 in 2001 to $158,037 in 2002.

Gross profit increased from $533,372 or 24% in 2001 to $724,534 or 27% in 2002,
an increase of $191,162 or 36%. The increase in gross profit as a percentage of
sales came primarily from a decrease in material and labor costs.

Selling, general and administrative expenses decreased from $1,881,400 in 2001
to $1,574,243 in 2002, a decrease of $307,157, or 16%. The decrease reflects a
concerted effort on the part of management to control costs associated with
overhead expenses.

In January 2003, the Company reduced its workforce by 16%, continuing its
efforts to trim overhead expenses. The layoffs occurred primarily in areas
reflecting administrative functions and excess production capacity. The Company
is not anticipating additional workforce reductions in the near term.

Net loss per common share for year end 2002 on weighted shares outstanding of
21,250,289, was ($0.07) compared to ($0.08) on weighted shares outstanding of
17,761,069, for year end 2001.

<PAGE>

Changes in Financial Condition

At December 31, 2002, current assets were $873,517, with current liabilities of
$1,178,965, resulting in a current ratio of .74, compared to $558,943 and
$394,734 respectively for year 2001, and a corresponding current ratio of 1.42.

Current assets increased by $314,574 year 2001 to 2002, due primarily to an
increase in accounts receivable, inventory, and prepaid expenses. Current
liabilities increased by $784,231, year to year, primarily due to an increase in
short term convertible debentures. The convertible debentures may be converted
to stock at the option of the holder, upon the date of maturity. To the extent
the convertible debentures are converted to stock or equity, they will relieve
short term liabilities. Management does not yet know the disposition of the
holders of the convertible debentures regarding the potential for conversion to
equity.

Changes in accounting procedures on the balance sheet included, as previously
mentioned, impairment of intangible assets with a one time write down of
$429,952 for goodwill and customer lists in accordance with Financial Accounting
Standards Board (FASB) No. 142 and No.144.

Equipment and leasehold improvements, net of cost and accumulated depreciation
increased from $628,957 in 2001 to $888,247 in 2002.

Liquidity and Capital Resources

Liquidity remains one of the major challenges for the Company. The inclusion of
the short-term convertible debentures in the amount of approximately $895,000,
reduces the current ratio from approximately 3.08 to .74. Management recognizes
the critical nature of funding the convertible debentures either through
conversion to equity or cash payments. The Company will continue to seek
additional funding opportunities. Some flexibility exists in dealing with the
convertible debentures as the maturity dates are staggered throughout the
remainder of 2003.

At the annual shareholders meeting held in November 2002, the Board of Directors
authorized, and the stockholders voted to ratify, an additional 30 million
shares of common stock. It is not anticipated that the Company will need to use
all of the additional shares authorized, but may need to allocate some shares
for additional capital funding.

In order to increase capital resources and strengthen liquidity the Company may
seek partnership arrangements with larger, established corporations which have
distribution channels in place that would be synergistic to the Company's
existing product lines. Partnerships of this nature may include funding for
continued product research and joint development, or for development of
additional market opportunities.

The Company recognizes that to the extent it continues to have a negative cash
flow position, it will need to seek additional capital funding from external
investors.

<PAGE>

Company Strategy

The Company continues to focus on minimizing expenses, in the areas of cost of
goods sold as well as overhead expenses. Excess labor costs have been trimmed
for the short term to facilitate this strategy. Where possible, the Company also
is working on maximizing profitability on bidding opportunities.

With the completion of the interconnect products manufacturing plant, the
Company is aggressively introducing its interconnect products to new customers
and is reviewing new product opportunities that would be compatible with the
plant's capabilities. Management feels it has a product introduction period of 6
to 12 months prior to establishing, substantial, repeat orders with existing
clients. Management does feel however, that upon product acceptance, sales
should increase rapidly with existing customers. The plant capacity will support
significant increases in sales as currently constructed.

In addition, the Company has been approached with new opportunities for its
proprietary GCI(TM) products. Presently, the new product modifications are being
tested by existing customers for future applications. The Company feels that if
the new modifications are successful, significant, short-term revenues will
result.

Longer term, the Company is organizing strategic plans to expand its product
lines in the interconnect sector to provide a complete package solution. With
the existing product lines, the Company is reviewing the potential of the design
and manufacture of testing handlers, which would be compatible with existing
Company products. The addition of the capital equipment handlers with the
consumable testing products, could potentially create a captive market in some
testing sectors.

As previously mentioned, in order to increase sales in engineered automation
products, the Company's marketing group is aggressively exploring other market
segments that would build upon the engineering group's core competencies. The
Company is currently manufacturing its first project for the food services
industry. Also, bids have been placed for opportunities in the wood products
industry, for modified products utilizing known technology the Company has
successfully developed in previous projects. It is anticipated by management,
that this shift from a single market segment within the automation products to
multiple market segments will increase revenues by the 3rd and 4th quarters of
2003.

In negotiations with several large, well established companies, with worldwide
activities, the Company has recognized the weakness of its distribution
channels. With this in mind, the Company has engaged in discussions with larger
distributors who have existing vendor acceptance arrangements with the larger
companies. By utilizing the existing distribution channels, it is felt the
Company may be able to realize additional revenue increases for its products.
The companies selected for this type of partnering, have similar product lines
that could utilize the proprietary products of R-Tec.

<PAGE>

Due to the current financial condition, the Company will necessarily need to
seek additional capital funding. First, the Company will continue to seek
smaller investments that will minimize dilution of the existing stockholder
base. Funding from these sources will be used for operations and to retire
convertible debentures in the event holders of those investment instruments
choose not to convert to equity. Secondly, the Company will pursue larger
funding partners whose existing product lines would be compatible. These funds
would be used for longer term planning and development of products such as the
testing handlers as mentioned above. Management recognizes that the latter type
of funding would necessitate a greater dilution of stockholder equity, but
feels, with the right partner, it may be the most prudent approach to strengthen
the Company's financial position.

Income Taxes

Income taxes are provided for temporary differences between financial and tax
basis income. The components of net deferred taxes are as follows at December
31, 2002, using a combined deferred tax rate of 40%:

Deferred tax asset from:
     Net operating loss carryforward                                $ 1,015,000
     Fixed assets                                                        44,000
     Stock options                                                      100,000
     Bad debt reserve                                                     8,000
                                                                    -----------
                                                                      1,167,000
Deferred tax liability from:
     Valuation allowance                                             (1,167,000)
                                                                    -----------

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

The following reconciles the federal tax provisions with the expected provisions
by applying statutory rates (34%) to income before income taxes as of December
31:

                                                                        2002
                                                                     ----------

   Provision at statutory rate                                       $ (510,000)
   State income taxes, net of federal expense                           (60,000)
   Non-deductible interest expense                                        7,000
   Goodwill impairment                                                   67,000
   Change in valuation allowance                                        496,000
                                                                     ----------

   Income tax expense                                                $       --
                                                                     ==========

The net operating loss carry forward at December 31, 2002, for federal tax
purposes of approximately $2,550,000 begins to expire in the year 2020.

<PAGE>

The following reconciles the federal tax provisions with the expected provisions
by applying statutory rates (34%) to income before income taxes as of December
31, 2001:

                                                          2001           2000
                                                       ---------      ---------

Provision at statutory rate                            $(470,000)     $(141,622)
State income taxes, net of federal expense               (83,000)        (1,923)
Effect of graduated rates                                (23,000)        10,376
Effect of merger                                          40,000           --
Change in valuation allowance                            536,000        121,265
Other                                                       --             (989)
                                                       ---------      ---------

Income tax expense (benefit)                           $    --        $ (12,893)
                                                       =========      =========

The net operating loss carry forward at December 31, 2001, for federal tax
purposes of approximately $1,550,000 begins to expire in the year 2020.

Recently Issued Accounting Statements

In April 2002, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 145, "Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections
". SFAS 145 slightly changes and clarifies the accounting for the extinguishment
of long-term debt and eliminates inconsistency between the required accounting
for sale-leaseback transactions and the required accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. Under current operations, adoption of SFAS 145 is not expected to
have a material impact on the Company's results of operations or financial
position. SFAS 145 will be effective for the Company's fiscal year ending
December 31, 2003, although earlier adoption is permitted.

In June 2002, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 146, "Accounting for Costs Associated with Exit or Disposal Activities".
SFAS 146 changes the accounting for costs associated with exit or disposal
activities. Under current operations, adoption of SFAS 146 is not expected to
have a material impact on the Company's results of operations or financial
position. SFAS 146 will be effective for the Company's fiscal year ending
December 31, 2003, although earlier adoption is permitted.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. The Interpretation elaborates on the disclosures to be
made by sellers or guarantors of products and services, as well as those
entities guaranteeing the financial performance of others. The Interpretation
further clarifies that a guarantor is required to recognize, at the inception of
a guarantee, a liability for the obligations it has undertaken in

<PAGE>

issuing the guarantee. The initial recognition and initial measurement
provisions of this Interpretation are effective on a prospective basis to
guarantees issued or modified after December 31, 2002, and the disclosure
requirements are effective for financial statements of periods ending after
December 15, 2002. The Company believes that its disclosures with regards to
these matters are adequate as of December 31, 2002.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure, an
amendment of FASB Statement No. 123. This Statement amends FAS 123 to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, it
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. As of December 31, 2002, the Company continued to
follow the intrinsic value method to account for stock-based employee
compensation. The additional disclosure requirements of this Statement are
effective for financial statements for interim periods beginning after
December15, 2002.

ITEM 7: FINANCIAL STATEMENTS

d-Tech to attach auditors report here - word file
d-Tech to attach financial statements here  - excel file
d-Tech to attach auditors notes to financials statements here - word file

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT ACCOUNTANTS ON ACCOUNTING,
        AND FINANCIAL DISCLOSURE.

None

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

      9.1   Directors and Officers.


Name                      Age     Position                        Date Appointed
--------------------------------------------------------------------------------

Douglas G. Hastings       45      Director, President/CEO         Nov.3, 1999
Gary A. Clayton           45      Director, VP Engineering        Nov.3, 1999
Rulon L. Tolman           53      Director, VP Investor Rel.      Original
David R. Stewart          49      Director                        Nov.3, 1999
Robert C. Montgomery      55      Secretary                       Nov. 3, 1999
Michael T. Montgomery     46      Treasurer, CFO, VP Finance      March 1, 2001

<PAGE>

The directors of the Company are elected to serve until the next annual
shareholder's meeting or until their respective successors are elected and
qualified. Officers hold office until removal by the Board of Directors. There
are no arrangements or understandings among the Officers and Directors pursuant
to which any of them were elected as Officers and Directors except for the
following. When the Company was formed, shareholders Douglas G. Hastings, Gary
A. Clayton, Rulon L. Tolman, Ronald J. Tolman, L. William Glazier, Robert C.
Montgomery, George W. Wadsworth and Keith Cline, entered into a voting agreement
under which Hastings and Clayton have the right to nominate 3 of the 5 directors
and the other named shareholders have the right to nominate 2 of the 5
directors. The combined ownership, which controls a voting percentage of
approximately 65%, would then be voted as a block for the nominated directors.
The voting agreement is effective for 5 years from August 11, 1999.

William E. Browand resigned as a member of the Company's board of directors in
the Spring of 2002.

Family Relationships: Douglas G. Hastings is married to Rena Clayton Hastings, a
sister of Gary A. Clayton. Robert C. Montgomery and Michael T. Montgomery are
brothers.

Business Experience of Officers and Directors:

Douglas G. Hastings, Meridian, Idaho, is currently serving as President and CEO
of the Company. He received a Micro M.B.A. in May of 1999, and received special
training in Robotics, Machine Vision and software controls. Prior to starting
R-Tec Corporation in 1995, Mr. Hastings was employed by Hewlett Packard from
1981 to 1995 specializing in electrical and mechanical tool design and controls.

Gary A. Clayton, Meridian, Idaho, is currently serving as Vice President of
Engineering for the Company. He received a BS degree in Mechanical Engineering
from BYU in 1983. He received training in Robotics and Industrial Controls in
1987 (with honors), and a Masters Degree in Mechanical Engineering in 1993 from
the University of Utah. Prior to 1995 (when he helped start R-Tec Corporation),
Mr. Clayton was the Engineering Manager for Lynn Industries of Boise, Idaho for
a year, and prior thereto was Project Engineer at Thiokol Corporation in Brigham
City, Utah, for design, implementation and project management of HVAC system,
process equipment, CNC type machine tools, and plant automation.

Rulon L. Tolman, Boise, Idaho, is currently serving as Vice President of Public
Relations for the Company. Mr. Tolman was employed with Mutual of New York from
1978 through 2000 in various capacities including Account Executive, Field
Underwriter and Sales Manager. Previously Mr. Tolman was a Production Supervisor
with Boise Cascade Container Division managing 80 employees.

David R. Stewart, Boise, Idaho, is a Certified Public Accountant with Stewart &
Associates, with more than 20 years experience. He has been President of the
accounting firm for the past 6 years. He obtained his BS degree in Accounting in
1979 from the University of Utah.

<PAGE>

Michael T. Montgomery, is presently CFO, Vice President of Finance and Treasurer
of the Company. He received a Bachelor of Arts Degree in Finance, with composite
minors in Accounting & Economics, from Brigham Young University in 1981. He
completed the MBA program at Boise State University in 1986. Prior to his
employment with the Company, he was involved in production management for 15
years, financial management 12 years and 1 year international business
management and government negotiations.

Robert C. Montgomery, is presently Secretary and General Counsel of the Company.
He received his JD Degree from the University of Idaho in 1974 and is admitted
to practice law in the states of Idaho, Oregon and Washington. He has served as
legal counsel to both private and nonprofit corporations. He was a former
adjunct professor of Business Law and Ethics at Boise State University, and has
practiced law in Idaho since 1974.

*William E. Browand left his employment as Vice President of Sales for the
Company in the Spring of 2002. The employment of Jeanette LaMeire as Vice
President of Marketing was terminated in the Spring of 2002.

9.5   Compliance with Section 16(a) of the Exchange Act:

Section 16 of the Securities Exchange Act of 1934 ("Section 16") requires that
reports of beneficial ownership of common stock and preferred stock and changes
in such ownership be filed with the Securities and Exchange Commission by
Section 16 "reporting persons" including directors, certain officers, holders of
more than 10% of the outstanding common stock or preferred stock, and certain
trusts of which reporting persons are trustees. The Company is required to
disclose each reporting person whom it knows has failed to file any required
reports under Section 16 on a timely basis. Based solely upon a review of copies
of Section 16 reports furnished to the Company for the year ended December 31,
2002, the Company finds the following information is appropriately disclosed:
None of the officers, directors and 10% shareholders filed Form 4 for calendar
year 2002. However, all of the officers and directors filed a Form 5 on or
before February 14, 2002, respecting transactions occurring during calendar year
2002. Douglas G. Hastings should have filed a Form 4, but did not, with respect
to 1 stock option acquisition and 2 transactions involving gifting of shares
during calendar year 2002. He did file a Form 5 reporting these transactions.
Gary A. Clayton should have filed a Form 4, but did not, with respect to 1 stock
acquisition of shares during calendar year 2002. He did file a Form 5 reporting
these transactions. Rulon L. Tolman should have filed a Form 4, but did not,
with respect to 1 stock option acquisition and 1transaction involving the sale
of shares during calendar year 2002. He did file a Form 5 reporting these
transactions. David R. Stewart should have filed a Form 4, but did not, with
respect to 1 stock option acquisition during calendar year 2002. He did file a
Form 5 reporting this transaction. Michael T. Montgomery should have filed a
Form 4, but did not, with respect to 1 stock option acquisition during calendar
year 2002. He did file a Form 5 reporting this transaction. Robert C. Montgomery
should have filed a Form 4, but did not, with respect to 1 stock option
acquisition during calendar year 2002. He did file a Form 5 reporting this
transaction.

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

The 2002 salary and stock remuneration paid to the officers and directors and
other benefits received by each of them are set forth below:

R-Tec Corporation paid executive compensation for the years ended December 31,
2000, 2001, and 2002 to the following:

Douglas G. Hastings, President.             Year 2000      $78,912
                                            Year 2001      $86,058
                                            Year 2002      $86,058

On July 1, 2001, the Company granted to the following officers options to
purchase 50,000 shares each of common stock at $1.00 per share, exercisable 1
year from date of grant: Douglas G. Hastings, Gary A. Clayton, Rulon L. Tolman,
Michael T. Montgomery, William E. Browand, and Jeanette LaMeire.

On August 14, 2002, the Company granted to the following officers and board
members options to purchase shares of common stock at $ .50 per share as
follows: 50,000 options each to Douglas G. Hastings, Gary A. Clayton, Rulon L.
Tolman, Michael T. Montgomery, 15,000 options each to David R. Stewart and
Robert C. Montgomery. The options are exercisable 1 year from the date of grant.

No other executive compensation or forms of compensation, short or long term
apply and are required to be disclosed as required by Reg. S-B 228.402 (Item
402).

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the shares of Common Stock
and Preferred Stock of the Company that is convertible into common stock, which
is presently held beneficially by (i) each director and executive officer of the
Company, (ii) all officers and directors as a group, and (iii) each person known
by the Company to beneficially own 5% or more of the outstanding shares of the
Company's common and preferred stock. Share ownership and subscriptions are
reflected as of December 31, 2001.

<PAGE>

<TABLE>
<CAPTION>
                                                 Amount & Nature
Name and Address                                 of Benef. Owner                 Percent
of Beneficial Owner                             Common - Preferred         Common - Preferred
---------------------------------------------------------------------------------------------

<S>                                          <C>          <C>              <C>        <C>
a. MORE THAN FIVE PERCENT SHAREHOLDERS

L. William Glazier (11)                        250,000      569,345         1.14%      20.47%
     121 Tyson Dr.
     Cottage Grove, OR 97424

Ronald J. Tolman   (11)                        694,340      600,427         3.19%      21.59%
     2326 Bruins Avenue
     Boise, Idaho 83704

More than five percent                         944,340    1,169,772         4.33%      42.06%
Shareholders as a group.
(2 persons)

b. DIRECTORS AND EXECUTIVE OFFICERS

Gary A. Clayton (1)(2)(3)                    4,160,659          -0-        19.14%        -0-%
     1471 E. Commercial Ave
     Meridian, Idaho 83642

Douglas G. Hastings (1)(2)(4)                4,160,657          -0-        19.14%        -0-%
     1471 E. Commercial Ave
     Meridian, Idaho 83642

Rulon L. Tolman (1)(2)(5)                    1,009,250      532,478         4.64%      19.14%
     7213 Potomac Drive
     Boise, Idaho 83704

David R. Stewart (2)(6)                        103,490          -0-         0.46%       -0-%
     9486 Fairview Ave
     Boise, Idaho

Michael T. Montgomery (1)(7)                   115,000          -0-         0.34%       -0-%
         3072 Maywood Ave.
         Boise, Idaho 83704

Robert C. Montgomery (1)(10)                   254,876      149,506         1.35%      5.38%
         2160 S. Twin Rapid Way
         Boise, Idaho 83709

All Officers and Directors
as a Group (6 persons)                       9,803,932      681,984       45.09%       24.52%
</TABLE>

Total Shares Issued and Outstanding as of 12/31/02 include:

                      Common 21,742,189 Preferred   2,781,564

(1)   These individuals are the executive officers of the Company.

<PAGE>

(2)   These individuals are the directors of the Company.

(3)   The beneficial ownership of Gary A. Clayton includes 100,000 options by
      grant.

(4)   The beneficial ownership of Douglas G. Hastings includes 100,000 options
      by grant.

(5)   The beneficial ownership of Rulon L. Tolman includes 115,000 options by
      grant.

(6)   The beneficial ownership of David R. Stewart includes 37,500 options by
      grant.

(7)   The beneficial ownership of Michael T. Montgomery includes 100,000 options
      by grant.

(8)   The beneficial ownership of Robert C. Montgomery includes 37,500 options
      by grant.

(9)   If converted to Common Stock at the present conversion ratio, the
      Preferred Stock would represent approximately .08% of the after-
      conversion issued and outstanding common stock.

Securities authorized for issuance under equity compensation plans

<TABLE>
<CAPTION>
                                          Number of securities to       Weighted average
                                          be issued upon exercise      exercise price of        Number of securities
                                          of outstanding options,     outstanding options,    remaining available for
             Plan category                  warrants and rights       warrants and rights         future issuance
---------------------------------------------------------------------------------------------------------------------
                                                    (a)                       (b)                       (c)
---------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                         <C>                      <C>
Year 2001

Equity compensation plans not approved
by security holders                              1,522,100                   $ .70                    477,900
---------------------------------------------------------------------------------------------------------------------
Year 2002

Equity compensation plans not approved
by security holders                              1,854,020                   $ .57                    145,980
---------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:

a.    Commercial Building Ownership and leases:

R-Tec Corporation currently leases 100% of the building it presently occupies at
1471 E. Commercial Ave, Meridian, Idaho 83642 from H2C2 & Associates, LLC, an
Idaho limited liability company owned by Mr. and Mrs. Hastings and Mr. and Mrs.
Clayton under a five year lease ending November 30, 2004, with an option to
extend the lease for an additional five years. The rental rate is $4,365 per
month subject to annual Cost of Living Index increases.

b.    Stock Transactions with Douglas G. Hastings and Gary A. Clayton.

On November 3, 1999, the Company issued 4,266,797 shares of Common Stock (50%
ownership) in a private placement transaction, to Gary A. Clayton and Douglas G.
Hastings the two shareholder-owners of R-Tec Corporation, an engineering company
located in Meridian, Idaho, in exchange for 80% of the outstanding stock of
R-Tec Corporation. In addition, the Company contributed its stock of IntorCorp,
Inc. to R-Tec Corporation. On November 4, 1999, R-Tec Corporation redeemed the
remaining 20% of R-Tec Corporation stock from the two shareholder-owners for the
price of $100,000 paid with an interest bearing promissory note payable from
available earnings commencing in January of 2001.

(c)   Purchase of R-Tec Machine Tools by the Company

On July 3, 2001, the Company acquired R-Tec Machine Tool, Inc., an Idaho
corporation pursuant to a Share Exchange and Reorganization Agreement by and
between the Company and the four individual shareholders of R-Tec Machine Tool.
Under the terms of the Agreement, the parties agreed to be bound by and accept
the fair market value placed on R-Tec Machine Tool obtained from an independent
business appraisal. Consideration for the acquisition was 291,248 shares of the
common stock of the Registrant valued at $1.00 per share which the parties agree
and acknowledge was the fair market value of the Company's shares as of the date
of the Agreement. The Agreement provides for each of the four R-Tec Machine Tool
shareholders to receive equal shares of the Company's common stock in the
transaction. Two of R-Tec Machine Tool shareholders, Douglas G. Hastings and
Gary A. Clayton, are also officers, directors and major shareholders of the
Company. The other two shareholders of R-Tec Machine Tool are Walter T. Hinkle
and Joseph E. Hawkins. R-Tec Machine Tool is located in the same building used
by the Company as its primary business location.

(d)   Purchase of Assets from Browand, LaMeire & Associates

On July 17, 2001, the Company acquired certain assets from Browand, LaMeire &
Associates, Inc., an Oregon corporation, pursuant to an Asset Purchase Agreement
(the "Agreement") by and between the Company and Browand, LaMeire & Associates
and its two shareholders, William E. Browand and Jeanette LaMeire. The Agreement
culminated a

<PAGE>

lengthy period of discussion and negotiation between the parties. Under the
terms of the Agreement, the Company acquired certain assets which include the
client list and industry contacts, certain items of office equipment and
inventory. Consideration for the acquisition was 380,000 shares of the common
stock of the Company valued at $1.00 per share which the parties agree and
acknowledge was the fair market value of the Company's shares as of the date of
the Agreement. The Agreement provides for the shares to be issued in the name of
Browand, LaMeire & Associates, Inc. William E. Browand was employed as Vice
President of Sales for the Company but left his employment in the Spring of
2002. Jeanette LaMeire was employed as Vice President of Marketing but her
employment was terminated in the Spring of 2002.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

                Exhibit Index
Exhibit
Number          Description
------          -----------

4.1             DEF 14A, Definitive Proxy Statements (Filed November 6, 2002)


<PAGE>

                                   SIGNATURES

In accordance with section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

                               R-Tec HOLDING, INC.
                                  (Registrant)


March 27, 2001                          By /s/ Douglas G. Hastings
                                               ---------------------------------
                                               Douglas G. Hastings, President


Principal Executive Officer:            By /s/ Douglas G. Hastings
                                               ---------------------------------
                                               Douglas G. Hastings, President


Principal Financial Officer:            By /s/ Michael T. Montgomery
                                               ---------------------------------
                                               Michael T. Montgomery, CFO


Majority of Board of Directors:            /s/ Rulon J. Tolman
                                               ---------------------------------
                                               Rulon J. Tolman, Director


                                           /s/ Gary C. Clayton
                                               ---------------------------------
                                               Gary C. Clayton, Director


                                           /s/ Douglas G. Hastings
                                               ---------------------------------
                                               Douglas G. Hastings, Director


                                           /s/ David R. Stewart
                                               ---------------------------------
                                               David R. Stewart, Director

<PAGE>

                                 CERTIFICATIONS

I, Douglas G. Hastings, certify that:

1. I have reviewed this annual report on Form 10-KSB of R-Tec Holding, Inc.;

2. Based on my knowledge, this annual 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 annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
      annual report (the "Evaluation Date"); and

      c) presented in this annual 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
functions):

      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
annual report whether 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 2, 2003                      Sig /s/ Douglas G. Hastings
     ----------------------                -------------------------------------
                                           Douglas G. Hastings
                                           Chief Executive Officer and President

<PAGE>

                                 CERTIFICATIONS

I, Michael T. Montgomery, certify that:

1. I have reviewed this annual report on Form 10-KSB of R-Tec Holding, Inc.;

2. Based on my knowledge, this annual 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 annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual 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 annual 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 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 annual 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
      annual report (the "Evaluation Date"); and

      c) presented in this annual 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
functions):

      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
annual report whether 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 2, 2003                      Sig /s/ Michael T. Montgomery
     ----------------------                -------------------------------------
                                           Michael T. Montgomery
                                           Chief Financial Officer