U.S.  SECURITIES  AND  EXCHANGE  COMMISSION
                             WASHINGTON,  D.C.  20549

                          FORM 10-KSB (AMENDMENT NO. 3)


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

                      FOR  FISCAL  YEAR  ENDED:  JUNE  30,  2003

                                       OR

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

          For  the  transition  period  from                  to
                                            ----------------    ----------------
          Commission  file  number  000-30711
                                    ---------


                            Security  Biometrics,  Inc.
                            ------------------------

                     (Exact  name  of  small  business  issuer  as
                            specified  in  its  charter)

          Nevada                              98-0209119
     -----------------                        --------------
  (State  or  other  jurisdiction             (IRS  Employer
of  incorporation  or  organization)        Identification  No.)


        1030  West  Georgia  Street,  Suite  1410, Vancouver, BC V6E 2Y3, Canada
            -------------------------------------------------------
            (Address  of  principal  executive  offices)     (Zip  Code)

Issuer's  telephone  number     604  685  7749
                                ------------------

Securities  registered  under  Section  12(b)  of  the  Act:  None
                                                            ------

Securities  registered  under  Section 12(g) of the Act: Common Stock, par value
                                                         -----------------------
$.001  per  share
  ---------------

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

Check if 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.  [X  ]

State  issuer's  revenues  for  its  most  recent  fiscal  year:  $  1,147,140


          As of June 30, 2003, there were 124,296,257 shares of the registrant's
          common  stock,  par  value  $0.001  issued  and outstanding. Of these,
          39,600,953  shares  are  held by non affiliates of the registrant. The
          market  value  of securities held by non-affiliates is approximately $
          5,742,138  based on an assumed market value per share of $ 0.145 based
          on the recent sale price per share of the registrant's common stock on
          November  14,  2003.

Transitional  Small  Business  Disclosure  Format  (check  one):
Yes  [     ]  ;  No  [  X  ]


<PAGE>

                       DOCUMENTS  INCORPORATED  BY  REFERENCE

If  the following documents are incorporated by reference, briefly describe them
and  identify  the  part  of  the Form 10-KSB (e.g., Part I, Part II, etc.) into
which  the document is incorporated:  (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule  424(b) or (c) of the Securities Act of 1933, as amended ("Securities Act")
--  N/A.

<TABLE>
<CAPTION>
                                TABLE  OF  CONTENTS

ITEM  NUMBER  AND  CAPTION                                                 PAGE
--------------------------                                                 ----
<S>       <C>                                                              <C>

          Special  Note  Regarding  Forward-Looking  Statements               3

PART I

    1.    Description of Business                                             3

    2.    Description of Property                                             5

    3.    Legal Proceedings                                                   5

    4.    Submission of Matters to a Vote of Security Holders                 5

PART II

    5.    Market for Common Equity and Related Stockholder Matters            6

    6.    Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                               8

    7.    Financial Statements                                               11

    8.    Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure                                               44

PART III

    9.    Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act                  45

   10.    Executive Compensation                                             47

   11.    Security Ownership of Certain Beneficial Owners and Management.    48

   12.    Certain Relationships and Related Transactions                     49

   13.    Exhibits and Reports on Form 8 K                                   51

   14.    Controls and Procedures                                            53

</TABLE>


                                        2
<PAGE>

                SPECIAL  NOTE  REGARDING  FORWARD-LOOKING  STATEMENTS

     Except  for  historical  information,  this report contains forward-looking
statements  within  the meaning of Section 27A of the Securities Act of 1933 and
Section  21E  of  the  Securities  Exchange  Act  of 1934.  Such forward-looking
statements  involve  risks  and  uncertainties,  including,  among other things,
statements  regarding  our  business  strategy,  future revenues and anticipated
costs  and  expenses.  Such  forward-looking  statements  include, among others,
those  statements  including  the  words  "expects",  "anticipates",  "intends",
"believes"  and  similar  language.  Our actual results may differ significantly
from  those  projected  in  the  forward-looking statements.  Factors that might
cause  or  contribute to such differences include, but are not limited to, those
discussed  in  the  section  "Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations".  You should carefully review the risks
described  in  other documents we file from time to time with the Securities and
Exchange  Commission.  You  are  cautioned  not  to  place undue reliance on the
forward-looking  statements, which speak only as of the date of this report.  We
undertake no obligation to publicly release any revisions to the forward-looking
statements  or  reflect events or circumstances after the date of this document.


                                     PART  I

DESCRIPTION  OF  BUSINESS

         BUSINESS

         Our  objective  is  to become a leading provider of biometric solutions
for  improved  security.

LICENSE  FOR  BIOMETRIC  SIGNATURE  AUTHENTICATION

     On  April  20,  2002,  we  were granted an exclusive license which included
rights  to  use,  market,  sell,  distribute  and  commercially exploit in North
America,  including Mexico, Central America, Bermuda, and the Caribbean Islands,
the  products  and  other  applications  of  the PenFlow(TM) Biometric Signature
Authentication  technology  developed  by  WonderNet,  Ltd., an Israeli company.
WonderNet  has  granted  us  a  right of first refusal to acquire the issued and
outstanding  shares  of  WonderNet.  We  market the PenFlow technology under the
brand  name  "Signature  Secure"  powered  by  PenFlow(TM).

     The  personal  signature,  by its nature, is a series of one of a kind hand
gestures.  The  repeated  gestures, along with subtle variations that occur each
time  an individual signs, are unique to that individual. It is because of these
subtle  variations,  that two signatures by one person can never be the same. By
accumulating  a  series  of  signatures  for an individual, an accurate personal
profile  for  authentication  can  be  created.

     Signature  Secure  powered  by  PenFlow(TM)  consists of a database of user
profiles and enables remote and local access to the database using the internet,
smart  cards,  or  LAN  connections  to  verify  signatures by comparison to the
database. Under the PenFlow(TM) system you must first register your signature by
writing  your name several times on a special pad using the PenFlow(TM) software
so  that  the  system  can  learn  your  signature. Once your signature has been
recorded  by  the  PenFlow(TM)  system  it  becomes your unique pass or personal
identification and when you subsequently sign your name to enter into a software
controlled  system,  the  biometrics  of  your  signature  is  compared  to  the
PenFlow(TM) database where your signature can either be accepted or rejected. We
believe  that  based  on  WonderNet's  experience  utilizing  the  PenFlow(TM)
technology  for  certain  applications  in Israel, that PenFlow(TM) is reliable,
user  friendly,  and  secure.  PenFlow(TM)  meets  the  requirements  of the new
electronic  signature  laws  in  the  United  States.

     To  obtain  the license for the PenFlow(TM) technology, we issued 2,500,000
shares  of  our  common stock to WonderNet and agreed to pay WonderNet a royalty
equal to 5% of the gross sale proceeds from the sale of PenFlow(TM) products and
applications.  WonderNet  has  the  right  to  terminate  the  license

     o    immediately  upon  the occurrence of certain events of our bankruptcy,
          insolvency,  receivership,  liquidation  or  cessation  of  business

     o    if  we  fail to make payments due under the license agreement after 90
          days'  written  notice  of  default

     o    after  90  days,  if  we  fail  to  comply  with  any  other  material
          responsibility or obligation under the license agreement after 30 days
          written  notice of default, or if we do not take and diligently pursue
          reasonable  steps  to  cure  such  default.

                                        3
<PAGE>

Due  to  the  nature  of  market  conditions  during the financial year 2003 the
commercial  development  of  Penflow was slower than anticipated and resulted in
write  downs associated with the Wondernet License, see financial statements and
notes  to  financial  statements.  However, we believe the commercial outlook is
strong  enough  to have subsequently justified a renewal of licensing agreements
in  August  2003.

LIGHTEC  COMMUNICATIONS

On  March  14,  2002,  we acquired Lightec Communications, Inc. through a merger
with a wholly-owned subsidiary formed by us named LT Acquisition Corp. This firm
was  subsequently  renamed  Lightec  LLC and is a provider of telecommunications
design,  installation  and  information  technology services. Lightec's customer
base includes governmental units, particularly school districts. We believe that
Lightec's  experience  in bidding for government contracts and its relationships
with  governmental  units  may  provide marketing opportunities for Penflow. The
merger  consideration  consisted  of  19,000,000  shares of our common stock and
$4,000,000  in  cash.  18,000,000  shares  were  issued  to Maryanne Richard and
1,000,000  shares  were issued to Dr. Nabil El-Hag. We financed the cash portion
of  the  merger consideration through the issuance and sale of our 9% promissory
notes,  each  in  the  principal  amount  of $1,000,000. These were issued to an
investment partnership of which Gerard Munera, a director of our company, is the
managing  partner  and  to  Maryanne  Richard,  the  owner  of  Lightec. Further
financing  of  the  deal  was  obtained through cash flow from the operations of
Lightec's  business  and  the  sale  of 7,083,333 shares of our common stock (at
$0.12  per share). We also entered into an employment agreement with the manager
of  Lightec  under  which  we  will  pay  him  an  annual salary of $150,000 and
performance  related  bonuses  2002,  2003  and  2004.

     Lightec's projects involve design and installation of cable and fiber optic
networks.  Lightec's  clients  include  educational  institutions,  including
universities  and  local  school  systems,  governmental entities, hospitals and
corporations.

     Lightec's  target  market  includes  government, manufacturers, processors,
utilities,  banks,  schools,  universities,  research  complexes,  media
conglomerates,  securities  and commodities exchanges, law firms, consulting and
research  organizations  and  transportation  service  companies.

     Lightec  competes  on the basis of quality versus price. Lightec's services
are  largely  delivered through long term subcontractors and temporary staff. In
the  information  technology  sector,  Lightec competes with large-scale project
firms  such  as  Verizon  and  SNET  rather  than maintenance shops or equipment
resellers.  In  the general installation business Lightec competes with 20 to 30
small  regional/local  premise-wiring  providers.  In  the  fiber optic splicing
market,  Lightec  competes  with  national and regional firms. Lightec views its
real  competition  as  the  turnkey  solution  providers  who  can  retain  the
value-added  service  contracts ensuring the longevity of the solution provided.

     Lightec  relied  on  three  customers for the majority of its revenues. The
largest of these customers accounts for over half of Lightec's revenues. Lightec
is under contract to provide supplies and services to this customer for the next
three  years.  If  Lightec  were  to  be  unable to supply requisite products or
provide  the needed services to any of these three customers, or if any of these
customers  became  unable to finance the continued acquisition of these supplies
and  services,  the  impact  on  Lightec's  earnings  would  be  significant.
..

TERMINATION  OF  OPTIONS  TO ACQUIRE LICENSES FOR GESTURE RECOGNITION TECHNOLOGY
DEVELOPED  BY  DSI  DATOTECH  SYSTEMS,  INC.

     In  2002  we  elected  not  to  exercise  the option held by our Biometrics
Security  subsidiary  to  acquire an exclusive worldwide royalty-free license to
exploit  the  gesture  recognition technology developed by DSI Datotech Systems,
Inc. for banking and financial transactions and we do not intend to exercise the
option  held by our NetFace subsidiary to acquire an exclusive word-wide license
for  video  games  and  Internet  television.

     The exercise price of the option for the banking and financial transactions
application was $8,000,000, of which we paid DSI $320,000. The exercise price of
the  option  for  the  video  games  and  Internet  television  application  is
$5,000,000,  of  which  we  have paid $200,000. Although DSI did provide us with
certain  working  prototypes, we did not believe that any of the prototypes were
readily marketable. However this technology will be reviewed in 2004 with a view
to  bringing  this  technology  to  the  commercial  market.


                                        4
<PAGE>

HISTORY

     We were incorporated in the State of Nevada on March 12, 1999 as Great Bear
Resources,  Inc.  On May 25, 1999, we changed our name to Great Bear Investments
Inc.  On  August  11,  2000, we changed our name to Security Biometrics, Inc. On
August  25, 2000, we acquired all of the outstanding capital stock of Biometrics
Security  in  a  share  exchange  with  its  shareholders.  Gesture  Recognition
Technologies  International  Limited  received  37,500,000  shares of our common
stock  in  exchange  for  the  500,000 shares of Biometrics Security's preferred
stock,  and  the  holders  of  the  common stock of Biometrics Security received
757,675 shares of our common stock in the share exchange. Upon completion of the
share  exchange, Biometrics Security became our wholly-owned subsidiary. On June
29,  2001, we acquired all of the outstanding membership interests of NetFace in
exchange  for  an  aggregate  of 20,000,000 shares of our common stock All share
information in this report gives effect to a four-for-one forward stock split to
shareholders  of  record  on  August  28,  2000.

EMPLOYEES

         As  of  November  1st,  2003,  we had eight (8) full-time employees and
nine  (9)  part-time  employees, none of whom is represented by any labor union.

ITEM  2.  DESCRIPTION  OF  PROPERTY

     We  occupy  approximately  2,500  square  feet  of  space at 1410-1030 West
Georgia  Street,  Vancouver,  British  Columbia,  Canada, under a lease expiring
March  31,  2004,  at  a  base  rent  of approximately $2,400 per month. We also
sublease  approximately 1,000 square feet of serviced space at 650 5th Avenue on
a  month  to  month basis for approximately $2,500 per month. We hold a one year
lease  on  office  space  in  Wainscott,  NY  under at a cost of $500 per month.
Lightec  rents  the  space required to support its functions on a month to month
basis.  We  believe  that the locations and arrangements are highly suitable and
provide  adequate capacity and resources for the business at the current time. A
reduction  in  capacity  may  be  considered upon the expiration of the lease in
Vancouver.

ITEM  3.  LEGAL  PROCEEDINGS

A  settlement  was  reached  with  Edinburgh Investments LLC on August 29th 2003
covered  by  a stipulation for judgment by a Nevada district court. The terms of
the  settlement  included  a lien against certain future revenues resulting from
certain  education  contracts  held  by  SBTI,  Lightec  and  or  other  SBTI
subsidiaries.

Neither  we,  nor  any  of  our  subsidiaries,  is a party to any other material
legal  proceeding,  nor, to our knowledge, is any material litigation threatened
against  us
or  our  subsidiaries.

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

     None.


                                        5
<PAGE>

                                     PART  II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS.

MARKET  INFORMATION.

     Our  common  stock  is  traded  in the over-the-counter market and has been
quoted  on  the  OTC Bulletin Board under the symbol "SBTI" since June 12, 2001.
From September 1, 2000 to June 11, 2001, our common stock was quoted in the Pink
Sheets.  The  following  table  presents  the  range  of  the  high  and low bid
quotations  for our common stock as reported for each quarter beginning July 27,
2000  when  the  stock  was  first  quoted. Such quotations reflect inter-dealer
prices  without  adjustments for retail mark-up, markdown or commissions, and do
not  necessarily  represent  actual  transactions.

<TABLE>
<CAPTION>
PERIOD                                                                  HIGH        LOW
------                                                                 ------       ------
<S>                                                                    <C>          <C>
APRIL 1, 2003 - JUNE 30, 2003                                           $0.18       $0.10
JANUARY 1, 2003 - MARCH 30, 2003                                        $0.14       $0.07
OCTOBER 1, 2002 - DECEMBER 31, 2002                                     $0.18       $0.14
JULY 1, 2002 - SEPTEMBER 30, 2002                                       $0.19       $0.08

APRIL 1, 2002 - JUNE 30, 2002                                           $0.25       $.007
JANUARY 1, 2002 - MARCH 31, 2002                                        $0.25       $0.075
OCTOBER 1 - DECEMBER 31, 2001                                           $2.55       $0.30
JULY 1 - SEPTEMBER 30, 2001                                             $5.25       $2.35

APRIL 1 - JUNE 30, 2001                                                 $4.95       $2.25
JANUARY 1 - MARCH 31, 2001                                              $6.625      $2.50
OCTOBER 1 - DECEMBER 31, 2000                                           $6.25       $5.00
JULY 27 - SEPTEMBER 30, 2000                                            $14.00      $4.00
</TABLE>

HOLDERS

     As  of  August  1st,  2003,  our  common  stock was owned by 216 holders of
record.

DIVIDENDS


     We have never declared or paid any cash dividends. It is our present policy
to  retain  earnings  to finance the growth and development of the business and,
therefore,  we  do  not  anticipate  paying  dividends  on  common  stock in the
foreseeable  future.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     The  following sets forth certain information regarding sales of, and other
transactions  with  respect to, our securities issued during the year ended June
30, 2003, which sales and other transactions were not registered pursuant to the
Securities  Act  of  1933.  Unless  otherwise  indicated,  no  underwriters were
involved  in  such  transactions.

1.   From  March  25, 2002 to September 16, 2002, we issued a total of 2,560,000
     shares  of  our  common stock to seven persons for consulting services. The
     issuance  of  these shares was exempt from the registration requirements of
     the  Securities  Act  under  Section  4(2).

2.   From  June  30,2002  to  September  30,  2002, we issued a total of 763,740
     shares  of  our  common  stock  for  a total of $114,561 ($0.15 per share).
     The  issuance  and  sale  of  these shares was exempt from the registration
     requirements  of  the  Securities  Act  under  Regulation  S.

3.   From  September 30, 2002, to December 31, 2002 we issued a total of 780,000
     shares  of  our  common  stock  for  a total of $117,000 ($0.15 per share).
     The  issuance  and  sale  of  these shares was exempt from the registration
     requirements  of  the  Securities  Act  under  Regulation  S.

4.   From  December  31,  2002  to March 30, 2003 we issued a total of 1,768,333
     shares  of  our  common  stock  for  a total of $265,250 ($0.15 per share).
     The  issuance  and  sale  of  these shares was exempt from the registration
     requirements  of  the  Securities  Act  under  Regulation  S.

5.   From  March  30,  2003  to  June  30,  2003  we  issued  a total of 100,000
     shares  of  our  common  stock  for  a total of $12,500 ($0.125 per share).
     The  issuance  and  sale  of  these shares was exempt from the registration
     requirements  of  the  Securities  Act  under  Regulation  S.


                                        6
<PAGE>

     With  respect  to  the  sales made in reliance on the exemption afforded by
Section  4(2)  of the Securities Act, (i) no advertising or general solicitation
was  employed  in offering the securities, (ii) the securities were offered to a
limited  number  of  individuals  and  the  transfer  thereof  was appropriately
restricted  by  us,  (iii)  all purchasers were sophisticated investors who were
capable  of  evaluating the merits and risks of the investment and had access to
the  type of information that would be included in a registration statement with
respect  to  the  securities  and  (iv)  each  purchaser  represented  that  the
securities  were  acquired  for  investment  and  not  with a view to re-sale in
contravention  of  the  registration  provisions  of  the  Securities  Act.


                                        7
<PAGE>

                                          PART  III

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

     When  used  in  this  Form  10-KSB,  the  words  "anticipated", "estimate",
"expect",  and  similar  expressions  are  intended  to identify forward-looking
statements.  Such  statements  are  subject  to certain risks, uncertainties and
assumptions  including  the  possibility  that  we will fail to generate planned
revenues.  Should  one  or  more of these risks or uncertainties materialize, or
should  underlying  assumptions  prove  incorrect,  actual  results  may  vary
materially  from  those  anticipated,  estimated  or  projected.

     The  following  discussion and analysis of financial conditions and results
of  operation  should  be  read  in  conjunction with our consolidated financial
statements  and  notes  thereto  included  elsewhere  in  this  Form  10-KSB.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations
are  based  upon  our  consolidated  statements,  which  have  been  prepared in
accordance  with  accounting principles generally accepted in the United States.
The  preparation of these financial statements requires us to make estimates and
judgments  that affect the reported amounts of assets, liabilities, revenues and
expenses.  In  consultation  with our Board of Directors and Audit Committee, we
have  identified  two  accounting  policies  that  we  believe  are  key  to  an
understanding  of  our  financial  statements.  These  are  important accounting
policies  that  require  management's  most  difficult,  subjective  judgments.

The  first  critical  accounting  policy  relates  to  revenue  recognition.  We
recognize  revenue  form  product  sales  upon shipment to the customer. License
revenues  are recognized when earned, in accordance with contractual provisions.
Royalty  revenues  are  recognized  upon  shipment of products incorporating the
related technology by the original equipment manufacturers (OEMs) and foundries.

The  second  critical  accounting  policy  relates  to  intangible  assets.  Our
intangible  assets  consist  primarily of goodwill. In accordance with SFAS 142,
"Goodwill  and  Other  Intangible  Assets," only intangible assets with definite
lives  are  amortized.  Non-amortized  intangible  assets are instead subject to
annual  impairment  testing.

Principles  of  consolidation; the consolidated financial statements include the
accounts  of  Security  Biometrics,  Inc.  and  the  following  subsidiaries:
Biometrics Security, Inc.

Netface, LLC (Inactive)
Lightec Communications Corp.
Datadesk Technologies, Inc.
eMedRx, Inc.

All material inter-company accounts and transactions have been eliminated.

Depreciation;  the  Company depreciates its property and equipment for financial
reporting  purposes  using  the  straight-line  method  based upon the following
useful  lives  of  the  assets:

Furniture and fixtures     7-10 years
Machinery and equipment    5 Years
Computer equipment         5 Years
Vehicles                   5 Years

Foreign  Currency;  the  consolidated  financial  statements  of the Company are
measured  using  the  United  States  dollar  as  the  functional  and reporting
currency.  Assets, liabilities and equity accounts of the Company are translated
from  foreign  currency  to  United  States currency at exchange rates as of the
balance  sheet  date  or historical acquisition date, depending on the nature of
the  account.  Revenues and expenses are translated at average rates of exchange
in effect during the year. The resulting cumulative translation adjustments have
been  recorded  as  a  separate  component  of  stockholders'  equity.

Income Tax; provisions for income taxes are based on taxes payable or refundable
for  the  current  year  and deferred taxes on temporary differences between the
amount  of  taxable income and pretax financial income and between the tax basis
of  assets  and  liabilities  and  their  reported  amounts  in  the  financial
statements.  Deferred  tax  assets and liabilities are included in the financial
statements  at  currently  enacted  income tax rates applicable to the period in
which  the  deferred  tax  assets and liabilities are expected to be realized or
settled as prescribed in FASB Statement No. 109, Accounting for Income Taxes. As
changes  in  tax  laws or rates are enacted, deferred tax assets and liabilities
are  adjusted  through  the  provision  for  income  taxes.


                                        8
<PAGE>

Account  estimates;  management  uses  estimates  and  assumptions  in preparing
financial  statements  in  accordance  with  generally  accepted  accounting
principles.  Those  estimates  and  assumptions  affect  the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from the estimates
that  were  used.

     Security Biometrics, Inc. was incorporated as Great Bear Resources, Inc. in
the  State  of  Nevada  on  March 12, 1999 and we changed our name to Great Bear
Investments,  Inc.  on  May 25, 1999. On August 11, 2000, we changed our name to
Security  Biometrics,  Inc.  We were a development state company whose objective
was  to  develop  market  under  license  and  distribute  dynamic  biometric
technologies  specific  to  the  security  applications of banking and financial
transactions,  including  dynamic  gesture  recognition  technology,  dynamic
signature  verification  and  voice  recognition.

     On  August  22, 2000, we entered into an option agreement with DSI Datotech
of  Vancouver, Canada. The exercise price of the option was $8,000,000, of which
we  paid  $320,000.  On  June  29,  2001,  we  acquired  all  of the outstanding
membership  interests  of NetFace, LLC, a Connecticut limited liability company,
in exchange for 20,000,000 share of our common stock. NetFace holds an option to
acquire an exclusive worldwide, perpetual, royalty-free license to exploit DSI's
gesture  recognition  technology  for  video  games and Internet/television. The
exercise  price  of  the  option  is $5,000,000 plus a 20% Class B Membership of
NetFace.

     On  April  20,  2002,  the  Company  entered  into  an exclusive rights and
licensing  distribution and partnership agreement with WonderNet Ltd. of Israel.
Under this agreement, we became the exclusive distributor for North America, the
Caribbean  and  Mexico  of  WonderNet's  Penflow(TM)  patented  and  proprietary
Biometric  Signature Authentication ("BSA") software engine, which consists of a
database  of  user  profiles  and enable remote and local access to the database
using  the  internet,  smart  cards,  or LAN connections to verify signatures by
comparison  to  said  database.  To  acquire  these  rights, we issued WonderNet
2,500,000  shares  of  common  stock  and  agreed  to pay WonderNet a 5 per cent
royalty  on  products  sold. Penflow's commercial performance led to write downs
associated  with  WonderNet  however, our confidence in the commercial prospects
for  this product going forward led us to renew the agreement in August 2003. We
anticipate  significantly  improved  commercial  performance  in  response  to
increased investment in sales and marketing of the product supported by revenues
from  Lightec  and  sales  of  securities.

     The agreement with WonderNet allows us to commence sub-licensing, marketing
a  proven  biometric  security  product.  We have decided to not to exercise our
options  with DSI Datotech at this time as we do not believe that the prototypes
delivered  to  us  are  market  ready  at  this  time. Consequently, the Company
expensed $320,000 in 2001 and the balance of the investment of $200,000 in 2002.

     In  order  to  assist in the development and support of providing biometric
security  solutions,  we  entered  into an agreement effective March 14, 2002 to
acquire  the  issued  and outstanding shares of Lightec Communications, Corp. of
Pleasant  Valley,  New  York.  Lightec  is  a  provider  of  high  quality
telecommunications  design,  installation  and  information technology services.
Lightec  was  established  in  1994  and  provides  quality  network  design,
installation,  and  maintenance  of  internal  building,  campus-wide,  local,
metropolitan  and  wide  area  network systems, in primarily in the northeastern
United  States.  On June 14, 2002, we closed the agreement to acquire Lightec by
issuing  19,000,000  shares  of  common  stock and paying $4,000,000 in cash. In
connection  with this acquisition, we issued 4,000,000 in shares of common stock
and  accrued $200,000 as finder's fees under a finder's fee agreement with Chris
Farnworth.  (Lightec  has  a  portfolio  of stable, long term contracts which we
forecast  will  generate more than $6 million in 2004 following the confirmation
of  release of funds by federal government to the SLD agency for distribution in
respect  of  these  specific  contracts)  .  The  anticipated stability of these
revenues  has  allowed SBTI to schedule debt payments against this income stream
and  take  steps to stabilize the balance sheet. Furthermore, the stable margins
that  the  Lightec  Communications  business  supports we believe will result in
generation  of  free  cash  flow  for  the  business.

     On  June  28,2002  we  entered  into an agreement to acquire the issued and
outstanding  shares  of  Datadesk  Technologies,  Inc.  of  Seattle, Washington.
Datadesk  was  in  the business of designing, manufacturing, and selling desktop
solutions, educational computing systems, and handheld and wireless devices. The
acquisition  was  closed  on  June  28,2000.  Security Biometrics, Inc's initial
strategy was to provide platform development of vertical solutions incorporating


                                        9
<PAGE>

Penflow  Biometric  Signature  Authentication  with innovative computer keyboard
products  being  delivered  by  Datadesk.  To  this  end, Security Biometrics in
conjunction  with  Datadesk  developed  EmedRX  to provide an electronic medical
prescription  solution  to  physicians and pharmacists, which was launched in Q1
2003.

     In  order  to focus the resources of SBI on its core Penflow technology and
the EmedRX application it was agreed to divest SBI of the remainder of Datadesk.
In  order  to  execute  the divestiture it was mutually agreed by SBI and Robert
Solomon,  (President  of  Datadesk  and  CTO  of  SBI)  to  cancel  Mr Solomon's
employment  agreement  with SBI and transfer ownership of Datadesk to PanPacific
for  a  consideration  of  $1,000,000.  The  effective date of the agreement and
transfer  of  ownership  was August 20th, 2003 and is reflected in a significant
reduction  in goodwill in our financial statements. However, the vertical sector
focus  has  resulted  in  the  appointment  of  Mr David Dalton as a director of
Security  Biometrics  and  chairman  of  EmedRX USA. Mr Dalton, who is currently
president  and  CEO  of Health resources, Inc (50,000 pharmacies under contract)
enjoys  other  roles  with  the  Sherman  Group,Medical  Service Agency, MEDNET,
Managed  Care RX, Univec among others. Mr Dalton's more than 30 years experience
in  the  sector  has  brought  excellent insight and we hope it will enhance our
penetration  in  this  market.

     In  order  to  grow  the  penflow  business  additional resources have been
allocated,  post  2003  year end, to market and sell the solution. We anticipate
that  these  resources  will  be  supported  by  free cash flow generated in the
Lightec  business,  however  we  forecast that in the short term some additional
financing  provided  by  the  sale  of  additional securities may be required to
support  these  efforts.  Our  analysis  suggests  that  the sales cycle for our
solution,  even  supported  by  additional  sales and marketing resources, is in
excess  of  three  months  because of the solution's impact on client's business
processes.  Therefore  we anticipate that the results of the investment in sales
and  marketing  efforts  may  not be reflected in our revenues until Q2 or Q3 of
financial  year  2004.

     Until  the  acquisition of Lightec, we were a development stage company. As
of  March  14,  2002,  with  the  acquisition  of Lightec we became an operating
company.  During  the  year  ended  June  30  2003  our  comprehensive  loss was
$13,575,873 with a pro forma loss of ($0.11) per share compared to June 30, 2002
("YE2002"),  when  our  comprehensive loss was ($749,473) and our pro forma loss
per  share  was  ($0.01),  reflecting  charges  associated  with divestiture and
impairment  of  goodwill.

         At  June  30,  2003,  shareholder  equity  (deficiency)  $(6,814,397).

LIQUIDITY  AND  CAPITAL  RESOURCES

         During  the  YE2003  as compared to YE2002, our cash flow used from
operations  decreased  from  $1,418,000  million  to ($898,510) million in 2003.
The  divestiture  of  Datadesk  had  a significant impact through the write-offs
associated  with  the  transaction.

     In  addition  to  the  cash  on  hand at the start of the year $671,702 was
raised  through  proceeds  from  the  issuance  of  common  stock.

     At June 30, 2003, we will require additional financing over the next twelve
months  to  fund  our  operations  and  satisfy our debt service obligations. We
anticipate  significant  cash  contributions  from  Lightec  but  believe  that
additional  cash  will  be  required from proceeds from sale of common stock and
other  sources.

     Payment of 10% convertible debentures in the principal amount of $1,680,000
issued  in  connection with the acquisition of Datadesk became due in June 2003.
This and payments of the notes issued in connection with the Lightec acquisition
are  secured  by the assets of Lightec. If we are unable to generate substantial
cash  flows  from the operations of Lightec and our other operations, and unable
to  obtain additional financing, or restructure the indebtedness relating to the
acquisitions,  our  ability  to  continue  the operation of these businesses and
expand  our  other  biometric  security  activities  may  be  severely impaired.


                                        10
                                       10
<PAGE>

ITEM  7.  FINANCIAL  STATEMENTS

                          INDEPENDENT AUDITORS' REPORT

To  the  Stockholders,
Security  Biometrics,  Inc.  and  Subsidiaries

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Security
Biometrics,  Inc.  and  Subsidiaries  as  of  June  30,  2003  and  the  related
consolidated  statements  of operations, stockholders' deficiency and cash flows
for  the  year ended June 30, 2003.  These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an  opinion  on  these  consolidated  financial  statements  based on our audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  an  audit  to  obtain  reasonable  assurance  whether  the consolidated
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
audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  these  consolidated  financial  statements  referred to above
present  fairly,  in  all  material respects, the financial position of Security
Biometrics,  Inc.  and Subsidiaries as of June 30, 2003 and the results of their
operations  and their cash flows for the year ended June 30, 2003, in conformity
with  accounting  principles generally accepted in the United States of America.

The  accompanying  consolidated financial statements referred to above have been
prepared assuming the Company will continue as a going concern.  As discussed in
Note  1  to  the  financial statements, conditions exist which raise substantial
doubt  about  the  Company's ability to continue as a going concern unless it is
able  to  generate sufficient cash flows to meet its obligations and sustain its
operations.  Management's  plan  in  this  regard  to  these  matters  are  also
described  in  Note  1.  The financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.


Vancouver, Canada                                   'Amisano Hanson'
November 6, 2003                                    Certified Public Accountants


                                       11
<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To  The  Stockholders  and  Board  of  Directors
Security  Biometrics,  Inc.  and  Subsidiaries

We  have  audited  the  accompanying  consolidated  balance  sheets  of Security
Biometrics,  Inc. and Subsidiaries, as of June 30, 2002 and 2001 and the related
statements of operations, stockholders' equity and cash flows for the year ended
June  30,  2002  and  for the period from August 25, 2000 (date of inception) to
June  30,  2001.  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  audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United State of America. Those standards require that we plan and perform
the  audit 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  June 30, 2002 and 2001 consolidated financial statements
referred  to  above  present  fairly,  in  all  material respects, the financial
position  of  Security Biometrics, Inc. and Subsidiaries as of June 30, 2002 and
2001,  and  the  results of its operations and its cash flows for the year ended
June  30,  2002  and  for the period from August 25, 2000 (date of inception) to
June 30, 2001 in conformity with accounting principles generally accepted in the
United  States  of  America.





MOFFITT  &  COMPANY,  P.C.
SCOTTSDALE,  ARIZONA


September  13,  2002


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                  SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS
                                            June 30, 2003 and 2002
                                            ----------------------


                                                    ASSETS
                                                    ------

                                                                                    2003             2002
                                                                               ---------------  --------------
<S>                                                                            <C>              <C>
Current
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .  $        4,092   $     481,297
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          94,634          29,837
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . .          19,064         188,227
Current assets of discontinued operations . . . . . . . . . . . . . . . . . .         137,270         158,516
                                                                               ---------------  --------------

                                                                                      255,060         857,877
Property, plant and equipment, net of accumulated depreciation. . . . . . . .          65,018         212,864
Goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -       7,527,654
Investment in Wondernet, Inc. . . . . . . . . . . . . . . . . . . . . . . . .               -         187,500
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               -           4,374
Long-term assets of discontinued operations . . . . . . . . . . . . . . . . .          23,783       3,435,830
                                                                               ---------------  --------------

                                                                               $      343,861   $  12,226,099
                                                                               ===============  ==============

                                                 LIABILITIES
                                                 -----------
Current liabilities
Accounts payable
Non-related entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      686,762   $     761,723
Related entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       1,540,704         296,732
Billings in excess of costs and estimated earnings on  uncompleted contracts
                                                                                            -         541,245
Corporation income tax payable. . . . . . . . . . . . . . . . . . . . . . . .         424,542         424,542
Capital lease payable, current portion. . . . . . . . . . . . . . . . . . . .           5,230           5,230
Notes payable, current portion. . . . . . . . . . . . . . . . . . . . . . . .       2,000,000       2,000,000
Notes payable, equipment, current portion . . . . . . . . . . . . . . . . . .               -          23,667
Convertible debentures, current portion . . . . . . . . . . . . . . . . . . .       1,780,000       1,680,000
Current liabilities of discontinued operations. . . . . . . . . . . . . . . .         719,955         481,380
                                                                               ---------------  --------------

                                                                                    7,157,193       6,214,519
Capital lease payable, net of current portion . . . . . . . . . . . . . . . .             872           6,411
Notes payable, net of current portion . . . . . . . . . . . . . . . . . . . .               -           5,251
Minority interest in equity of consolidated subsidiary. . . . . . . . . . . .             193               -
Convertible debentures, net of current portion. . . . . . . . . . . . . . . .               -         100,000
                                                                               ---------------  --------------

                                                                                    7,158,258       6,326,181
                                                                               ---------------  --------------

                                                                                                       /Cont'd
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Continued

                                  SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS
                                            June 30, 2003 and 2002
                                            ----------------------

                                       STOCKHOLDERS' EQUITY (DEFICIENCY)
                                       ---------------------------------

                                                                                    2003             2002
                                                                               ---------------  --------------
<S>                                                                            <C>              <C>
Current
Preferred stock - no shares authorized or issued, no par value authorized
Common stock
Authorized - 300,000,000, par value $0.001 per share
Issued and outstanding
June 30, 2003 - 124,296,257 common shares . . . . . . . . . . . . . . . . . .  $      124,296   $           -
June 30, 2002 - 117,601,248 common shares . . . . . . . . . . . . . . . . . .               -         117,601
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . .       8,201,508       7,346,645
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (  15,134,954)   (  1,557,339)
Accumulated other comprehensive loss. . . . . . . . . . . . . . . . . . . . .        (  5,247)       (  6,989)
                                                                               ---------------  --------------

                                                                                 (  6,814,397)      5,899,918
                                                                               ---------------  --------------

                                                                               $      343,861   $  12,226,099
                                                                               ===============  ==============

</TABLE>


                See  Notes  to  Consolidated  Financial  Statements.


                                       14
<PAGE>

<TABLE>
<CAPTION>

                   SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   for the years ended June 30, 2003 and 2002
               --------------------------------------------------



                                                           2003            2002
                                                      ---------------  ------------
<S>                                                   <C>              <C>
Revenue
Contract revenues earned . . . . . . . . . . . . . .  $    1,147,140   $ 2,656,457
                                                      ---------------  ------------

Costs and Expenses
Cost of revenues earned. . . . . . . . . . . . . . .         666,138     1,469,252
Gesture recognition technology option. . . . . . . .               -       200,000
Interest expense . . . . . . . . . . . . . . . . . .         391,514       261,281
Selling, general and administrative. . . . . . . . .       1,969,626     1,043,866
Other items
Write-down of capital assets . . . . . . . . . . . .       (  64,042)            -
Write-down of investment . . . . . . . . . . . . . .      (  187,500)            -
Write-down of goodwill . . . . . . . . . . . . . . .    (  7,527,654)            -
                                                      ---------------  ------------
                                                          10,806,474     2,974,399
                                                      ---------------  ------------
Loss before corporation income taxes . . . . . . . .    (  9,659,334)   (  317,942)
Corporation income taxes . . . . . . . . . . . . . .               -    (  424,542)
                                                      ---------------  ------------

Loss from continuing operations. . . . . . . . . . .    (  9,659,334)   (  742,484)
Loss from discontinued operations. . . . . . . . . .    (  3,918,281)            -
                                                      ---------------  ------------

Net loss for the year. . . . . . . . . . . . . . . .  $(  13,577,615)  $(  742,484)
                                                      ===============  ============

Basic and diluted loss per common share
Continuing operations. . . . . . . . . . . . . . . .  $      (  0.08)  $   (  0.01)
                                                      ===============  ============

Discontinued operations. . . . . . . . . . . . . . .  $      (  0.03)  $      (  -)
                                                      ===============  ============

Net loss for the year. . . . . . . . . . . . . . . .  $      (  0.11)  $   (  0.01)
                                                      ===============  ============

Weighted average number of common shares outstanding     120,749,524    77,965,658
                                                      ===============  ============

</TABLE>


                                       15
<PAGE>

<TABLE>
<CAPTION>

                   SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                   for the years ended June 30, 2003 and 2002
               --------------------------------------------------



                                               2003            2002
                                          ---------------  ------------
<S>                                       <C>              <C>
Net loss for the year. . . . . . . . . .  $(  13,577,615)  $(  742,484)

Other comprehensive income (loss)
Foreign currency translation adjustment.           1,742      (  6,989)
                                          ---------------  ------------

Net comprehensive loss . . . . . . . . .   (  13,575,873)   (  749,473)
                                          ===============  ============

</TABLE>




                See  Notes  to  Consolidated  Financial  Statements.


                                       16
<PAGE>

<TABLE>
<CAPTION>
                                     SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     for the years ended June 30, 2003 and 2002
                                 --------------------------------------------------


                                                                                            2003            2002
                                                                                       --------------  --------------
<S>                                                                                    <C>             <C>
Operating Activities
Net loss from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . .  $(  9,659,334)  $  (  742,484)
Adjustments to reconcile net loss to cash provided by (used in)  operating activities
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         55,072          20,791
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              -         233,333
Compensation charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         85,500               -
Stock issued for consulting fees. . . . . . . . . . . . . . . . . . . . . . . . . . .        104,550         175,100
Write-down of capital assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         64,042               -
Write-down of investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .        187,500               -
Write-down of goodwill. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      7,527,654               -
Changes in operating assets and liabilities
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      (  64,797)      (  25,641)
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . . . .        169,163      (  188,471)
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          4,374        (  1,111)
Accounts payable accrued liabilities. . . . . . . . . . . . . . . . . . . . . . . . .      1,169,011         981,182
Corporation income tax payable. . . . . . . . . . . . . . . . . . . . . . . . . . . .              -         424,542
Billings in excess of costs and estimated earnings on uncompleted  contracts
                                                                                          (  541,245)        541,245
                                                                                       --------------  --------------

Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . .     (  898,510)      1,418,486
                                                                                       --------------  --------------

Investing Activities
Proceeds on disposal of property and equipment. . . . . . . . . . . . . . . . . . . .         38,000               -
Purchase of property and equipment. . . . . . . . . . . . . . . . . . . . . . . . . .       (  9,268)      (  50,182)
Acquisition of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              -    (  4,843,001)
Advances to subsidiary - discontinued operations. . . . . . . . . . . . . . . . . . .     (  246,414)              -
                                                                                       --------------  --------------

Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . .     (  217,682)   (  4,893,183)
                                                                                       --------------  --------------

Financing Activities
Proceeds from issuance of common stock. . . . . . . . . . . . . . . . . . . . . . . .        615,702       1,164,125
Proceeds from issuance of common stock by subsidiary. . . . . . . . . . . . . . . . .         56,000               -
Proceeds from convertible debentures. . . . . . . . . . . . . . . . . . . . . . . . .              -       1,780,000
Payments on capital lease payable . . . . . . . . . . . . . . . . . . . . . . . . . .       (  5,539)       (  1,362)
Payments on notes payable, equipment. . . . . . . . . . . . . . . . . . . . . . . . .      (  28,918)       (  3,948)
Proceeds from notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              -       1,000,000
                                                                                       --------------  --------------

Net cash provided by financing activities . . . . . . . . . . . . . . . . . . . . . .        637,245       3,938,815
                                                                                       --------------  --------------

                                                                                                              /Cont'd
</TABLE>


                                       17
<PAGE>

<TABLE>
<CAPTION>
                                                                                                            Continued
                                     SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                     for the years ended June 30, 2003 and 2002
                                 --------------------------------------------------


                                                                                            2003            2002
                                                                                       --------------  --------------
<S>                                                                                    <C>             <C>
Effect of exchange rate changes on cash and cash equivalents. . . . . . . . . . . . .          1,742        (  6,989)
                                                                                       --------------  --------------

Increase (decrease) in cash and cash equivalents - continuing  operations
                                                                                          (  477,205)        457,129
Increase (decrease) in cash and cash equivalents - discontinued  operations
                                                                                            (  1,978)              -
                                                                                       --------------  --------------

Increase (decrease) in cash and cash equivalents during the year. . . . . . . . . . .     (  479,183)        457,129

Cash and cash equivalents, beginning of the year. . . . . . . . . . . . . . . . . . .        483,275          26,146
                                                                                       --------------  --------------

Cash and cash equivalents, end of the year. . . . . . . . . . . . . . . . . . . . . .  $       4,092   $     483,275
                                                                                       ==============  ==============


Cash and cash equivalents is comprised of:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $       4,092   $     481,297
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              -           1,978
                                                                                       --------------  --------------

                                                                                       $       4,092   $     483,275
                                                                                       ==============  ==============


Supplemental disclosure of cash flow information
Cash paid for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           -   $      11,711
                                                                                       ==============  ==============

Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           -   $           -
                                                                                       ==============  ==============


Non-cash Transactions:
Issuance of common stock for:
Acquisition of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           -   $   4,779,934
                                                                                       ==============  ==============

Wondernet, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $           -   $     187,500
                                                                                       ==============  ==============

Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $     104,550   $     175,100
                                                                                       ==============  ==============

</TABLE>


                                       18
<PAGE>

<TABLE>
<CAPTION>
                                  SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   for the years ended June 30, 2003 and 2002
                               --------------------------------------------------

                                                                            Deficit
                                                           Accumulated    Accumulated
                                            Additional        Other       During the
                Common Stock   Paid-in    Comprehensive    Development    Accumulated
                ------------
                   Number     Par Value      Capital          Loss           Stage          Deficit           Total
                ------------  ----------  --------------  -------------  -------------  ---------------  ---------------
<S>             <C>           <C>         <C>             <C>            <C>            <C>              <C>
Balance, June.    70,757,675  $   70,758  $      853,496  $          -   $ (  814,855)  $            -   $      109,399
                    30, 2001
Issuance of
common stock
for:
Cash . . . . .     8,168,983       8,169       1,155,956             -              -                         1,164,125
Acquisition. .    23,000,000      23,000       2,897,000             -              -                         2,920,000
of Lightec
Acquisition. .    11,624,590      11,624       1,848,310             -              -                         1,859,934
of Datadesk
Wondernet, . .     2,500,000       2,500         185,000             -              -                           187,500
Ltd.
agreement
Services . . .     1,550,000       1,550         173,550             -              -                           175,100
Interest . . .             -           -         233,333             -              -                           233,333
expense
Transfer
deficit
accumulated. .             -           -               -             -        814,855       (  814,855)               -
 during the
development
stage  to
accumulated
deficit
Accumulated
other
comprehensive.             -           -               -      (  6,989)             -                -         (  6,989)
loss for the
year ended
June 30, 2002
Net loss for
the year . . .             -           -               -             -              -       (  742,484)      (  742,484)
ended June
30, 2002
                ------------  ----------  --------------  -------------  -------------  ---------------  ---------------

Balance, June.   117,601,248     117,601       7,346,645      (  6,989)             -     (  1,557,339)       5,899,918
30, 2002
                ------------  ----------  --------------  -------------  -------------  ---------------  ---------------
                                                                                                                ./Cont'd
</TABLE>


                                       19
<PAGE>

<TABLE>
<CAPTION>
                                                                                                              Continued
                                  SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   for the years ended June 30, 2003 and 2002
                               --------------------------------------------------

                                                                            Deficit
                                                           Accumulated    Accumulated
                                            Additional        Other       During the
                Common Stock   Paid-in    Comprehensive    Development    Accumulated
                ------------
                   Number     Par Value      Capital          Loss           Stage          Deficit           Total
                ------------  ----------  --------------  -------------  -------------  ---------------  ---------------
<S>             <C>           <C>         <C>             <C>            <C>            <C>              <C>
Balance, June.   117,601,248  $  117,601  $    7,346,645  $   (  6,989)  $          -   $ (  1,557,339)  $    5,899,918
30, 2002
Issuance of
common stock
for:
Cash (net
of $24,287 . .     5,635,634       5,636         610,065             -              -                -          615,701
finder's
fees paid)
Services . . .     1,059,375       1,059         103,491             -              -                           104,550
Non-cash
compensation charge                               85,500             -              -                -           85,500
Issuance of
common stock .             -           -          55,807             -              -                            55,807
by subsidiary
Accumulated
other
comprehensive.             -           -               -         1,742              -                             1,742
loss for the
year ended
June 30, 2003
Net loss for
the year . . .             -           -               -             -              -    (  13,577,615)   (  13,577,615)
ended June
30, 2003
                ------------  ----------  --------------  -------------  -------------  ---------------  ---------------

Balance, June.   124,296,257  $  124,296  $    8,201,508  $   (  5,247)  $          -   $(  15,134,954)  $ (  6,814,397)
30, 2003
                ============  ==========  ==============  =============  =============  ===============  ===============

</TABLE>


                                       20
<PAGE>

                   SECURITY BIOMETRICS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                             June 30, 2003 and 2002
                             ----------------------



Note  1     Summary  of  Significant  Accounting  Policies
            ----------------------------------------------

Organization  and  Nature  of  Business
Security  Biometrics,  Inc.  and  Biometrics  Security,  Inc.
-------------------------------------------------------------

Security  Biometrics,  Inc. (hereinafter referred to as the Company) is a Nevada
corporation  incorporated  on  March  12,  1999.

On August 25, 2000, the Company acquired all of the issued and outstanding stock
of  Biometrics  Security,  Inc. (hereinafter referred to as BSI) in exchange for
38,257,675 shares of its common stock. (37,500,000 of these shares were owned by
a  trust  whose  beneficiaries  were the children of an officer of the Company).

This  transaction  has  the effect of what is commonly referred to as a "reverse
acquisition"  in  that  the  Company  is the legal acquirer; however, BSI is the
accounting  acquirer.

In connection with the legal form of this transaction, BSI became a wholly-owned
subsidiary  of the Company.  For accounting purposes, the acquisition is treated
as  a  recapitalization  of  BSI  rather  than  a  business  combination.
The  Company  is a holding company for subsidiary acquisitions.  The Company and
its  subsidiaries intend to develop market under license, and distribute dynamic
biometric  technologies.

Netface,  LLC.
--------------

On  June  29,  2001,  the  Company  acquired  all  of the outstanding membership
interest  of  Netface, LLC.  Netface, LLC held an option to acquire on exclusive
worldwide  perpetual,  royalty-free  license  to exploit the Gesture Recognition
Technology  developed  by DSI Datotech Systems, Inc. (hereinafter referred to as
Datotech)  for  video games and internet/television.  In the year ended June 30,
2002,  Netface,  LLC  abandoned  its  Datotech  option  and  is  now  inactive.

Lightec  Communications  Corp.
------------------------------

On  March 14, 2002, the Company acquired 100% of the outstanding common stock of
Lightec Communications Corp. (hereinafter referred to as Lightec).  Lightec is a
New  York  corporation  incorporated  on July 2, 1996.  Lightec is a provider of
telecommunications  design,  installation  and  information technology services.


                                       21
<PAGE>

Note  1     Summary  of  Significant  Accounting  Policies  -  (cont'd)
            ----------------------------------------------

Organization  and  Nature  of  Business  -  (cont'd)

Datadesk  Technologies,  Inc.
-----------------------------

On  June  28, 2002, the Company acquired 100% of the outstanding common stock of
Datadesk  Technologies, Inc. (hereinafter referred to as Datadesk).  Datadesk is
a  state  of  Washington  corporation  incorporated  on  May 20, 1997.  Datadesk
designs and produces (through subcontractors) advanced digital input devices and
appliances.

eMedRx,  Inc.
-------------

On  January  21,  2003,  the Company incorporated a new wholly-owned subsidiary,
eMedRx,  Inc.  (hereinafter  referred to as eMedRx) under the Company Act of the
Province  of British Columbia, Canada.  eMedRx entered into an exclusive license
agreement  with  the  Company  to  develop  and  market  its  electronic medical
prescription system around the world.  EMedRx had no revenues, expenses, nor net
income/loss  during  the  period  from  January  21,  2003  to  June  30,  2003.
During  the  year ended June 30, 2003, eMedRx received $56,000 from new minority
stockholders which reduced the Company's investment in eMedRx to less then 100%.
This  resulted  in  additional  paid-in  capital  of  $55,807 and an increase in
minority  interest  of  $193.

Going  Concern

The  Company  experienced significant operating losses since inception totalling
approximately  $15.0 million.  In addition, as at June 30, 2003, the Company has
a  working  capital  deficit  amounting  to  approximately  $6.9  million.  The
consolidated  financial  statements have been prepared assuming the Company will
continue  to  operate  as  a going concern which contemplates the realization of
assets  and  the settlement of liabilities in the normal course of business.  No
adjustment has been made to the recorded amount of assets or the recorded amount
of  classification  of  liabilities  which would be required if the Company were
unable  to  continue  its  operations.  Management  has  negotiated  a financial
reorganization plan which the Company believes should address some or all of its
present  financial  condition.

Principles  of  Consolidation

The  consolidated  financial  statements  include  the  accounts  of  Security

     Biometrics,  Inc.  and  the  following  subsidiaries:
     Biometrics  Security,  Inc.
     Netface,  LLC  (Inactive)
     Lightec  Communications  Corp.
     Datadesk  Technologies,  Inc.
     eMedRx,  Inc.

All  material  inter-company  accounts  and  transactions  have been eliminated.


                                       22
<PAGE>

Note  1     Summary  of  Significant  Accounting  Policies  -  (cont'd)
            ----------------------------------------------

Cash  and  Cash  Equivalents

The  Company  considers  all  highly  liquid  debt instruments purchased with an
original  maturity  of  three  months  or  less  to  be  cash  equivalents.

Accounting  Estimates
---------------------

Management  uses  estimates and assumptions in preparing financial statements in
accordance  with  generally accepted accounting principles.  Those estimates and
assumptions  affect  the  reported  amounts  of  assets  and  liabilities,  the
disclosure  of  contingent assets and liabilities, and the reported revenues and
expenses.  Actual  results  could  vary  from  the  estimates  that  were  used.

Revenue  and  Cost  Recognition
-------------------------------

Lightec
-------

Lightec  recognizes  revenues  from  fixed-price  and  modified  fixed-price
construction  contracts  on the percentage-of-completion method, measured by the
percentage  of  cost incurred to date to estimated total cost for each contract.
That  method  is  used  because  management  considers total cost to be the best
available  measure  of  progress  on  the  contracts.  Because  of  inherent
uncertainties  in  estimating costs, it is at least reasonably possible that the
estimates  used  will  change  within  the  near  term.
Revenue from time-and-materials contracts is recognized currently as the work is
performed.

Contract  costs  include  all direct material and labor costs and those indirect
costs  related to contract performance, such as indirect labor, supplies, tools,
repairs,  and  depreciation.  Selling,  general,  and  administrative  costs are
charged  to expense as incurred.  Provisions for estimated losses on uncompleted
contracts  are  made in the period in which such losses are determined.  Changes
in  job  performance,  job conditions, and estimated profitability may result in
revisions  to  costs and income, which are recognized in the period in which the
revisions are determined.  Changes in estimated job profitability resulting from
job  performance,  job  conditions,  contract  penalty  provision, claims change
orders and settlements, are accounted for as changes in estimates in the current
period.

The  asset,  "Costs  and estimated earnings in excess of billings on uncompleted
contracts,"  represents  revenues  recognized  in excess of amounts billed.  The
liability,  "Billings  in  excess of costs and estimated earnings on uncompleted
contracts,"  represents  billings  in  excess  of  revenues  recognized.

Revenue  from  claims  is recognized when realization is probable and the amount
can  be reliably estimated.  When realization is probable, but the amount cannot
be  reliably  estimated,  revenue is recognized to the extent of costs incurred.


                                       23
<PAGE>

Note  1     Summary  of  Significant  Accounting  Policies  -  (cont'd)
            ----------------------------------------------

Revenue  and  Cost  Recognition  -  (cont'd)
-------------------------------

Datadesk
--------

Product  sales  -  when  goods  are  shipped  and  title passes to the customer.

Keyboard  development  fees  -  when  services  are  performed.

Royalties  -  when  the  licensee  sells the product and reports the sale to the
Company.

Accounts  Receivable
--------------------

Accounts receivable are reported at the customers' outstanding balances less any
allowance  for  doubtful  accounts, marketing credits and allowance for possible
sales  returns.

Allowance  for  Doubtful  Accounts, Marketing Credits and Allowance for Possible
--------------------------------------------------------------------------------

Sales  Returns
--------------

The allowance for accounts receivable is charged to income in amounts sufficient
to  maintain  the  allowance at a level management believes is adequate to cover
any  possible  losses,  credits  or  returns.

Inventory
---------
Datadesk's inventory is stated at the lower of cost (determined on the first-in,
first-out  method)  or  market.

Property  and  Equipment
------------------------

Property  and equipment are stated at cost.  Major renewals and improvements are
charged to the asset accounts while replacements, maintenance and repairs, which
do  not  improve or extend the lives of the respective assets, are expensed.  At
the  time property and equipment are retired or otherwise disposed of, the asset
and  related  accumulated  depreciation  accounts are relieved of the applicable
amounts.  Gains  or  losses from retirements or sales are credited or charged to
income.

The  Company  depreciates  its  property  and  equipment for financial reporting
purposes using the straight-line method based upon the following useful lives of
the  assets:

     Furniture  and  fixtures           7-10  years
     Machinery  and  equipment          5  Years
     Computer  equipment                5  Years
     Vehicles                           5  Years


                                       24
<PAGE>

Note  1     Summary  of  Significant  Accounting  Policies  -  (cont'd)
            ----------------------------------------------

     Accounting  for  Convertible  Debt  Securities
     ----------------------------------------------

The  Company  has  issued  convertible  debt  securities  with  a non-detachable
conversion  feature  that were "in the money" at the date of issue.  The Company
accounts for such securities in accordance with Emerging Issues Task Force Topic
98-5.  The  Company  has  recorded  the  fair value of the beneficial conversion
feature  as interest expense and an increase in Paid in Capital in Excess of Par
Value  of  Stock.

The  beneficial  interest  is computed by subtracting the stock conversion price
from  the  market  price  of  the  stock times the number of shares and warrants
eligible  for  conversion.

Income  Taxes
-------------

Provisions  for  income  taxes  are based on taxes payable or refundable for the
current  year  and deferred taxes on temporary differences between the amount of
taxable  income  and pretax financial income and between the tax basis of assets
and  liabilities  and  their  reported  amounts  in  the  financial  statements.
Deferred  tax assets and liabilities are included in the financial statements at
currently  enacted  income  tax  rates  applicable  to  the  period in which the
deferred  tax  assets  and liabilities are expected to be realized or settled as
prescribed  in  FASB Statement No. 109, Accounting for Income Taxes.  As changes
in  tax  laws  or  rates  are  enacted,  deferred tax assets and liabilities are
adjusted  through  the  provision  for  income  taxes.

Net  (Loss)  per  Share
-----------------------

The  Company  adopted  Statement  of Financial Accounting Standards No. 128 that
requires the reporting of both basic and diluted (loss) per share.  Basic (loss)
per share is computed by dividing net (loss) available to common stockholders by
the  weighted  average  number  of  common  shares  outstanding  for the period.
Diluted  (loss)  per  share  reflects the potential dilution that could occur if
securities  or other contracts to issue common stock were exercised or converted
into  common stock. In accordance with FASB 128, any anti-dilutive effect on net
(loss)  per  share  are  excluded.

Long-Lived  Assets
------------------

Statement  of  Financial  Accounting  Standards  No.  144,  "Accounting  for the
Impairment  of  Long-lived  Assets  and for Long-Lived Asset to be Disposed Of,"
requires  that  long-lived  assets be reviewed for impairment whenever events or
changes  in  circumstances  indicate  that  the  carrying amount of the asset in
question  may  not  be  recoverable.


                                       25
<PAGE>

Note  1     Summary  of  Significant  Accounting  Policies  -  (cont'd)
            ----------------------------------------------

Disclosure  about  Fair  value  of  Financial  Instruments
----------------------------------------------------------

The  Company  estimates  that  the fair value of all financial instruments as of
June  30, 2003 and 2002, as defined in FASB 107, does not differ materially from
the  aggregate  carrying  values  of  its  financial instruments recorded in the
accompanying consolidated balance sheets.  The estimated fair value amounts have
been  determined  by  the  Company  using  available  market  information  and
appropriate  valuation  methodologies.  Considerable  judgement  is  required in
interpreting  market  data  to  develop  the  estimates  of  fair  value,  and
accordingly,  the  estimates  are not necessarily indicative of the amounts that
the  Company  could  realize  in  a  current  market  exchange.

Stock-Based  Compensation
-------------------------

The  Company  uses  the  intrinsic  value  based  method  of APB Opinion No. 25,
Accounting  for  Stock  Issued  to  Employees, to account for its employee stock
based  compensation  plans.  The  Company  has  therefore  adopted the pro forma
disclosure provisions of SFAS No.123, Accounting for Stock-Based Compensation as
amended  by  SFAS  No. 148, Accounting for Stock-Based Compensation - Transition
and  Disclosure,  an  amendment  of  FASB  Statement  No.  123.

Stock  Issued  by  Subsidiary
-----------------------------

The issuance of stock by a subsidiary to third parties reduces the proportionate
ownership  interest  in  the  investee.  The  subsidiary's  plan  is to continue
raising  funds  through private placements and as a result the additional equity
raised  has  been  included  in  additional  paid-in  capital.

Comprehensive  Income
---------------------

The  Company  has  adopted  Statement of Financial Accounting Standards No. 130,
"Reporting  Comprehensive Income".  Comprehensive Income is comprised of foreign
currency  translation  adjustments.

Foreign  Currency  Translation
------------------------------

The  consolidated  financial  statements  of  the Company are measured using the
United  States  dollar  as  the  functional  and  reporting  currency.  Assets,
liabilities  and  equity  accounts  of  the  Company are translated from foreign
currency  to  United  States  currency at exchange rates as of the balance sheet
date  or  historical  acquisition  date, depending on the nature of the account.
Revenues  and  expenses  are  translated  at average rates of exchange in effect
during  the  year.  The  resulting  cumulative translation adjustments have been
recorded  as  a  separate  component  of  stockholders'  equity.

Note  1     Summary  of  Significant  Accounting  Policies
            ----------------------------------------------

Shipping  and  Handling  Costs
------------------------------

The  Company's policy is to classify shipping and handling costs as part of cost
of  goods  sold  in  the  statement  of  operations.

Note  2     Recent  Accounting  Pronouncements
            ----------------------------------

In  2002  and  2003,  the  FASB  issued  the  following  statements:

SFAS  No.  141     -     Business  combinations
SFAS  No.  142     -     Goodwill  and  other  intangible  assets
SFAS  No.  143     -     Accounting  for  asset  retirement  obligation
SFAS  No.  144     -     Accounting for the impairment of disposal of long-lived
                         assets
SFAS  No. 145      -     Recession  of  FASB  statements,  4,  44  and  64  and
                         Amendment of  FASB  13
SFAS  No.  146     -     Accounting  for  costs associated with exit or disposal
                         activities
SFAS  No.  147     -     Acquisitions  of  Certain  Financial  Institution
SFAS  No.  148     -     Accounting of Stock-based Compensation - Transition and
                         Disclosure, an amendment  of  FASB  statement  No.  123
SFAS  No. 149      -     Amendment  of  Statement  No.  133  on  Derivitive
                         Instruments and  Hedging  Activities
SFAS  No.  150     -     Accounting  for  Certain  Financial  Instruments  with
                         Characteristic's  of  Both  Liabilities  and  Equity.

The  Company  followed  the  guidance  of SFAS No.s 141 and 142 in recording the
acquisitions  of  Lightec  and Datadesk.  SFAS No.s 143-146, 147 and 149 did not
have  a  material  impact  on  the  Company's  financial position and results of
operations.

The  disclosure  provisions  of  SFAS  No.148  have been adopted by the Company,
however,  the  Company  continues to use the intrinsic value based method of APB
opinion No. 25 to account for its employee stock-based compensation plans.  SFAS
No.150 is effective for financial instruments entered into or modified after May
31, 2003 and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003.  The Company is evaluating the impact of adoption
SFAS  No.150.

Note  3     Cash
            ----

The Federal Deposit Insurance Corporation and the Securities Investor Protection
Corporation  insure up to $100,000 for approved deposits in registered financial
institutions.  The Company had $NIL (2002-$452,751) of uninsured deposits at the
June  30,  2003.

Note  4     Development  Stage  Operations
            ------------------------------

For  the  year ended June 30, 2002, the Company ceased being a development stage
company  as  it  acquired  two active companies, Lightec and Datadesk, and these
companies  provide  the  Company's  main  sources  of  revenue.


                                       26
<PAGE>

Note  5     Accounts  Receivable
            --------------------

A  summary  of  accounts  receivable  is  as  follows:

<TABLE>
<CAPTION>
                                                                                        2003       2002
                                                                                     -----------  -------
<S>                                                                                  <C>          <C>
Accounts receivable
Non-related entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  105,560   $ 5,058
Related entities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .           -    24,779
                                                                                     -----------  -------

                                                                                        105,560    29,837
Allowance for doubtful accounts, marketing credits and  allowance for sales returns
                                                                                      (  10,926)        -
                                                                                     -----------  -------

                                                                                     $   94,634   $29,837
                                                                                     ===========  =======
</TABLE>

Note  6     Property  and  Equipment
            ------------------------

Property  and  equipment  and  accumulated  depreciation  consists  of:

<TABLE>
<CAPTION>
                                                                                        2003       2002
                                                                                     -----------  -------
<S>                                                                                  <C>          <C>
Furniture  and  fixtures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  64,198   $ 75,679
Machinery  and  equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          -     98,396
Computer  equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     16,027     51,908
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          -    103,902
                                                                                     -----------  -------

                                                                                         80,225   392,885
Less  accumulated  depreciation . . . . . . . . . . . . . . . . . . . . . . . . . .   (  15,207) (117,021)
                                                                                     -----------  -------

                                                                                      $  65,018  $212,864
                                                                                     ===========  =======
</TABLE>

Note  7     Goodwill
            --------

The  Company adopted the provisions of FASB 142 for the accounting for goodwill.
According  to  the FASB requirements, goodwill is capitalized and not amortized.
Each  year,  management is required to review goodwill to determine if there has
been  an  impairment  loss  to  recognize  on  the  carrying  value of goodwill.
Management  believes  that there has been an impairment of goodwill for the year
ended  June  30,  2003  and has accordingly written-down the balance of goodwill
relating  to the acquisition of Lightec in the amount of $7,527,654 and goodwill
relating  to  the  acquisition  of  Datadesk  in  the  amount of $3,405,345 (see
discontinued  operations).

Note  8     Estimated  Earnings  On  Uncompleted  Contracts
            -----------------------------------------------

<TABLE>
<CAPTION>
                                                                                        2003          2002
                                                                                     -----------  -------------
<S>                                                                                  <C>          <C>
Costs  incurred  on  uncompleted  contracts                                          $        -    $ 1,461,365
Estimated  earnings  to  date                                                                 -      1,148,208
                                                                                     -----------  -------------

                                                                                              -      2,609,573
Less:  Billings  to  date                                                                     -     (3,150,818)
                                                                                     -----------  -------------

Billings  in  excess  of  costs and estimated earnings  on uncompleted contracts     $        -    $   541,245
                                                                                     ===========  =============
</TABLE>

Note  9     Acquisition  of  Lightec  Communications  Corp.
            -----------------------------------------------

On  March 14, 2002, the Company acquired 100% of the outstanding common stock of
Lightec.  The  results  of  Lightec's  operations  have  been  included  in  the
consolidated  financial  statements  since  that date.  Lightec is a provider of
telecommunications  design,  installation  and  information technology services.

The  business  combination is accounted for using the purchase method.  The fair
value  of  the  assets  acquired  at  the  date  of  acquisition are as follows:

     Property  and  equipment                               $    146,363
     Prepaid  expenses                                            20,000
     Goodwill                                                  7,527,654
                                                            ------------

     Net  assets  acquired  at  fair  values                $  7,694,017
                                                            ============

     Total  consideration:
     Cash                                                   $  3,000,000
     Note  payable                                             1,000,000
     19,000,000 common shares of the Company                   2,280,000
     Direct costs - 4,000,000 common shares of the Company       640,000
           -  cash                                               774,017
                                                            ------------

                                                            $  7,694,017
                                                            ============


                                       27
<PAGE>

Note  9     Acquisition  of  Lightec  Communications  Corp.  -  (cont'd)
            -----------------------------------------------

A summary of Lightec's operations included in the statement of income from March
14,  2002  to  June  30,  2002  is  as  follows:

     Revenue                                                $  1,469,252
     Costs and expenses                                          404,984
                                                            ------------

     Net  income  before  taxes                             $  1,064,268
                                                            ============

     Net  income  after  taxes                              $    639,726
                                                            ============

The Company's pro-forma (unaudited) results of operations as though the business
combination  with  Lightec  had  been  completed  at the beginning of 2002 is as
follows:

     Revenue                                                $  4,496,173
     Costs  and  expenses                                   (  4,402,992)
                                                            ------------

     Net  income  after  taxes                              $     93,181
                                                            ============

At  June  30, 2003, the Company wrote-down the carrying value of goodwill in the
amount  of  $7,527,654  due  to  management's  belief  that  there  has  been an
impairment  of  goodwill.

Note  10     Acquisitions  of  Datadesk  Technologies,  Inc.
             -----------------------------------------------

On  June  28, 2002, the Company acquired 100% of the outstanding common stock of
Datadesk.  Datadesk  designs  and  produces  (through  subcontractors)  advances
digital  input  devices  and  appliances.

The  business  combination is accounted for using the purchase method.  The fair
value  of  the  assets  acquired  at  the  date  of  acquisition are as follows:

     Current  assets                                        $    158,516
     Property,  plant  and  equipment                             28,686
     Other  assets                                                 1,500
     Goodwill                                                  3,405,645
                                                            ------------

     Total  assets  acquired                                   3,594,347
     Total  liabilities                                     (  1,741,880)
                                                            ------------

     Net  assets  acquired                                  $  1,852,467
                                                            ============

     Total  consideration:
     Cash  -  direct  costs                                    $  92,532
     10,999,590  common  shares  of  the  Company              1,759,935
                                                            ------------

                                                            $  1,852,467
                                                            ============



                                       28
<PAGE>

Note  10     Acquisitions  of  Datadesk  Technologies,  Inc.
             -----------------------------------------------

Datadesk's revenues, expenses and net income/loss were immaterial for the period
from  June  28,  2002  to  June  30,  2002.

The Company's pro-forma (unaudited) results of operations as though the business
combination  with  Datadesk  had  been  completed at the beginning of 2002 is as
follows:

     Revenue                                                $    621,727
     Costs  and  expenses                                    ( 2,170,888)
                                                            ------------

     Net  loss                                              $( 1,549,161)
                                                            ============

At  June  30, 2003, the Company wrote-down the carrying value of goodwill in the
amount  of  $3,405,645  due  to  management's  belief  that  there  has  been an
impairment  of  goodwill.

Note  11     Capital  Lease  Payable
             -----------------------

The  Company  acquired an office copier on a capital lease with National Leasing
Group,  Inc.  The  lease  requires monthly payments of approximately $400 for 48
months  including  interest  at  11%.  Future  minimum  payments are as follows:


     June  30,  2004                                        $      5,230
     June  30,  2005                                                 872
                                                            ------------

     Total  minimum  lease  payments                               6,102
     Less:  amount  representing  interest                      (  1,537)
                                                            ------------

     Present  value  of  minimum  lease  payments           $      4,565
                                                            ============


                                       29
<PAGE>

Note  12     Notes  Payable
             --------------
<TABLE>
<CAPTION>
                                                                                       2003          2002
                                                                                   ------------  -------------
<S>                                                                               <C>           <C>
Maryanne  Richard

On  June  13, 2002, the Company issued a note payable to Maryanne Richard in the
amount  of  $1,000,000 as part of the consideration for the purchase of Lightec.
The  note  bears  interest  at  9%  and  requires $250,000 principal payments on
September  30,  2002,  December 31, 2002 and final $500,000 payment on March 31,
2003.  Included  in  accrued  liabilities at June 30, 2003 is $94,192 of accrued
interest.  The note is secured by deposit accounts, investment property, letters
of  credit rights and letters of credit, rights to payments evidenced by chattel
paper,  rights  to payments for money or funds advanced or sold and all proceeds
of  any  and  all  of  the  above.

Consideration  of  8,000,000  stock purchase warrants, which gives the rights to
the  holder  to acquire one of common stock at a price of $0.125 for a period of
two  years,  was given to extend the repayment terms by three months to commence
on  December  31,  2002.  The  granting of share purchase warrants is subject to
Lightec  obtaining funding on the Bridgeport School contract.  As of the date of
this  statement,  the  Company has defaulted on the repayments starting December
31,  2002 and the Bridgeport School contract has yet to be funded, consequently,
interest  payments  on  the  loan  are  in  arrears.

Pursuant  to  an agreement dated October 29, 2003, the Company has agreed to set
the principal of the note at $1,105,000 ("new principal").  Interest will accrue
on  the  new  principal at the rate of 9% per annum commencing on the day of the
first  receipt  of  funds  from  the  Bridgeport  School  contract.

Payments  against  the new principal and accrued interest will commence once the
$362,500 included in accounts payable - related entities, has been repaid.  This
$362,500  is owed to Mike Richard pursuant to an employment contract.  9% of the
receipts  from  the  Bridgeport  School  contract  will be applied against these
debts.

                                                                                   $  1,000,000  $  1,000,000
                                                                                   ------------  -------------
</TABLE>


                                       30
<PAGE>

Note  12     Notes  Payable  -  (cont'd)
             --------------

<TABLE>
<CAPTION>
                                                                                       2003          2002
                                                                                   ------------  -------------
<S>                                                                                <C>           <C>
Synergex  Group  Partnership

One  June  11,  2002 Synergex Group Partnership loaned the Company $1,000,000 to
facilitate  the  acquisition  of  Lightec.  The  note  bears  interest at 9% and
required  $250,000  principal  payments on September 30, 2002, October 31, 2002,
November  30,  2002  and  December 31, 2002.  Included in accrued liabilities at
June  30,  2003  is $94,685 of accrued interest.  The note is secured by deposit
accounts,  investment  property, letters of credit rights and letters of credit,
rights  to  payments evidenced by chattel paper, rights to payments for money or
funds  advanced  or  sold  and  all  proceeds  of  any  and  all  of  the above.

Consideration  of  8,000,000  stock purchase warrants, which gives the rights to
the  holder  to acquire one of common stock at a price of $0.125 for a period of
two  years,  was given to extend the repayment terms by three months to commence
on  December  31,  2002.  The  granting of share purchase warrants is subject to
Lightec  obtaining funding on the Bridgeport School contract.  As of the date of
this  statement,  the  Company has defaulted on the repayments starting December
31,  2002 and the Bridgeport School contract has yet to be funded, consequently,
interest  payments  on  the  loan  are  in  arrears.

At  June 30, 2003 the Company is in default on its loan repayments.  Pursuant to
an  agreement  dated  September  12,  2003  the  Company  is required to pay the
following:

i)  pay  the  principal  plus  all interest accrued in the outstanding principal
balance  at  the  rate  of  9%  per  annum from the date of receipt of the first
payment  related  to  the  Bridgeport  School  contract  until  paid  in  full;

ii)  pay  no  less than 7.47% of all money received on account of the Bridgeport
School  contract  until  paid  in  full
                                                                                      1,000,000     1,000,000
                                                                                   ------------  -------------

                                                                                   $  2,000,000  $  2,000,000
                                                                                   ============  =============
</TABLE>


                                       31
<PAGE>

Note  13     Notes  Payable,  Equipment

<TABLE>
<CAPTION>
                                                                                       2003          2002
                                                                                   ------------  -------------
<S>                                                                                <C>           <C>
Payable  to  General  Motors  Acceptance  Corporation,  secured  by two 2001 GMC
Savanas  with  original  costs  of  $46,864; payable for 36 months at $1,316 per
month  including  interest  at  4.9%.
                                                                                    $      -     $     28,918
Less:  current  portion                                                                    -           23,667
                                                                                   ------------  -------------

Long-term  portion                                                                  $      -     $      5,251
                                                                                   ============  =============
</TABLE>

Note  14     Convertible  Debenture  Payable
             -------------------------------

<TABLE>
<CAPTION>
                                                                                       2003          2002
                                                                                   ------------  -------------
<S>                                                                                <C>           <C>
Librico  Properties,  Ltd.

On  November  8,  2001,  the  Company  issued a convertible debenture to Librico
Properties,  Ltd.  for  a  minimum of $100,000 to a maximum of $1,000,000.   The
debenture  is  unsecured, bears interest at 12% and matures on November 2, 2011.
Librico  Properties,  Ltd.  has  the option, in whole or in part, to convert the
debenture  into  the  Company's common stock at a conversion price of $0.125 per
share,  subject  to  anti-dilution  adjustments.  Subsequent  to  June 30, 2003,
Librico  Properties,  Ltd.  converted  its  convertible debenture into 1,100,000
common  shares  of  the  Company  with another 1,100,000 warrants to purchase an
additional  1,100,000  common  shares  of the Company at $0.15 CDN for two years
from  June  30, 2003.  At June 30, 2003, interest payable of $17,718 is included
in  accrued  liabilities  and was due on September 1, 2003.  This amount was not
paid  and  is  currently  in  default.

                                                                                   $    100,000  $    100,000
</TABLE>



                                       32
<PAGE>

Note  14     Convertible  Debenture  Payable  -  (cont'd)
             -------------------------------

<TABLE>
<CAPTION>
                                                                                       2003          2002
                                                                                   ------------  -------------
<S>                                                                                <C>           <C>
Edinburgh  Investments  LLC
On  June  30,  2002,  the  Company  issued  a convertible debenture to Edinburgh
Investments  LLC.  The  debenture  is  unsecured,  matures  on June 30, 2003 and
accrues interest at 10% payable quarterly.  At June 30, 2003 interest payable of
$168,920  is  included  in  accrued  liabilities.  Edinburgh  has  the option to
convert  the  debenture into the Company's common stock at a conversion price of
$.30  per  share,  subject  to  anti-dilution  adjustments. Because the interest
payments  on the loan are currently in arrears and the Company has defaulted the
payment  on  June  30,  2003,  the  Company  has  breached  the  loan agreement.

On  August  29, 2003 Edinburgh obtained a court order for settlement against the
Company  requiring  the  Company  to  pay  the  following:

-  pay  Edinburgh  $50,000  on  each of September 30, 2003, October 31, 2003 and
November  28,  2003  ($100,000  paid);

-  pay  Edinburgh  the accrued interest for September 30, 2003 onward on January
5,  2004,  April  5,  2004,  July  15,  2004  and  October  5,  2004;

-  pay  Edinburgh  15% of all funds received from the Bridgeport School contract
until  the  principal  and  interest  is  fully  paid;

-  deliver to Edinburgh a five year warrant to purcahse 13,440,000 common shares
at  an  excersie  price  of  $0.15  per  share                                        1,680,000     1,680,000
                                                                                   ------------  -------------

                                                                                      1,780,000      1,780,000
Less:  current  portion                                                                       -     (  100,000)
                                                                                   ------------  -------------

                                                                                   $  1,780,000  $   1,680,000
                                                                                   ============  =============
</TABLE>


                                       33
<PAGE>

Note  15     Share  Capital  and  Commitments
             --------------------------------
Stock-based  Compensation  Plan:
On  April  29, 2002, the Company adopted the 2002 employee stock option plan for
the  purpose  of  providing  an  incentive  based  form  of  compensation to the
officers,  directors, key employees and service providers of the Company.  These
options  were  granted  with  an exercise price equal to the market price of the
Company's  stock  on  the  date  of  the  grant.

<TABLE>
<CAPTION>
                                                      June 30, 2003
                                            ---------------------------------
                                                                 Weighted
                                                Optioned          Average
                                                 Shares       Exercise Price
                                            ----------------  ---------------
<S>                                         <C>               <C>
Outstanding, beginning of the year . . . .        6,300,000   $          0.11
Granted. . . . . . . . . . . . . . . . . .          850,000              0.12
Cancelled. . . . . . . . . . . . . . . . .     (  2,197,727)             0.11
Exercised. . . . . . . . . . . . . . . . .       (  968,182)             0.11
                                            ----------------  ---------------

Outstanding and exercisable at end of year  $     3,984,091   $          0.11
                                            ================  ===============


                                                      June 30, 2003
                                            ---------------------------------
                                                                 Weighted
                                                Optioned          Average
                                                 Shares       Exercise Price
                                            ----------------  ---------------

Granted. . . . . . . . . . . . . . . . . .        6,300,000   $          0.11
                                            ----------------  ---------------

Outstanding at end of year . . . . . . . .  $     6,300,000   $          0.11
                                            ================  ===============

</TABLE>

2,950,000  shares  were  exercisable  at  June  30,  2002.


                                       34
<PAGE>

Note  15     Share  Capital  and  Commitments  -  (cont'd)
             --------------------------------
Stock-based  Compensation  Plan:  -  (cont'd)

At  June 30, 2003 the following consultant or employee and director common share
purchase  options were outstanding and exercisable entitling the holders thereof
the  right  to  purchase  one  common share for each share purchase option held:

<TABLE>
<CAPTION>
                  Exercise             Expiry
 Number            Price                Date
---------        ---------       ------------------
<S>             <C>             <C>

2,609,091        $    0.11         April 28, 2004
1,000,000        $    0.11         April 30, 2004
  100,000        $    0.20         June 20, 2004
   50,000        $    0.17         October 7, 2004
  100,000        $    0.14         October 14, 2004
  125,000        $    0.11         June 27, 2012
---------
3,984,091
=========
</TABLE>

The  Company accounts for its stock-based compensation using the intrinsic value
method in accordance with Accounting Principles Board Opinion No. 25 "Accounting
for  Stock  Issued  to  Employees"  and its related interpretations.  A non-cash
compensation charge of $85,500 has been recognized in the consolidated financial
statements.

SFAS No. 123, "Accounting for Stock-based Compensation", requires the disclosure
of  pro-forma  net  loss and net loss per share by determining the fair value of
the  options  awarded  using  the  Black-Scholes  option  pricing  model.  Had
compensation  expense for the Company's shares option plan been determined based
on  the  Black-Scholes  value  at  the  date  granted  or on the date that share
purchase  options  were  repriced,  pro-forma loss and loss per share would have
been  as  follows:

<TABLE>
<CAPTION>
                                                      2003                2002
                                                -----------------  -----------------
<S>                                             <C>                <C>
Net  loss                                       $  (  13,577,615)     $  (  742,484)
Pro-forma  adjustment  for  SFAS  123              (     161,155)        (   25,175)
                                                -----------------  -----------------
Pro-forma  net  loss                            $  (  13,738,770)     $  (  767,659)
                                                =================  =================

Pro-forma  net  loss  per  share                $        (  0.11)     $     (  0.01)
                                                =================  =================
</TABLE>


                                       35
<PAGE>

Note  15     Share  Capital  and  Commitments  -
             --------------------------------

Stock-based  Compensation  Plan:  -  (cont'd)

The fair value of these options was estimated at the date of the grant using the
following  weighted  average  assumption:

                                                                         2003
                                                                         ----
Volatility  factor  of  expected  market  price of company's shares        195%
Dividend  yield                                                              0%
Weighted  average  expected  life  of  stock  options                  2  years
Risk-free  interest  rate                                                    5%

The Black-Scholes option valuation model was developed for use in estimating the
fair  value  of  traded options which have no vesting restrictions and are fully
transferable.  In  addition, option valuation models require the input of highly
subjective  assumptions,  including  expected  share  price  volatility.  The
Company's  employee  stock  options have characteristics significantly different
from  those  of  traded options, and changes in the subjective input assumptions
can  materially  affect  fair  value  estimates.

Share  Purchase  Warrants

At  June 30, 2003 the Company has 10,675,783 share purchase warrants outstanding
entitling  the  holder  thereof  the right to purchase one common share for each
warrant  held  as  follows:

<TABLE>
<CAPTION>

Number of        Exercise Price               Expiry
 Warrants          Per Warrant                 Date
----------       ---------------       -------------------
<S>              <C>                   <C>
 1,810,000       $          0.15         February 17, 2004
    20,000       $          0.15         February 27, 2004
 1,762,450       $          0.15         May 27, 2005
 7,083,333       $          0.35         June 13, 2005
----------
10,675,783
==========

</TABLE>
Other  share  purchase warrants commitments are as described in Notes 12 and 14.


                                       36
<PAGE>

Note  16     Real  Estate  Leases

On April 2, 2001, the Company leased its office facilities in Vancouver, British
Columbia  under  a  36  month lease.  The lease requires monthly rentals for the
first  two  years of approximately $2,200 and approximately $2,400 for the third
year  of  the  lease  plus  sales  taxes  and  common  area  costs.

The  lease  provides  that BSI has a three year option to renew the lease at the
prevailing  rates  at  the  time  the  lease  is  renewed.

     Future  minimum  lease  payments  are  as  follows:

     June  30,  2004     $     20,953
                         ============

     Lightec  rents  its  facilities  on  a  month-to-month  basis.

Rent expense for the years ended June 30, 2003 and 2002 was $53,744 and $50,911,
respectively.

Note  17     401(K)  Plan
             ------------

On  February  1,  2002, Lightec adopted a 401(K) retirement savings plan for its
employees.  Contributions  are  determined  by  the  Board of Directors, and the
Company did not make any contributions to the plan for the period ended June 30,
2003.

Note  18     Wondernet,  Ltd.  Agreement
             ---------------------------

On  April  2,  2002,  the  Company  entered  into  an exclusive distribution and
partnership  agreement  with  WonderNet,  Ltd.  located  in  Israel, whereby the
Company  received  the  distribution  rights for WonderNet's Penflow Proprietary
Biometric signature authentication software engine. The Company issued 2,500,000
of  its  common  shares  for  the distribution rights.  In addition, the Company
agreed  to  pay a royalty of 5% of the gross sales proceeds from the sale of the
products  and  applications.  The  Company  agreed  to  commit  $250,000 for the
initial  funding  and  development  of  the distribution territory.  The Company
prepaid $100,000 for future purchases of WonderNet's products.  The Company will
amortize  the  acquisition  once  the  property  rights  are  fully  developed.
During  the  year  ended June 30, 2003, the Company wrote-down its investment to
its net realizable value of $Nil and wrote-off the balance of the paid purchases
in the amount of $68,219.  This amount is included in general and administrative
expenses.

On  August  15,  2003,  the  Company entered into new exclusive distribution and
partnership  agreement  with WonderNet whereby the Company was granted the right
to  develop  products  based on WonderNet's Technology and to use, market, sell,
distribute and exploit the Technology in North America, Central America, Bermuda
and  the  Caribbean  Islands.  The  Company  is required to pay a 12% royalty on
gross sales of the product and purchase a minimum of $120,000 per quarter of the
product.  In consideration for the payment the Company will maintain a perpetual
right  to  exploit  WonderNet's  Technology.


                                       37
<PAGE>

Note  19     Income  Taxes
             -------------

The  Components  of  income  tax  expense  are  as  follows:

<TABLE>
<CAPTION>
                                   June 30,
                             -------------------
                               2003       2002
                             ---------  --------
<S>                          <C>        <C>
U.S. Federal tax - current.  $       -  $424,542
U.S. Federal tax - deferred          -         -
                             ---------  --------

                             $       -  $424,542
                             =========  ========
</TABLE>

Significant  components  of  the  Company's  deferred tax assets are as follows:

<TABLE>
<CAPTION>
                                        June 30,
                                 -------------------
                                    2003        2002
                                 ----------  ----------
<S>                              <C>         <C>
Net operating loss carryforward  $1,696,052  $1,052,363
Less: valuation allowance . . .   1,696,052   1,052,363
                                 ----------  ----------

Net deferred tax assets . . . .  $        -  $        -
                                 ==========  ==========
</TABLE>

A  reconciliation  of  the  valuation  allowance  is  as  follows:

<TABLE>
<CAPTION>
                                        June 30,
                                  -------------------
                                     2003        2002
                                  ----------  ----------
<S>                               <C>         <C>
Balance at beginning of the year  $1,052,363  $  129,900
Addition for the year. . . . . .     643,689     922,463
                                  ----------  ----------

Balance at end of the year . . .  $1,696,052  $1,052,363
                                  ==========  ==========
</TABLE>

The  Company  has  the  following  net  operating  loss carry forwards totalling
$9,235,372,  the  benefit  of  which  has  not  been  recorded  in the financial
statements.

      Expiration Date
      ---------------
          2013              $    410,542
          2019                   794,490
          2020                   890,950
          2021                 1,736,008
          2022                 3,183,763
          2023                 2,219,618
                            ------------
                            $  9,235,372
                            ============

                                       38
<PAGE>

Note  20     Business  Segments
             ------------------

FASB  Statement  No. 131 "Disclosure about Segments of an Enterprise and Related
Information,"  requires  companies  to  provide  certain information about their
operating  segments.  The  Company  has  three reportable segments: the Company,
Lightec  and  DataDesk.
Summarized financial information concerning the Company's reportable segments is
shown  on  the  following  table:

<TABLE>
<CAPTION>
                                        -              -         Total before      Datadesk
                                       The             -         Discontinued    (Discontinued
                                     Company        Lightec       Operations      Operations)
                                  --------------  ------------  --------------  ---------------
<S>                               <C>             <C>           <C>             <C>
2003
-----
Net sales to external customers
                                  $           -   $ 1,147,140   $   1,147,140   $      231,301
Operating earnings (loss). . . .   (  9,525,366)   (  133,918)   (  9,659,334)      (  512,636)
Total assets . . . . . . . . . .         82,432       100,376         182,808          161,053
Depreciation and amortization
                                          8,399        46,673          55,072           10,568
Capital expenditures . . . . . .          7,176         2,092           9,268            4,165

2002
-----
Net sales to external customers
                                  $           -   $ 2,656,457   $   2,656,457   $            -
Operating earnings (loss). . . .   (  1,382,210)      639,726      (  742,484)               -
Total assets . . . . . . . . . .      8,332,545       457,724       8,790,269        3,435,830
Depreciation and amortization
                                          6,235        14,556          20,791                -
Capital expenditures . . . . . .         50,182             -          50,182                -
</TABLE>

Note  21     Economic  Dependency
             --------------------
The  sales  and purchases listed below are for the year ended, June 30, 2003 and
the  period  of  March  14,  2002  to  June  30,  2002  for  Lightec  only:

<TABLE>
<CAPTION>
                                                                    2003   2002
                                                                    -----  -----
<S>                                                                 <C>    <C>
Sales
-----
Sales to major customers were as follows:
     Customer A. . . . . . . . . . . . . . . . . . . . . . . . . .    47%    99%
     Customer B. . . . . . . . . . . . . . . . . . . . . . . . . .    28%     -
Purchases
-----
Purchases from major suppliers and subcontractors were as follows:
     Supplier or subcontractor A . . . . . . . . . . . . . . . . .    14%    33%
     Supplier or subcontractor B . . . . . . . . . . . . . . . . .     -     15%
     Supplier or subcontractor C . . . . . . . . . . . . . . . . .     -     20%
</TABLE>

Note  22     Related  Party  Transactions
             ----------------------------

During the year ended June 30, 2003, the Company incurred the following expenses
charged  by  directors,  relatives  of directors, former directors, officers and
private  companies  with  common  directors  with  the  Company.

<TABLE>
<CAPTION>
<S>                                           <C>
Consulting fees. . . . . . . . . . . . . . .  $  277,350
Directors fees . . . . . . . . . . . . . . .       1,965
Interest . . . . . . . . . . . . . . . . . .     180,000
Accounting fees. . . . . . . . . . . . . . .      62,500
Travel . . . . . . . . . . . . . . . . . . .      28,050
Wages and benefits - administrative expenses     724,248
                                              ----------
                                              $1,274,113
                                              ==========
</TABLE>


                                       39
<PAGE>

During  the  year  ended  June  30,  2003,  the  Company entered into consulting
agreements  with  four  key  individuals.  The  agreements  provide for  minimum
aggregate  annual base salaries of $456,000, bonuses to specific individuals and
stock  options  for  1,000,000  shares  of  the  Company's  common  stock.  The
agreements  expire  within  a  year  and  may  be  renewed.

Included in share capital are finder's fees totalling $14,850 paid to a director
of  the  Company.

During  the year ended June 30, 2002, the Company purchased $40,000 of furniture
and  fixtures  from  an  officer  of  the  Company.

These  expenses were measured by the exchange amount, which is the amount agreed
upon  by  the  transacting  parties.

Included  in accounts payable-related entities at June 30, 2003 is $76,539 owing
to  a  former  officer  of  the  Company  with  respect  to  advances.

Accounts  payable-related  entities at June 30, 2003 represents amounts owing to
directors, former directors, officers and companies with a former common officer
with  respect to unpaid wages, advances, fees and expenses. Of the amount due to
related  entities,  four  individuals have agreed to settle $825,129 of debt for
$206,282  cash  and  $618,847  of  S-8  common  stock.  This  settlement has not
completed.  Amounts  due to related entities are unsecured, non-interest bearing
with  no  specific  terms for repayment with the exception of the aforementioned
$825,129.

Included  in  accrued  liabilities  is  interest  payable  of  $188,875 due to a
relative  of  a  former  director  and  to  a  company  with  a common director.

Notes  payable are due to relatives of a former director and to a company with a
common  director.


                                       40
<PAGE>

Note  23     Discontinued  Operations
             ------------------------

During  the  year  ended  June  30,  2003,  the Company adopted a formal plan to
dispose  of  its wholly-owned subsidiary Datadesk.  Loss related to Datadesk has
been  disclosed  for  the  year  ended  June  30, 2003 as loss from discontinued
operations.  The consolidated financial statements include the following amounts
related  to  the  discontinued  operations  of  Datadesk:

<TABLE>
<CAPTION>

                                                  2003       2002
                                                --------  ----------
<S>                                             <C>       <C>
Cash and short-term investments. . . . . . . .  $      -  $    3,128
Accounts receivable. . . . . . . . . . . . . .         -      89,905
Inventories. . . . . . . . . . . . . . . . . .   137,270      65,483
                                                --------  ----------

Current assets of discontinued operations. . .  $137,270  $  158,516
                                                ========  ==========


Capital assets . . . . . . . . . . . . . . . .  $ 22,283  $   28,685
Goodwill . . . . . . . . . . . . . . . . . . .         -   3,405,645
Other. . . . . . . . . . . . . . . . . . . . .     1,500       1,500
                                                --------  ----------

Long-term assets of discontinued operations. .  $ 23,783  $3,435,830
                                                ========  ==========


Bank indebtedness. . . . . . . . . . . . . . .  $  1,207  $        -
Accounts payable . . . . . . . . . . . . . . .   718,748     481,380
                                                --------  ----------

Current liabilities of discontinued operations  $719,955  $  481,380
                                                ========  ==========

</TABLE>

Capital  assets  related  to  discontinued  operations consist of the following:

<TABLE>
<CAPTION>
                                                      Net carrying value
                                         Accumulated  ------------------
                             Cost       Amortization    2003       2002
                         -------------  ------------  -------    -------
<S>                      <C>            <C>           <C>        <C>
Computer equipment. . .  $      39,320  $    27,984  $ 11,336    $12,559
Furniture and equipment         26,131       15,184    10,497     15,216
Vehicles. . . . . . . .         27,393       27,393         -        910
                         -------------  ------------  -------    -------

                         $      92,844  $    70,561  $ 22,283    $28,685
                         =============  ============  =======    =======
</TABLE>


                                       41
<PAGE>

Note  23     Discontinued  Operations  -  (cont'd)
             ------------------------

Loss  from  discontinued  operations  is  as  follows:

<TABLE>
<CAPTION>


                                         2003         2002
                                         ----         ----
<S>                                <C>             <C>
Revenue . . . . . . . . . . . . .  $     231,301   $      -
Direct expenses . . . . . . . . .         99,357          -
                                   --------------  ------------
Gross profit. . . . . . . . . . .        131,944          -
                                   --------------  ------------

Expenses
Administrative and general. . . .        634,012          -
Amortization of capital assets. .         10,568          -
                                   --------------  ------------

                                         644,580          -
                                   --------------  ------------

Loss before other item. . . . . .     (  512,636)         -
Other item:
Write-down of goodwill. . . . . .   (  3,405,645)         -
                                   --------------  ------------

Loss from discontinued operations  $(  3,918,281)  $      -
                                   ==============  ============

</TABLE>



                                       42
<PAGE>

Note  23     Discontinued  Operations  -  (cont'd)
             ------------------------

Cash  flows  from  discontinued  operations  are  as  follows:
<TABLE>
<CAPTION>
                                                                2003       2002
                                                           --------------  -----
<S>                                                        <C>             <C>
Operating Activities
Net loss for the year . . . . . . . . . . . . . . . . . .  $(  3,918,281)  $   -
Items not involving cash:
Amortization of capital assets. . . . . . . . . . . . . .         10,568       -
Write-off of marketable securities. . . . . . . . . . . .          1,150       -
Write-down of goodwill. . . . . . . . . . . . . . . . . .      3,405,645       -
Changes in non-cash working capital balances consist  of:
Accounts receivable . . . . . . . . . . . . . . . . . . .         89,905       -
Inventories . . . . . . . . . . . . . . . . . . . . . . .      (  71,787)      -
Accounts payable and accrued liabilities. . . . . . . . .        237,366       -

                                                              (  245,434)      -

Financing Activities
Bank indebtedness . . . . . . . . . . . . . . . . . . . .          1,207       -
Advances from parent company. . . . . . . . . . . . . . .        246,414       -

                                                                 247,621       -

Investing Activity
Acquisition of capital assets . . . . . . . . . . . . . .       (  4,165)      -

Decrease in cash during the year. . . . . . . . . . . . .       (  1,978)      -

Cash, beginning of the year . . . . . . . . . . . . . . .          1,978       -

Cash, end of the year . . . . . . . . . . . . . . . . . .  $           -   $   -

</TABLE>

Note  24     Comparative  Figures
             --------------------

Certain  of  the  comparative  figures  have  been  restated to conform with the
current  years  presentation.

Note  25     Subsequent  Events
             ------------------

Subsequent  to  June  30,  2003:

i)     the  Company  entered  into a Stock  and Note Transfer Agreement with Pan
Pacifica Ltd. ("Pan Pacifica") Pursuant to the agreement, effective as of August
20, 2003, the Company will transfer all of the outstanding shares of Datadesk, a
wholly-owned  subsidiary  of  the  Company, and a promissory note payable to the
Company  made  by  Datadesk in the principal amount of $1,000,000, together with
the  related  security  interest in the assets of Datadesk to Pan Pacifica.  The
agreement  was  entered  into simultaneously with a settlement agreement between
the  Company  and  its  former  officer.
The  transfers  to  Pan Pacifica pursuant to the Transfer Agreement were partial
consideration  for  the release of its former officer of the Company and certain
other  related  parties  from  any  claims  that the former officer may have had
against  them  as  of  the  date  of  the settlement agreement. The Company also
released  the  former officers from any claims it may have had against him as of
the  date  of  the settlement agreement.  In connection with the settlement, the
Company will also transfer immediately available funds in the amount of $151,020
to  Pan  Pacifica;

ii)     the  Company  received $824,357 pursuant to a private placement at $0.08
per  unit.  Each unit consists of one common share and one common share purchase
warrant.  Each  warrant  and  $0.15  entitles  the holder thereof to acquire one
additional  common  share;

iii)     the  Company  and  a subsidiary were served with a complaint filed with
the  Superior  Court  of the State of Washington for $140,443 with respect to an
unpaid  account.  The  Company  has  provided for $104,040, which is included in
current  liabilities of discontinued operations.  The Company has retained legal
representation  to  contest  this  matter;

iv)     the  Company  and a subsidiary received a summary judgement against them
dated  September 12, 2003 for $93,912 plus interest for an unpaid account.  This
amount  has  been  provided  for  in  the  current  liabilities  of discontinued
operations.



                                       43
<PAGE>

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

None.


                                       44
<PAGE>

                                    PART  III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT

EXECUTIVE  OFFICERS  AND  DIRECTORS

     NAME                       AGE                        POSITION
     ----                       ---                        --------

Michel Berty                     64           Chairman, Chief Executive Officer,
                                              President and  Director
William  Moore                   35           Chief  Financial  Officer
Christopher  Farnworth           53           Executive  Vice-President
David  Angus                     66           Director
Allan  Gibbins                   55           Director
Gerard  Munera                   67           Director
Ken  Taylor                      61           Director
Elaine  Bloom                    66           Director
Wayne  Taylor                    51           Director


     Each  director  is  elected to hold office until the next annual meeting of
stockholders  and  until  his  successor is elected and qualified. Our directors
receive  (CDN)  $1,000 for their attendance at each board meeting and (CDN) $500
for  each  telephonic  board  meeting.  It  was  resolved  at a board meeting on
September  18th  2003 in New York City that the directors would waive their fees
until  further  notice  .  All  officers serve at the discretion of the Board of
Directors  subject  to  the  terms  and  conditions of their agreements with the
Company  as  approved  by  the  Compensation  Committee.

     Kenneth  Barr  was  a  Director from September 29, 2000 and Chief Executive
Officer  from  July 15 2000. On May 1, 2002, Mr. Barr was appointed as President
and  held  these  offices  until  his death on June 2nd 2003. As a result Michel
Berty  was  asked  by  the  board  to hold the dual offices of Chairman and CEO.
Michel  Berty  has  been  a  Director  since  April  24, 2002. Mr. Berty was the
Chairman and CEO of Cap Gemini USA from 1992 until he retired in April 1998. Mr.
Berty is currently president of M B Y Consultants which provides services to the
Information  Technology  industry.  Mr. Berty also acts as a director for Merant
Plc.  (NASDAQ),  Sapiens  (NASD),  iGate  Capital Corp (NASDAQ), Dataraid (OTC);
NetGain  (OTC);  Aserop  S.A. resigned(France) and Dust S.A. (France). Mr. Berty
was  educated  at  La  Sorbonne  in Paris France, where he received his Ph.D. in
physics  and  an  MBA.

     Wayne  Taylor  served  as Chief Financial Officer from 3rd March 2003 until
the  subsequent  appointment  of  William  Moore  September  1st 2003. Mr Taylor
continues  to  serve  the  board as a director and is president of FGH Insurance
Agencies  Ltd  and has developed both creditor insurance and specialist products
for  some  of the largest banks. Mr Taylor has held a senior management position
with  an  international  financial  institution.  AS  the international database
representative  for  OKRA,  Mr  Taylor successfully sold their software to major
financial  institutions. Mr Taylor's most recent success was the introduction of
internet  insurance  products  for  a  world  leader  in  sports  training.

     Christopher D. Farnworth has been our Executive Vice President in charge of
Corporate  Development  since  March  2002. From December 2001 through February,
2002,  Mr. Farnworth was a consultant to the Company. From 1993 through December
2001,  Mr. Farnworth was Chief Operating Officer, Vice President and Director of
Nostrad  Telecommunications  Pte  of  Singapore and as of September 1997 Nostrad
Telecommunications  Inc.  Nostrad  and  provided  wireless  cable,  and internet
solutions  to  developing  countries.  From  1998  to  2002, Mr. Farnworth was a
Director  of  the  Wireless Communications Association International ("WCAI"), a
non-profit  trade association that represent companies worldwide in the field of
wireless  broadband  services  over  fixed  terrestrial platforms. Mr. Farnworth
served on the Boards of Rystar Communications from March 1999 to September 2001,
and  on  Pinewood  Resources  Ltd.  from  July  1999  to  November  2001.

     The Honorable W. David Angus has been a Director since November 6, 2000. He
has  practiced law with the law firm of Stikeman Elliott since February 1963. He
was  appointed  Queens Counsel in December 1984. He is a senior partner and head
of  the  Shipping and Insurance Department in the Montreal office. Senator Angus
was  summoned  to the Senate of Canada in 1993. Senator Angus is a member of the
Standing  Senate  Committee on "Banking, Trade and Commerce" and a member of the
Standing  Senate Committee on "Transport and Communications." Senator Angus is a
Member  of  the  Montreal,  Quebec and Canadian Bar Associations. He is Honorary
Life  Member  of  the  Canadian  Maritime  Law  Association, of which he was the
President  from  1989  to  1992.  Senator Angus also serves as a Governor of the
International  Maritime Law Institute, Malta. He is an Associate Member and Past
Chairman  of  the  Association  of  Average  Adjusters  of Canada. He is also an
Associate  Member of the U.K., and U.S. Associations of Average Adjusters and of
the  Canadian Board of Marine Underwriters. Senator Angus serves on the Board of


                                       45
<PAGE>

Directors  of Air Canada, AON Reed Stenhouse Inc, Eastern Canada Towing Limited,
Eastern  Canadian  Tug  Owners  Association,  Madeg  Holdings  Inc,  Nymox
Pharmaceutical  Corporation (non-executive Chairman) Systech Retail Systems Inc,
AutoSkill  International  Inc.  and  3DVisit.com  Inc. (non-executive Chairman).

     Allan  Gibbins  has been a Director since November 6, 2000. Mr. Gibbins was
interim Vice President, General Manager beginning in June 1992 and was appointed
President  and  Chief  Executive Officer of Hubbell Canada Inc., a subsidiary of
Hubbell  Incorporated,  in September 1993. He is the Chairman of the Electrical,
Electronic  Manufacturers  Association of Canada (EEMAC). From September 1988 to
May  1992,  Mr.  Gibbins  was  Vice  President  and  General  Manager  of Nutone
Electrical  Inc.  Prior  to that he held senior management positions with duPont
Canada  Inc.  for  16 years. He also was a Director of DSI Datotech Systems Inc.
since  December  2000  until  July  2002.

     Gerard  E.  Munera has been a Director since June 26, 2001. Since 1995, Mr.
Munera  has  been Managing Director of Synergex Group Partnership, a Connecticut
general  partnership,  with  majority  participations  since  1996 in Arcadia, a
manufacturer  of low-rise curtain walls, store-fronts and office partitions, and
in  Estancia  El  Olmo,  a  large  cattle  ranch. From 1994-1996, Mr. Munera was
Chairman  and  CEO  of  Latin  American Gold Inc., a junior gold exploration and
mining  company  with  activities  in Ecuador and Venezuela. From 1991-1994, Mr.
Munera  was  president and CEO of Minorco (USA), a diversified natural resources
group  with  interests in base and precious metals, industrial minerals, oil and
gas,  chemicals  and  fertilizers,  in  both  the  U.S.  and  Canada.

     Elaine  Bloom was appointed director in July 8, 2003. Rep. Bloom has served
in  the  Florida  legislature  for  more than 18 years serving on many important
committees and subcommittees and authoring more than 100 major laws. Rep Bloom's
career  has  also  included  being  a radio talk show host, government relations
consultant, and fundraiser. Rep Bloom has served on the boards of ANDRX and been
general  partner  of  the  South  Florida  Broadcasting  Corporation.

     Ken  Taylor  has  been  a  Director since May 10, 2002. Mr. Taylor has been
active  as  an  independent  consultant  to clients on issues of political risk,
international  marketing and strategic accommodation with government. Mr. Taylor
serves  as  the  Chairman of Global Public Affairs, Inc., Chancellor of Victoria
University  of  the  University of Toronto, and serves as a director for several
companies.  Mr.  Taylor  was  the  former  Canadian  Ambassador  to  Iran,  and
consequently earned the Congressional Gold Medal from the United States, and the
Official  Order  of  Canada.  Mr.  Taylor  earned  an MBA from the University or
California  (Berkeley).

CERTAIN  LEGAL  PROCEEDINGS

To  the  knowledge of the Company, there are no material proceedings, other than
relating  to  the  settlement  reached with Edinburgh Investments LLC settled on
August  29th  2003  and  described in Section I, item iii to which any director,
executive  officer  or affiliate of the Company, owner of record or beneficially
of  more  than  5%  of  any  class  of  voting  securities of the Company or any
associate of any such director, executive officer or affiliate of the Company or
security  holder is a party adverse to the Company or any of its subsidiaries or
has  a  material  interest  adverse  to  the Company or any of its subsidiaries.

COMPLIANCE  WITH  SECTION  16(A)  OF  THE  EXCHANGE  ACT.

     Section  16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and executive officers, and persons who beneficially own more than
ten  percent  of a registered class of our equity securities, to file reports of
ownership  and changes in ownership with the Securities and Exchange Commission.
Based  solely  on  our  review  of  the  copies of such forms received by us, or
written  representations  from  certain  reporting persons that no other reports
were required for those persons, we believe that, during the period from July 1,
2002  through June 30, 2003, all filing requirements applicable to its officers,
directors,  and  greater  than ten percent beneficial owners were complied with.


                                       46
<PAGE>

ITEM  10.  EXECUTIVE  COMPENSATION

     Compensation  in excess of $100,000 for the fiscal year ended June 30, 2003
was  received  by  only  to  the  executive  officers  below.

The  following  table  sets  forth,  for  the  fiscal  year ended June 30, 2003,
compensation  awarded  to,  earned  by,  or  paid  to  those  officers.

<TABLE>
<CAPTION>
                                                                        Long  Term  Compensation
                                Annual  Compensation                  Awards               Payouts
                                                             Restricted   Securities             All Other
                                              Other Annual      Stock     Underlying     LTIP     Compen-
Name &                  -    Salary   Bonus   Compensation     Awards      Options/    Payouts     sation
Principal Position     Year  ($)       ($)         ($)           ($)       SARs (#)      ($)        ($)
<S>                    <C>   <C>      <C>     <C>            <C>          <C>          <C>       <C>
Ken Bar                2003  $187,800      -            -             -    1,500,000         -           -
President and Chief
Executive Officer

Chris Farnworth
Executive Vice         2003  $126,000      -            -              -     250,000         -           -
 President
</TABLE>

         OPTION/SAR GRANTS IN LAST FISCAL YEAR
         [INDIVIDUAL GRANTS]

The following table below contains certain information concerning stock
options/SARs granted to our executive officers during the
fiscal year ended June 30, 2003:

<TABLE>
<CAPTION>
                          Number of           %age of total
                          securities          options/SARs
                          underlying          granted to        Exercise or                 Market price on
                          options/SARS        employees in      base price    Expiration    Date of Grant
Name                      granted             fiscal year       ($/share)     Date
------------------------- ------------------- ----------------- ------------- ------------- ----------------
<S>                                  <C>                    <C>        <C>           <C>               <C>
Ken Barr                             500,000                8%         $0.11     Apr 29/04             $0.11
Ken Barr                           1,000,000               16%         $0.11      May 1/04             $0.11
Michel Berty                         400,000                           $0.11      Apr 28/04            $0.12
Chris Farnworth                      250,000                           $0.11      Apr 28/04            $0.12
Wayne Taylor                         450,000                           $0.11      Apr 28/04            $0.12
</TABLE>

 AGGREGATED OPTION/SAR EXERCISES DURING THE FISCAL YEAR-ENDED JUNE 30, 2002
                      AND FISCAL YEAR-END OPTION/SAR VALUES

     The  following  table  sets forth certain information concerning the number
and  value  of  securities  underlying  exercisable  and  unexercisable  stock
options/SARs  as  of  the  fiscal  year  ended  June  30,  2003 by the Company's
executives.

<TABLE>
<CAPTION>
                                                  Number of securities              Value of Unexercised
                       Shares acquired on        underlying unexercised        in-the-money options/SARS at
                            Exercise         options/SARS at fiscal year-end         Fiscal Year-End($) *
                    ------------------------ -------------------------------- ------------------------------
                                 Value
Name                Number       realized    Exercisable    Unexercisable     Exercisable    Unexercisable
------------------- ------------ ----------- -------------- ----------------- -------------- ---------------
<S>                 <C>          <C>         <C>            <C>               <C>            <C>
Ken Barr                340,909  $37,500     409,091
Wayne Taylor            450,000  $49,500     450,000
</TABLE>

*  The  closing price for our common stock on June 30, 2002 was $0.11 per share.

     In  2002  we  granted  Mr. Barr options to purchase 1,000,000 shares of our
common  stock  as an inducement to his employment. After Mr Barr's death in June
2003  Mr Michel Berty was appointed as chairman and CEO. He was awarded a salary
of  $180,000  per  annum  and  a  grant  of  400,000  options.

     Christopher  Farnworth  is  employed  as  our  Executive  Vice President --
Corporate  Development  under  an  agreement which expires in December 2003. His
base  annual  salary  is  $126,000.  He  was  awarded  250,000  options.


                                       47
<PAGE>

     Wayne  Taylor  employed as Chief Financial Officer until September 2003, he
received  a salary of 7,500/month and was awarded 450,000 options. William Moore
was  subsequently  appointed  Chief  Financial  Officer  in  September  2003 and
receives  a  salary  of  $6000/month, 300,000 share signing bonus deliverable in
January  2004  and  200,000  options.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.

     The  following  table  sets  forth as of September 20, 2002, the beneficial
ownership  of our common stock, our only class of voting securities, by (i) each
person  who  is  known  to be the beneficial owner of more than 5% of our common
stock,  (ii)  each  of  our  directors,  (iii)  executive officers listed in the
Compensation  Table  and  (iv)  all our officers and directors as a group. As of
September  20,  2002,  we  had  outstanding  117,601,248 shares of common stock.

<TABLE>
<CAPTION>
----------------------------------------------------- ------------------------------- ----------------------
Name and address of beneficial owner                            Amount and nature of        Percent of Class
                                                            beneficial ownership (1)
----------------------------------------------------- ------------------------------- ----------------------
<S>                                                    <C>                            <C>
Kenneth Barr                                                           1,159,091 (2)                    1.4%
PO Box 56, RR4
Havelock, ON, Canada
----------------------------------------------------- ------------------------------- ----------------------
W. David Angus                                                           250,000 (3)                       *
1155 Rene Levesque Blvd.
Montreal, PQ, Canada
----------------------------------------------------- ------------------------------- ----------------------
Allan Gibbins                                                            250,000 (4)                       *
212 Westridge Drive
Kleinberg, ON Canada
----------------------------------------------------- ------------------------------- ----------------------
Gerard E. Munera                                                      10,830,000 (5)                    9.2%
16 Old Mill Road
Greenwich CT
----------------------------------------------------- ------------------------------- ----------------------
Gesture Recognition Technologies International                        37,000,000                       31.5%
Limited
c/o CIBC Trust and Merchant Bank
----------------------------------------------------- ------------------------------- ----------------------
(Barbados) Limited
Bank Warrens Street,
Michael's Bar, Barbados
----------------------------------------------------- ------------------------------- ----------------------
Michel Berty                                                          3,790,000  (6)                    3.2%
PO Box 466 Sayres Avenue
Wainscroft, New York
----------------------------------------------------- ------------------------------- ----------------------
Ken Taylor                                                              250,000  (7)                       *
1775 York Avenue, Apt. 29H
New York, New York
----------------------------------------------------- ------------------------------- ----------------------
Chris Farnworth                                                       3,440,000  (8)                    2.9%
1410 - 1030 West Georgia St
Vancouver, BC, Canada
----------------------------------------------------- ------------------------------- ----------------------
David Alexander                                                         660,000  (9)                       *
1410 - 1030 West Georgia St
Vancouver, BC, Canada
----------------------------------------------------- ------------------------------- ----------------------
Steve Henry                                                             730,000 (10)                       *
1410 - 1030 West Georgia St
Vancouver, BC, Canada
----------------------------------------------------- ------------------------------- ----------------------
Robert Solomon                                                        3,347,454 (11)                    2.1%
10598 Northeast Valley Road
Bainbridge Island, Washington
----------------------------------------------------- ------------------------------- ----------------------
Maryanne  Richard                                                    18,250,000 (12)                   15.5%
Suite 3, Charles Street
Pleasant Valley, New York
----------------------------------------------------- ------------------------------- ----------------------
Wayne Taylor                                                            850,000                            *
1410 - 1030 West Georgia Street
Vancouver, BC, Canada
----------------------------------------------------- ------------------------------- ----------------------
All officers and directors as a group (11 persons)                   43,397,454                        37.0%
----------------------------------------------------- ------------------------------- ----------------------
</TABLE>


                                       48
<PAGE>

*  Indicates  less  than  1%

(1)  Except  as otherwise noted in the footnotes to this table, the named person
     owns  directly  and  exercises  sole  voting  and investment power over the
     shares  listed  as  beneficially  owned  by  such  persons.  Includes  any
     securities  that  such  person  has  the  right  to  acquire within 60 days
     pursuant  to  options,  warrants,  conversion  privileges  or other rights.

(2)  Includes  1,159,091  shares  that  he  may  acquire  upon exercise of stock
     options  prior  to  April  29,  2004.

(3)  Represents  250,000  shares  that  he  may  acquire  upon exercise of stock
     options  prior  to  April  29,  2004

(4)  Represents  250,000  shares  that  he  may  acquire  upon exercise of stock
     options  prior  to  April  29,  2004

(5)  Includes  250,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(6)  Includes  250,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(7)  Represents  250,000  shares  that  he  may  acquire  upon exercise of stock
     options  prior  to  April  29,  2004

(8)  Includes  250,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(9)  Includes  500,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(10) Includes  450,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(11) Includes  100,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004

(12) Includes  250,000 shares that he may acquire upon exercise of stock options
     prior  to  April  29,  2004


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     On  October  9th  and  13th  we  borrowed  $100,000  from  Synergex  Group
Partnership  (of  which  Gerrard  Munera, a director of our company, is managing
director) and Michel Berty our chairman and CEO to provide short finance for the
operations  of  Lightec.  The  Notes  are unsecured and re-payable no later than
January  31st  2004  with  an  interest  rate of 1.5% of principal per month. We
believe  that  the  terms  of  these loans from Synergex and Michel Berty are as
favourable  to  us  as  those  which we could have obtained from an unaffiliated
party.

     On  June  28, 2002, we borrowed $1,000,000 from Synergex Group Partnership,
of  which  Gerard  Munera,  a  director of our company, is managing director, to
finance  the  acquisition of Lightec Communications, Inc. We issued a promissory
note  to  Synergex to evidence our obligation to repay this loan. The note bears
interest  at  9%  per  annum and payment of the note is secured by the assets of
Lightec.  Monthly  principal  installments in the amount of $250,000 are payable
commencing  September  30, 2002. We believe the terms of this loan from Synergex
are  as  favorable  to  us  as  those  which  we  could  have  obtained  from an
unaffiliated  party.

     On  June  28,  2002  in  connection  with  the  acquisition  of  Lightec
Communications,  Inc.,  4,000,000  shares  of  common  stock  were  issued and a
$200,000  fee  was  accrued  to  Chris  Farnworth  as  a finder's fee, under his
December  15,  2001  consultancy  agreement  with  us.

     From  time  to  time, we have obtained advances from certain officers. From
February  18,  through  May  24, 2002, Wayne Taylor, our chief financial officer
until April 1, 2002 and a promoter of our company, advanced $72,519. On February
7,  2002, Stephen Henry, our secretary, advanced $19,167. There are no terms for
the  repayment  of  those  advances.

     On May 15, 2002, we sold shares of our common stock for $0.10 per share: to
David Alexander, our Chief Financial Officer, 150,000 shares; Stephen Henry, our
Secretary,  280,000 shares; and Wayne Taylor, a promoter of our company, 400,000
shares.

     On  June  29,  2001, the Company acquired all of the outstanding membership


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interests  of Netface in exchange for 20,000,000 shares of our common stock. The
assets  of  Netface  consisted  of  an  option to acquire an exclusive worldwide
perpetual,  royalty-free  license  to exploit the gesture recognition technology
developed  by DSI Datotech for video games and internet television. Netface paid
$200,00  for  this option, with the exercise price being $5 million, plus 20% of
the  Class B Membership interest in Netface. As Ken Barr (CEO of our company and
advisor  to DSI), Wayne Taylor (ex-CFO of our company and advisor and consultant
to  DSI),  Stephen  Henry (Secretary of our company), Allan Gibbins (Director of
our  company  and  DSI),  George  Gould  (ex-president  and  ex-director  of our
company),  and Robert Egery (ex-director of our company and COO of DSI) owned in
aggregate  1,114,500  shares  of  DSI  Datotech  plus  options for an additional
265,000  shares.


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ITEM  13.  EXHIBITS,  AND  REPORTS  ON  FORM  8  K

     (a)     The  following  exhibits  are  included  as  part  of  this report:

EXHIBIT
NUMBER                              TITLE  OF  DOCUMENT

 2.1      List  of  Subsidiaries  of  the  Registrant

 3.0      Rule  13(a)-14(a)/15(d)-14(a)  Certification  of  Principal  Executive
Officer

 3.1      Rule  13(a)-14(a)/15(d)-14(a)  Certification  of  Principal  Financial
Officer

 3.2      Section  1350  Certification  of  Chief  Executive  Officer

 3.3      Section  1350  Certification  of  Chief  Financial  Officer

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

     (b)     Reports  on  Form  8  K.

4.0     November 25, 2002 CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
        ACCOUNTING  AND FINANCIAL DISCLOSURE

        On  November  25,  2002,  Moffitt  &  Company  P.C.  (the  "Former
        Accountant")  resigned  as  our  principal  accountants.

4.1     March  3,  2003 RESIGNATION  OF  REGISTRANT'S  CHIEF  FINANCIAL  OFFICER
        David Alexander resigned as CFO of the registrant as of March 3, 2003,
        as  per attached letter. Wayne A. Taylor has accepted the role of CFO.

4.2     August  20,  2003  ACQUISITION  OR  DISPOSITION  OF  ASSETS.

        Security Biometrics, Inc. (the "Company") has entered into a Stock And
        Note  Transfer  Agreement (the "Transfer Agreement") with Pan Pacifica
        Ltd.  ("Pan  Pacifica"). Pursuant to the Transfer Agreement, effective
        as of August 20, 2003, the Company transferred to Pan Pacifica (i) all
        of the Outstanding shares of Datadesk Technologies, Inc. ("Datadesk"),
        previously  a  wholly-owned  subsidiary  of  the  Company,  and (ii) a
        promissory  note  payable  to  the  Company  made  by  Datadesk in the
        principal  amount  of  $1,000,000,  together with the related security
        interest  in  the  assets  of  Datadesk.

ITEM  14.  CONTROLS  AND  PROCEDURES.

     Our  principal  executive officer and principal financial officer evaluated
the  effectiveness  of  the  Company's  disclosure  controls  and procedures (as
defined  in  Rules  13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934,  as  amended) as of the end of the period covered by this report. Based on
this  evaluation,  the  Company's  principal  executive  officer  and  principal
financial  officer have concluded that the Company's controls and procedures are
effective  in providing reasonable assurance that the information required to be
disclosed  in  this report has been recorded, processed, summarized and reported
as of the end of the period covered by this report. During the period covered by
this  report,  there  have  not  been  any  significant  changes in our internal
controls  or, to our knowledge, in other factors that could significantly affect
our  internal  controls.


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                                   SIGNATURES

     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange  Act of 1934, as amended, the Registrant has duly caused this report to
be  signed  on  it  behalf  by  the  undersigned,  thereunto  duly  authorized.

Security  Biometrics,  INC.


By:     /s/  Michel  Berty                          Dated:  November  14,  2003
        ------------------------------------
        Michel  Berty
Its:    Chairman  of  the  Board  of  Directors  and  Chief  Executive  Officer


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


By:     /s/  Wayne  Taylor                          Dated:  November  14,  2003
        ------------------------------------
       Wayne  Taylor
Its:  Chief  Financial  Officer


By:     /s/  David  Angus                           Dated:  November  14,  2003
      ------------------------------------
      David  Angus
Its:  Director


By:     /s/  Alan  Gibbins                          Dated:  November  14,  2003
      ------------------------------------
      Alan  Gibbins
Its:  Director


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