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

                                   FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended March 31, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from              to              .
                               ------------    -------------

                         Commission File Number: 0-5014

                               PACIFIC REALM, INC.
                               -------------------
                 (Name of Small Business Issuer in its charter)

          DELAWARE                                        95-2554669
          --------                                        ----------
 (State or other jurisdiction of                         (IRS Employer
 incorporation or organization)                      Identification Number)

           13428 MAXELLA AVENUE, SUITE #322, MARINA DEL REY, CA 92092
           ----------------------------------------------------------
               (Address of principal executive offices)(Zip Code)

Issuer's telephone number: (310) 574-8555
                           --------------

Securities registered pursuant to Section 12(b) of the Act:  None.

Name of each exchange on which registered: None.

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

Check  whether  the Issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange Act during the  preceding 12 months (or such
shorter period of 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 there is no disclosure  of delinquent  filers to Item 405 of Regulation
S-B contained in this form, and if no disclosure will be contained,  to the best
of the Registrant=s  knowledge,  in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K. [ ]

State Issuer's Revenues for its most recent fiscal year: $42,662

The number of shares  outstanding  of the  Company's  $.00008  Par Value  Common
Stock, as of March 31, 2001 were 2,737,413 (post-split). The aggregate number of
shares  of the  voting  stock  held by  non-affiliates  on  March  31,  2001 was
1,019,724.  No public market exists and therefore,  market value for such shares
cannot be determined.

                   DOCUMENTS INCORPORATED BY REFERENCE: None.



                                       1
<PAGE>


PART I

ITEM 1.  BUSINESS

GENERAL

Pacific Realm,  Inc. (the "Company") was  incorporated in Delaware on August 26,
1968 as Continental  Convalescent Centers, Inc. The Company subsequently changed
its name to Century Convalescent Centers, Inc., National Health Services,  Inc.,
Carex  International,  Inc.  and Medica USA,  Inc. On July 6, 1984,  the Company
changed its name to "Pacific  Realm,  Inc." The Company was inactive and dormant
from 1990 through 2000. In 2000, the Company began limited  operations and began
seeking consulting  opportunities to advise companies interested in establishing
telecom  business  in the  Pacific  Rim as  well  as  South  America  and  other
less-developed areas of the world.

The Company was  previously  in the health care industry and briefly in the gold
mining  business.  Those  operations  were  ultimately  unsuccessful.  From 1989
through 2000, the Company had no revenues, operating profits or any identifiable
assets which could be attributable to any industry segment.

The Company's office is located at 13428 Maxella Avenue,  Suite #322, Marina del
Rey, CA 92092.

As of March 31, 2001, the Company had no employees.  The Company engages outside
independent  contractors to perform some of its  consulting  work and pays those
contractors directly.

Item 2. Properties.

The Company  presently  occupies  office space  provided by its  President at no
charge to the Company. The Company anticipates that this space is sufficient for
the near future.

Item 3. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party.

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

None.

Item 5. Market for Registrant's Common Equity and Related Shareholder Matters.

There is no established public trading market for the Company's common stock. As
of March 31, 2001,  the Company had 2,737,413  shares of its common stock issued
and outstanding (post-split), of which 1,019,724 were held by non-affiliates. As
of March 31, 2001, there were 20,000,000 shares of common stock authorized,  par
value $.00008, of which 2,737,413 are issued and outstanding  (post-split).  The
Company has authorized a total of 2,000,000 shares of preferred stock, par value
$.001 and presently has no shares of preferred stock issued and outstanding. The
Company estimates there are approximately  1,400 holders of the Company's common
stock. In April,  2003, the Company's Board of Directors  approved a proposal to
increase the Company's  capitalization to 200,000,000 shares of common stock and
the  shareholders  subsequently  approved this increase in  capitalization.  The
Company  implemented a 20-to-1  reverse stock split in June,  2002 and a forward
split of one-for-three in late 2002. The numbers stated herein reflect these two
corporate actions.



                                       2
<PAGE>

Item 6.  Management's Discussion and Analysis or Plan of Operation.

FORWARD-LOOKING STATEMENTS MAY NOT PROVE ACCURATE
-------------------------------------------------

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 the Company  will fail to  generate  projected
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  of the  financial  condition,  changes in  financial
condition  and results of  operations  of the Company for the fiscal years ended
March 31,  2001 and  March  31,  2000  should  be read in  conjunction  with the
financial statements of the Company and related notes included therein.

RESULTS OF OPERATIONS

During the fiscal years ended March 31, 1990 through March 31, 2000, the Company
had no revenues and no operations.  In 2000, the Company began  operations after
several years of being  inactive/dormant.  The Company  appointed new management
and began offering its consulting  services to companies  interested in entering
the telecom industry in under-developed countries.

For the year ended March 31,  2001,  the Company  had  revenues of $42,662.  The
revenues  consisted of consulting income. For the year ended March 31, 2000, the
Company  had no  revenues.  For the year ended March 31,  2001,  the Company had
expenses of $42,617 compared to expenses of $26,438 for the year ended March 31,
2000.  The  Company's  expenses  for the year  ended  March 31,  2001  consisted
primarily  of  contract   services  of  approximately   $26,000  and  legal  and
professional  fees of  approximately  $16,000.  The  expenses for the year ended
March 31, 2000  consisted  primarily of general and  administrative  expenses of
approximately $26,000.

The Company's net profit from operations  before income taxes for the year ended
March 31, 2001 was $45  compared to a net loss of  ($26,438)  for the year ended
March 31, 2000.  The net profit (loss) per share for the periods ended March 31,
2001 and 2000 was nil for both periods.

At March 31, 2001, shareholder's equity (deficit) was ($26,247).

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At March 31, 2001,  the Company had negative  working  capital of  approximately
($26,000)  which  consisted  of  assets  of  $45  and  current   liabilities  of
approximately $26,000. At March 31, 2001, the Company had current liabilities of
approximately $26,000 comprised of shareholder advances of approximately $24,000
and approximately $2,000 in accounts payable.

The Company's balance sheet as of March 31, 2001 reflects  negligible assets and
certain liabilities which the Company is obligated to pay. Further, there exists
no agreements or  understandings  with regard to loan  agreements by or with the
Officers, Directors, principals, affiliates or shareholders of the Company.



                                       3
<PAGE>

The Company will  attempt to carry out its plan of business as discussed  above.
The  Company  cannot  predict to what extent its lack of  liquidity  and capital
resources will hinder its business plan.

Item 7. Financial Statements.

Financial  statements  are audited and included  herein  beginning on Exhibit 1,
page 1 and are incorporated herein by this reference.

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

There  were no  disagreements  with  accountants  on  accounting  and  financial
disclosure during the relevant period.

Part III

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

Identification of Directors and Executive Officers of the Company

The following table sets forth the names and ages of all directors and executive
officers  of the  Company  and all  persons  nominated  or  chosen  to  become a
director,  indicating  all  positions  and offices with the Company held by each
such person and the period during which he has served as a director:

The principal executive officers and directors of the Company are as follows:


NAME                                POSITIONS HELD AND TENURE
----                                -------------------------

Joseph Gutierrez                    President, CFO and Director since 2002

The  Director  named  above  will  serve  until the next  annual  meeting of the
Company's stockholders. Thereafter, Directors will be elected for one-year terms
at the annual stockholders'  meeting.  Officers will hold their positions at the
pleasure of the Board of Directors,  absent any employment  agreement,  of which
none  currently   exist  or  is   contemplated.   There  is  no  arrangement  or
understanding  between the  Directors  and Officers of the Company and any other
person  pursuant to which any  Director or Officer was or is to be selected as a
Director or Officer of the Company.

There is no family relationship between or among any Officer and Director.

The  Directors  and  Officers  of the  Company  will  devote  their  time to the
Company's  affairs on an "as needed"  basis.  As a result,  the actual amount of
time which each will devote to the Company's affairs is unknown and is likely to
vary substantially from month to month.

The Company has no audit or compensation committee.

Business Experience. The following is a brief account of the business experience
during at the least the last five years of the directors and executive officers,
indicating their principal  occupations and employment  during that period,  and


                                       4
<PAGE>

the  names  and  principal   businesses  of  the  organizations  in  which  such
occupations and employment were carried out.

JOSEPH  GUTIERREZ.  Mr.  Gutierrez  has an  extensive  background  in  technical
management and accounting.  He has also been responsible for internal audits and
involved in preparing  filings for the SEC. His efforts resulted in a company in
reorganization  being able to complete its financing  through  negotiations with
banks and investors.  Mr. Gutierrez successfully  negotiated the mergers of four
corporations and completed  investment  placements to expand the projects of the
new entity.  Mr.  Gutierrez has appeared on behalf of companies and as a special
advisor before the IRS, the State Board of  Equalization,  workers  compensation
board,  and state labor board.  Mr. Gutierrez also set-up and maintained a human
resources   department  and  trained  division   managers  for  a  180  employee
international publicly traded company.

         From 1999 to 2002, Mr. Gutierrez served as CFO of WebCapital  Ventures,
with operations in Florida and California.  From 1997 to 1999, Mr. Gutierrez was
the controller of SaddleSprings Beverage Co. in Torrance, California.

         Mr.  Gutierrez  received  his Masters in Business  Taxation - Corporate
from Golden Gate  University.  He received  his  Bachelor of Science in Business
Administration  -  Accounting/Finance  from the California  State  University at
Northridge.

CONFLICTS OF INTEREST
---------------------

The  Officers and  Directors of the Company will devote only a small  portion of
their  time  to the  affairs  of  the  Company,  estimated  to be no  more  than
approximately  60  hours  per  month.  There  will be  occasions  when  the time
requirements of the Company's  business conflict with the demands of their other
business and investment activities.  Such conflicts may require that the Company
attempt to employ additional personnel.  There is no assurance that the services
of such  persons  will be  available  or that they can be  obtained  upon  terms
favorable to the Company.

There is no procedure  in place which would allow the Officers and  Directors to
resolve potential conflicts in an arms-length fashion. Accordingly, they will be
required to use their discretion to resolve them in a manner which they consider
appropriate.

Identification of Certain Significant Employees. The Company does not employ any
persons  who  make or are  expected  to make  significant  contributions  to the
business of the Company.

Item 10. Executive Compensation.

During fiscal 2001, and as of the date of the filing of this report, none of the
Company's officers were paid any compensation by the Company.

COMPENSATION OF DIRECTORS
-------------------------

No director receives or accrues any compensation for his services as a Director,
including committee participation and or special assignments.

Directors  are  entitled  to  reimbursement  for  reasonable  travel  and  other
out-of-pocket  expenses incurred in connection with attendance at meeting of the
Board of Directors.



                                       5
<PAGE>

The Company has no material bonus or profit-sharing plans pursuant to which cash
or  non-cash  compensation  is or may be  paid  to the  Company's  directors  or
executive officers except as described above.

The Company has no compensatory plan or arrangements,  including  payments to be
received from the Company,  with respect to any  executive  officer or director,
where such plan or arrangement  would result in any compensation or remuneration
being paid resulting from the resignation,  retirement or any other  termination
of  such  executive  officer's  employment  or from a  change-in-control  of the
Company or a change in such  executive  officer's  responsibilities  following a
change-in-control   and  the  amount,   including   all  periodic   payments  or
installments  where  the  value of such  compensation  or  remuneration  exceeds
$100,000 per executive officer.

During the last completed fiscal year, no funds were set aside or accrued by the
Company to provide  pension,  retirement  or similar  benefits for  Directors or
Executive Officers.

The Company has no written employment agreements.

Compensation  Pursuant to Plans.  Other than disclosed above, the Company has no
plan  pursuant to which cash or non-cash  compensation  was paid or  distributed
during the last fiscal  year,  or is proposed to be paid or  distributed  in the
future, to the individuals and group described in this item.

Compensation  of Directors.  Directors of the Company are entitled to reasonable
reimbursement  for their travel  expenses in attending  meetings of the Board of
Directors.

Termination  of Employment  and Change of Control  Arrangement.  Except as noted
herein, the Company has no compensatory plan or arrangements, including payments
to be received from the Company, with respect to any individual names above from
the latest or next preceding fiscal year, if such plan or arrangement results or
will result from the  resignation,  retirement or any other  termination of such
individual=s  employment  with the  Company,  or from a change in control of the
Company or a change in the individual=s  responsibilities  following a change in
control.

Section 16(a) Beneficial Ownership Reporting  Compliance.  During the year ended
March 31, 2001,  the following  persons were  officers,  directors and more than
ten-percent shareholders of the Company=s common stock:

NAME                             Position                        Filed Reports
----                             --------                        -------------

Joseph Gutierrez                 Director, President, CFO        No
Maxwell Energy & Metals Ltd.     Shareholder                     No

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

There were 2,737,413  shares of the Company's common stock  (post-split)  issued
and  outstanding  on March  31,  2001.  No  preferred  shares  were  issued  and
outstanding at March 31, 2001. The following tabulates holdings of shares of the
Company by each person who,  subject to the above,  at the date of this  Report,
holds or record or is known by  Management  to own  beneficially  more than five
percent  (5%) of the Common  Shares of the  Company  and,  in  addition,  by all
directors and officers of the Company individually and as a group.


                                       6
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------- -------------------------------- ------------------------------------------
Name and Address                         Number of Shares Owned           Percent of Beneficially Owned Shares
                                         Beneficially
---------------------------------------- -------------------------------- ------------------------------------------
<S>                                      <C>                              <C>
Joseph Gutierrez *                       0                                0.0%
13428 Maxella Ave #322
Marina del Rey, CA 92092
---------------------------------------- -------------------------------- ------------------------------------------
Maxwell Energy & Metals Ltd.             1,717,724                        62.75%
13428 Maxella Ave #322
Marina del Rey CA 92092
Woodland Hills CA 91364
---------------------------------------- -------------------------------- ------------------------------------------
All Directors and Executive Officers     0                                0.0%
as a Group (one person)
---------------------------------------- -------------------------------- ------------------------------------------
* Denotes officer or director
</TABLE>

Changes in Control.  There are no arrangements  known to the Company,  including
any pledge by any person of  securities  of the Company,  the operation of which
may at a subsequent date result in a change of control of the Company.

Item 12. Certain Relationships and Related Transactions.

The Company's President provides office space to it at no charge.

Item 13.  Exhibits and Reports on Form 8-K.

(a) Financial Statements and Schedules

The  following  financial  statements  and  schedules  are filed as part of this
report:

Independent Auditors' Report dated June 4, 2003
Balance Sheet for the Fiscal Year Ended March 31, 2001
Statements  of  Operations  for the Fiscal  Years  Ended March 31, 2001 and 2000
Statement of  Stockholders'  Equity (Deficit) For the Years Ended March 31, 2001
and 2000 Statements of Cash Flows For the Years Ended March 31, 2001 and 2000

Notes to Financial Statements

List of Exhibits

The following exhibits are filed with this report.

Financial Statements.

(b) There  were no Reports  filed on Form 8-K  during the fourth  quarter of the
Company's fiscal year ended March 31, 2001.

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


June 20, 2003                        PACIFIC REALM, INC.

                                     /S/ JOSEPH GUTIERREZ
                                     ------------------------------------------
                                     Joseph Gutierrez, President, CFO, Director




                                       7
<PAGE>

                              FORM OF CERTIFICATION
                       PURSUANT TO RULE 13a-14 AND 15d-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

                                  CERTIFICATION

         I, Joseph Gutierrez, certify that:

         1. I have reviewed this annual report on Form 10-KSB of Pacific  Realm,
Inc.;

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

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

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

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

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

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

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

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

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

         6. The registrant's  other  certifying  officer and I have indicated in
this annual  report  whether or not there were  significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: June 20, 2003                /s/ Joseph Gutierrez
                                   --------------------------------------------
                                   Name: Joseph Gutierrez
                                   Title: President and Chief Financial Officer


                                       8
<PAGE>

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

In connection  with the Annual Report of Pacific Realm,  Inc. on Form 10-KSB for
the period  ended  March 31,  2001 as filed  with the  Securities  and  Exchange
Commission on the date hereof (the "Report"),  each of the  undersigned,  in the
capacities and on the dates indicated  below,  hereby  certifies  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that to the best of his knowledge:

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

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



                                        /s/ Joseph Gutierrez
                                        ------------------------------------
                                        Joseph Gutierrez, President and
                                        Chief Financial Officer


Dated: June 20, 2003



                                       9
<PAGE>



                               Pacific Realm Inc.

                                 MARCH 31, 2001







                               Clyde Bailey, P.C.
                           Certified Public Accountant
                            10924 Vance Jackson #404
                            San Antonio, Texas 78230





<PAGE>


CLYDE BAILEY P.C.
-----------------------------------------------------------------------------
                                                  CERTIFIED PUBLIC ACCOUNTANT
                                                     10924 VANCE JACKSON #404
                                                     SAN ANTONIO, TEXAS 78230
                                                         (210) 699-1287(OFC.)
                                          (888) 699-1287 (210) 691-2911 (FAX)
                                                                      Member:
                                                  American Institute of CPA's
                                                       Texas Society of CPA's

Board of Directors
Pacific Realm Inc.



                          INDEPENDENT AUDITOR'S REPORT
                          ----------------------------

I have audited the accompanying balance sheet of Pacific Realm Inc. (Company) as
of  March  31,  2001 and the  related  statement  of  operations,  statement  of
stockholders'  equity,  and the statement of cash flows for the year ended March
31, 2001 These  financial  statements  are the  responsibility  of the Company's
management. My responsibility is to express an opinion on these statements based
on my audit. The financial statements of the Company, as of March 31, 2000, were
audited by other  auditors  whose  report is dated  August 8, 2000  expressed an
unqualified opinion on those statements.

I conducted my audit in accordance with generally accepted auditing standards in
the United States.  Those standards require that I 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.  I  believe  that my audit  provides  a  reasonable  basis  for my
opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of March 31,2001 and
the results of its  operations  and its cash flows for the years ended March 31,
2001 in conformity with accounting  principles  generally accepted in the United
States.

                                        /s/ Clyde Bailey P.C.
                                        ---------------------------
                                        Clyde Bailey P.C.
San Antonio, Texas
June 4, 2003



                                        1

<PAGE>


                               Pacific Realm Inc.
                                  Balance Sheet
                               As of March 31 2001


<TABLE>
<CAPTION>
                                   A S S E T S



    CURRENT ASSETS

<S>                                                                           <C>          <C>
        Cash                                                                         45
                                                                      ------------------
               Total Current Assets                                                  45
               Total Assets                                                                $              45
                                                                                           ==================

                              L I A B I L I T I E S

    CURRENT LIABILITIES
        Accounts Payable                                                          2,817
        Advances from Stockholder                                                23,475
                                                                      ------------------
               Total Current Liabilities                                                              26,292

        Commitments and Contingencies


                      S T O C K H O L D E R S ' E Q U I T Y

    Preferred Stock
        2,000,000 authorized shares, par value $.001                                 --
        no shares issued and outstanding
    Common Stock *                                                                  219

    Additional Paid-in-Capital                                                  973,236
    Accumulated Deficit                                                        (999,702)
                                                                      ------------------

               Total Stockholders' Equity (Deficit)                                                  (26,247)
                                                                                           ------------------
               Total Liabilities and Stockholders' Equity                                  $              45
                                                                                           ==================
</TABLE>

        *   Retroactively Restated

     The accompanying notes are integral part of the financial statements.



                                       2
<PAGE>


                               PACIFIC REALM INC.
                             Statement of Operations


<TABLE>
<CAPTION>
                                                     --------------------------
                                                         FOR THE TWELVE MONTHS
                                                           ENDED MARCH 31
                                                         2001           2000
                                                     -----------    -----------
<S>                                                  <C>            <C>
REVENUES:
      Revenues                                       $    42,662    $        --
                                                     -----------    -----------
           Total Revenues                            $    42,662    $        --

EXPENSES:
      Contract Services                                   26,239              0
      Legal & Professional Fees                           16,378              0
      Operating Expenses                                      --         26,438
                                                     -----------    -----------

           Total Expenses                                 42,617         26,438

           Net Income (Loss) from Operations         $        45    $   (26,438)


PROVISION FOR INCOME TAXES:

      Income Tax Benefit                                      --             --
                                                     -----------    -----------

           Net Income (Loss)                         $        45    $   (26,438)
                                                     ===========    ===========


Basic Loss Per Common Share                                   --             --
                                                     -----------    -----------
Diluted Loss Per Common Share                                 --             --
                                                     -----------    -----------

Weighted Average number of Common Shares
      used in per share calculations *                 2,734,068      2,734,068
                                                     ===========    ===========
</TABLE>


Retroactively Restated


     The accompanying notes are integral part of the financial statements.


                                       3
<PAGE>

                               PACIFIC REALM INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY




<TABLE>
<CAPTION>
                                                          Preferred      Common
                                Common       Preferred     $0.001       $0.00008      Paid-In    Accumulated  Stockholders'
                                Shares        Shares      Par Value     Par Value     Capital      Deficit      Equity
                              ------------  ------------ ------------  ------------ ------------ ------------ ------------
<S>                             <C>         <C>                  <C>         <C>      <C>         <C>               <C>
Balance, March 31, 1999         2,737,413             -          $ -         $ 219    $ 973,236   $ (973,309)       $ 146

Net Income  (Loss)                                                                                   (26,438)     (26,438)
                              ------------  ------------ ------------  ------------ ------------ ------------ ------------

Balance, March 31, 2000         2,737,413 -           -            - -         219      973,236     (999,747)     (26,292)
                              --------------------------------------------------------------------------------------------

Net Income  (Loss)                                                                                        45           45
                              ------------  ------------ ------------  ------------ ------------ ------------ ------------

Balance, March 31, 2001         2,737,413 -           -            - -         219      973,236     (999,702)     (26,247)
                              --------------------------------------------------------------------------------------------
</TABLE>

Retroactively Restated


      The accompanying notes are integral part of the financial statements.


                                       4
<PAGE>


                               PACIFIC REALM INC.
                             STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
                                                   ---------------------
                                                   FOR THE TWELVE MONTHS
                                                     ENDED MARCH 31
                                                     2001       2000
                                                   --------   --------
<S>                                                <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net Income (Loss)                              $     45   $(26,438)

    Changes in operating assets and liabilities:
    Accounts Payable                                     --      2,963
                                                   --------   --------

Net Cash Provided From  Operating Activities       $     45   $(23,475)


CASH FLOWS FROM INVESTING ACTIVITIES:

    Capital Expenditures                                 --         --
                                                   --------   --------

Net Cash Used in Investing Activities              $     --   $     --
                                                   --------   --------


CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on Notes Payable - Shareholder          23,475
                                                   --------   --------
Net Cash Provided for Financing Activities         $     --   $ 23,475
                                                   --------   --------

Net Increase (Decrease) in Cash                    $     45   $     --

Cash Balance,  Begin Period                              --
                                                   --------   --------

Cash Balance,  End Period                          $     --   $     --
                                                   ========   ========


Supplemental Disclosures:
    Cash Paid for interest                         $     --   $     --
    Cash Paid for income taxes                     $     --   $     --

</TABLE>


      The accompanying notes are integral part of the financial statements.


                                       5
<PAGE>

                               Pacific Realm Inc.
                          Notes to Financial Statements

NOTE 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION
------------
Pacific Realm Inc. ("the Company") was incorporated  under the laws of the State
of Delaware in 1968 for the purpose to promote and carry on any lawful  business
for  which a  corporation  may be  incorporated  under  the laws of the State of
Delaware. The company has a total of 200,000,000 authorized common shares with a
par value of $.00008 and  2,000,000  preferred  shares with a par value of $.001
per share  and with  2,713,413  common  shares  issued  and  outstanding  and no
preferred  shares issued and outstanding as of March 31, 2000. The Company filed
an amendment of its Certificate of  Incorporation  with the State of Delaware to
increase the  authorized  shares from  20,000,000  authorized  common  shares to
200,000,000 authorized shares.

FEDERAL INCOME TAX
------------------
The Company has adopted the provisions of Financial  Accounting  Standards Board
Statement No. 109,  Accounting for Income Taxes. The Company accounts for income
taxes pursuant to the  provisions of the Financial  Accounting  Standards  Board
Statement No. 109,  "Accounting  for Income Taxes",  which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary  differences  between the carrying
amounts and the tax basis of assets and liabilities.

USE OF ESTIMATES
----------------
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  on
contingent assets and liabilities at the date of the financial  statements,  and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

ACCOUNTING METHOD
-----------------

The Company's  financial  statements  are prepared  using the accrual  method of
accounting.  Revenues are recognized when persuasive  evidence of an arrangement
exists,  delivery has  occurred,  the sales price is fixed or  determinable  and
collectibility is probable and expenses when incurred on the related  consulting
engagements. Fixed assets are stated at cost.

During 2000, the Company adopted the U.S.  Securities and Exchange  Commission's
("SEC") Staff Accounting Bulletin 101, "Revenue  Recognition" ("SAB 101"), which
provides guidance on the recognition, presentation, and disclosure of revenue in
financial  statements filed with the SEC. The adoption of SAB 101 did not have a
material  effect on the  Company's  business,  financial  condition,  results of
operations or cash flows. The Company believes that SAB 101 has been followed in
the recognition of revenues.




                                        6
<PAGE>

                               Pacific Realm Inc.
                          Notes to Financial Statements

NOTE 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON'T)

EARNINGS PER COMMON SHARE
-------------------------
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which  simplifies the  computation  of earnings per share  requiring the
restatement of all prior periods.

Basic  earnings  per share are  computed  on the basis of the  weighted  average
number of common shares outstanding during each year.

Diluted  earnings per share are  computed on the basis of the  weighted  average
number of common shares and dilutive securities outstanding. Dilutive securities
having an  anti-dilutive  effect on diluted earnings per share are excluded from
the calculation.

COMPREHENSIVE INCOME
--------------------
Statement  of  Financial   Accounting   Standards  (SFAS)  No.  130,  "Reporting
Comprehensive  Income,"  establishes  standards  for  reporting  and  display of
comprehensive  income,  its components and accumulated  balances.  Comprehensive
income is defined to include all changes in equity except those  resulting  from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized  under current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements.  The Company does not have any assets requiring disclosure
of comprehensive income.

IMPAIRMENT OF LONG-LIVED ASSETS
-------------------------------
The Company  follows SFAS No. 121,  "Accounting  for  Impairment  of  Long-Lived
Assets and for Long-Lived Assets to be Disposed Of". The Statement requires that
long-lived assets,  liabilities and certain identifiable  intangibles to be held
and used by an entity be reviewed for impairment  whenever  events of changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.

Long-lived   assets  consist  primarily  of  property  and  equipment  and  note
receivable,  and  other  assets.  The  recoverability  of  long-lived  assets is
evaluated at the  operating  unit level by an analysis of operating  results and
consideration   of  other   significant   events  or  changes  in  the  business
environment. If an operating unit has indications of impairment, such as current
operating  losses,  the Company will evaluate whether  impairment  exists on the
basis of undiscounted expected future cash flows from operations before interest
for the remaining amortization period. If impairment exists, the carrying amount
of the long-lived  assets is reduced to its estimated fair value, less any costs
associated  with  the  final  settlement.  As of March  31,  2001  there  was no
impairment of the Company's long-lived assets.






                                        7

<PAGE>


                               Pacific Realm Inc.
                          Notes to Financial Statements


NOTE 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CON'T)

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------
In June 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations".  SFAS No. 143  addresses  financial  accounting  and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated  asset retirement  costs.  SFAS No. 143 is effective for fiscal years
beginning  after June 15, 2002. The Company does not expect that there will be a
material  impact from the  adoption of SFAS No. 143 on its  financial  position,
results of operations, or cash flows.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets".  SFAS No. 144 addresses financial accounting and
reporting for the  impairment or disposal of  long-lived  assets.  It supersedes
SFAS No.  121,  "Accounting  for the  Impairment  of  Long-Lived  Assets and for
Long-Lived  Assets  To  Be  Disposed  Of",  and  the  accounting  and  reporting
provisions of Accounting  Principles Board Statement  ("APB") 30, "Reporting the
Results of  Operations  -  Reporting  the  Effects of Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions",  for the  disposal  of a segment of a  business.  The  Company is
required to adopt SFAS No. 144 on October 1, 2002.  The Company  does not expect
that the adoption of SFAS No. 144 will have a material  effect on its  financial
position, results of operations or cash flows.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB Statements No.
4,44 and 64,  Amendment of FASB  Statement No. 13, and  Technical  Corrections".
SFAS  No.  145   requires   the   classification   of  gains  and  losses   from
extinguishments  of debt as  extraordinary  items  only  if  they  meet  certain
criteria  for such  classification  in APB No.  30,  "Reporting  the  Results of
Operations,  Reporting  the Effects of Disposal of a Segment of a Business,  and
Extraordinary, Unusual, and Infrequently Occurring Events and Transactions". Any
gain or loss on  extinguishments  of debt classified as an extraordinary item in
prior  periods that does not meet the  criteria  must be  reclassified  to other
income or expense.  These  provisions  are effective for fiscal years  beginning
after  May  15,  2002.  Additionally,   SFAS  No.  145  requires  sale-leaseback
accounting for certain lease modifications that have economic effects similar to
sale-leaseback   transactions.   These  lease   provisions   are  effective  for
transactions  occurring  after May 15,  2002.  The  Company  does not expect the
adoption of SFAS No. 145 to have a material  effect on its  financial  position,
results of operations or cash flows.

In July 2002,  the FASB issued SFAS No. 146 , "Accounting  for Costs  Associated
with Exit or Disposal  Activities".  SFAS No. 146 replaces "Emerging Issues Task
Force Issue No. 94-3,  "Liability  Recognition for Certain Employee  Termination
Benefits and Other Costs to Exit an Activity  (including  Certain Costs Incurred
in a  Restructuring)".  SFAS No.  146  requires  companies  to  recognize  costs
associated  with exit or disposal  activities when they are incurred rather than
at the date of a  commitment  to an exit or  disposal  plan.  Examples  of costs
covered by the standard  include lease  termination  costs and certain  employee
severance  costs  that  are  associated  with  a   restructuring,   discontinued
operation, plant closing, or other exit or disposal activity. SFAS No. 146 is to
be applied prospectively to exit or disposal activities initiated after December
31,  2002.  The Company  does not expect the  adoption of SFAS No. 146 to have a
material effect on its financial position, results of operations or cash flows.



                                        8

<PAGE>

                               Pacific Realm Inc.
                          Notes to Financial Statements

NOTE 2  -  COMMON STOCK

The company has a total of  200,000,000  authorized  common shares and 2,000,000
preferred shares with a par value of $.00008 per share and with 2,737,068 common
shares issued and outstanding and no preferred  shares issued and outstanding as
of March 31, 2001.

In August 2002, the Board of Directors authorized a 20 to 1 reverse split of the
Company's common stock.  The financial  statements as of March 31, 2001 and 2000
were retoractively adjusted to reflect the effect of this change,

In January 2003, the Board of Directors authorized a 3 to 1 forward split of the
Company's  common  stock.  The  result  of  this  forward  split  increased  the
outstanding  shares  from to  911,356  outstanding  common  shares to  2,737,413
outstanding common shares after adjusting for fractional shares.

NOTE 3 - INCOME TAXES

For the years ended March 31, 2001 and 2000,  the Company  recorded  minimal net
income  but has a net  operating  loss  carryforward  and  therefore  has no tax
liability.  The net deferred tax asset  generated by the loss  carryforward  has
been  fully  reserved.   The  cumulative  net  operating  loss  carryforward  is
approximately $216,000, and will expire in the years 2002 through 2020.

The  provision  for federal  income tax consists of the  following for the years
ended March 31;

                                        2001                   2000
                               --------------------------------------
Current Provision                    $   -0-            $       -0-
Deferred Provision                       -0-                    -0-
                               --------------------------------------
                                     $   -0-            $       -0-
                               --------------------------------------

DEFERRED INCOME TAXES CONSISTS OF THE FOLLOWING AT MARCH 31;

Long-Term:
                                        2001                   2000
                              ----------------------------------------
Deferred tax liability             $     32,418           $     32,433
Valuation Allowance                     (32,418)               (32,433)
                              ----------------------------------------
                                   $        -0-           $        -0-
                              ----------------------------------------

NOTE 4 -  RELATED PARTY TRANSACTIONS

The company neither owns nor leases any real or personal property. An officer of
the  corporation  provides  office  services  without  charge.  Such  costs  are
immaterial to the financial statements and accordingly,  have not been reflected
therein.  The  officers  and  directors  of the  Company  are  involved in other
business  activities  and may in the future  become  involved in other  business
opportunities.  If a  specific  business  opportunity  becomes  available,  such
persons  may face a conflict  in  selecting  between the Company and their other
business  interests.  The Company has not formulated a policy for the resolution
of such conflicts



                                        9


<PAGE>



                               PACIFIC REALM, INC.

                              FINANCIAL STATEMENTS

                             MARCH 31, 2000 AND 1999

                                   (RESTATED)



<PAGE>











                                TABLE OF CONTENTS

                                                                       PAGE NO.
                                                                       --------


INDEPENDENT AUDITORS' REPORT......................................        1

FINANCIAL STATEMENTS

       Balance Sheets.............................................        2

       Statements of Operations...................................        3

       Statement of Changes in Stockholders' Equity ..............        4

       Statements of Cash Flows...................................        5

       Notes to Financial Statements..............................      6 - 9




<PAGE>














                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders
Pacific Realm, Inc.
Woodland Hills, California

We have audited the  accompanying  balance sheets of Pacific  Realm,  Inc. as of
March 31, 2000 and 1999 and the related  statements  of  operations,  changes in
stockholders'  equity and cash flows for the years then ended.  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  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  make by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Pacific Realm, Inc. as of March
31, 2000 and 1999,  and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

The accompany financial  statements have been prepared assuming that the company
will  continue as a going  concern.  As shown in the financial  statements,  the
company has no assets,  is inactive and has no planned business  purpose.  These
uncertainties  raise  substantial doubt about its ability to continue as a going
concern.  Management's plans regarding those matters are also discussed in notes
6 and 7. The  financial  statements  do not include any  adjustments  that might
result from the outcome of these uncertainties.



Moffitt & Company, P.C.
Scottsdale, Arizona

August 8, 2000, except for footnote number 7 which is dated January 15, 2003



<PAGE>





                               PACIFIC REALM, INC.
                                 BALANCE SHEETS
                             MARCH 31, 2000 AND 1999
                                   (RESTATED)



<TABLE>
<CAPTION>
                                     ASSETS

                                                                     2000              1999
                                                                  ---------         ---------

<S>                                                               <C>               <C>
ASSETS                                                            $       0         $       0
                                                                  =========         =========



                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
       Accounts payable                                           $   2,963         $       0
       Loan payable, stockholder                                     23,475                 0
                                                                  ---------         ---------

       TOTAL CURRENT LIABILITIES                                     26,438                 0
                                                                  ---------         ---------

STOCKHOLDERS' EQUITY
       Preferred stock, par value $0.001 per share
          2,000,000 shares authorized
          0 shares issued or outstanding                                  0                 0
       Common stock, par value $0.00008 per share
          20,000,000 shares authorized
          18,227,117 shares issued and outstanding                    1,458             1,458
       Paid in capital in excess of par value of stock              971,851           971,851
       Retained earnings (deficit)                                 (999,747)         (973,309)
                                                                  ---------         ---------

       TOTAL STOCKHOLDERS' EQUITY                                   (26,438)                0
                                                                  ---------         ---------

       TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                                    $       0         $       0
                                                                  =========         =========
</TABLE>





                 See Accompanying Notes and Accountants' Report


                                       2

<PAGE>





                               PACIFIC REALM, INC.
                             STATEMENT OF OPERATIONS
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
                                   (RESTATED)


<TABLE>
<CAPTION>
                                                           2000                  1999
                                                        ------------         ------------

<S>                                                     <C>                  <C>
INCOME                                                  $          0         $          0

EXPENSES                                                      26,438                    0
                                                        ------------         ------------

(LOSS) BEFORE INCOME TAXES                                   (26,438)                   0

INCOME TAXES                                                       0                    0
                                                        ------------         ------------

NET (LOSS)                                              $    (26,438)        $          0
                                                        ============         ============

NET (LOSS) PER COMMON SHARE

       BASIC AND DILUTED                                $        .00         $        .00
                                                        ============         ============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES

       BASIC AND DILUTED                                  18,227,117           18,227,117
                                                        ============         ============
</TABLE>


            See Accompanying Notes and Independent Auditors' Report.


                                       3
<PAGE>




                               PACIFIC REALM, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
                                   (RESTATED)


<TABLE>
<CAPTION>
                                     PREFERRED STOCK                       COMMON STOCK
                             -------------------------------      -------------------------------
                                SHARES             AMOUNT            SHARES             AMOUNT
                             ------------        -----------      --------------     ------------


<S>                          <C>                <C>               <C>                <C>
BALANCE, APRIL 1, 1998                  0       $          0          18,227,117     $      1,458

NET INCOME FOR THE
   YEAR ENDED
   MARCH 31, 1999                       0                  0                   0                0
                             ------------        -----------      --------------     ------------

BALANCE, MARCH 31, 1999                 0                  0          18,227,117            1,458

NET (LOSS) FOR THE
   YEAR ENDED
   MARCH 31, 2000                       0                  0                   0                0
                             ------------        -----------      --------------     ------------

BALANCE, MARCH 31, 2000                 0       $          0          18,227,117     $      1,458
                             ============       ============      ==============     ============

<CAPTION>


                                    PAID IN
                                    CAPITAL
                                   IN EXCESS               RETAINED
                                 OF PAR VALUE              EARNINGS
                                   OF STOCK                (DEFICIT)
                              -------------------    ----------------------

<S>                           <C>                    <C>
BALANCE, APRIL 1, 1998        $           971,851    $            ( 973,309)

NET INCOME FOR THE
   YEAR ENDED
   MARCH 31, 1999                               0                         0
                              -------------------    ----------------------

BALANCE, MARCH 31, 1999                   971,851                 ( 973,309)

NET (LOSS) FOR THE
   YEAR ENDED
   MARCH 31, 2000                               0                  ( 26,438)
                              -------------------    ----------------------

BALANCE, MARCH 31, 2000       $           971,851    $            ( 999,747)
                              ===================    ======================
</TABLE>


            See Accompanying Notes and Independent Auditors' Report.


                                       4

<PAGE>




                               PACIFIC REALM, INC.
                             STATEMENT OF CASH FLOWS
                   FOR THE YEARS ENDED MARCH 31, 2000 AND 1999
                                   (RESTATED)


<TABLE>
<CAPTION>

                                                              2000            1999
                                                           ----------       --------

<S>                                                        <C>              <C>
CASH FLOWS FROM OPERATING
   ACTIVITIES
       Net (loss)                                          $(26,438)        $      0
       Changes in operating assets and liabilities:
           Accounts payable                                   2,963                0
                                                           --------         --------

       NET CASH FLOWS (USED) BY
          OPERATING ACTIVITIES                              (23,475)               0
                                                           --------         --------

CASH FLOWS FROM INVESTING
   ACTIVITIES                                                     0                0
                                                           --------         --------

CASH FLOWS FROM FINANCING
   ACTIVITIES
       Loans from stockholder                                23,475                0
                                                           --------         --------

       NET CASH FLOWS PROVIDED
          BY FINANCING ACTIVITIES                            23,475                0
                                                           --------         --------

NET INCREASE IN CASH                                              0                0

CASH BALANCE, BEGINNING OF YEAR                                   0                0
                                                           --------         --------

CASH BALANCE, END OF YEAR                                  $      0         $      0
                                                           ========         ========


SUPPLEMENTARY DISCLOSURE OF
   CASH FLOW INFORMATION

   CASH PAID FOR:

       Interest                                            $      0         $      0
                                                           ========         ========


       Taxes                                               $      0         $      0
                                                           ========         ========
</TABLE>

            See Accompanying Notes and Independent Auditors' Report.


                                       5
<PAGE>





                               PACIFIC REALM, INC.
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2000 AND 1999
                                   (RESTATED)



NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

         NATURE OF BUSINESS
         ------------------

         Pacific Realm, Inc. was incorporated in the state of Delaware on August
         26, 1968.  The company has been inactive and dormant since 1990. It has
         no assets or operations. (See notes 6 and 7)

         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.

         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 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 EARNINGS (LOSS) PER SHARE
         -----------------------------

         The company  adopted  Statement  of  Financial  Standards  No. 128 that
         requires the  reporting of both basic and diluted  earnings  (loss) per
         share.  Basic  earnings  (loss) per share is computed  by dividing  net
         income (loss) available to common  shareholders by the weighted average
         number of common shares  outstanding for the period.  Diluted  earnings
         (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 effects on net loss per share are excluded.


            See Accompanying Notes and Independent Auditors' Report.



                                       6
<PAGE>



                               PACIFIC REALM, INC.
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2000 AND 1999
                                   (RESTATED)


NOTE 2   INCOME TAXES

<TABLE>
<CAPTION>
                                                                                 2000             1999
                                                                           ----------------  ---------------

<S>                                                                        <C>               <C>
         (Loss) from operations before income taxes                        $     ( 26,438)   $             0
                                                                           ----------------  ---------------

         The provision for income taxes is estimated as follows:

                  Currently payable                                        $            0    $             0
                  Deferred                                                              0                  0

         A reconciliation of the provision for income taxes
            compared with the amounts at the U.S. federal
            statutory rate was as follows:

                  Tax at U.S. federal statutory income tax rate                         0                  0

         Deferred income tax assets and  liabilities  reflect the
            impact of temporary  differences  between  amounts of
            assets  and  liabilities for financial reporting
            purposes and the basis of such assets and liabilities
            as measured by tax laws.

                  The net deferred tax asset is                            $            0    $             0
                  The net deferred tax liability is                                     0                  0

         Temporary  differences and carryforwards  that give rise
            to deferred tax assets and  liabilities  included the
            following:

                                                                                   DEFERRED TAX (2000)
                                                                                ASSETS         LIABILITIES

                  Net operating loss                                       $       32,433    $             0
                  Valuation allowance                                              32,433                  0
                                                                           --------------    ---------------

                     Total deferred taxes                                  $            0    $             0
                                                                           ==============    ===============

         A reconciliation of the valuation allowance is as follows:

                  Balance at April 1, 1998                                                   $        51,418
                  Lost due to expiration of net operating losses                                      17,250
                                                                                             ---------------

                  Balance at March 31, 1999                                                  $        34,168
</TABLE>


            See Accompanying Notes and Independent Auditors' Report.



                                       7
<PAGE>



                               PACIFIC REALM, INC.
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2000 AND 1999
                                   (RESTATED)



NOTE 2   INCOME TAXES (CONTINUED)

             Lost due to expiration of net operating losses     $       ( 5,700)
             Addition for the year ended March 31, 2000                   3,965
                                                                ---------------

             Balance at March 31, 2000                          $        32,433
                                                                ===============

NOTE 3   NET OPERATING LOSS CARRYFORWARDS

         The company has the following net operating loss carryforwards:

                         EXPIRATION DATE                    AMOUNT

                         March 31, 2002               $          68,357
                         March 31, 2003                          53,325
                         March 31, 2004                          57,627
                         March 31, 2005                           5,230
                         March 31, 2006                           1,050
                         March 31, 2007                           1,050
                         March 31, 2008                           1,050
                         March 31, 2009                           1,050
                         March 31, 2010                           1,050
                         March 31, 2020                          26,438
                                                      -----------------
                                                      $         216,227
                                                      =================

NOTE 4   PREFERRED STOCK

         No rights or preferences have been assigned to the preferred stock.

NOTE 5   GOING CONCERN

         These financial  statements are presented on the basis that the company
         is a going  concern.  Going concern  contemplates  the  realization  of
         assets and the  satisfaction  of  liabilities  in the normal  course of
         business over a reasonable  length of time.  The company had no assets,
         was inactive and had no planned business purpose. See notes 6 and 7 for
         management's plans regarding these matters.

NOTE 6   SUBSEQUENT EVENT - START OF OPERATIONS

         Effective June 1, 2000, the company  received three contracts to market
         and  distribute  Palm  Oil  Biodiesel  fuel and  Nutraceuticals  of the
         vitamin E family.


            See Accompanying Notes and Independent Auditors' Report.


                                       8
<PAGE>

                               PACIFIC REALM, INC.
                          NOTES TO FINANCIAL STATEMENTS
                             MARCH 31, 2000 AND 1999
                                   (RESTATED)



NOTE 7   RESTATED FINANCIAL STATEMENTS

         On January 15,  2003,  the March 31,  2000  financial  statements  were
         restated  to  correct  footnote  Number  7.  On the  originally  issued
         financial statements,  footnote Number 7 stated "In September 2000, the
         Company  received $58,400 of new financing and issued 116,800 shares of
         $0.00008  par value  common  stock."  Upon  subsequent  review,  it was
         determined  that the $58,400 was for services  rendered and not for the
         issuance  of common  stock.  This  restatement  corrects  footnote 7 as
         previously presented.

         The Company  authorized a twenty-to-one  reverse stock split and then a
         one-to-three forward stock split.

         A summary of the common  stock  outstanding  at January  15, 2003 is as
         follows:

             Balance at March 31, 2000                              18,227,117
                                                                 =============
             Balance after twenty-to-one reverse stock split           913,000
                                                                 =============
             Balance after one-to-three forward stock split          2,737,413
                                                                 =============

            See Accompanying Notes and Independent Auditors' Report.


                                       9