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 ("Act")

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

                   For the fiscal year ended December 31, 2005
                                             -----------------

                           Commission File No. 0-28789
                                               -------

                         FALCON RIDGE DEVELOPMENT, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


                 NEVADA                                  84-1461919
      -------------------------------                ----------------
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                 Identification No.)

            5111 Juan Tabo Boulevard N.E.
            Albuquerque, New Mexico                         87111
      ----------------------------------------           ----------
      (Address of principal executive offices)           (Zip code)


                                  505.856.6043
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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



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

           Title of each class        Name of each exchange on which registered
      Common Stock, 0.001 par value                    OTTCB
      -----------------------------                    -----


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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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. |_|

<PAGE>

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act Yes |_| No |X|

Revenues for the most recent fiscal year were $7,457,112

The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of March 1, 2006, based upon the average high and low prices of
such stock on that date was $$5,526,194. Solely for purposes of the foregoing
calculation all of the Registrant's directors and officers are deemed to be
affiliates.

The Registrant has 752,262,441 shares of common stock outstanding as of March 1,
2006.

Transitional Small Business Disclosure Format Yes |_| No |X|


                                       2
<PAGE>


                         FALCON RIDGE DEVELOPMENT, INC.
                        2005 ANNUAL REPORT ON FORM 10-KSB

                                Table of Contents

Item                               Description                            Page
--------------------------------------------------------------------------------

Item 1.   Business.......................................................   5
Item 2.   Description of Property........................................  11
Item 3.   Legal Proceedings..............................................  12
Item 4.   Submission of Matters to a Vote of Security Holders............  12
Item 5.   Market for Common Equity and Related Stockholder Matters.......  12
Item 6.   Management's Discussion and Analysis...........................  13
Item 7.   Financial Statements...........................................  17
Item 8.   Changes In and Disagreements With Accountants on Accounting
             and Financial Disclosure....................................  18
Item 8A.  Controls and Procedures........................................  18
Item 8B.  Other Information..............................................  18
Item 9.   Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the
             Exchange Act................................................  18
Item 10.  Executive Compensation.........................................  20
Item 11.  Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters..................  21
Item 12.  Certain Relationships and Related Transactions.................  22
Item 13.  Exhibits.......................................................  23
Item 14.  Principal Accounting Fees and Services.........................  24


                                       3
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     We make statements in this report that relate to matters that are not
historical facts that we refer to as "forward-looking statements" regarding,
among other things, our business strategy, our prospects and our financial
position. These statements may be identified by the use of forward-looking
terminology such as "believes," "estimates, "expects, "intends," "may," "will,"
"should" or "anticipates" or the negative or other variation of these or similar
words, or by discussion of strategy or risks and uncertainties. Forward-looking
statements in this report include, among other things, statements concerning:

     o    projections of future results of operations or financial condition;
     o    expectations for our properties; and
     o    expectation of the continued availability of capital resources.

     Any forward-looking statement made by us necessarily is based upon a number
of estimates and assumptions that, while considered reasonable by us, is
inherently subject to significant business, economic, regulatory, and
competitive uncertainties and contingencies, many of which are beyond our
control, and are subject to change. Actual results of our operations may vary
materially from any forward-looking statement made by or on our behalf.
Forward-looking statements should not be regarded as representations by us or
any other person that the forward-looking statements will be achieved. Undue
reliance should not be placed on any forward-looking statements.

     All subsequent written and oral forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
the cautionary statements included in this report. We undertake no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
report might not occur.


                                       4
<PAGE>

                                     PART I
                                  Risk Factors


WE HAVE NO HISTORY OF PROFITABILITY WITH OUR DEVELOPMENT OF REAL ESTATE.

     Sales of our real estate development properties may never generate
sufficient revenues to fund our continuing operations. We may never generate
positive cash flow or attain profitability in the future. As of December 31,
2005, our accumulated deficit was $1,471,088. For the Fiscal year ended December
31, 2005, we incurred a loss of $119,297. These losses have primarily resulted
from:

Costs of operating a public company that included increased accounting and legal
fees.

BECAUSE OF OUR LIMITED HISTORY AND THE POTENTIAL FOR COMPETITION, AN INVESTMENT
IN US IS INHERENTLY RISKY.

     Because we are a company with a limited history, our operations are subject
to numerous risks similar to that of a start-up company. We expect the real
estate development business to be highly competitive with many developers having
access to the same market. Substantially all of them have greater financial
resources and longer operating histories than we have and can be expected to
compete within the business in which we engage and intend to engage. There can
be no assurance that we will have the necessary resources to be competitive.

WE MAY NOT BE ABLE TO CONDUCT SUCCESSFUL OPERATIONS IN THE FUTURE.

     The results of our operations will depend, among other things, upon our
ability to develop and market our properties. Furthermore, it is possible that
our proposed operations will not generate income sufficient to meeting operating
expenses or will generate income and capital appreciation, if any, at rates
lower than those anticipated or necessary to sustain ourselves. Our operations
may be affected by many factors, some known by us, some unknown, and some which
are beyond our control. Any of these problems, or a combination thereof, could
have a materially adverse effect on our viability as an entity and might cause
the investment of our shareholders to be impaired or lost.

TO FULLY DEVELOP OUR BUSINESS PLAN, WE WILL NEED ADDITIONAL FINANCING.

     For the foreseeable future, we expect to rely principally upon our cash
flow, although we have raised limited private placement funds during the past
fiscal year and may be required to do so in the future. We cannot guarantee the
success of this plan. We believe that from time to time, we may have to obtain
additional financing in order to conduct our business in a manner consistent
with our proposed operations. There can be no guaranty that additional funds
will be available when, and if, needed. If we are unable to obtain such
financing, or if the terms thereof are too costly, we may be forced to curtail
proposed expansion of operations until such time as alternative financing may be
arranged, which could have a materially adverse impact on our operations and our
shareholders' investment. At the present time, we are negotiating bank financing
for the Spanish Trails Project.

                                       5
<PAGE>


IF WE FAIL TO EXPAND OUR CONTROLS AND INTEGRATE NEW PERSONNEL TO SUPPORT OUR
ANTICIPATED GROWTH, OUR BUSINESS OPERATIONS WILL SUFFER.

     Management is in the process of analyzing and adopting new policies and
procedures to remedy the design and operations of our disclosure controls,
including review and education concerning Form 8-K requirements, and we recently
hired an internal accountant that has prior experience in public accounting
including our industry, regulatory filings and preparing financial statements.
We acknowledge that a change with respect to financial controls has been made to
alert us with respect to funding provided by related parties and that the
changes in disclosure controls, particularly recognizing Form 8-K events, are
ongoing. We expect these changes in internal controls will have a significant
effect on our disclosure controls after the evaluation date and the date of this
report.


WE ANTICIPATE THAT WE WILL BE SUBJECT TO INTENSE COMPETITION.

     We will face intense competition in the development of real estate near
Albuquerque, New Mexico. Many developers have started developing in the nearby
areas with similar developments.

WE LACK CAPITAL.

     We currently lack the capital necessary to increase our operations.
Management is actively negotiating financing through lending institutions to
meet its short term working capital needs and is reviewing long term capital
options.

WE HAVE LIMITED HUMAN RESOURCES NECESSARY TO EXPAND OPERATIONS.

     We have a small staff of skilled developers and supplement our human
resource needs through sub-contracting. We are planning to acquire additional
resources internally thereby reducing the use of sub-contractors and increasing
direct control over our operations.

OUR ULTIMATE SUCCESS WILL BE DEPENDENT UPON MANAGEMENT, INCLUDING FRED M.
MONTANO and KAREN Y. DURAN.

     Our success is dependent upon the decision making of our directors and
executive officers, which includes Fred M. Montano and Karen Y. Duran. These
individuals intend to commit as much time as necessary to our business. The loss
of any or all of these individuals could have a materially adverse impact on our
operations. We have verbal employment agreements with our officers and
directors, but have not obtained key man life insurance on the lives of any of
these individuals.

OUR STOCK PRICE MAY BE VOLATILE, AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES
AT OR ABOVE YOUR INITIAL SALE PRICE.

     There has been, and continues to be, a limited public market for our common
stock. Although our common stock trades on the NASD Bulletin Board, an active
trading market for our shares has not, and may never develop or be sustained. If
you purchase shares of common stock, you may not be able to resell those shares
at or above the initial price you paid. The market price of our common stock may
fluctuate significantly in response to numerous factors, some of which are
beyond our control, including the following:

     o    actual or anticipated fluctuations in our operating results;

     o    changes in financial estimates by securities analysts or our failure
          to perform in line with such estimates;

                                       6
<PAGE>

     o    changes in market valuations of other real estate companies,
          particularly those that sell products similar to as ours;
          announcements by us or our competitors of significant innovations,
          acquisitions, strategic partnerships, joint ventures or capital
          commitments;

     o    introduction of technologies or product enhancements that reduce the
          need for our products; and

     o    departures of key personnel.

     Most of our common stock is currently restricted. As restrictions on resale
end, the market price of our stock could drop significantly if the holders of
restricted shares sell them or are perceived by the market as intending to sell
them. This could cause the market price of our common stock to drop
significantly, even if our business is doing well.

OUR COMMON STOCK HAS A LIMITED PUBLIC TRADING MARKET.

     While our common stock currently trades in the Over-the-Counter Bulletin
Board market, our market is limited and sporadic. We cannot assure that such a
market will improve in the future, even if our securities ever are listed on the
NASDAQ Small Cap Market or the American Stock Exchange. We cannot assure that an
investor will be able to liquidate his investment without considerable delay, if
at all. If a more active market does develop, the price may be highly volatile.
The factors which we have discussed in this document may have a significant
impact on the market price of the common stock. It is also possible that the
relatively low price of our common stock may keep many brokerage firms from
engaging in transactions in our common stock.

THE OVER-THE-COUNTER MARKET FOR STOCK SUCH AS OURS HAS HAD EXTREME PRICE AND
VOLUME FLUCTUATIONS.

     The securities of companies such as ours have historically experienced
extreme price and volume fluctuations during certain periods. These broad market
fluctuations and other factors, such as new product developments and trends in
the our industry and in the investment markets generally, as well as economic
conditions and annual variations in our operational results, may have a negative
effect on the market price of our common stock.

WE ARE SUBJECT TO RISKS ASSOCIATED WITH INVESTMENTS IN REAL ESTATE

     The value of, and our income from, our properties may decline due to
developments that adversely affect real estate generally and those that are
specific to our properties. General factors that may adversely affect our real
estate portfolios include:

     o    increases in interest rates;

     o    a general tightening of the availability of credit;

     o    a decline in the economic conditions in one or more of our primary
          markets;

     o    an increase in competition for customers or a decrease in demand by
          customers;

     o    an increase in supply of our property types in our primary markets;

     o    declines in consumer spending during an economic recession that
          adversely affect our revenue from our retail centers; and

                                       7
<PAGE>

     o    the adoption on the national, state or local level of more restrictive
          laws and governmental regulations, including more restrictive zoning,
          land use or environmental regulations and increased real estate taxes.

     In addition, there are factors that may adversely affect the value of, and
our income from, specific properties, including:

     o    adverse changes in the perceptions of prospective purchasers of the
          attractiveness of the property;

     o    opposition from local community or political groups with respect to
          development or construction at a particular site;

     o    our inability to provide adequate management and maintenance or to
          obtain adequate insurance;

     o    our inability to collect receivables;

     o    an increase in operating costs;

     o    introduction of a competitor's property in or in close proximity to
          one of our current markets; and

     o    earthquakes, floods or underinsured or uninsured natural disasters.

     The occurrence of one or more of the above risks could result in
significant delays or unexpected expenses. If any of these occur, we may not
achieve our projected returns on properties under development and we could lose
some or all of our investments in those properties.

WE ARE SUBJECT TO REAL ESTATE DEVELOPMENT RISKS

     Our development projects are subject to significant risks relating to our
ability to complete our projects on time and on budget. Factors that may result
in a development project exceeding budget or being prevented from completion
include:

     o    an inability to secure sufficient financing on favorable terms,
          including an inability to refinance construction loans;

     o    construction delays or cost overruns, either of which may increase
          project development costs;

     o    an increase in commodity costs;

     o    an inability to obtain zoning, occupancy and other required
          governmental permits and authorizations;


     If any of these occur, we may not achieve our projected returns on
properties under development and we could lose some or all of our investments in
those properties.

WE ARE VULNERABLE TO CONCENTRATION RISKS BECAUSE OUR OPERATIONS ARE CURRENTLY
ALMOST EXCLUSIVE TO THE ALBUQUERQUE, NEW MEXICO AREA, MARKET.

     Our real estate activities are almost entirely located in the Albuquerque,
New Mexico area. Because of our geographic concentration and limited number of
projects, our operations are more vulnerable to local economic downturns and
adverse project-specific risks than those of larger, more diversified companies.

                                       8
<PAGE>

     The performance of the Albuquerque economy greatly affects our sales and
consequently the underlying values of our properties. The Albuquerque economy is
heavily influenced by conditions in the defense industry and government
employment. Rising interest rates may adversely affect our ability to sell lots
and homes.

OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION ARE GREATLY AFFECTED BY THE
PERFORMANCE OF THE REAL ESTATE INDUSTRY.

     Our real estate activities are subject to numerous factors beyond our
control, including local real estate market conditions (both where our
properties are located and in areas where our potential customers reside),
substantial existing and potential competition, general national, regional and
local economic conditions, fluctuations in interest rates and mortgage
availability and changes in demographic conditions. Real estate markets have
historically been subject to strong periodic cycles driven by numerous factors
beyond the control of market participants.

     Real estate investments often cannot easily be converted into cash and
market values may be adversely affected by these economic circumstances, market
fundamentals, competition and demographic conditions. Because of the effect
these factors have on real estate values, it is difficult to predict with
certainty the level of future sales or sales prices that will be realized for
individual assets.

     Our real estate operations are also dependent upon the availability and
cost of mortgage financing for potential customers, to the extent they finance
their purchases, and for buyers of the potential customers' existing residences.

OUR OPERATIONS ARE SUBJECT TO AN INTENSIVE REGULATORY APPROVAL PROCESS.

     Before we can develop a property, we must obtain a variety of approvals
from local and state governments with respect to such matters as zoning,
density, parking, subdivision, site planning and environmental issues. Certain
of these approvals are discretionary by nature. Because certain government
agencies and special interest groups are involved there is a high degree of
uncertainty in obtaining these approvals.

THE REAL ESTATE BUSINESS IS VERY COMPETITIVE AND MANY OF OUR COMPETITORS ARE
LARGER AND FINANCIALLY STRONGER THAN WE ARE.

     The real estate business is highly competitive. We compete with a large
number of companies and individuals, and many of them have significantly greater
financial and other resources than we have. Our competitors include local
developers who are committed primarily to particular markets and also national
developers who acquire properties throughout the U.S.

OUR OPERATIONS ARE SUBJECT TO NATURAL RISKS.

     Our performance may be adversely affected by weather conditions that delay
development or damage property.

THE U.S. MILITARY INTERVENTION IN IRAQ, THE TERRORIST ATTACKS IN THE U.S. ON
SEPTEMBER 11, 2001 AND THE POTENTIAL FOR ADDITIONAL FUTURE TERRORIST ACTS HAVE
CREATED ECONOMIC, POLITICAL AND SOCIAL UNCERTAINTIES THAT COULD MATERIALLY AND
ADVERSELY AFFECT OUR BUSINESS.

                                       9
<PAGE>

     It is possible that further acts of terrorism may be directed against the
U.S. domestically or abroad, and such acts of terrorism could be directed
against properties and personnel of companies such as ours. Moreover, while our
property and business interruption insurance covers damages to insured property
directly caused by terrorism, this insurance does not cover damages and losses
caused by war. Terrorism and war developments may materially and adversely
affect our business and profitability and the prices of our common stock in ways
that we cannot predict at this time.


Item 1. Description of Business

Introduction

     Falcon Ridge Development, Inc. (the "Company") is a Nevada corporation. Our
principal business address is 5111 Juan Tabo Boulevard N.E., Albuquerque, New
Mexico 87111. We changed the domestication of the company from Colorado to
Nevada on or about July 6, 2005 and changed our name from PocketSpec
Technologies, Inc. to Falcon Ridge Development, Inc. We have two subsidiaries,
Sierra Norte, LLC ("Sierra Norte") and Spanish Trails, LLC ("Spanish Trails").
We operate in the real estate industry and we primarily acquire tracts of raw
land and develop them into residential lots for sale to homebuilders. We plan to
expand our operations in 2006 into building entry level homes.

     On May 20, 2005, we completed a reverse acquisition transaction. We
acquired Sierra Norte, a New Mexico limited liability company, which thereby
became our wholly-owned subsidiary. Sierra Norte is a land development company
in the Albuquerque, New Mexico area. Formerly we were a technology company which
was in the business of developing and marketing color comparison devices. We
acquired Spanish Trails on July 6, 2005 as discussed below. Previously, we were
a technology company in the business of developing and marking color comparison
devices. Originally, we were incorporated as Monument Galleries, Inc., a
Colorado corporation, incorporated on May 15, 1998.

     As a result of the Sierra Norte acquisition, the former security holders of
Sierra Norte acquired a majority of our outstanding shares of common stock. For
accounting purposes, Sierra Norte has been deemed to be the acquirer in the
acquisition and, consequently, the assets, liabilities and historical operations
that are reflected in our financial statements are those of Sierra Norte, which
are recorded at the historical cost basis of Sierra Norte. The reverse
acquisition was consummated under Colorado law pursuant to an Agreement and Plan
of Reorganization dated May 20, 2005.

     On July 6, 2005, we entered into an exchange of securities whereby we
acquired 100% of the ownership of Spanish Trails, in exchange for the issuance
of a total of 614,882,069 of our common shares. As a result, of the Spanish
Trails acquisition, the former security holders of Spanish Trails acquired a
majority of our outstanding shares of common stock, but there was not a change
of control of us, as the owners of a majority of Spanish Trails were the
executive officers of the Company. After the exchange, 752,147,441 shares of
common stock were issued and outstanding.

     Also, on July 6, 2005 we reincorporated our company to Nevada from Colorado
and changed our name to Falcon Ridge Development Inc., after shareholder
approval. In connection with the name change, we changed to a new trading
symbol, FLRD.BB.

     We plan to commence construction on 84 lots already platted in mid-spring.
The remaining land in our Spanish Trails project is progressing through local
real estate governmental clearance toward final approval of our platting plan.
We anticipate the process should be completed by mid-2006. When our platting
plan receives final approval, we will be able to begin construction of the
second phase of development of approximately 357 lots for single family homes.

                                       10
<PAGE>

Considerable up front costs in any real estate platting project must first be
incurred and paid for, thus in the early stages of our real estate projects
significant amounts of capital can be required until platting occurs, and lots
are improved and sold. Predictably, greater revenues will be achieved as soon as
a portion of the lots are improved and sold. As disclosed in our Form 8-K filed
on October 25, 2005, we have an executed contract with DR Horton under which it
will purchase approximately 150 designated completed lots in Phase II of our
Spanish Trails project. When the lot development plan has been completed and
accepted by Valencia County, New Mexico and the City of Belen, construction of
the lots completed, the sale of these lots will be currently funded and closed.
It is also our intention to initiate a home building division, which will
construct entry level homes with the remaining developed Spanish Trails project
lots. We expect to have initial models open in the spring of 2006. The sale of
homes and, consequently, the pace of construction, will be determined by the
rate of market absorption. Simultaneously, we will be processing other parcels
that are currently under purchase contracts in preparation for seeking
entitlements and final plat approval from Valencia County and City of Belen
authorities.

     Since our master plan for the Spanish Trails project has many facets and
the development includes residential lots and recreational areas, our time
frames and the order in which we begin various projects is highly dependent upon
the market for the area and the need for specific areas to be completed and
other uncontrollable items such as financing.

     We have not been involved in any bankruptcy, receivership, or similar
proceeding.

(b) Business of the Issuer

     We are in the real estate industry and acquire tracts of raw land and
develop them into residential lots for sale to homebuilders. We plan to expand
our operations in 2006 into homebuilding on our Spanish Trails lots.


Item 2.  Description of Property

(a)  The principal office of our company is located at 5111 Juan Tabo Boulevard
N.E., Albuquerque, New Mexico 87111. We do not own the building that our
principal offices are located; however we do sub-lease the building.

     Affiliated Party Lease -

     Falcon Ridge Development (a related party) leases our office space from
Tucana LLC (a related party) for $5000 per month through May 14, 2006 with
annual escalations of $250 per month through May 14, 2008.

(b)  Investment Policies

     We acquire property for the purpose of developing it. We do not invest in
real estate at this time and have no plans to do so.

     We do not invest in real estate mortgages.

     We do not invest in securities of other companies. We do have two wholly
owned subsidiaries, which are Sierra Norte and Spanish Trails. However, two of
our principals own two companies that are involved in real estate development.

                                       11
<PAGE>

(c)  Description of Real Estate and Operations

     We currently own real estate in Belen, New Mexico comprising 200 acres. Our
operations consist of developing lots for resale to third party builders. In the
current year we plan to expand our operations to include offering and installing
system built homes.


Item 3. Legal Proceedings

     There are no legal proceedings, to which we are a party, which could have a
material adverse effect on our business, financial condition or operating
results.


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

     We held our annual Shareholders' Meeting on July 6, 2005. A total of
100,200,000 shares out of 137,265,372 shares were present in person or by proxy.
Our shareholders voted to amend our Articles of Incorporation to change our name
to Falcon Ridge Development, Inc., to change our domicile to the State of
Nevada, to reincorporate through a merger with Falcon Ridge Development, Inc., a
Nevada company, and to ratify and approve the appointment of Cordovano and
Honeck, LLP as our independent registered public accounting firm for the fiscal
year 2005. A total of 100,200,000 shares voted in favor of the measures.


                                     Part II

Item 5. Market for Common Equity and Related Stockholder Matters

(a)  Principal Market or Markets.

     Since May 2001, our securities have been listed for trading in the
Over-the-Counter market on the NASD's "Electronic Bulletin Board." We currently
trade under the symbol FLRD.BB. The following table sets forth the high and low
bid quotation for our common stock for each fiscal quarterly period of 2005.
There is no market for our preferred stock.

                                           Bid Price
                                       ---------------

                                       High       Low
                                       ----       ---
             2005
             First Quarter            $0.030      .009
             Second Quarter   0.090              0.015
             Third Quarter             0.030     0.009
             Fourth Quarter   0.025              0.005

(b)  Approximate Number of Holders of Common Stock and Preferred Stock

     As of March 1, 2006, we had a total of 752,262,441 shares of common stock
outstanding. The number of holders of record of our common stock at that date
was approximately 170.

     As of March 1, 2006, we had a total of 160,000 shares of preferred stock
outstanding. The number of holders of record of our common stock at that date
was four (4).

                                       12
<PAGE>

(c)  Dividends

     Holders of common stock and preferred stock are entitled to receive such
dividends as may be declared by our Board of Directors. We paid no dividends on
the common stock during the periods reported herein nor do we anticipate paying
dividends in the foreseeable future.

(d)  Repurchases

     We did not repurchase any of the common stock or preferred stock during the
fourth quarter.

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

     This section discusses the results of our operations. You should read the
following discussions and analyses in conjunction with the audited consolidated
financial statements that are included in this Form 10-KSB. Certain statements
contained in this Management's Discussion and Analysis of Financial Condition
and Results of Operations constitute "forward-looking statements," which
statements involve risks and uncertainties described elsewhere in this report.
The historical information should not necessarily be taken as a reliable
indication of our future performance.

(a)  Management's Discussion and Analysis of Financial Condition and Results of
     Operations

Forward-Looking Statements
--------------------------

     This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates, and
projections about our industry, management beliefs, and certain assumptions made
by our management. Words such as "anticipates," expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words, and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties, and assumptions that are difficult to predict; therefore,
actual results may differ materially from those expressed or forecasted in any
such forward-looking statements. Unless required by law, we undertake no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise. However, readers should
carefully review the risk factors set forth in other reports and documents that
we file from time to time with the Securities and Exchange Commission,
particularly our Annual Reports on Form 10-KSB and any Current Reports on Form
8-K.

Overview and History

     We are a Nevada corporation with two subsidiaries, Sierra Norte, LLC
("Sierra Norte") and Spanish Trails, LLC ("Spanish Trails"). We are in the real
estate industry and acquire tracts of raw land and develop them into residential
lots for sale to homebuilders. We plan to expand our operations in 2006 into
homebuilding on our Spanish Trails lots. Our executive offices are located in
the Albuquerque, New Mexico area.

     On May 20, 2005, we completed a reverse acquisition transaction. We
acquired Sierra Norte, a New Mexico limited liability company, which thereby
became our wholly-owned subsidiary. Sierra Norte is a land development company
in the Albuquerque, New Mexico area. Formerly we were a technology company which
was in the business of developing and marketing color comparison devices. We
acquired Spanish Trails on July 6, 2005 as discussed below.

                                       13
<PAGE>

     As a result of the Sierra Norte acquisition, the former security holders of
Sierra Norte acquired a majority of our outstanding shares of common stock. For
accounting purposes, Sierra Norte has been deemed to be the acquirer in the
acquisition and, consequently, the assets, liabilities and historical operations
that are reflected in our financial statements are those of Sierra Norte, which
are recorded at the historical cost basis of Sierra Norte. The reverse
acquisition was consummated under Colorado law pursuant to an Agreement and Plan
of Reorganization dated May 20, 2005.

     On July 6, 2005, we entered into an exchange of securities whereby we
acquired 100% of the ownership of Spanish Trails, in exchange for the issuance
of a total of 614,882,069 of our common shares. As a result, of the Spanish
Trails acquisition, the former security holders of Spanish Trails acquired a
majority of our outstanding shares of common stock, but there was not a change
of control of us, as the owners of a majority of Spanish Trails were the
executive officers of the Company. After the exchange, 752,147,441 shares of
common stock was issued and outstanding.

     Also, on July 6, 2005 we reincorporated our company to Nevada from Colorado
and changed our name to Falcon Ridge Development Inc., after shareholder
approval. In connection with the name change, we changed to a new trading
symbol, FLRD.BB.

     Our Spanish Trails project is progressing through local real estate
governmental clearance toward final approval of our platting plan. We anticipate
the process should be completed by mid-2006. When our platting plan receives
final approval, we will be able to begin construction of the first phase of
development of approximately 500 lots for single family homes. Considerable up
front costs in any real estate platting project must first be incurred and paid
for, thus in the early stages of our real estate projects significant amounts of
capital can be required until platting occurs, and lots are improved and sold.
Predictably, greater revenues will be achieved as soon as a portion of the lots
are improved and sold. As disclosed in our Form 8-K filed on October 25, 2005,
we have an executed contract with DR Horton under which it will purchase
approximately 150 designated completed lots in Phase II of our Spanish Trails
project. When the lot development has been completed and accepted by the
Valencia County, New Mexico, engineers and construction of the lots completed,
the sale of those lots will be funded and closed. It is also our intention to
initiate a home building division with remaining developed Spanish Trails
project lots. We expect to have initial models open in the Spring of 2006. The
sale of homes and, consequently, the pace of construction, will be determined by
the rate of market absorption. Simultaneously, we will be processing other
parcels that are currently under purchase contracts in preparation for seeking
entitlements and final plat approval from Valencia County authorities.

     Since our master plan for the Spanish Trails project has many facets and
the development includes not only residential lots but and recreational areas,
our time frames and the order in which we begin various projects is highly
dependent upon the market for the area and the need for specific areas to be
completed and other uncontrollable items such as financing.


Results of Operations
---------------------

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004
--------------------------------------------------------------------------------

     We achieved revenues for the year ended December 31, 2005 of $7,457,113,
compared to revenues of $2,720,867 for the years ended December 31, 2004 or a
174.1% increase. This increase was primarily attributable to significantly
increased lot closings by Sierra Norte. In 2004, we were finishing phase one on
the Sierra Norte project and were about midway through phase two and only
receiving revenue from phase one on the Sierra Norte project lot closings. In
2005, we had sold out phase one and began receiving revenue from phase two lot
sales. Lot closings are tied to construction and completion or partial
completion of the lots for the community and closings take place only after
completion.

                                       14
<PAGE>

     Our costs of sales for the year ended December 31, 2005 were $6,979,677
compared to costs of sales of $2,793,739 for the like year in 2004, or a 150.3%
increase. This increase was due to significantly greater lot sales during the
2005 period compared to the 2004 period. In addition, gross profit increased due
to lower lot and infrastructure costs

     Our selling, general and administrative expenses for the year ended
December 31, 2005 increased significantly to $414,433, compared to selling,
general and administrative expenses of $44,263 for the year ended December 31,
2004. The major components of these expenses are salaries, payroll taxes and
professional fees. We have significantly expanded our operations as a public
company in 2005. This is reflected in the increased overhead. We expect that our
costs of being a public company will lead to increased general and
administrative expenses. However, we do not expect to incur merger costs of the
magnitude of the Sierra Norte acquisition $180,000 in the future.

     Due primarily to increased lot sales volume, partially offset by increased
general and administrative expenses as a result of being a public company, we
incurred a loss of $119,297, or $0.00 per share, for the year ended December 31,
2005 compared to a loss of $117,135, or $0.00 per share, for the year ended
December 31, 2004.

     Our principal source of revenue at this time is the sales of lots in our
Sierra Norte project. In addition, we control approximately 2,300 acres in the
Spanish Trails project, which are being developed as discussed above. In this
development, we plan to be a homebuilder as well as a land developer. We may in
the future acquire other real estate development projects which are owned
primarily by our executive officers but no such arrangements or understandings
have been reached at this time. We also search on an ongoing basis for
additional real estate development projects.

Liquidity and Capital Resources
-------------------------------

     At December 31, 2005 our cash position was $468,069.

     Our net cash used in operating activities was $1,040,093 for the year ended
December 31, 2005, compared to net cash provided by operating activities of
$713,245 for the year ended December 31, 2004.

     Our net cash used by investing activities was $34,011 for the year ended
December 31, 2005, compared to $0 of net cash used by investing activities for
the year ended December 31, 2004.

     Our net cash provided by financing activities was $1,383,339 for the year
ended December 31, 2005, compared to $582,000 of net cash used by financing
activities for the year ended December 31, 2004.

     From time to time we need working capital when we do not have funds to pay
for lot development or general and administrative expenses. During the year
ended December 31, 2005 our chief financial officer and Falcon Ridge Development
LLC (a related party) have loaned us funds ($1,088,339) for us to meet our
obligations and to continue working on platting and preparing lots for home
building. We cannot assure that such funding will be available in the future. In
August 2005 we raised $400,000 from the sale of convertible preferred stock,
which has helped us with our working capital needs and allowed us to continue to
use capital in seeking to develop our Spanish Trails project.

                                       15
<PAGE>

     The timing of the completion of the platting of our Spanish Trails project
is not certain, so we cannot assure that our cash flow from lot sales,
particularly relating to the DR Horton proposed purchase and other lots closings
relating to Sierra Norte will occur in the near future. Thus, we may be faced
with a working capital shortage. In such event we may be required to seek
financing which may not be available or, if available, it could be on terms
which are cost prohibitive to us.

     In addition, we expect to begin building homes on our Spanish Trails
project in early 2006. This initiative will require working capital which we
cannot assure will be available. We have begun negotiating with banks to seek
debt financing for this endeavor.

     Most of our costs are incurred in the initial phases of our real estate
projects. We are in the latter stages of the Sierra Norte project and expect it
to be profitable. In the December 31, 2005 quarter we incurred significant
development costs on our Spanish Trails project. Our profitability depends upon
our ability to develop, manage and sell real estate projects on a timely basis
and to control our costs. We expect that we will develop a more consistent
pipeline of activity as we mature and, thereby, a more consistent source of
revenues and profit. If we succeed in this effort and generate sufficient
revenues, we will expect to be profitable. However, we cannot assure that we
will be profitable.

     We do not intend to pay dividends for the foreseeable future. We do not
expect our revenues to be impacted by seasonal demands.

Recently Issued Accounting Pronouncements

     We do not expect the adoption of any recently issued accounting
pronouncements to have a significant impact on our net results of operations,
financial position or cash flows.

Critical Accounting Policies

     The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires us to make a number of estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements. Such estimates and
assumptions affect the reported amounts of revenues and expenses during the
reporting period. On an ongoing basis, we evaluate estimates and assumptions
based upon historical experience and various other factors and circumstances. We
believe our estimates and assumptions are reasonable in the circumstances;
however, actual results may differ from these estimates under different future
conditions.

     We believe that the estimates and assumptions that are most important to
the portrayal of our financial condition and results of operations, in that they
require our most difficult, subjective or complex judgments, form the basis for
the accounting policies deemed to be most critical to us. These critical
accounting policies relate to long lived assets, contractual adjustments to
revenue, and contingencies and litigation. We believe estimates and assumptions
related to these critical accounting policies are appropriate under the
circumstances; however, should future events or occurrences result in
unanticipated consequences, there could impact on our future financial
conditions or results of operations.

                                       16
<PAGE>


(b)  Off-Balance Sheet Arrangements

We have no Off-Balance Arrangements


Item 7. Financial Statements

     Reference is made to the financial statements, the notes, and the reports
of our registered public accounting firm commencing on page F-1 of this report,
which financial statements, notes, and reports are incorporated herein by
reference.


                                       17
<PAGE>


                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)

                              Financial Statements

                                December 31, 2005

         (with Report of Independent Registered Public Accounting Firm)


<PAGE>

                         FALCON RIDGE DEVELOPMENT, INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                          Index to Financial Statements

                                                                      Page
                                                                      ----

   Report of Independent Registered Public Accounting Firm             F-2

   Consolidated Balance Sheet at December 31, 2005                     F-3

   Consolidated Statements of Operations, for the years
        ended December 31, 2005 and 2004                               F-4

   Consolidated Statements of Changes in Shareholders' Deficit
        for the for the years ended December 31, 2005 and 2004         F-5

   Consolidated Statements of Cash Flows, for the years
        ended December 31, 2005 and 2004                               F-6

   Notes to Consolidated Financial Statements                          F-7


<PAGE>

             Report of Independent Registered Public Accounting Firm


To the Board of Directors
Falcon Ridge Development Inc.:


We have audited the accompanying consolidated balance sheet of Falcon Ridge
Development Inc. (formerly PocketSpec Technologies, Inc.) and subsidiaries as of
December 31, 2005, and the related consolidated statements of operations,
changes in shareholders' deficit, and cash flows for the years ended December
31, 2005 and 2004. These consolidated 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about 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 consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Falcon Ridge
Development Inc. as of December 31, 2005, and the results of their operations
and their cash flows for the years ended December 31, 2005 and 2004 in
conformity with generally accepted accounting principles in the United States.



/s/ Cordovano and Honeck LLP
----------------------------
Cordovano and Honeck LLP
Englewood, Colorado
April 17, 2006

                                       F-2
<PAGE>


                         FALCON RIDGE DEVELOPMENT, INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                           Consolidated Balance Sheet


                                    Assets
      Cash                                                        $   468,069
      Real estate held for resale                                   1,174,829
      Prepaid expenses                                                 13,540
      Property and equipment, net of accumulated depreciation          33,213
      Other assets                                                        220
                                                                  -----------
                    Total assets                                  $ 1,689,871
                                                                  ===========

                     Liabilities and Shareholders' Deficit

Liabilities
      Accounts payable                                            $   293,200
      Accrued expenses                                                 81,299
      Note payable, current portion                                    18,737
      Indebtedness to related parties                               1,091,338
      Note payable, long-term portion                                 370,311
      Retainage payable                                               151,627
                                                                  -----------
                                                                    2,006,512
                                                                  -----------

 Shareholders' deficit
      Convertible preferred stock, Class A no par value,
         400,000 shares authorized, 160,000 shares issued
         and outstanding                                              400,000

      Common stock, $0.001 par value, 900,000,000 shares
         authorized, 752,262,441 shares issued and outstanding        752,262
      Additional paid in capital                                        2,185
      Accumulated deficit                                          (1,471,088)
                                                                  -----------
                    Total shareholders' deficit                      (316,641)
                                                                  -----------

                    Total liabilities and shareholders' deficit   $ 1,689,871
                                                                  ===========

           See accompanying notes to consolidated financial statements

                                       F-3
<PAGE>

                         FALCON RIDGE DEVELOPMENT, INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                      Consolidated Statements of Operations


                                                     2005              2004
                                                 -------------    -------------
Lot sales:
    Net sales                                    $   7,457,113    $   2,720,867
    Costs of sales                                  (6,979,677)      (2,793,739)
                                                 -------------    -------------

               Gross profit (loss)                     477,436          (72,872)

Merger costs                                           180,000             --
Stock-based compensation                                 2,300             --
Selling, general and administrative expenses           414,433           44,263
                                                 -------------    -------------

        Loss before provision for income taxes        (119,297)        (117,135)
Income taxes                                              --               --
                                                 -------------    -------------
          Net loss                                    (119,297)        (117,135)

Pro forma adjustments:
    Members' distributions                             (30,000)        (631,634)

                                                 -------------    -------------
               Pro forma Loss                    $    (149,297)   $    (748,769)
                                                 =============    =============


Net loss per share                               $        --      $        --
                                                 =============    =============


Weighted average number of shares outstanding      424,662,036      100,000,000
                                                 =============    =============

           See accompanying notes to consolidated financial statements

                                       F-4
<PAGE>

<TABLE>
                         FALCON RIDGE DEVELOPMENT, INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
           Consolidated Statement of Changes in Shareholders' Deficit
<CAPTION>


                                  Preferred Stock            Common Stock             Additional
                               -----------------------  -------------------------      paid-in       Accumulated
                               Shares       Amount        Shares      Par value        capital         deficit          Total
                               -------   ------------   -----------   ------------   ------------    ------------    ------------
<S>                            <C>       <C>            <C>           <C>            <C>             <C>             <C>
Balance at
   January 1, 2004                --     $       --     100,000,000 * $    100,000   $    210,644    $   (133,520)   $    177,124
Cash dividend distribution        --             --            --             --             --          (582,000)       (582,000)
Deemed dividend distribution      --             --            --             --             --           (49,633)        (49,633)
Net loss                          --             --            --             --             --          (117,135)       (117,135)
                               -------   ------------   -----------   ------------   ------------    ------------    ------------
Balance at
   December 31, 2004              --             --     100,000,000 *     100,000        210,644        (882,288)       (571,644)
                               -------   ------------   -----------   ------------   ------------    ------------    ------------

Dividend distribution             --             --            --             --             --           (30,000)        (30,000)
Merger with PocketSpec
   Technologies, Inc              --             --      37,265,372         37,265           --           (37,265)           --
Stock issuance for
   Spanish Trails, LLC            --             --     614,882,069        614,882       (210,644)       (402,238)          2,000
Stock issuance for cash        160,000        400,000          --             --             --              --           400,000
Stock issuance for services       --             --         115,000            115          2,185            --             2,300
Net loss                          --             --            --             --             --          (119,297)       (119,297)
                               -------   ------------   -----------   ------------   ------------    ------------    ------------

Balance at
   December 31, 2005           160,000   $    400,000   752,262,441   $    752,262   $      2,185    $ (1,471,088)   $   (316,641)
                               =======   ============   ===========   ============   ============    ============    ============
</TABLE>

* Restated (See footnote 1)

           See accompanying notes to consolidated financial statements

                                       F-5
<PAGE>


                         FALCON RIDGE DEVELOPMENT, INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                      Consolidated Statements of Cash Flows


                                                           Year Ended
                                                           December 31,
                                                      ------------------------
                                                         2005           2004
                                                      -----------   -----------
Cash flows from operating activities:
    Net loss                                          $  (119,297)  $  (117,135)
    Adjustments to reconcile net loss to net cash
       (used in) provided by operating activities:
          Depreciation                                        798          --
          Stock-based compensation                          2,300          --
    Changes in operating assets and liabilities,
       excluding effects of business combinations:
          Land development costs                        3,509,704      (825,647)
          Prepaid expenses                                (13,540)         --
          Other current assets                             45,241       175,043
          Acquisition and development notes            (4,051,172)      714,009
          Accounts payable                                (98,413)      717,341
          Deferred revenue                               (315,714)       49,634
                                                      -----------   -----------
                      Net cash (used in) provided by
                         operating activities          (1,040,093)      713,245
                                                      -----------   -----------

Cash flows from investing activities:
    Acquisition of fixed assets                           (34,011)         --
                                                      -----------   -----------
                      Net cash used in
                         investing activities             (34,011)         --
                                                      -----------   -----------

Cash flows from financing activities:
    Proceeds from related party indebtedness            1,088,339       170,000
    Proceeds from the sale of preferred stock             400,000          --
    Repayments of related party indebtedness              (75,000)     (170,000)
    Dividends paid                                        (30,000)     (582,000)
                                                      -----------   -----------
                      Net cash provided by (used in)
                         financing activities           1,383,339      (582,000)
                                                      -----------   -----------

                      Net change in cash and
                         cash equivalents                 309,235       131,245
    Cash, beginning of year                               158,834        27,589
                                                      -----------   -----------

    Cash, end of year                                 $   468,069   $   158,834
                                                      ===========   ===========

Supplemental disclosure of cash flow information:
    Cash paid during the year for:
       Income taxes                                   $      --     $      --
                                                      ===========   ===========
       Interest                                       $    19,452   $   115,408
                                                      ===========   ===========

           See accompanying notes to consolidated financial statements

                                       F-6
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements

(1)  Summary of Significant Accounting Policies

Organization, Shell Merger and Principles of Consolidation

Organization
------------
Falcon Ridge Development, Inc. ("FRDI"or the "Company") is engaged in the real
estate industry and acquires tracts of raw land and develops them into
residential lots for sale to homebuilders. In addition, FRDI plans to expand its
operations into the homebuilding business. These operations are predominantly
located in the City of Rio Rancho, New Mexico and Belen, New Mexico. Since
inception, the Company has developed one property known as Sierra Norte.

Shell Merger
------------
On May 20, 2005, Sierra Norte LLC ("SNLLC") exchanged certificates representing
100 percent of its equity securities for 100,000,000 shares of the common stock
of Pocketspec Technologies, Inc. (PTI), a public shell company. The acquisition
has been treated as a recapitalization of SNLLC, a New Mexico limited liability
company, with PTI the surviving legal entity. Since PTI had, prior to the
merger, minimal assets, (consisting of cash) and no operations, the
recapitalization has been accounted for as the sale of 37,265,372 shares of
common stock for the net assets of PTI. Costs of the transaction, totalling
$180,000, have been charged to the period. After the closing of the acquisition,
there were 137,265,372 shares of common stock of the Company issued and
outstanding. PTI was incorporated under the laws of Colorado in 1998. In June
2005, PTI changed its domicile to Nevada and its name to Falcon Ridge
Development Inc.

SNLLC was deemed to be the acquirer (for accounting purposes) in the reverse
acquisition and, consequently, the assets and liabilities and historical
operations that are reflected in the accompanying financial statements are those
of SNLLC and are recorded at the historical cost basis of SNLLC.

In connection with the merger, PTI sold to a group of its shareholders, PTI's
color comparison devices business in exchange for an indemnification from
liabilities by these investors. These shareholders assumed the color comparison
devices business including its liabilities. The sale was consummated between
related parties. Accordingly, the sale was booked as a capital transaction and
no gain or loss on the transaction was recorded.

Since incorporation in 1998, PTI has conducted three businesses. Originally PTI
was in the retail arts and crafts industry. PTI then transitioned into the real
estate development business, where it acquired and developed real estate
properties for its own account, primarily in Colorado. Finally, PTI became a
technology company. In 1999, PTI filed a registration statement on Form 10-SB
with the U.S. Securities and Exchange Commission to become a reporting company
under Section 12G of the Securities and Exchange Act of 1934.

Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of Falcon Ridge
Development, Inc. and its wholly owned subsidiaries SNLLC and Spanish Trails
LLC (STLLC) (together, the "Company"). Intercompany transactions and balances
have been eliminated in the consolidation.

Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of 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.

                                       F-7
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements

Reclassifications

Certain prior-year amounts have been reclassified for comparative purposes to
conform to the current-year presentation.

STLLC decided, in the fourth quarter of 2005, that the $471,908 Falcon Ridge
Development, LLC ("FRLLC") recorded as a contribution to capital during the
third quarter of 2005 in the acquisition of the Cordova Property should be
repaid to FRLLC. Therefore, the Company reclassified the $471,908 from
additional paid in capital to indebtedness to related parties in the
accompanying consolidated financial statements.

Revenue Recognition on Sales of Real Estate
-------------------------------------------
The profit on sales of real estate is accounted for in accordance with the
provisions of SFAS No. 66, "Accounting for Sales of Real Estate." The Company
recognizes revenue from the sale of real estate at the time the sale is closed
and the title is transferred from the Company to the buyer.

Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid securities with original maturities of
three months or less when acquired to be cash equivalents. The Company had no
cash equivalents at December 31, 2005.

Real Estate Held for Resale
---------------------------
The carrying value of land and development includes the initial acquisition
costs of land, improvements thereto, and other costs incidental to the
acquisition or development of land. These costs are allocated to properties on a
relative sales value basis and are charged to costs of sales as specific
properties are sold. Due to the nature of the business, land and development
costs have been classified as an operating activity on the consolidated
statement of cash flows.

Impact credits received from the negotiated settlement with the City of Rio
Rancho are offset against land development costs.

Interest and Real Estate Taxes
------------------------------
The Company capitalizes interest costs to real estate held for resale during
development and construction. Capitalized interest is charged to cost of sales
as the related lots are delivered to the buyer. Interest costs totalling $84,835
and $214,943 were capitalized to real estate held for resale during the years
ended December 31, 2005 and 2004, respectively. In addition, real estate taxes
of $12,922 and $-0- were capitalized during the years ended December 31, 2005
and 2004, respectively.

Fixed Assets and Depreciation
-----------------------------
Fixed assets are recorded at cost. Expenditures that extend the useful lives of
assets are capitalized. Repairs, maintenance and renewals that do not extend the
useful lives of the assets are expensed as incurred. Depreciation is provided on
the straight-line method over the following estimated useful lives: software, 5
years; equipment, 5 years.

Earnings (loss) per Common Share
--------------------------------
Basic net income per share is computed by dividing the net income available to
common shareholders (the numerator) for the period by the weighted average
number of common shares outstanding (the denominator) during the period. The
computation of diluted earnings is similar to basic earnings per share, except
that the denominator is increased to include the number of additional common
shares that would have been outstanding if potentially dilutive common shares
had been issued.

                                       F-8
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements


At December 31, 2005, there was no variance between basic and diluted loss per
share as the convertible preferred stock outstanding, if converted, would be
antidilutive.

Impairment or Disposal of Long-Lived Assets
-------------------------------------------
The Company evaluates long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable in accordance with SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." An asset is considered impaired if its
carrying amount exceeds the future net cash flow the asset is expected to
generate. If an asset is considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the asset
exceeds its fair market value. We assess the recoverability of our long-lived
and intangible assets by determining whether the unamortized balances can be
recovered through undiscounted future net cash flows of the related assets. The
amount of impairment, if any, is measured based on projected discounted future
net cash flows.

Advertising Expenses
--------------------
The Company expenses advertising expenses as incurred. Advertising expense was
$3,673 and $2,637, respectively, for the years ended December 31, 2005 and 2004.

Stock-based Compensation
------------------------
The Company accounts for stock-based employee compensation issued under
compensatory plans using the intrinsic value method, which calculates
compensation expense based on the difference, if any, on the date of the grant,
between the fair value of our stock and the option exercise price. Generally
accepted accounting principles require companies who choose to account for stock
option grants using the intrinsic value method to also determine the fair value
of option grants using an option-pricing model, such as the Black-Scholes model,
and to disclose the impact of fair value accounting in a note to the financial
statements. In December 2002, the Financial Accounting Standards Board, or FASB,
issued Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation Transition and Disclosure, an Amendment of FASB
Statement No. 123." The Company did not elect to voluntarily change to the fair
value based method of accounting for stock based employee compensation and
record such amounts as charges to operating expense.

The Company accounts for stock-based consulting compensation under the fair
value based method, which calculates compensation expense based on the fair
value of the securities issued.

The FASB revised Statement No. 123 in 2004. Statement No. 123, as revised,
requires recognition of the cost of employee services provided in exchange for
stock options and similar equity instruments based on the fair value of the
instrument at the date of grant. Statement 123, as originally issued, is
effective until the provisions of Statement 123(R) are fully adopted. Statement
123(R) is effective the first interim reporting period after December 15, 2005.
The Company will adopt this guidance as of January 1, 2006 and begin recognizing
compensation expense related to stock options should any be issued. The
requirements of SFAS No. 123 will also be applied to stock options granted
subsequent to December 15, 2005.

Income Taxes
------------
In tax years December 31, 2004, the Company operated as a partnership, and
therefore was exempt from taxation; instead, its earnings and losses are
included in the personal returns of the members and taxed depending on the
individual's personal tax situation. For the tax year December 31, 2005 the
Company operated as a partnership through May 20, 2005 and as a "c" corporation
for the period May 21, 2005 through December 31, 2005. The Company intends to
file a consolidated tax return and will recognize the tax attributes on a
consolidated basis.

                                       F-9
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements


The Company has a consolidated tax loss of approximately $179,582, which is
available to reduce taxable income in future years. Use of the loss will expire
in 2026.

Financial Instruments and Concentration of Credit Risk
------------------------------------------------------
The carrying amounts of the Company's financial assets and liabilities,
including cash, and accounts payable at December 31, 2005, approximate fair
value because of the short maturity of these instruments. The carrying amount of
the Company's notes payable approximates fair value at December 31, 2005, since
the notes are at floating rates or fixed rates that approximate current market
rates for notes with similar risks and maturities.

Financial instruments with significant credit risk include cash. The Company has
a cash investment with a bank that exceeded the Federal Deposit Insurance
Corporation limit as of December 31, 2005.

For the years ended December 31, 2005 and 2004, 100 percent of the Company's
sales were to three homebuilders.

Pro Forma Provision for Salary Distributions and Income Taxes
-------------------------------------------------------------
The accompanying statements of operations include pro forma adjustments to
reflect as salaries, distributions to officers/shareholders that were made while
the Company operated as an LLC, and to reflect an estimated provision for income
taxes. Prior to the reverse acquisition, the Company was taxed as a partnership
and, consequently, was not subject to income tax. The effective income tax rate
used on the pro forma adjustments is that estimated had the Company been a C
corporation.

New Accounting Standards

SFAS No. 151, "Inventory Costs," is effective for fiscal years beginning after
June 15, 2005. This statement amends the guidance in Accounting Research
Bulletin ("ARB") No. 43, Chapter 4, Inventory Pricing, to clarify the accounting
for abnormal amounts of idle facility expense, freight, handling costs, and
wasted material (spoilage). The adoption of SFAS 151 is expected to have no
impact on the Company's financial statements.

SFAS No. 152, "Accounting for Real Estate Time-Sharing Transactions," is
effective for fiscal years beginning after June 15, 2005. This statement amends
SFAS No. 66, Accounting for Sales of Real Estate, to reference the financial
accounting and reporting guidance for real estate time-sharing transactions that
is provided in American Institute of Certified Public Accountants Statement of
Position 04-2, Accounting for Real Estate Time-Sharing Transactions. The
adoption of SFAS No. 152 is expected to have no impact on the Company's
financial statements.

SFAS No. 123(R), "Share-Based Payment," replaces SFAS No. 123, "Accounting for
Stock-Based Compensation," and supersedes APB Opinion No. 25, "Accounting for
Stock Issued to Employees." This statement requires that the compensation cost
relating to share-based payment transactions be recognized in the financial
statements. The Company is required to apply this statement in the first interim
period that begins after December 15, 2005. The adoption of SFAS No. 123(R) is
expected to have an impact on the Company's financial statements should the
Company issue share-based payments to its employees or others.

SFAS No. 153, "Exchanges of Nonmonetary Assets" - an amendment of APB Opinion
No. 29, is effective for fiscal years beginning after June 15, 2005. This
statement addresses the measurement of exchange of nonmonetary assets and
eliminates the exception from fair-value measurement for nonmonetary exchanges
of similar productive assets in paragraph 21(b) of APB Opinion No. 29,
"Accounting for Nonmonetary Transactions," and replaces it with an exception for
exchanges that do not have commercial substance. The adoption of SFAS No. 153 is
expected to have no impact on the Company's financial statements.

                                      F-10
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements


FIN No. 46(R) revised FIN No. 46, "Consolidation of Variable Interest Entities,"
requiring the consolidation by a business of variable interest entities in which
it is the primary beneficiary. The adoption of FIN No. 46 did not have an impact
on the Company's financial statements.

The Emerging Issues Task Force ("EITF") reached consensus on Issue No. 03-1,
"The Meaning of Other-Than-Temporary Impairment and Its Application to Certain
Investments" ("EITF 03-1") which provides guidance on determining when an
investment is considered impaired, whether that impairment is other than
temporary and the measurement of an impairment loss. The FASB issued FSP EITF
03-1-1, "Effective Date of Paragraphs 10-20 of EITF Issue No. 03-1, 'The Meaning
of Other-Than-Temporary Impairment and Its Applications to Certain Investments'"
("FSP") which delays the effective date for the measurement and recognition
criteria contained in EITF 03-1 until final application guidance is issued. The
Company does not expect the adoption of this consensus or FSP to have a material
impact on its financial statements.

The EITF reached a consensus on Issue No. 04-8, "The Effect of Contingently
Convertible Debt on Diluted Earnings Per Share" ("EITF 04-8"), which addresses
when the dilutive effect of contingently convertible debt instruments should be
included in diluted earnings (loss) per share. EITF 04-8 is effective for
reporting periods ending after December 15, 2004. The adoption of EITF 04-8 did
not have an impact on diluted earnings (loss) per share.


(2)  Related Party Transactions

The Company conducts its operations in a building owned by an affiliate. During
the years ended December 31, 2005 and 2004, the Company recorded rent expense of
$60,000 and $5,981, respectively

The Company's affiliate pays certain expenses on its behalf. The Company
reimburses these expenses paid on its behalf by the affiliate at actual cost.
Overhead expenses and indirect labor incurred by the affiliate are allocated to
the Company based on management-approved estimates of time and effort. The
Company reviews the estimated rate from time-to-time.

Indebtedness to related parties consisted of the following at December 31, 2005:


    Note payable to Karen Duran, interest at 8.5%,
        principal and interest payable in annual
        installments of $17,000
          Total financing under the agreement is $200,000        $  191,000

    Note payable to Karen Duran, interest at 8.5%,
        principal and interest payable May 25,2006
          Total financing under the agreement is $150,000           150,000

    Advances payable to Falcon Ridge Development LLC,
        an affiliate, payable on demand                             731,060

    Accrued interest payable                                         19,278
                                                                 ----------
                                                                 $1,091,338
                                                                 ==========

                                      F-11
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements



(3)  Property and Equipment

Property and equipment consists of the following at December 31, 2005:

                                       Accumulated
                             Cost      Depreciation
                            -------       -------
                Software    $26,030       $  --
                Equipment     7,981           798
                            -------       -------
                            $34,011       $   798
                            =======       =======

Depreciation expense, included in selling, general and administrative expenses
in the accompanying financial statements, was $798 and $-0- in 2005 and 2004,
respectively.

(4)  Real Estate Operations

The Company completed development of Sierra Norte I and II subdivisions in Rio
Rancho, New Mexico in 2005. The Company is in the process of developing
approximately 1,100 acres of raw land in the Belen, New Mexico referred to as
"Spanish Trails." Spanish Trails is divided into two phases. Phase one consists
of 200 acres of land subdivided into 439 home sites and phase two consists of
900 acres of land subdivided into 1,239 home sites. Home sites will be sold to
different builders or developed by the Company.

Real estate held for resale, consists of the following at December 31, 2005:

                 Land acquisition costs   $  806,529
                 Land development costs      283,465
                 Capitalized interest         84,835
                                          ----------
                                          $1,174,829
                                          ==========

(5)  Note Payable

Note payable consists of the following at December 31, 2005:

        Note payable to Toby and Mary Ann Cordova,
        with interest at 6.5 percent, principal and
        interest payable in semi-annual installments of
        $21,862, collateralized by a real estate contract
        Total financing under the agreement is $435,000      $ 389,048
        Less: current portion                                  (18,737)
                                                             ---------
                                                             $ 370,311
                                                             =========

                                      F-12
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements


Aggregate maturities required on long-term debt at December 31, 2005, are as
follows:

         Year ending December 31,
         ------------------------
         2006                                    $18,737
         2007                                     19,975
         2008                                     21,294
         2009                                     22,702
         2010 and thereafter                     306,340
                                                 --------
                                                 $389,048
                                                 ========

(6)  Income Taxes

A reconciliation of U.S. statutory federal income tax rate to the effective rate
follows for the period ended December 31, 2005:

           U.S. statutory federal rate                     25.90%
           State income tax rate                            4.80%
           Net operating loss for which no tax
              benefit is currently available              -30.70%
                                                         --------
                                                            0.00%
                                                         ========

At December 31, 2005, the Company has a net operating loss carryforward for
federal income tax purposes of approximately $179,582, which was fully allowed
for in the valuation allowance of $55,183. The valuation allowance offsets the
net deferred tax asset for which there is no assurance of recovery. The change
in the valuation allowance for the year ended December 31, 2005 was $55,183.

Because of various stock transactions during 2005, management believes the
Company has undergone an "ownership change" as defined by Section 382 of the
Internal Revenue Code. Accordingly, the utilization of a portion of the net
operating loss carryforward may be limited. Due to this limitation, and the
uncertainty regarding the ultimate utilization of the net operating loss
carryforward, no tax benefit for losses has been provided by the Company in the
accompanying financial statements. The net operating loss carryforward will
expire in 2025.

(7)  Shareholders' Deficit

On July 6, 2005, the Company entered into an exchange of securities whereby it
acquired 100% of the ownership of Spanish Trails, LLC ("STLLC"), and a New
Mexico limited liability company, in exchange for the issuance of a total of
614,882,069 common shares. STLLC held the land and related debt on the Cordova
property and contributed the land at cost to the Company for further
development. STLLC's balance sheet immediately before acquisition is as follows:

                                      F-13
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements


                                        Assets

        Other receivables                                          $    220
        Preacquisition development costs                            851,855
        Deposit                                                      20,000
                                                                   --------
                                                                   $872,075
                                                                   ========

                                Liabilities and Capital

        Property taxes payable                                     $    190
        Real Estate contract payable                                397,977
                                                                   --------
                                                                    398,167

        Members capital                                             473,908
                                                                   --------
                                                                   $872,075
                                                                   ========

The Company recognized the assets and liabilities transferred at their carrying
amounts at the July 6, 2005, date of transfer.

The accompanying consolidated financial statements report results of operations
for the year ended December 31, 2005 as though the exchange of equity interests
with STLLC had occurred at the beginning of the year. Results of operations for
the year ended December 31, 2005 comprise those of the previously separate
entities combined from the beginning of the year to the July 6, 2005, date the
transfer, and those of the combined operations from that date to December 31,
2005. The effects of intercompany transactions in determining the results of
operations for the period before the exchange have been eliminated.

The accompanying consolidated balance sheet at December 31, 2005 and other
financial information has been presented as though the equity interests had been
exchanged at the beginning of the year. Financial statements and financial
information presented for the year ended December 31, 2004 has been prepared on
a consistent basis.

Preferred Stock

On July 20, 2005, the Company established Series A Convertible Preferred Shares
and authorized 400,000 shares. The preferences are as follows:

     o    Shares are non-cumulative with a preference over common shares if and
          when a dividend is declared.

     o    Shares are convertible into common stock at any time on the basis of
          100 common shares for 1 share of preferred stock. This conversion rate
          is subject to adjustments for forward or reverse splits or other
          capitalizations. The option was of no intrinsic benefit, at the
          commitment date, to the preferred shareholder.

     o    Shares have a priority over common shares upon liquidation.

                                      F-14
<PAGE>

                          FALCON RIDGE DEVELOPMENT INC.
                    (FORMERLY POCKETSPEC TECHNOLOGIES, INC.)
                   Notes to Consolidated Financial Statements



     o    Shares are callable at any time by the Company at the original
          purchase price. The Preferred Shareholders will have thirty days
          thereafter to convert to common stock.

                                      F-15
<PAGE>


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

         None.


Item 8A. Controls and Procedures

     Within the 90 days prior to the date of this report, our chief executive
officer and our chief financial officer evaluated the effectiveness of the
design and operation of our disclosure controls and procedures pursuant to Rule
13a-15b under the Securities Exchange Act of 1934. Based on their review of our
disclosure controls and procedures, they have concluded that our disclosure
controls and procedures are not effective in timely alerting each of them to
material information relating to us that is required to be included in our
periodic SEC filings. Since our Company has been acquired as a result of the
Sierra Norte acquisition discussed above, and a new board and management has
been installed, we have not been able to timely file our Form 10-QSBs and we
missed deadlines for filing some Form 8-Ks due to non recognition of the events
requiring the Form 8-Ks. Management is in the process of analyzing and adopting
new policies and procedures to remedy the design and operations of our
disclosure controls, including review and education concerning Form 8-K
requirements, and we recently hired an internal accountant that has prior public
accounting experience in our industry, regulatory filings and preparing
financial statements. We acknowledge that a change with respect to financial
controls has been made to alert us with respect to funding provided by related
parties and that the changes in disclosure controls, particularly recognizing
Form 8-K events, are ongoing. We expect these changes in internal controls will
have a significant effect on our disclosure controls after the evaluation date
and the date of this report.

     Changes to Internal Controls include a reorganization of available staff to
better segregate duties, acquisition and implementation of more sophisticated
accounting software and a personnel plan to hire additional accounting and
administrative staff. We have scheduled training for employees and management in
critical areas to enhance their ability to perform the duties assigned to them.]

Item 8B. Other Information

     There is no information we were required to report on Form 8-K during our
fourth fiscal quarter of the year ended December 31, 2005 that was not so
reported.


                                    Part III


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

     The following table provides information regarding our directors and
executive officers and key employees of Falcon Ridge Development, Inc. as of
March 1, 2006:

                                       18
<PAGE>

    Name                          Age                   Position
    -----------------------   -------------   ---------------------------
    Fred M. Montano                           Chief Executive Officer and
                                              Chairman of the Board
    Karen Y. Duran                            Chief Financial Officer

    Jerry Apodaca                             Director
    Sebastian Ramirez                         Director
    Troy Duran                                Director



     Fred Montano, Chairman and Chief Executive Officer. Mr. Montano has worked
with Sierra Norte since its founding in June, 2003. He became the Chairman and
Chief Executive Officer of Falcon Ridge Development, Inc. (formerly PocketSpec
Technologies, Inc.) on May 20, 2005. He has been an owner of Falcon Ridge
Development, LLC, a private New Mexico real estate development company since
1997. He has also been an owner of Real Estate Services, Inc., a privately held
New Mexico corporation since 1987. Prior to that time, he did real estate
development on behalf of client home builders. He is a licensed New Mexico real
estate broker. He attended the University of New Mexico.

     Karen Duran, Chief Financial Officer. Ms. Duran became our Chief Financial
Officer on June 6, 2005. She is our Secretary/Treasurer from May 20, 2005 to
date. She has been an owner of Falcon Ridge Development, LLC, a private New
Mexico real estate development company since 1997. She has also been an owner of
Real Estate Services, Inc., a privately held New Mexico corporation, since 1987.
Prior to that time, she did real estate development on behalf of client home
builders. She is a licensed New Mexico real estate broker. She attended the
University of New Mexico.

     Jerry Apodaca, Director. Mr. Apodaca became a member of the board of
directors of Falcon Ridge Development, Inc. (formerly PocketSpec Technologies,
Inc.) on June 6, 20005. He served as New Mexico's 24th governor from 1975 to
1979. Beginning in 1979, he wrote a statewide column, "From the Outside", served
as a member of the Board of Regents of the University of New Mexico from
1985-1991, two of those years as president, invested in several businesses,
consulted certain corporations on marketing the Hispanic consumer, traveled to
many university campuses as a motivational speaker, headed three non-profit
organizations, and was involved in the start-up of two national Hispanic
publications. He was one of the founders of Vista Magazine, an English language
newspaper insert targeted at Hispanics and was the founding publisher of
Hispanic Magazine. From 1985-1992, he served as president of the Hispanic
Association on Corporate Responsibility, a coalition of national Hispanic
organizations, which came together to improve working relations with corporate
America. During this time he negotiated and signed seven corporate fair share
agreements. In 1990 he founded the Japan-Hispanic Institute and served as
president until 1994. The Institute worked to improve relations with Japanese
owned companies and the Hispanic community. That same year he founded the
National Institute of Former Governors. As its president, he recruited many of
the former governors to bring their individual experience, talents and knowledge
to work on problems in our country. In 1989, he and his son Jerry founded
Apodaca Investment Group, a money management firm with offices in San Francisco.
He served as Chairman and CEO until 1997 when he resigned from the company to
run for governor. At that time the firm was managing 500 million dollars. He is
currently Chairman of the Board of Infinite Dispute Resolution Services, LLC, a
mediation firm, President of Jerry Apodaca Consultants, LLC., and a senior level
associate with Butch Maki & Associates, Santa Fe, NM.

                                       19
<PAGE>

     He is a graduate of the University of New Mexico. He is past Chairman of
the President's Council on Fitness and Sports. In 1977 he was elected Chairman
of the Education Commission of the States. In 1978 he was the recipient of the
Award for Distinguished Service for Higher Education. He was also awarded
Honorary Doctor of Law degrees from Our Lady of the Lake University and Eastern
New Mexico University.

     Sebastian Ramirez, Director. Mr. Ramirez became a member of the board of
directors of Falcon Ridge Development, Inc. (formerly PocketSpec Technologies,
Inc.) on June 6, 2005. From 1999 to the present, he has been President of
Sebastian R. Ramirez Advisors, a consulting firm specializing in market research
and analysis, market development and strategic planning. From 2004, to present,
he has also been a Partner in Cascade Design and Development, a company offering
professional architectural, engineering, and planning services to the public and
private sectors in New Mexico. From 1993 to 1998, he was President of Rampart
Development Corporation, a diversified firm offering full service engineering,
land development, and financial and planning services to public and private
sector clients in New Mexico.

     Mr. Ramirez is a graduate of the University of New Mexico and has
post-graduate work on a Master's degree from the University of New Mexico. From
1996 to 2001, he was on the Board of Trustees of the University of New Mexico
Hospital. From 1991 to 1993, he served on the New Mexico Quincentenary
Commission. From 1991 to 1992, he served on the Advisory Committee of the New
Mexico Border Development Authority.

     Troy Duran, Director. Mr. Duran became a member of the board of directors
of Falcon Ridge Development, Inc. (formerly PocketSpec Technologies, Inc.) on
June 6, 2005. Troy Duran is a communications and marketing specialist with more
than 23 years experience in broadcast advertising. From 2002 to the present, he
has owned his own radio production company, which specializes in imaging and
voice-over work. Prior to that time, he was the production director for KMOX,
news talk radio in St. Louis, Missouri from 2000 to 2002. Troy is the son of
Karen Duran, our company's Chief Financial Officer. Mr. Duran has not been
involved in any legal proceedings that would be material to an evaluation of his
ability or integrity as a Director of our Company.

Our Company does not have an audit committee.
---------------------------------------------
     We are not required to have an audit committee. Our chief operating and
financial officers oversee daily operations and report directly to the board.
Currently, we are conducting a search for an independent financial expert to
serve on the board and form an audit committee.


Item 10. Executive Compensation


     The following table sets forth information regarding the compensation paid
by Falcon Ridge Development to each of the following individuals for services
rendered in all capacities for the years indicated:

                                       20
<PAGE>

<TABLE>
<CAPTION>

                                                                                 Long-Term Compensation
                                                                             --------------------------------
                                               Annual Compensation            Awards          Payouts
                                       ------------------------------------  ---------- ---------------------
Name and Principal            Year       Salary      Bonus        Other      Restricted Securities     LTIP     All Other
                                                                 Annual        Stock    Underlying    Payout    Compensation
                                                               Compensation   Awards(s)   Options/      ($)        ($)
Position(1)                               ($)         ($)         ($)       ($)      SARs (#)
-------------------------- ----------- -----------  ---------  ------------  ---------- ------------  -------   -----------
<S>                        <C>         <C>          <C>        <C>           <C>        <C>           <C>       <C>
Fred M. Montano......            2005      24,000
                                 2004       8,000       --           --            --        --         --          --
                                 2003           0       --           --            --        --         --          --
Karen Y. Duran.......            2005      24,000
                                 2004       8,000       --           --            --        --         --          --
                                 2003           0       --           --            --        --         --          --
</TABLE>

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

(1)  See Item 9 above which describes the principal positions of the named
     executives.


Item 11. Security Ownership of Certain Beneficial Owners and Management and
         Related Stockholder Matters

     Our shareholders have not authorized the issuance of any common stock or
preferred stock under equity compensation plans. Nor do we plan on requesting
the shareholders to approve such compensation arrangements.

     The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 1, 2006, for (i) each stockholder who
is known by us to own beneficially more than 5% of our common stock, (ii) each
director and executive officer, and (iii) all of our directors and executive
officers as a group. Except as otherwise indicated, we believe, based on
information furnished by the persons named in this table, that such persons have
voting and investment power with respect to all shares of common stock
beneficially owned by them, subject to community property laws, where
applicable.

     As of March 1, 2006, there were 752,262,441 shares of our common stock
outstanding and 160,000 shares of our convertible preferred stock outstanding.
The convertible preferred stock is convertible at the option of the holder into
100 shares of common stock. The convertible preferred stock does not have a
dividend but has a preference in liquidation over our common stock.

                                       21
<PAGE>

<TABLE>
<CAPTION>

Stockholder                                                 Number of Shares            Percentage
--------------------------------------------------------------------------------- -----------------------
                                                           Common   Preferred        Common Preferred
                                                                                  -----------------------
<S>                                                   <C>           <C>           <C>        <C>
Fred M. Montano(1)(2)...............................  369,074,148     0             49%       0%



Karen Y. Duran(1)(2)                                  309,571,244     0           41.1%       0%


Jerry Apodaca(1)                                                0     0              0%       0%

Sebastian Ramirez(1)................................            0     0              0%       0%


Troy Duran(1) ......................................            0     0              0%       0%


All executive officers and directors as a group.....  592,008,511     0             80%       0%


New World Development, Inc.                           45,150,446      0            5.9%       0%
5901 J. Wyoming N.E. #307
Albuquerque, New Mexico 87109
</TABLE>

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

(1)  The business address is 5111 Juan Tabo Boulevard N.E., Albuquerque, New
     Mexico 87111.

(2)  Ms. Duran and Mr. Montano are co-owners of Real Estate Services, Inc.,
     which holds of record 45,574,674 shares of common stock. By virtue of Ms.
     Duran's 50% ownership of Real Estate Services, Inc. and her position with
     it as an officer, Ms. Duran may be deemed to be the beneficial owner of all
     of the shares of Common Stock held of record by Real Estate Services, Inc.
     However, she expressly disclaims ownership of 50% of the shares of the
     common stock held of record by Real Estate Services, Inc. By virtue of Mr.
     Montano's 50% ownership of Real Estate Services, Inc. and his position with
     it as an officer, Mr. Montano may be deemed to be the beneficial owner of
     all of the shares of common stock held of record by Real Estate Services,
     Inc. However, he expressly disclaims ownership of 50% of the shares of the
     common stock held of record by Real Estate Services, Inc. Mr. Montano and
     Ms. Duran are co-owners of Falcon Ridge Development, LLC, which owns of
     record 61,488,207 shares of common stock. Ms. Duran owns 49% of Falcon
     Ridge Development, LLC and expressly disclaims beneficial ownership of 51%
     of the shares of common stock owned of record by Falcon Ridge Development,
     Inc. Mr. Montano owns 51% of Falcon Ridge Development, LLC and expressly
     disclaims beneficial ownership of 49% of the shares of common stock owned
     of record by Falcon Ridge Development, Inc.


Item 12.  Certain Relationships and Related Transactions

     On May 20, 2005, Falcon Ridge Development, Inc., as borrower, and Karen Y.
Duran, as lender, executed a Promissory Note in the amount of $150,000 with an
interest rate of 8.50% per annum. The principal of $150,000 and any unpaid
interest of is due on May 25, 2006. The unpaid principal after May 25, 2006 will
accrue interest at a rate of 12.0% annually until paid. The purpose of the loan
was to provide working capital for the Falcon Ridge Development.

                                       22
<PAGE>

     On June 1, 2005, Sierra Norte LLC, as borrower and wholly owned subsidiary
of Falcon Ridge Development, Inc., and Karen Y. Duran, as lender, executed a
Promissory Note in the amount of $200,000 with an interest rate of 8.50% per
annum. The principal of $191,000 with any unpaid interest is due on June 1,
2006. The unpaid principal after June 1, 2006 will accrue interest at a rate of
12.0% annually until paid. The purpose of the loan was to provide working
capital for the Falcon Ridge Development.

     On June 19, 2005, Sierra Norte LLC, as borrower and wholly owned subsidiary
of Falcon Ridge Development, Inc., and Karen Y. Duran, as lender, executed a
Promissory Note in the amount of $66,000 with an interest rate of 8.50% per
annum. The principal of $66,000 was paid and the remaining interest of $1,557 is
due on May 25, 2006. The purpose of the loan was to provide working capital for
the Falcon Ridge Development.

     During the year, Falcon Ridge Development, LLC. ("Falcon LLC") made funds
available on an unsecured basis for working capital needs of the Falcon Ridge
Development, Inc. Falcon LLC is 51% owned by the president and chief executive
officer of the Registrant, Fred M. Montano and 49% owned by Karen Y. Duran, the
chief financial officer of the Registrant. Falcon LLC may make additional
advances to the Registrant from time to time. The Registrant expects to repay
advances under this arrangement when it has available capital to do so.


Item 13.  Exhibits


2.1       Agreement and Plan of Reorganization - Pocketspec Technologies,
          Inc. and Sierra Norte LLC (a)

2.2       Acquisition Agreement - Pocketspec Technologies, Inc. and Spanish
          Trails, LLC (b)

3.1       Articles of Incorporation of Falcon Ridge Development, Inc.
          previously filed.

3.2       Bylaws of Falcon Ridge Development, Inc. previously filed

3.3       Articles of Organization of Sierra Norte, LLC previously
          filed.

3.4       Operating Agreement of Sierra Norte, LLC previously filed.

3.5       Articles of Organization of Spanish Trails, LLC previously
          filed.

3.6       Operating Agreement of Spanish Trails, LLC previously filed.

4.1       Articles of Amendment - Establishment of Series of Preferred
          Stock previously filed.

10.1      Purchase Agreement - Spanish Trails, LLC and D.R. Horton*
          (Confidential portions of this agreement noted by *** have been
          omitted and filed separately with the Securities and Exchange
          Commission pursuant to a request for confidentiality under Rule
          24b-2  of the Securities Exchange Act of 1934.) Previously
          filed.

                                       23
<PAGE>

10.2      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - May 20,
          2005 - $150,000*

10.3      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - June 1,
          2005 - $200,000*

10.4      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - June 19,
          2005 - $66,000*

14.1      Code of Ethics*

21.1      List of Subsidiaries*

23.1      Consents of experts

31.1      Certification of Chief Executive Officer pursuant to Rule
          13a-14(a)/15(d)-14(a)*

31.2      Certification of Chief Financial Officer pursuant to Rule
          13a-14(a)/15(d)-14(a)*

32.1      Certification of Chief Executive Officer pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002*

32.2      Certification of Chief Financial Officer pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002*

99        Additional Exhibits - None


______________

*    Filed herewith.

(a)  Filed on May 25, 2005 as Exhibit 2.1 with the Registrant's Current Report
     on Form 8-K and incorporated herein by reference.

(b)  Filed on July 8, 2005 as Exhibit 10.19 with the Registrant's Current Report
     on Form 8-K and incorporated herein by reference.


Item 14. Principal Accountant Fees and Services

     The company's principal accountant Cordovano and Honeck LLP billed us
$40,091 in fees for Falcon ridge Development Inc.s audit for the period ended
December 31, 2004,Form 10Q for June and September 2005.

                                       24
<PAGE>


                                   SIGNATURES

     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.

                                            FALCON RIDGE DEVELOPMENT, INC.

                                            By:  /s/ Fred M. Montano
                                                ----------------------------
                                                Fred M. Montano
                                                Chief Executive Officer

                                            By:  /s/ Karen Y. Duran
                                                ----------------------------
                                                Karen Y. Duran
                                                Chief Financial Officer

Date: May 2, 2006

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature                           Title                        Date
---------------------- ------------------------------  ------------------------

/s/ Fred M. Montano        Chairman of the Board           May 2, 2006
----------------------     of Directors and Chief
Fred M. Montano            Executive Officer



/s/ Karen Y. Duran         Chief Financial Officer         May 2, 2006
----------------------
Karen Y. Duran



/s/ Jerry Apodaca          Director                        May 2, 2006
----------------------
Jerry Apodaca




/s/ Sebastian Ramirez      Director                        May 2, 2006
----------------------
Sebastian Ramirez




/s/ Troy Duran             Director                        May 2, 2006
----------------------
Troy Duran


                                       25
<PAGE>



                                  EXHIBIT INDEX


2.1       Agreement and Plan of Reorganization - Pocketspec Technologies,
          Inc. and Sierra Norte LLC (a)

2.2       Acquisition Agreement - Pocketspec Technologies, Inc. and Spanish
          Trails, LLC (b)

3.1       Articles of Incorporation of Falcon Ridge Development, Inc.
          previously filed.

3.2       Bylaws of Falcon Ridge Development, Inc. previously filed

3.3       Articles of Organization of Sierra Norte, LLC previously
          filed.

3.4       Operating Agreement of Sierra Norte, LLC previously filed.

3.5       Articles of Organization of Spanish Trails, LLC previously
          filed.

3.6       Operating Agreement of Spanish Trails, LLC previously filed.

4.1       Articles of Amendment - Establishment of Series of Preferred
          Stock previously filed.

10.1      Purchase Agreement - Spanish Trails, LLC and D.R. Horton*
          (Confidential portions of this agreement noted by *** have been
          omitted and filed separately with the Securities and Exchange
          Commission pursuant to a request for confidentiality under Rule
          24b-2  of the Securities Exchange Act of 1934.) Previously
          filed.

10.2      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - May 20,
          2005 - $150,000*

10.3      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - June 1,
          2005 - $200,000*

10.4      Promissory Note - Karen Y. Duran - Sierra Norte, LLC - June 19,
          2005 - $66,000*

14.1      Code of Ethics*

21.1      List of Subsidiaries*

23.1      Consents of experts

31.1      Certification of Chief Executive Officer pursuant to Rule
          13a-14(a)/15(d)-14(a)*

31.2      Certification of Chief Financial Officer pursuant to Rule
          13a-14(a)/15(d)-14(a)*

32.1      Certification of Chief Executive Officer pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002*

32.2      Certification of Chief Financial Officer pursuant to 18 U.S.C.
          Section 1350, as adopted pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002*

99        Additional Exhibits - None

                                       26
<PAGE>

________________

*    Filed herewith.

(a)  Filed on May 25, 2005 as Exhibit 2.1 with the Registrant's Current Report
     on Form 8-K and incorporated herein by reference.

(b)  Filed on July 8, 2005 as Exhibit 10.19 with the Registrant's Current Report
     on Form 8-K and incorporated herein by reference.


                                       27