SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                   Annual Report Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                   For the Fiscal Year Ended: January 31, 2003
                           Commission File No. 0-28759


                          PocketSpec Technologies Inc.
       -----------------------------------------------------------------
       (Exact Name of Small Business Issuer as specified in its charter)


         COLORADO                                         84-1461919
----------------------------                       --------------------------
(State or other jurisdiction                       (IRS Employer File Number)
 of incorporation)


            3225 East 2nd Ave.
            Denver, Colorado                                     80206
----------------------------------------                      ----------
(Address of principal executive offices)                      (zip code)


                                 (303) 393-8060
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


     Securities to be Registered Pursuant to Section 12(b) of the Act: None

       Securities to be Registered Pursuant to Section 12(g) of the Act:

                   Common Stock, $0.001 per share par value

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

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

Registrant's  revenues  for its most  recent  fiscal  year  were  $128,248.  The
aggregate   market  value  of  the  voting  stock  of  the  Registrant  held  by
non-affiliates as of January 31, 2003 was approximately  $1,574,189.  The number
of  shares  outstanding  of the  Registrant's  common  stock,  as of the  latest
practicable date, May 16, 2003, was 22,998,630.

<PAGE>


References  in this  document  to "us," "we,"  "our" or "the  Company"  refer to
PocketSpec Technologies Inc.

Forward-Looking Statements

     The following discussion contains forward-looking  statements regarding our
Company,  its business,  prospects and results of operations that are subject to
certain  risks and  uncertainties  posed by many  factors  and events that could
cause our  actual  business,  prospects  and  results  of  operations  to differ
materially   from  those  that  may  be  anticipated  by  such   forward-looking
statements.  Factors that may affect such  forward-looking  statements  include,
without  limitation:  our ability to  successfully  develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements  that adversely  affect or preclude clients from using our products
or certain  applications;  delays our  introduction of new products or services;
and our failure to keep pace with emerging technologies.

     When used in this  discussion,  words  such as  "believes",  "anticipates",
"expects",   "intends"  and  similar   expressions   are  intended  to  identify
forward-looking  statements,  but are not the  exclusive  means  of  identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these  forward-looking  statements,  which  speak  only  as of the  date of this
report.  Our Company  undertakes  no  obligation  to revise any  forward-looking
statements in order to reflect  events or  circumstances  that may  subsequently
arise.   Readers  are  urged  to  carefully  review  and  consider  the  various
disclosures  made  by us in  this  report  and  other  reports  filed  with  the
Securities and Exchange  Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

                                     PART I

RISK FACTORS

     THE OWNERSHIP AND INVESTMENT IN OUR SECURITIES INVOLVES  SUBSTANTIAL RISKS.
OUR COMMON  SHARES  SHOULD BE  PURCHASED  ONLY BY PERSONS WHO CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT.  PROSPECTIVE  INVESTORS SHOULD CAREFULLY CONSIDER THESE
RISKS RELATING TO OUR COMPANY.

     WE HAVE A LACK OF OPERATING  HISTORY.  We were formed on May 15,  1998.  We
have  been in three  different  lines of  business  since our  formation.  Since
beginning  operations,  we have operated at a loss and we have been  profitable.
However,  we have never been profitable in our current line of business.  We are
going  into our second  year of  operation  in this  current  line of  business.
Furthermore,  we have not engaged in any  substantial  business  activity over a
sustained period of time, and thus cannot be said to have a successful operating
history. Our current product lines do not generate enough revenue to support us.
Therefore,  we have  limited  financial  results  upon  which  you may judge our
potential.  We expect to continue to incur losses in the near future. We may not
ever become profitable again. We have experienced in the past and may experience
in  the  future  under-capitalization,  shortages,  setbacks  and  many  of  the
problems,  delays and expenses encountered by any early stage business,  many of
which are beyond our control. These include:

     -    substantial  delays and expenses related to testing and development of
          our new products,

     -    production and marketing  problems  encountered in connection with our
          new and existing products and technologies,

     -    competition from larger and more established companies, and

     -    lack of market acceptance of our new products and technologies.

                                        2
<PAGE>

     WE HAVE NO HISTORY OF PROFITABILITY WITH OUR NEW PRODUCTS. Sales of our new
products  may  never  generate   sufficient  revenues  to  fund  our  continuing
operations.  We may never generate positive cash flow or attain profitability in
the future. Historically,  we have incurred losses, particularly with operations
related to our new  products.  As of January 31,  2003,  our  retained  earnings
deficit was $ 2,203,806. For the fiscal year ended January 31, 2003, we incurred
a net loss of $1,183,372. These losses have resulted primarily from:

     - being in the  development  phase of our new product  line, -  significant
     costs  associated  with  the  development  of our new  products,  - lack of
     marketing  of those  products,  and - lack of  sufficient  sales to achieve
     profitability.

     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  will be extremely  competitive and subject to numerous
risks. We expect the color  comparison  business to be highly  competitive  with
many companies 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 are  subject  to the  risks  which are  common to  start-up
companies.  Therefore,  investors  should  consider an investment in us to be an
extremely risky venture.

     TO FULLY DEVELOP OUR BUSINESS PLAN, WE WILL NEED FOR 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 have no definitive plans for
additional financing.

     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 to market our color  comparison  products.  Further,  it is possible
that  our  proposed  operations  will not  generate  income  sufficient  to meet
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. Our
technologies and products are in various stages of development.  Our products in
development may not be completed in time to allow production or marketing due to
the inherent  risks of new product and  technology  development,  limitations on
financing,  competition,  obsolescence, loss of key personnel and other factors.
Although  we may  license or market our  development  technology  at its current
stage of  development,  there can be no assurance that we will be able to do so.
Unanticipated  technical  obstacles  can arise at any time and result in lengthy
and  costly  delays  or in a  determination  that  further  development  is  not
feasible.

                                        3
<PAGE>

     The  development  of  some  of  our  technologies  has  taken  longer  than
anticipated  and  could be  additionally  delayed.  Therefore,  there  can be no
assurance  of  timely   completion  and   introduction  of  our  products  on  a
cost-effective basis, or that such products, if introduced,  will achieve market
acceptance such that, in combination with existing  products,  they will sustain
us or allow us to achieve profitable operations.

     IF WE FAIL TO EXPAND OUR CONTROLS AND  INTEGRATE  NEW  PERSONNEL TO SUPPORT
OUR ANTICIPATED  GROWTH, OUR BUSINESS  OPERATIONS WILL SUFFER. We are undergoing
rapid growth in the scope of our operations. Our business prospects,  results of
operations or financial  condition could be harmed if we encounter  difficulties
in effectively  managing the budgeting,  forecasting  and other process  control
issues presented by such a rapid expansion.

     WE HAVE NO EXPERIENCE  MARKETING  OUR PRODUCTS AT ANY LEVEL,  INCLUDING THE
LEVEL  WE PLAN TO SELL IN THE  FUTURE.  We  cannot  assure  you  that we will be
successful  in executing our planned  expansion of our  activities to the levels
which we are seeking. We have not previously sold our products in any volume. We
do not know  whether or when we will be able to develop or  continue  efficient,
marketing  capabilities  and processes that will enable us to meet the standards
or volumes  required to  successfully  market large  quantities of our products.
Even if we are successful in developing our  capabilities  and processes,  we do
not know whether we will do sustain our production or to continue to satisfy the
requirements of our customers.

     WE ARE DEPENDENT  UPON  TECHNOLOGY  FOR OUR SUCCESS.  We are operating in a
business which requires extensive and continuing research efforts.  There can be
no  assurance  that new  products  will not  render  our  products  obsolete  or
non-competitive at some time in the future.

     TO BE  SUCCESSFUL,  WE MUST BE ABLE TO PROTECT  OUR  TECHNOLOGY  BUT CANNOT
GUARANTEE  THAT WE CAN DO SO. A  successful  challenge  to our  ownership of our
technology  could  materially  damage  our  business  prospects.  We  rely  on a
combination   of   patents,   trademarks,   copyrights,   trade   secret   laws,
confidentiality   procedures   and   licensing   arrangements   to  protect  our
intellectual  property  rights.  We currently have one (1) U.S.  patent acquired
from  Colorimeter,  LLC. Any issued  patent may be challenged  and  invalidated.
Patents may not issue from any of our future  applications.  Any claims  allowed
from  existing  or future  pending  patents  may not be of  sufficient  scope or
strength to provide significant protection for our products.  Patents may not be
issued  in all  countries  where  our  products  can be  sold  so as to  provide
meaningful  protection or any commercial  advantage to us. Our  competitors  may
also be able to design around our patents or the patents which we license.

     We expect vigorous  protection and pursuit of intellectual  property rights
or positions to characterize our industry, which could result in significant and
often protracted and expensive litigation. Therefore, our competitors may assert
that our  technologies  or  products  infringe on their  patents or  proprietary
rights.  Problems  with patents or other  rights could  increase the cost of our
products or delay or preclude new product development and  commercialization  by
us. If  infringement  claims against us are deemed valid,  we may not be able to
obtain appropriate  licenses on acceptable terms or at all.  Litigation could be
costly and  time-consuming  but may be  necessary  to protect our future  patent
and/or technology license positions or to defend against infringement claims.

                                        4
<PAGE>

     WE ANTICIPATE THAT WE WILL BE SUBJECT TO INTENSE COMPETITION. Technological
competition  from  larger  and  more  established  companies  is  a  significant
possibility  and can be expected.  Most of the companies with which we expect to
compete have far greater  capital  resources and more  significant  research and
development staffs, marketing and distribution programs and facilities, and many
of them have substantially greater experience in the production and marketing of
products.  Our ability to compete  effectively may be adversely  affected by the
ability  of  these  competitors  to  devote  greater  resources  to the sale and
marketing  of  their  products  than we  can.  In  addition,  one or more of our
competitors may succeed or may already have succeeded in developing technologies
and products that are more effective than any of those we currently offer or are
developing.  In  addition,  there  can be no  guarantee  that we will be able to
protect our technology from being copied or infringed upon. Therefore, there are
no  assurances  that we will ever be able to obtain and to maintain a profitable
position in the marketplace

     OUR  ULTIMATE  SUCCESS WILL BE DEPENDENT  UPON  MANAGEMENT.  Our success is
dependent  upon the decision  making of our directors  and  executive  officers.
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 four 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:

     actual or anticipated fluctuations in our operating results;

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

     changes  in  market  valuations  of  other  mortgage  brokerage  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;

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

     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.

                                        5
<PAGE>

     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 SmallCap 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 quarterly  variations  in our  operational  results,  may have a
negative effect on the market price of our common stock.


     (a) GENERAL DEVELOPMENT OF BUSINESS

     We are a Colorado corporation.  Our principal business address is 3225 East
2nd Ave.,  Denver,  Colorado 80206. We are a technology  company which is in the
business of developing and marketing color comparison  devices.  Previously,  we
were in the real estate development  business.  Originally we were in the retail
arts and crafts industry.

     We were  incorporated  under the laws of the State of  Colorado  on May 15,
1998 under the name Monument Galleries, Inc. In 1998, we acquired the trade name
"Santa Fe Trail Art  Gallery"  and the assets and  inventory of the Santa Fe Art
Gallery and Museum Store (the  "Gallery").  As of January 31, 1999, we sold this
Gallery to a third party entity for the assumption of debt and the assets of the
Gallery.

     On April 6, 2000, our Board of Directors approved our acquisition of all of
the issued and outstanding shares of Real Estate Opportunities,  Inc., a private
Colorado  corporation  (REO).  As a  result,  REO will  become  a  wholly  owned
subsidiary of us, and we changed our name to Real Estate Opportunities,  Inc. We
issued a total of  5,482,977  of our common  shares in  exchange  for all of the
issued and outstanding common shares of REO.

     In October,  2001,  our main focus  became the business of  developing  and
marketing color comparison devices, ultra-violet measurement devices and related
software products.

     On December 4, 2001 we amended our Articles of  Incorporation to change our
name from Real Estate  Opportunities,  Inc. to PocketSpec  Technologies Inc. and
increased our authorized common shares from 10,000,000 to 50,000,000 shares.

     In May 2002,  we  acquired  Color-Spec  Technologies,  Inc.  in a tax-free,
stock-for-stock  transaction.  We exchanged a total of  8,316,353  shares of our
common  stock  in  exchange   for  100%  of  the  common  stock  of   Color-Spec
Technologies, Inc., which became a wholly owned subsidiary of us.

                                        6
<PAGE>

     In December,  2002, we refined the focus of our business to the development
and marketing of two products:  our PocketSpec(TM)  ColorQA;  and our PocketSpec
BronzCheck(TM). In addition, we began to concentrate on the creation of a set of
software  products to be used in the indoor tanning salon  industry.  We entered
into  independent  contractor  agreements  and obtained a license  agreement for
software development. We plan to concentrate on developing software for use with
our PocketSpec  BronzCheck(TM)  device,  which is our principal color comparison
product for the tanning  industry.  Our plan is to  integrate  the data which is
received from our PocketSpec  BronzCheck(TM)  device with a new software  system
which we currently have under development.

     We have  not  been  subject  to any  bankruptcy,  receivership  or  similar
proceeding.

     (b) NARRATIVE DESCRIPTION OF THE BUSINESS

     Since  we  incorporated  in  1998,  we  have  conducted  three  businesses.
Originally we were in the retail arts and crafts industry.  We then transitioned
into the real estate development business,  where we acquired and developed real
estate properties for our own account,  primarily in Colorado.  Finally, we have
become a  technology  company.  At the  present  time,  our main focus is in the
business of developing  and marketing  color  comparison  devices,  ultra-violet
measurement devices and related software products.

     c) OPERATIONS

General

     In 2001, we changed our business plan from real estate  development  to the
color comparing business. Our focus has completely shifted away from real estate
as a business enterprise,  except to note that we may acquire company owned real
estate in the future for our own use,  such as offices,  retail  facilities  and
development facilities.

         We changed our name to PocketSpec  Technologies Inc. to better identify
and describe the directions we intend to pursue. On October 3, 2001, we acquired
an exclusive,  worldwide  license under a technology  license  agreement for the
manufacturing and marketing rights to a hand-held device for comparing the color
of objects and light emission.  In addition,  the agreement assigned rights to a
pending  utility  patent  covering the color  technology  and  applications  for
trademarks and patent protection for the ColorQA and the BronzCheck  devices and
related  technologies.  In January,  2003, we entered into a technology transfer
agreement  to  acquire  an  exclusive   license  to  technologies  used  in  the
measurement of ultra-violet  emissions from tanning beds used in tanning salons.
We may  license  and/or  acquire  rights to other  intellectual  properties  and
trademarks  as it may be found  to  enhance  or  align  to our own  intellectual
property and technology.

     All electronic  components used within our products are readily  available.
All  optical,  mechanical  and  packaging  components  are  unique to us but use
standard  injection mold practices for  manufacturing  of these  components.  We
attempt to incorporate  previously  used  programming  codes and  electronics in
planning for future products.  At the present time, we do not plan to produce or
assemble products outside of our direct control.

                                        7
<PAGE>

Our Current Products

     We have two current products. The first is our PocketSpec(TM)  ColorQA. The
other is our  PocketSpec  BronzCheck(TM).  At the present time, we are producing
both the ColorQA units and BronzCheck units.

     The  PocketSpec(TM)  ColorQA is a color  comparison  device with a built-in
display which has been  developed to compare  millions of colors.  The device is
designed  to measure a specified  target  color in a format of red,  green,  and
blue, each on a scale of 0 to 255. The measurement of the target color is stored
for  comparison  to other  colors  in the same  format.  The user can then  take
multiple comparative readings of other colors and determine if the colors match,
or  alternatively  determine  the closest  match.  The two series of numbers are
compared and the device gives a  percentage  difference  in the same display for
easy color  comparison.  The device has circuit  board  space to add  additional
memory if needed for more advanced functions. During the first quarter of fiscal
year  2003-2004,  we plan to fit the  PocketSpec(TM)  ColorQA  device with a USB
connection.

     The  PocketSpec  BronzCheck(TM)  is a color  comparison  device  that  uses
essentially the same technology as the PocketSpec(TM) ColorQA but has a specific
application  to the indoor  tanning  industry.  This is a device with a built-in
display,  used for the comparison of a person's skin color,  with absolute white
being 0 and absolute  black being 1,000.  The tanning salon  operator can take a
measurement of a person's skin with the device and record the number manually to
verify to its clientele that they are increasing or maintaining their individual
tanning goals. This device only differs from the  PocketSpec(TM)  ColorQA in the
programming and printing of the brand name on the outside of the housing. and to
sell related  software which  transmits the have an optional USB port for use in
the BronzCheck product, and possible advances to the ColorQA.  Chris Wrigley has
been hired to lead the electronic engineering and program changes.

Products in Development:

     We expect  to have the  following  products  development  completed  in the
second quarter of fiscal year 2003:

     Solarmeter(R)  Tower,  which is a  device  to be used  with the  PocketSpec
BronzCheck.(TM)  This device is being  designed to permit salon owners to better
calculate tan exposure schedules. We plan to retail the device for approximately
$1,200. We also plan to incorporate the device for use with associated  graphing
software, our TanTone(TM) Salon System.

     BronzCheck(TM)  with USB port,  which will be an enhancement to our present
PocketSpec   BronzCheck(TM)   product.   We  plan  to  retail  this  device  for
approximately  $1,000 each. We also plan to incorporate  the device for use with
associated software, our TanTone(TM) Salon System.

     TanTone(TM) Salon System,  which is a point-of-sale  software system, which
will be designed to produce a seamless  integration to  Quickbooks(R)  and other
known  computer  software  products,  such as Microsoft  Access,  as well as our
Solarmeter(R)  Tower and  BronzCheck(TM).  We plan to  retail  this  system  for
approximately $3,000 each.

Our Future Products

     We are in the  preliminary  stages of development of the ColorRT,  a device
which will be designed to use both the reflective  manner of color  measurement,
present in the  ColorQA,  and  additionally,  the  transmissive  method of color
measurement,  which measures almost any translucent  material,  either liquid or
solid.  We have begun  preliminary  work to secure  patent  protection  for this
technology.

                                        8
<PAGE>

     We believe that the first  potential use of this device will be an improved
and more portable  embodiment of an existing  product now in use to measure thin
translucent breast implant shells. In addition,  we believe that this technology
will have other potential uses,  including the measurement of perfume colorants,
sports drinks,  petroleum,  translucent  plastics,  agriculture and chemical and
biological applications.

Suspended Development Plans

     We have  suspended  development  plans  of a  previously  planned  product,
principally planned for cosmetic and dental applications, called the "PocketSpec
Color  Probe".  We believe that there is only a limited  market  opportunity  in
these  applications,  but we believe that we hold potentially  valuable patented
color technology, which we may utilize in the future.

     We have also suspended  development plans of a previously  planned product,
principally  planned for  remotely  displaying  readings  of color  measurements
generated  digitally  by the  "PocketSpec  Color  Probe".  We have found that in
marketing  our ColorQA  device we had some interest in remotely  displaying  and
recording  color  measurements,  but  decided  that  a  separate  device  is not
necessary.  With minimal additional  expense,  we believe that we can eventually
incorporate the USB device which we plan to build for the BronzCheck and related
software to a PC program  potentially  using  Microsoft  Access and Visual Basic
design to  remotely  display  and record  measurements  of the  ColorQA  and the
ColorRT  now in  development.  This would  potentially  enable our devices to be
operated  portably  and also as a bench top  laboratory  or factory  device,  by
plugging in the USB connection.

     We no longer produce our  ColorCheck  units because we found that there was
no demand for this product.

     Finally,  in order to consolidate  operations,  we terminated three limited
liability companies,  which we had established.  The indebtedness of the limited
liability  companies has been assumed by PocketSpec  Technologies Inc., the sole
owner/member of the limited liability companies. The limited liability companies
were known as PocketSpec  Cosmetic,  LLC; PocketSpec Dental, LLC; and PocketSpec
Dermatology, LLC.

Other

     We believe that there are numerous future  potential  applications  for our
products and those in development and planned for development in the future.  We
believe that we can deliver a more marketable range of color comparison  devices
to our  customers  by  integrating  our present and future  product  line with a
series  of  software  applications.  We  initially  plan to focus on the  indoor
tanning  industry.  However,  if we can  achieve  acceptance  of our  integrated
devices and associated  software products,  we plan to expand their applications
to other industries.

     (d) MARKETS

General

     We sell our products  directly to end user markets through direct mailings,
including email and physical  mailings through the US Postal Service and through

                                        9
<PAGE>

trade shows and expositions.  We use independent contractors as sales personnel.
We have two web sites for sales.  We added on-line  purchasing in May 2002.  The
web sites are www.pocketspec.com for the ColorQA product and www.bronzcheck.com,
with www.tantone.net linked for our BronzCheck product. We accept credit cards.

Current Marketing Plans

     During the last fiscal year,  we  completely  revamped and  redesigned  our
marketing program for our products.  For the present, we have abandoned attempts
to enter  corporate  sales to  larger  companies  and  government  agencies.  We
previously  expended  significant  resources  to pursue  these  markets and were
unsuccessful. We have also terminated relations with Dr. Roger Hutchison and his
companies,  CD Rom USA and CD Rom Inc.,  which  operated  as USGS web site.  Dr.
Hutchison  resigned his position as a director at approximately the same time by
arrangement.


     We believe that the use of direct  mailings can give us the  flexibility to
improve our  effectiveness  as well as conserve our  resources.  We use in-house
printing for our promotional materials. This gives us the ability to print as we
need and in full color using all the modern  software design systems used in the
magazine industry.

     We use a database of trade  industry  contacts.  We have  acquired  100,000
names of  painting  contractors,  decorators,  tanning  salons and other  target
markets.  We plan to utilize these in our direct  mailing  programs from time to
time.

     We operate two web sites for sales and support.  For  products  such as the
ColorQA  and  the  future  ColorRT  and  other   technical   products,   we  use
www.pocketspec.com.  On this  site  we have  limited  company  information,  SEC
filings, press releases,  distributor information, and on-line ordering. For the
Indoor Tanning Industry, we use bronzcheck.com and www.tantone.net,  both linked
to one  site at the  present  time.  On this  site  we have  information  on the
BronzCheck   product  and  the  future   software   and   Solarmeter   products,
distributors,  if any, and on-line ordering.  We plan to rebuild the current web
sites  and  launch  by  June  1,  2003  with  features   that  include   on-line
demonstration  of our  products.  We also  plan  to  include  technical  support
functionality in on  BronzCheck(TM)  and TanTone(TM)  Salon System product sites
when we launch and begin to sell our software products.  We are also considering
adding modern shopping cart systems and better  internal  control of pricing and
flow of order processing to our web sites.

Other Markets

     We also currently  sell the ColorQA  product to  professional  painters and
interior decorators,  plastic injection mold manufacturers,  and auto trim parts
and panels  companies.  The present  version of ColorQA  provides  assistance in
matching  colors of paint,  stucco,  fabrics and  virtually any solid color that
professional  painters,  interior  decorators,  and general  contractors need to
match.  The  device has the  capability  of being  programmed  with a color code
look-up table of paint colors,  which would be an enhanced product, we may offer
in the future.

     We are also  looking  as the  auto  body and  paint  industry  and the silk
screening and printing industry as potential markets in the future,  although we
have had no substantial sales in these markets at the present time.

                                       10
<PAGE>

     We believe  that there are  numerous  markets that may require some form of
color  comparison  which we have not yet explored,  such as color copy machines,
the home hobbyist, model makers, rapid prototyping companies, and biologists. We
will  continue to examine new uses for our  product.  Our primary goal for these
products will be to provide a low cost means to measure and compare color.

     (e) RAW MATERIALS

     The use of raw materials is not material  factor in our  operations  and is
not expected to be material factor in the future.

     (f) CUSTOMERS AND COMPETITION

     There  are a  number  of  established  companies  in the  color  comparison
business.  Among the  largest,  are Xrite,  Munsell  and  Minolta,  which make a
product similar to ours, but generally more expensive.  We plan to differentiate
our products by focusing on low price, hand-held devices, which use color charts
from  multiple  color  suppliers.  Furthermore,  we  believe  that the market is
fragmented, with no one company dominating this business.

     Our  decision to add a software  sales  component  to our lines of business
puts us in potential  competition with additional  competitors.  We believe that
our largest  potential  competitors will be Helios and Sun Touch.  Both are much
larger and better-capitalized companies than we are. However, we believe that if
we can begin by delivering  competitive  software products to the indoor tanning
industry  and add  servicing  and  support  for our  customers,  we will  have a
reasonable competitive edge.

     In any  case,  we  believe  that  competition  will be  intense.  We cannot
guarantee that we will be able to successfully compete.

     (g) BACKLOG

     At January 31, 2003, we had no backlogs.

     (h) EMPLOYEES AND CONSULTANTS

     At as of the date hereof,  we have six full-time  employees,  which include
five  administrative  employees.  We also have four part-time  employees,  which
included one executive and three administrative. We also utilize the services of
a total of nine independent  contractors.  Six contractors are involved with the
engineering and design of our products.  Three contractors are involved with the
marketing of our products.  We also plan to hire, from time to time,  additional
independent  contractors for prototype  design and production work and employees
as our needs may demand.

     In the past, we have customarily used in-house technical support to develop
our color comparing technology. However, with the exception of Gregg Wagner, one
of our  directors,  who  is a  product  designer  and  optics  expert,  we  have
terminated the original technical development team and have replaced it with one
part-time,  contract  engineer and  programmer.  In addition,  we will  attempt,
wherever possible, to out-source materials,  supplies and component assignments,
such as circuit boards and injected housings.

     We have also  terminated  most  arrangements,  which we previously  used to
develop  markets for our products.  At the present time we have some  immaterial
distribution  relationships.  Apart from these  distribution  relationships  and
co-development  ventures we may enter into from time to time,  we plan to do our

                                       11
<PAGE>

sales and marketing  exclusively  through our own  independent  contractors.  We
believe that this will provide better  customer  development and support for our
product line.

     We  have  also  terminated  relations  with  Dr.  Roger  Hutchison  and his
companies,  CD Rom USA and CD Rom Inc.,  which  operated  as USGS web site.  Dr.
Hutchison  resigned his position as a director at approximately the same time by
arrangement.

     (i) PROPRIETARY RIGHTS

     On  October  3,  2001,  we entered  into an  exclusive  technology  license
agreement with Color-Spec Technologies,  Inc., which granted us exclusive rights
to all of the  Color-Spec  Technologies'  intellectual  property and  technology
rights for a period of ten years, subject to our payment of a royalty of $75 per
unit sold by us based  upon the  rights.  In May 2002,  we  acquired  Color-Spec
Technologies,  Inc.  in  a  tax-free,  stock-for-stock  transaction.  Color-Spec
Technologies, Inc. became a wholly owned subsidiary of us.

     Also in October,  2001, we entered into a trademark  license agreement with
Color-Spec  Technologies,  Inc.  and  received an  exclusive  license to use the
trademarks "PocketSpec" and "PocketSpec Technologies,  Inc. T" for a term of ten
years. We use these trademarks in our business.

     We have also applied for several  trademark and service mark  applications,
which are pending. We have applications relating to Colorspec, Pocket Colorspec,
BronzeCheck, and Tantone.

     We own  two  patents.  One is  Patent  No.  6,157,454,  entitled  Miniature
Colorimeter.  We have applied for an additional patent on this device,  which is
pending.  We have also applied for two patents regarding the dental  application
of the Miniature Colorimeter,  one of which has been granted. We now have Patent
No. 6,525,819, entitled Colorimeter for Dental Applications, which was issued on
February  28,  2003.  Finally,  we have  applied  for a  patent  entitled  Color
Measurement Device.

     In January  2003,  we entered into a  technology  transfer  agreement  with
Solartech,  Inc., to acquire an exclusive  license to  technologies  used in the
measurement of ultra-violet  emissions from tanning beds used in tanning salons.
This  technology  is needed to  accurately  incorporate  bulbs into our  tanning
industry software products. We paid Solartech, Inc. 200,000 shares of our common
stock. We plan to use this technology in a device to be called the Solarmeter(R)
Tower.  We will pay a royalty of $10 per  device  sold.  We have also  agreed to
purchase a special sensor at $46 each from Solartech,  Inc. We also acquired the
right to use the name, Solarmeter(R),  which is a name associated with a line of
portable UV meters sold worldwide.  Our license is for 10 years,  with a 10 year
renewal period.

     (j) GOVERNMENT REGULATION

     We are not subject to any material governmental regulation or approvals.

     (k) RESEARCH AND DEVELOPMENT

     We believe that strong product  development  capabilities  are essential to
our  strategy  of  enhancing   our  core   technology,   developing   additional
capabilities  incorporating that technology and maintaining a strategic position
with our products.  We use the services of six  independent  contractors  in the

                                       12
<PAGE>

development  of our  products.  On  January  14,  2002  we  acquired  rights  to
intellectual  property for a total cost of $596,385.  The  transaction  included
cash in the  amount of  $15,000,  1,100,000  shares of  common  stock  valued at
$385,000 or $.35 per share, and partial assignment of a $644,403 note receivable
from an affiliate, or $196,385 of principal amount.

     In December 2002, we entered into a software development agreement with Mr.
Chris Wrigley to develop the USB port  capabilities of our products.  We pay for
these services on an hourly basis.

     In January  2003,  we entered into a software  development  agreement  with
Tyger POS, of Longmont,  Colorado,  a restaurant  software  developer,  to write
software  code and create a set of  software  products  to be used in the indoor
tanning salon industry.  We expect the project to be completed in June 2003. The
contract price is $200,000, payable in increments, based upon their performance.

     We plan to continue to invest significant time and resources in our product
development.  In  addition,  we have  recruited  and plan to continue to recruit
electronic and software  engineers,  as needed,  with experience in illumination
and detection systems.

     (l) ENVIRONMENTAL COMPLIANCE

     We are not subject to any costs for compliance with any environmental laws.

     (m) SUBSEQUENT EVENT

     On March 4, 2003 we signed an operating lease for office copying equipment.
The agreement is effective  through  November 4, 2007.  Monthly  lease  payments
total $1,318.

     On March 7, 2003 certain affiliates and individuals entered into agreements
with us to extinguish debt in exchange for stock. One affiliate provided us with
$10,000 in the form of a payment to another affiliate along with extinguishments
of $275,000  debt  principal  and  interest in the amount of $17,517 for a total
amount of $302,517 for 4,321,673 shares of common stock. The stock was valued at
$.07 per share.

     Ms. Janet  Brophy,  an officer and  director,  as custodian of James Andrew
Krupka, provided $8,400 cash to acquire 120,000 shares of common stock valued at
$.07 per share.

     An unaffiliated  individual  provided us with $7,000 cash and  extinguished
debt principal in the amount of $15,000 and interest in the amount of $399 for a
total amount of $22,399 in exchange for 319,992 shares of common stock valued at
$.07 per share.

     An unaffiliated  individual  provided us with $10,500 cash and extinguished
debt  principal  in the amount of $316,164  and interest in the amount of $1,988
for a total amount of $328,652 in exchange for 4,695,022  shares of common stock
valued at $.07 per share.

                                       13
<PAGE>

     An  unaffiliated  individual  provided  extinguished  debt principal in the
amount of $50,509  and  interest  in the amount of $1,085 for a total  amount of
$51,594 in exchange for 737,064 shares of common stock valued at $.07 per share.

     Our chief financial officer,  Cynthia Kettl, provided us with cash totaling
$1,998 and  extinguished  an account payable in the amount of $3,000 for a total
amount of $4,998 in exchange  for 71,400  shares of common  stock valued at $.07
per share.

     ITEM 2. DESCRIPTION OF PROPERTIES.

     Our  business  office is  located at 3225 East 2nd Ave.,  Denver,  Colorado
80206.  On March 5,  2002,  we signed a lease,  effective  from April 1, 2002 to
April 1, 2007,  with an organization  affiliated with our President,  F. Jeffrey
Krupka. We pay this organization  $4,000 per month on a triple net lease,  along
with real estate taxes, property insurance,  maintenance and repairs,  telephone
expenses,  and other normal expenses of the property. We have granted Mr. Krupka
the  non-exclusive  use of the  leased  property  for  himself  and as an office
location for his other  business  interests.  He pays us $500 per month for this
use, plus the cost of four  telephone  lines,  including  service and applicable
service charges.

     We  own  an  exclusive   technology   license   agreement  with  Color-Spec
Technologies,  Inc.,  which granted us exclusive rights to all of the Color-Spec
Technologies'  intellectual  property and technology  rights for a period of ten
years, subject to our payment of a royalty of $75 per unit sold by us based upon
the  rights.   We  also  own  a  trademark  license  agreement  with  Color-Spec
Technologies,  Inc.  and  received an  exclusive  license to use the  trademarks
"PocketSpec",  "BronzCheck",  "TanTone" and "PocketSpec Technologies Inc." for a
term  of ten  years.  We  use  these  trademarks  in  our  business.  Color-Spec
Technologies, Inc. is now our wholly owned subsidiary.

     We own  two  patents.  One is  Patent  No.  6,157,454,  entitled  Miniature
Colorimeter.  We have applied for an additional patent on this device,  which is
pending.  We have also applied for two patents regarding the dental  application
of the Miniature Colorimeter,  one of which has been granted. We now have Patent
No. 6,525,819, entitled Colorimeter for Dental Applications, which was issued on
February  28,  2003.  Finally,  we have  applied  for a  patent  entitled  Color
Measurement Device.

ITEM 3. LEGAL PROCEEDINGS.

     No material legal  proceedings of a material nature to which we are a party
were pending during the reporting  period.  We know of no legal proceedings of a
material  nature pending or threatened or judgments  entered  against any of our
directors or officers in their capacity as such.

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

     We held no shareholders meeting in the fourth quarter of our fiscal year.


                                     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 PKSP. The following table sets forth the high and low bid
quotation for our common stock for each fiscal  quarterly period of 2003 and the
three trading quarters of 2002.

                                       14
<PAGE>


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

                                   High              Low
                                   ----              ----
                  2003
                  ----
            First Quarter          $0.41             $0.27
         Second Quarter            $0.39             $0.26
         Third Quarter             $0.37             $0.09
         Fourth Quarter            $0.38             $0.08

                                   High              Low
                                   ----              ----
                  2002
                  ----
         Second Quarter            $0.42            $0.05
         Third Quarter             $0.37            $0.05
         Fourth Quarter            $0.40            $0.20

     (b) APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK

     As of January 31, 2003, we had a total of  22,998,630  shares of our common
shares outstanding.  The number of holders of record of our common stock at that
date was approximately 158.

     (c) DIVIDENDS

     Holders of common 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) THE SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990

     The  Securities  Enforcement  and Penny Stock  Reform Act of 1990  requires
additional  disclosure and  documentation  related to the market for penny stock
and for trades in any stock  defined  as a penny  stock.  Unless we can  acquire
substantial  assets  and trade at over  $5.00  per share on the bid,  it is more
likely than not that our securities,  for some period of time,  would be defined
under  that  Act as a  "penny  stock."  As a  result,  those  who  trade  in our
securities may be required to provide  additional  information  related to their
fitness to trade our shares. Also, there is the requirement of a broker- dealer,
prior  to a  transaction  in a penny  stock,  to  deliver  a  standardized  risk
disclosure  document that provides  information about penny stocks and the risks
in the penny stock market.  Further,  a broker-dealer  must provide the customer
with current bid and offer  quotations for the penny stock,  the compensation of
the  broker-dealer  and its salesperson in the transaction,  and monthly account
statements  showing the market value of each penny stock held in the  customer's
account.  These  requirements  present a  substantial  burden  on any  person or
brokerage  firm who plans to trade our  securities  and  would  thereby  make it
unlikely  that any liquid  trading  market  would ever result in our  securities
while the provisions of this Act might be applicable to those securities.

                                       15
<PAGE>

     (e) BLUE SKY COMPLIANCE

     The trading of penny stock  companies may be  restricted by the  securities
laws ("Blue Sky" laws) of several  states.  Management is aware that a number of
states  currently  prohibit the  unrestricted  trading of penny stock  companies
absent  the  availability  of  exemptions,  which are in the  discretion  of the
states' securities administrators.  The effect of these states' laws would be to
limit the trading  market,  if any,  for our shares and to make resale of shares
acquired by investors more difficult.


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

Forward-Looking Statements

     The following discussion contains forward-looking  statements regarding our
Company,  its business,  prospects and results of operations that are subject to
certain  risks and  uncertainties  posed by many  factors  and events that could
cause our  actual  business,  prospects  and  results  of  operations  to differ
materially   from  those  that  may  be  anticipated  by  such   forward-looking
statements.  Factors that may affect such  forward-looking  statements  include,
without  limitation:  our ability to  successfully  develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements  that adversely  affect or preclude clients from using our products
or certain  applications;  delays our  introduction of new products or services;
and our failure to keep pace with emerging technologies.

     When used in this  discussion,  words  such as  "believes",  "anticipates",
"expects",   "intends"  and  similar   expressions   are  intended  to  identify
forward-looking  statements,  but are not the  exclusive  means  of  identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these  forward-looking  statements,  which  speak  only  as of the  date of this
report.  Our Company  undertakes  no  obligation  to revise any  forward-looking
statements in order to reflect  events or  circumstances  that may  subsequently
arise.   Readers  are  urged  to  carefully  review  and  consider  the  various
disclosures  made  by us in  this  report  and  other  reports  filed  with  the
Securities and Exchange  Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

Overview

     We concluded our real estate business during January 2002, when we sold our
remaining  parcel of real estate located in Elbert County,  Colorado.  We do not
anticipate  any further real estate  investments.  We have sold all of our notes
receivable  for  cash or  exchange  of debt  principal  that  we  maintained  in
conjunction  with the real estate  transactions.  We believe that the end of our
real estate  business will enable us to focus on our direction of technology and
the development of our new color-measuring technology.

     On December 4, 2001 we changed our name to PocketSpec  Technologies Inc. to
identify and better describe us. We acquired from Color-Spec Technologies, Inc.,
which  is  an  affiliate  of  ours,  an  exclusive  worldwide  license  for  the
manufacturing  and  marketing  rights for a hand-held  device for  measuring and
comparing color of objects and light emission. We acquired these rights pursuant
to a technology license agreement on October 3, 2001. In addition, the agreement
assigned rights to a pending  utility patent  covering the color  technology and
application,  as well as  three  additional  provisional  patents  that  use the
technology in other  applications  including geology. A major thrust for us will
be to develop color-comparing technology. We have the right to use the trademark
"PocketSpec"  we believe  that this will allow us to market a family of products
under the same "PocketSpec" name.

                                       16
<PAGE>

     Our acquisition of intellectual property from Color-Spec Technologies, Inc.
will be a long-term development. We have what we believe to be an excellent team
to develop the technology. The combination of personnel, capital, and technology
should accelerate our development and the opportunities for our shareholders. We
believe that we are set to expand.

Our Operations

     We have two current products.  The first is our PocketSpec  ColorQATM.  The
other is our  PocketSpec  BronzCheck(TM).  At the present time, we are producing
both the ColorQA units and BronzCheck units.

     We sell our products  directly to end user markets through direct mailings,
including email and physical  mailings through the US Postal Service and through
trade shows and expositions.  We use independent contractors as sales personnel.
We have two web sites for sales.  We added on-line  purchasing in May 2002.  The
web sites are www.pocketspec.com for the ColorQA product and www.bronzcheck.com,
with www.tantone.net linked for our BronzCheck product. We accept credit cards.

     During the last fiscal year,  we  completely  revamped and  redesigned  our
marketing program for our products.  For the present, we have abandoned attempts
to enter  corporate  sales to  larger  companies  and  government  agencies.  We
previously  expended  significant  resources  to pursue  these  markets and were
unsuccessful.  We  believe  that  the use of  direct  mailings  can  give us the
flexibility to improve our  effectiveness as well as conserve our resources.  We
use in-house printing for our promotional materials.

Results of Operations

     We began generating  operating  revenues in our color  comparison  business
during this fiscal year.  We incurred a loss for the year ended January 31, 2003
totaling $ 1,183,372 compared to a loss of $1,040,934 for the year ended January
31, 2002.  Our loss for the year ended  January 31, 2003 was due to the start up
costs involved with developing our color comparison  business.  Our loss for the
year  ended  January  31,  2002  was due to a  deferred  gain on the sale of our
Arapahoe  County property in the amount of $192,336 and an expense in the amount
of $601,811  for  research  and  development  costs and $608,579 for general and
administrative  expenses.  In addition,  we incurred a loss on the final sale of
our Elbert  County,  Colorado  property in the amount of $165,428.  Our loss per
share, on a fully diluted basis, was $0.066 per share for the year ended January
31, 2003,  compared to a loss of $.121 per share for the year ended  January 31,
2002.

     We had total  revenues of  $128,248  for the year ended  January 31,  2003.
Total cost of sales,  which in the fiscal year ended January 31, 2003  consisted
of costs of manufacturing, was $79,199.

     Total operating  expenses,  which  consisted of general and  administrative
expenses,  were  $1,438,771  for the year ended  January 31,  2003,  compared to
$1,210,390 for the year ended January 31, 2002. The major  components of general
and  administrative  expenses are research and development,  legal,  accounting,
commissions, wages, rent, and stock based compensation, and other expenses.

     We recorded  stock-based  compensation  in the amount of $61,852 during the
year ended January 31, 2003.

                                       17
<PAGE>

     We recorded  stock-based  compensation in the amount of $160,320 during the
year ended January 31, 2002, which represented  common stock that was issued for
services  provided to us along with common  stock issued for  promotion  through
public relations  organizations  and web-site  development and maintenance.  The
common stock was valued at the closing price of the stock on the date of issue.

     On  January  12,  2002 we sold  the  remaining  parcel  of  property  to an
individual,  ending our real estate  business.  The  agreement  consisted  of an
$800,000  sale price to be paid by cash of $45,000,  a note  receivable  bearing
interest  at  12.69%  accruing  from  April 1, 2002 and due in full on or before
August 29,2002. In addition,  the buyer assumed a note payable for the amount of
$670,000.  We had a cost basis in the property in the amount of $965,478. A loss
on the sale of the property was recorded in the amount of $165,428.

     On January 14, 2002 we acquired rights to intellectual property for a total
cost of  $596,385.  The  transaction  included  cash in the  amount of  $15,000,
1,100,000  shares of common  stock  valued at  $385,000  or $.35 per share,  and
partial assignment of a $644,403 note receivable from an affiliate,  or $196,385
of principal  amount.  The  transaction was expensed to research and development
costs in the accompanying financial statements.

     Between  January 12, 2002 and January 31,  2002,  we sold part of the above
$85,000 note to  non-affiliates.  Net cash received on the partial assignment of
the note totaled  $55,845.  We  discounted  the partial  assignment  and charged
$6,205 to operating  expenses.  The current  carrying  balance on the promissory
note totaled $22,950 at January 31, 2002.

     We have not been profitable since we entered the color comparison business.
We believe that we have begun to generate  enough sales to  potentially  reach a
break-even during the second fiscal quarter. For the coming fiscal year, we plan
to vigorously market our technology and develop our operations.

Liquidity and Capital Resources

     We began generating  operating  revenues in our color  comparison  business
during this fiscal year.  We incurred a loss for the year ended January 31, 2003
totaling $ 1,183,372 compared to a loss of $1,040,934 for the year ended January
31, 2002.  Our net cash from used by operating  activities  was  $1,143,624  and
$538,399 for the year ended January 31, 2002.

     We have not been profitable since we entered the color comparison business.
We believe that we have begun to generate  enough sales to  potentially  reach a
break-even during the second fiscal quarter. For the coming fiscal year, we plan
to vigorously  market our technology and develop our  operations.  Even with our
marketing plan we will continue to have liquidity issues. If we are unsuccessful
in achieving  positive  results form  operations,  we may be required to curtail
operations, liquidate assets, or enter into capital or financing arrangements on
terms, which may have an adverse effect on future operations.

                                       18
<PAGE>

         Our net cash and cash  equivalents  were $6,451 as of January 31, 2003,
compared to $39,895 as of January 31, 2002.  Net cash  received  from  investing
activities  totaled $404,541 as of January 31, 2003 and $149,663 for January 31,
2002.  Cash from  investing  activities  came from  receipts  and sales of notes
receivable  and sale of stock for  January  31,  2003 while  cash for  investing
activities  for the year ended  January 31, 2002 came from sales of property and
notes receivable, and receipts from repayment of loans.

     Our net cash received from  financing  activities was $701,966 for the year
ended January 31, 2003,  compared to having received $424,180 for the year ended
January 31, 2002. Cash from financing activities totaled $867,642, which came as
loans from  affiliates and third  parties,  and sale of stock for the year ended
January 31 2003. Cash from financing  activities totaled $1,879,487,  which came
as loans from  affiliates  and third parties for the year ended January 31 2002.
Financing  activities  were repaid in the total amount of $79,470 for the fiscal
year ended January 31, 2003 and a total amount of $1,358,828 for the fiscal year
ended January 31, 2002.

     For the fiscal year ended  January 31, 2002 cash  received  from  financing
activities  came from an affiliate  for the amount of $200,000 that was recorded
as additional  paid in capital  during the third quarter ended October 21, 2001.
Other cash  received  came from the  exercise of 173,000  shares of common stock
options by a former director in our second quarter. Total cash received from the
exercise of stock options was $47,575.

     We have an amount receivable of $2,000 from our CEO and prepaid expenses of
$1,723 at January 31, 2003. The prepaid expenses  consist of insurance  premiums
and deposits on future trade shows and  expositions  for the year ended  January
31, 2003.

     During the year ended January 31, 2003 we had no outstanding stock options.
All stock  options  representing  150,000  shares of common stock with an option
price of $.275 per share were cancelled.  The options were originally granted on
July 18,  2001.  We  credited  the  original  transaction  valued at  $16,500 to
additional paid in capital on our balance sheets.

     While we have been profitable in the past, we have not been profitable over
the short term,  while we attempt to develop  operations in our color  comparing
technology business.

     During the next twelve  months,  we plan to use our internal  cash flow and
perhaps  private  placement  funds  as  the  principal  method  to  finance  the
commercialization of our technologies.  We do not intend to pay dividends in the
foreseeable future.


     New Accounting Pronouncements

     In April 2002,  the FASB  approved  for  issuance  Statements  of Financial
Accounting  Standards No. 145,  "Rescission of FASB Statements No. 4, 44 and 64,
Amendment of SFAS 13, and Technical Corrections" ("SFAS 145"). SFAS 145 rescinds
previous  accounting  guidance,   which  required  all  gains  and  losses  from
extinguishment  of debt be classified as an  extraordinary  item. Under SFAS 145
classification of debt extinguishment  depends on the facts and circumstances of
the transaction.  SFAS 145 is effective for fiscal years beginning after May 15,
2002 and  adoption is not  expected to have a material  effect on the  Company's
financial position or results of its operations.

     In  December  2002,  the FASB issued  Statements  of  Financial  Accounting
Standards  No.148,  "Accounting  for  Stock-Based  compensation - Transition and
Disclosure - an amendment of FASB  Statement  123" (SFAS 123). For entities that
change their accounting for stock-based  compensation  from the intrinsic method
to the fair value  method under SFAS 123, the fair value method is to be applied
prospectively  to those  awards  granted  after the  beginning  of the period of
adoption  (the  prospective   method).  The  amendment  permits  two  additional

                                       19
<PAGE>

transition  methods for  adoption of the fair value  method.  In addition to the
prospective  method,  the entity can choose to either (i)  restate  all  periods
presented  (retroactive  restatement method) or (ii) recognize compensation cost
from the  beginning  of the fiscal year of adoption as if the fair value  method
had been used to account for awards (modified  prospective  method).  For fiscal
years  beginning  December 15, 2003,  the  prospective  method will no longer be
allowed.  The Company currently accounts for its stock-based  compensation using
the intrinsic value method as proscribed by Accounting  Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and plans on continuing using
this method to account for stock options, therefore, it does not intend to adopt
the  transition  requirements  as specified in SFAS 148. As of January 31, 2003,
the Company  does not have a stock  option plan in  existence,  however;  if the
Company chooses to in the future they will be subject to these guidelines.

Significant Accounting Policies and Estimates

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

Our  consolidated  financial  statements  have been prepared in accordance  with
generally accepted accounting principles, which require us to make estimates and
judgments that affect the reported amounts of assets, liabilities,  revenues and
expenses and the related disclosures.  A summary of these significant accounting
policies  can be  found  in  PocketSpec  Technologies  Inc.'s  (PST's)  Notes to
Consolidated  Financial  Statements  include in this Form 10-KSB.  The estimates
used by management  are based upon PST's  historical  experiences  combined with
managements'  understanding of current facts and  circumstances.  Certain of our
accounting  policies are  considered  critical as they are both important to the
portrayal  of our  financial  condition  and the results of our  operations  and
require  significant  or complex  judgments  on our part.  We  believe  that the
following  represent  the  critical  accounting  policies of PST as described in
Financial Reporting Release No. 60, Cautionary Advice Regarding Disclosure About
Critical  Accounting  Policies,  which was issued by the Securities and Exchange
Commission, inventories, deferred income taxes, allowance for doubtful accounts,
and allowance for sales returns.

The valuation of  inventories  involves  complex  judgments on our part.  Excess
finished  goods  inventories  are a natural  component  of market  demand of our
products. We continually evaluate and balance the levels of inventories based on
sales  projections and historical  product demand.  While certain finished goods
items will sell out quantities of other finished goods items will remain.  These
finished  goods are reserved as excess  inventory.  We believe we have  adequate
control  with  respect  to the amount of  finished  goods  inventories  that are
anticipated  to become  excess,  while we believe this  process  produces a fair
valuation of inventories, changes in general economic conditions of our products
could materially effect valuation of our inventories.

We do not record an  allowance  that  directly  relates to the  warranty  of our
products,  which would otherwise reduce our gross sales. We believe an allowance
is not required at this time,  since  historical data has indicated that returns
of our products for repair or replacement have been insignificant.

                                       20
<PAGE>


ITEM 7. Financial Statements.

                                      INDEX


                                                                           Page
                                                                           ----

Independent Auditors' Report                                                F-2

Report of Independent Certified Public Accountant                           F-3

Consolidated Balance Sheet, January 31, 2003                                F-4

Consolidated Statements of Operations for the years ended
   January 31, 2003 and 2002                                                F-5

Consolidated Statement of Changes in Shareholders' Equity,
   January 31, 2001 through January 31, 2003                                F-6

Consolidated Statements of Cash Flows, for the years ended
   January 31, 2003 and 2002                                                F-8

Notes to Consolidated Financial Statements                                  F-10


<PAGE>

                          INDEPENDENT AUDITOR'S REPORT



Board of Directors
PocketSpec Technologies, Inc.
Denver, Colorado


We have  audited  the  accompanying  consolidated  balance  sheet of  PocketSpec
Technologies,  Inc. and  Subsidiaries  as of January 31,  2003,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  PocketSpec
Technologies,  Inc. and  Subsidiaries  as of January 31, 2003 and the results of
its  operations and its cash flows for the year then ended,  in conformity  with
accounting principles generally accepted in the United States of America.



By: /s/ HEIN + ASSOCIATES LLP
       --------------------------
HEIN + ASSOCIATES LLP

Denver, Colorado
April 3, 2003


                                       F-2
<PAGE>

Independent Auditors' Report

To the Board of Directors and Shareholders:
PocketSpec Technologies, Inc.


We have  audited  the  accompanying  consolidated  balance  sheet of  PocketSpec
Technologies,  Inc. (the  "Company")  and subsidiary as of January 31, 2002 (not
separately  included  herein),  and  the  related  consolidated   statements  of
operations,  shareholders'  equity and cash flows for the year then ended. These
consolidated  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility is to express an opinion on these  consolidated
financial statements based on our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform 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
audit provides 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  PocketSpec
Technologies,  Inc. as of January 31, 2002, and the results of their  operations
and their  cash  flows for the year then  ended in  conformity  with  accounting
principles generally accepted in the United States of America.

As discussed in the accompanying consolidated financial statements,  the Company
entered into material  transactions with related parties.  Such transactions are
not at terms  equivalent to arms-length  transactions  under generally  accepted
accounting principles.  Accordingly,  the operating results presented may not be
indicative  of the  operating  results had the  Company  not entered  into these
related party transactions.



By: /s/ CORDOVANO AND HARVEY, P.C.
    ------------------------------
Cordovano and Harvey, P.C
Denver, Colorado
April 28, 2002

                                       F-3
<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                           Consolidated Balance Sheet
                                   (Audited)
<CAPTION>

                                                                         January 31,
                                                                            2003
                                                                         -----------
<S>                                                                      <C>
                                     Assets
Current assets:
     Cash and Cash Equivalents                                           $     6,451
     Trade receivables (Note 6)                                                2,545
     Indebtedness from related party (Note 5)                                  2,000
     Inventory at cost (Note 6)                                              250,356
     Prepaid expenses                                                          1,723
                                                                         -----------
            Total current assets                                             263,075

Fixed assets: (Note 3)
     Furniture and fixtures, net of accumulated depreciation of $7,016        41,826
     Office equipment, net of accumulated depreciation of $6,999              27,265
     Molds, net of accumulated depreciation of $28,210                        86,056
                                                                         -----------
            Total fixed assets                                               155,147

Intangible assets: (Note 4)
     Patent costs, net of accumulated amortization of $21,338                147,040
     Trademark costs, net of accumulated amortization of $1,979               17,181
     License rights, net of accumulated amortization of $5,555                 4,444
     License rights, net of accumulated amortization of $-0-                  24,000
     License rights, net of accumulated
        amortization of $97,024                                            1,358,338
                                                                         -----------
            Total assets                                                 $ 1,969,225
                                                                         ===========

                      Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable
     Accounts payable, other                                             $    91,474
     Accounts payable, related party (Note 5)                                 48,507
     Accrued liabilities, other                                                5,152
     Accrued liabilities, related party (Note 5)                              20,000
     Accrued interest, other (Note 6)                                          9,950
     Accrued interest, related party (Note 5)                                 13,611
     Short term loans, related party (Note 5)                                 44,000
     Notes payable (Note 6)                                                  395,664
     Note payable, related party (Note 5)                                    280,800
                                                                         -----------
        Total current liabilities                                            909,158

Commitments (Notes 10 and 12)                                                   --

Shareholders' equity: (Note 8)
     Common stock, $0.001 par value, 50,000,000 shares authorized,
        23,028,630 shares issued, 22,998,630 shares outstanding               22,999
     Additional paid-in capital                                            3,251,480
     Treasury stock, excess of $.001 par value,
        30,000 shares at cost                                                (10,606)
     Accumulated deficit                                                  (2,203,806)
                                                                         -----------
            Total shareholders' equity                                     1,060,067
                                                                         -----------
                                                                         $ 1,969,225
                                                                         ===========
</TABLE>

                 See accompanying notes to financial statements

                                       F-4
<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                      Consolidated Statements of Operations
                                    (Audited)
<CAPTION>
                                                                         Twelve Months Ended
                                                                              January 31,
                                                                     ----------------------------
                                                                        2003             2002
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
Revenues
      Sales revenues                                                 $    128,248    $       --

Cost of sales:
      Cost of merchandise sold                                             79,199            --
                                                                     ------------    ------------

                  Gross margin                                             49,049            --

Operating expenses:
      General and administrative expenses                               1,083,695         431,234
      General and administrative-stock based compensation (Note 8)         61,852         160,320
      General and administrative expenses-related parties (Note 5)         25,500          17,025
      Research and development costs                                      115,160         601,811
      Depreciation                                                         40,906            --
      Amortization                                                        111,658            --
                                                                     ------------    ------------
                  Total general and administrative expenses             1,438,771       1,210,390

                  Operating (loss)                                     (1,389,722)     (1,210,390)

Other income (expense):
      Other income                                                           --            12,900
      Interest income (expense)                                             4,783        (169,508)
      Gain on sale of assets acquired from related party (Note 5)           9,231          94,228
                                                                     ------------    ------------
                  Total other income (expense)                             14,014         (62,380)

                  (Loss) before provision for income taxes             (1,375,708)     (1,272,770)

Provision for income tax (expense) benefit                                   --              --
                                                                     ------------    ------------
                  Net (loss)                                           (1,375,708)     (1,272,770)

Discontinued operations:
      Income (loss) of Real Estate Opportunities, Inc. (including
          gain on disposal of $192,336) (Note 5)                          192,336         231,836
      Income tax (expense) benefit                                           --              --
                                                                     ------------    ------------
      Income (loss) on discontinued operations                            192,336         231,836

                  Net (loss)                                         $ (1,183,372)   $ (1,040,934)
                                                                     ============    ============

Net income (loss) per share (basic and diluted):
      Continuing operations                                          $     (0.077)   $     (0.148)
                                                                     ============    ============
      Discontinued operations                                        $      0.011    $      0.027
                                                                     ============    ============
      Net income (loss)                                              $     (0.066)   $     (0.121)
                                                                     ============    ============
      Basic and diluted shares used for computation                    17,932,064       8,580,278
                                                                     ============    ============
</TABLE>
                 See accompanying notes to financial statements

                                       F-5

<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                 Consolidated Statements of Shareholders' Equity
<CAPTION>


                                                  Common    Treasury             Additional     Common
                                                  Stock      Stock                Paid In       Stock       Retained
                                                  Shares     Shares    Amount     Capital       Options     Earnings       Total
                                                ----------  --------  ---------  ----------    ---------   -----------  ------------
<S>                                             <C>         <C>       <C>        <C>            <C>        <C>          <C>

     Balance January 31, 2001                    6,872,433      --    $  6,873   $  20,473      $16,500    $   20,500    $   64,346

May 2001, stock based compensation
     recognized on shares issued for services       50,000      --           50       7,950         --            --          8,000
June 2001, shares of common stock issued
     in exchange for property                      695,000      --          695     277,305         --            --        278,000
Stock based compensation recognized
     on shares issued for services                  64,500      --           64      10,256         --            --         10,320
July 2001, shares of common stock issued
     on shares in exchange for property            714,285      --          714     199,286         --            --        200,000
Exercise of stock options for cash                 173,000      --          173      47,402         --            --         47,575
Stock based compensation recognized
     on shares issued for services                 275,000      --          275      43,725         --            --         44,000
Stock based compensation recognized on shares
     issued for promotional services               250,000      --          250      39,750         --            --         40,000
August 2001, stock options of 150,000
     shares cancelled                                 --        --         --        16,500      (16,500)         --              0
September 2001, shares repurchased                 (59,500)     --          (59)    (12,199)        --            --        (12,258)
October 2001, stock based compensation
     recognized on shares issued for services       95,000      --           95      19,705         --            --         19,800
Shares issued in exchange for intellectual
     property, related party                       700,000      --          700     139,300         --            --        140,000
Additional paid in capital recorded for
     cash on above transaction                        --        --         --       200,000         --            --        200,000
Shares repurchased                                 (54,500)     --          (55)    (16,380)        --            --        (16,435)
November 2001, stock based compensation
     recognized on shares issued for services       70,000      --           70      18,130         --            --         18,200
Shares issued in exchange for note
     receivable, related party                     100,000      --          100      29,900         --            --         30,000
Shares cancelled                                   (16,500)     --          (16)     (5,351)        --            --         (5,367)
Shares repurchased                                    --     (17,000)       (17)     (3,720)        --            --         (3,737)
December 2001, shares repurchased                     --     (57,000)       (57)    (15,030)        --            --        (15,087)
January 2002, stock based compensation
     recognized on shares issued for services       60,000      --           60      19,940         --            --         20,000
Shares issued for intellectual property          1,100,000      --        1,100     383,900         --            --        385,000
Shares repurchased                                    --     (37,850)       (38)    (10,320)        --            --        (10,358)

</TABLE>

                 See accompanying notes to financial statements

                                       F-6
<PAGE>
<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                 Consolidated Statements of Shareholders' Equity
<CAPTION>


                                                  Common    Treasury             Additional     Common
                                                  Stock      Stock                Paid In       Stock       Retained
                                                  Shares     Shares    Amount     Capital       Options     Earnings       Total
                                                ----------  --------  ---------  ----------    ---------   -----------  ------------
<S>                                             <C>         <C>       <C>        <C>           <C>         <C>          <C>

Net loss for the year                                 --        --         --          --           --      (1,040,934)  (1,040,934)
                                                ----------  --------  ---------  ----------    ---------   -----------  ------------
Balance January 31, 2002                        11,088,718  (111,850) $  10,977  $1,410,522         --     $(1,020,434) $   401,065
                                                ==========  ========  =========  ==========    =========   ===========  ============

February 2002 shares repurchased                      --     (74,858)       (75)    (25,690)        --            --        (25,765)
February 2002, shares cancelled                    (79,000)     --         --          --           --            --              0
March, 2002 shares repurchased                        --     (36,992)       (37)    (12,913)        --            --        (12,950)
March 2002, shares cancelled                       (33,358)     --           (1)       (177)        --            --           (178)
March 2002, shares issued for stock based
   compensation                                     30,000      --           30      10,670         --            --         10,700
April 2002, shares repurchased                        --     (75,500)       (76)    (27,066)        --            --        (27,142)
May 2002, shares repurchased                          --     (27,000)       (27)     (8,874)        --            --         (8,901)
May 2002, stock acquired from Color-Spec
   Technologies, Inc.                                 --    (700,000)      (700)        700         --            --              0
May 2002, shares issued for Color-Spec
   Technologies, Inc.                            8,316,353      --        8,316   1,378,734         --            --      1,387,050
June 2002, shares repurchased                         --      (7,500)        (7)     (2,962)        --            --         (2,969)
July 2002 shares repurchased - Gill & Assoc           --     (23,000)       (23)     (8,279)        --            --         (8,302)
July 2002, shares cancelled                       (901,850)  901,850       --          --           --            --              0
September 2002, shares issued for stock
   based compensation                               78,000      --           78      21,522         --            --         21,600
October 2002, sale of common stock, related
   parties                                       1,165,000      --        1,165     115,335         --            --        116,500
October 2002, common stock exchanged for debt    2,430,000      --        2,430     240,570         --            --        243,000
October 2002, sale of stock to individuals         436,996      --          438      61,308         --            --         61,746
October 2002, shares issued for stock based
   compensation                                      5,000      --            5         795         --            --            800
October 2002, shares issued for stock based
   compensation                                     10,000      --           10       1,590         --            --          1,600
October 2002, shares cancelled                     (13,000)   13,000       --          --           --            --              0
December 2002,  common stock issued for
  payable                                          130,000      --          130      34,303         --            --         34,433
December 2002, shares issued for stock based
   compensation                                     70,625      --           71      15,252         --            --         15,323
January 2003,  shares issued for stock based
   compensation                                     95,146      --           95      11,734         --            --         11,829
January 2003,  shares issued for intellectual
   property                                        200,000      --          200      23,800         --            --         24,000
Net loss for the year                                 --        --         --          --           --      (1,183,372)  (1,183,372)
                                                ----------  --------  ---------  ----------    ---------   -----------  -----------
Balance January 31, 2003                        23,028,630   (30,000) $  22,999  $3,240,874    $    --     $(2,203,806) $ 1,060,067
                                                ==========  ========  =========  ==========    =========   ===========  ===========
</TABLE>

                 See accompanying notes to financial statements

                                       F-7


<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                      Consolidated Statements of Cash Flows
                                    (Audited)
<CAPTION>
                                                                                     Twelve Months Ended
                                                                                         January 31,
                                                                                 --------------------------

                                                                                    2003           2002
                                                                                 -----------    -----------
<S>                                                                              <C>            <C>
Cash flows from operating activities:
      Net income /loss                                                           $(1,183,372)   $(1,040,934)
      Adjustments to reconcile net loss to net cash
        used by operating activities:
          Depreciation and amortization                                              148,565           --
          Stock-based compensation (Note 8)                                           61,852        160,320
          Non-cash interest expense, related parties (Note 5)                         53,433           --
          Non-cash interest expense, other (Note 6)                                    5,625         41,758
          Non-cash portion of research and development costs                            --          581,385
          Discount on sale of note receivable (Note 6)                                45,198         30,137
          Gain on sale of assets, related party                                     (192,336)       (94,228)
          Gains (Note 5)                                                            (227,004)
          (Increase) decrease in:
              Accounts receivable, trade                                              (2,545)          --
              Inventory                                                             (250,357)          --
              Prepaids and accruals                                                   (1,723)        (2,172)
          Increase (decrease) in:
              Payables, accruals, and other, net                                     271,889          2,670
              Deferred gain on sale of property, related party                          --            9,669
                                                                                 -----------    -----------
                   Net cash used by operating activities                          (1,043,771)      (538,399)
                                                                                 -----------    -----------

Cash flows from investing activities:
      Cash received on disposition of participation interest, related party             --          144,290
      Cash paid for property additions, related party (Note 5)                       (69,065)          --
      Cash paid for property additions, other (Note 6)                              (121,385)      (255,932)
      Cash paid for intangibles (Note 6)                                             (34,040)       (16,227)
      Loans made, related party (Note 5)                                              (2,497)          --
      Proceeds from sale of assets, related party                                       --           62,052
      Proceeds from sale of assets, other                                               --           45,000
      Proceeds from repayment of short term loan, related party (Note 5)               7,700           --
      Proceeds from repayment of notes receivable, related party (Note 5)             30,054           --
      Proceeds from sale of property bond                                               --           13,200
      Proceeds from sale of note receivable, related party (Note 5)                     --          101,435
      Proceeds from sale of note receivable, other (Note 6)                          493,921         55,845
                                                                                 -----------    -----------
                   Net cash received (used) by investing activities                  304,688        149,663
                                                                                 -----------    -----------
</TABLE>

                 See accompanying notes to financial statements

                                       F-8

<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                      Consolidated Statements of Cash Flows
                                    (Audited)
<CAPTION>

                                                                                     Twelve Months Ended
                                                                                         January 31,
                                                                                 --------------------------

                                                                                    2003           2002
                                                                                 -----------    -----------
<S>                                                                              <C>            <C>
Cash flows from financing activities:
      Principal payments paid on notes (Note 6)                                       (3,500)      (393,417)
      Principal payments paid on notes, related party                                   --         (236,011)
      Repayment of short term loans, other                                              --          (60,000)
      Principal payments paid on notes, related party (Note 5)                          (200)          --
      Repayment of short term loans, related parties (Note 5)                        (75,770)      (669,400)
      Proceeds from short term loans, related parties (Note 5)                        75,770        669,400
      Proceeds from borrowing, other (Note 6)                                        100,000           --
      Proceeds from borrowing, related parties (Note 5)                               99,689        195,752
      Repayment of short term borrowings, other                                         --          670,000
      Repayment of note receivable, related party                                       --             --
      Indebtedness of related parties                                                   --          (33,237)
      Repayment of indebtedness, related party                                          --           25,537
      Repayment of note receivable, related party                                       --           71,223
      Proceeds from revenue funding, related parties (Note 5)                        374,562           --
      Proceeds from revenue funding, other (Note 6)                                   39,375           --
      Cash paid to acquire stock (Note 8)                                            (86,206)       (63,242)
      Proceeds from exercised stock options                                             --           47,575
      Proceeds from issuance of common stock (Note 8)                                 61,746           --
      Proceeds from issuance of common stock, related party (Notes 5 & 8)            116,500           --
      Contributed capital, related party                                                --          200,000
                                                                                 -----------    -----------
                   Net cash provided by financing activities                         701,966        424,180
                                                                                 -----------    -----------

Net change in cash                                                                   (37,117)        35,444
Cash and cash equibalents at beginning of period                                      43,568          4,451
                                                                                 -----------    -----------
                   Cash and cash equivalents at end of period                    $     6,451    $    39,895
                                                                                 ===========    ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
      Cash paid during the year for:
          Interest                                                               $     6,732    $   134,480
                                                                                 ===========    ===========
          Income taxes                                                           $      --      $     4,734
                                                                                 ===========    ===========
      Non-cash investing and financing activities:
          Common stock issued for acquisition of Color-Spec Technologies, Inc.   $ 1,387,050    $      --
                                                                                 ===========    ===========
          Common stock issued for property                                       $      --      $   478,000
                                                                                 ===========    ===========
          Common stock issued for note receivable                                $      --      $    30,000
                                                                                 ===========    ===========
          Common stock issued to acquire intangibles                             $    24,000    $   140,000
                                                                                 ===========    ===========
          Common stock issued for services                                       $    61,852    $      --
                                                                                 ===========    ===========
          Common stock issued to repay revenue entitlement funding               $   284,485    $      --
                                                                                 ===========    ===========
          Common stock issued to repay payables                                  $    34,433    $      --
                                                                                 ===========    ===========
</TABLE>
                 See accompanying notes to financial statements

                                       F-9

<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements

Note 1:  Basis of presentation

(a)  Organization and Basis of Presentation

We were  incorporated  on January  1, 2000 as FJK  Millennium  Fund V, Inc.  and
subsequently  changed our name to FJK  Opportunities,  Inc. On April 6, 2000, we
merged with an affiliate,  Real Estate  Opportunities,  Inc.  (formerly Monument
Galleries,  Inc.),  a Colorado  corporation,  incorporated  on May 15, 1998.  We
acquired tracts of raw land and developed them into residential lots for sale to
homebuilders.  In addition, we acquired, for redevelopment,  a commercial rental
property in Denver,  Colorado.  During the year ended  January 31, 2002, we sold
all of our real estate holdings and effective during our third fiscal quarter of
2001,  we changed our business  plan and became a developer  of color  comparing
instruments.

On December 4, 2001,  our  shareholders  voted in favor of two amendments to our
Articles of Incorporation. The first amendment approved was our name change from
Real Estate  Opportunities,  Inc. to  PocketSpec  Technologies  Inc.  The second
amendment  approved  our  changing  our  authorized  shares of common stock from
10,000,000 to 50,000,000  shares. Our shareholders also elected four nominees to
our board of directors  and  ratified  our  selection of auditors for our fiscal
year ending January 31, 2003.

In  May  2002,  we  acquired  Color-Spec  Technologies,   Inc.  in  a  tax-free,
stock-for-stock  transaction.  We exchanged a total of  8,316,353  shares of our
common  stock  in  exchange   for  100%  of  the  common  stock  of   Color-Spec
Technologies, Inc., which became a wholly owned subsidiary of us.

Our consolidated  financial  statements  include the accounts of the Company and
our wholly owned subsidiary. All inter-company transactions have been eliminated
in consolidation.

We  are a  technology  company,  which  is in the  business  of  developing  and
marketing color comparison devices.  Previously, we were engaged in certain real
estate  activity  since  inception  through  January 31,  2002.  Inherent in our
business are various risks and  uncertainties,  including our limited  operating
history,  historical  operating  losses,  and the  success  of recent  change in
business  plans.  Our plans include  continuing  to develop our  color-measuring
technology and marketing our products. Our future success will be dependent upon
our ability to market an effective and competitive color-comparing instrument on
a timely and cost-effective bases.

(b) Liquidity and Capital Resources

We began generating  operating revenues in our color comparison  business during
this  fiscal  year.  We  incurred a loss for the year  ended  January  31,  2003
totaling $ 1,183,372 compared to a loss of $1,040,394 for the year ended January
31, 2002. We have a working  capital deficit of $646,083 as of January 31, 2003.
Our loss for the  year  ended  January  31,  2003 was due to the  start up costs
involved  with  developing  our  color  comparison  business.  Our  loss for the
totaling $ 1,183,372 compared to a loss of $1,040,394 for the year ended January
31, 2002. We have a working capital deficit of $646,083 as of January totaling $
1,183,372 compared to a loss of $1,040,394 for the year ended

                                      F-10
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements

totaling $ 1,183,372 compared to a loss of $1,040,394 for the year ended January
31, 2002. We have a working  capital deficit of $646,083 as of January 31, 2003.
Our loss for the  year  ended  January  31,  2003 was due to the  start up costs
involved with developing our color  comparison  business.  Our loss for the year
ended  January 31, 2002 was due to a deferred  gain on the sale of our  Arapahoe
County  property  in the  amount of  $192,336  and an  expense  in the amount of
$601,811  for research  and  development  costs along with and expense for stock
based   compensation  in  the  amount  of  $1,632,876   recorded  by  Color-Spec
Technologies,  Inc.  In  addition,  we  incurred a loss on the final sale of our
Elbert County, Colorado property in the amount of $165,428.

We have not been profitable since we entered the color comparison  business.  We
believe  that we have begun to  generate  enough  sales to  potentially  reach a
break-even during the second fiscal quarter. For the coming fiscal year, we plan
to vigorously  market our technology and develop our  operations.  Even with our
marketing plan we will continue to have liquidity issues. If we are unsuccessful
in achieving  positive  results form  operations,  we may be required to curtail
operations, liquidate assets, or enter into capital or financing arrangements on
terms, which may have an adverse effect on future operations.

(c) Use of Estimates

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain 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. Accordingly, actual results may differ from those estimates.

(d) 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. Our net cash and cash
equivalents  were  $6,451 as of  January  31,  2003,  compared  to $43,568 as of
January 31, 2002

(e) Revenue and Cost Recognition

Costs that clearly relate to sales of the Company's  color  comparison  products
are charged to  earnings  when  incurred.  Revenues  from sales of products  are
recognized  at the time of  shipment  of  product.  Customers  have the right to
return products for 90 days after purchase.  Defective  products are repaired or
replaced  at our  discretion.  Refunds  are issued  either by check or credit as
necessary.

(f) Inventory

Inventories are stated at the lower of cost or market.  Cost includes materials,
labor, direct costs, and allocated overhead. Generally,  inventories are written
down to market value during the period in which  impairment of such  inventories
is identified.  Inventory at January 31, 2003 consisted of finished goods. We do
not record an allowance  that directly  relates to the warranty of our products,
which would otherwise reduce our gross sales. We believe an allowance

                                      F-11
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements

is not required at this time,  since  historical data has indicated that returns
of our products for repair or replacement have been insignificant.

(g) Intangible Assets

The Company acquired an exclusive,  worldwide license under a technology license
agreement for the  manufacturing  and marketing rights to a hand-held device for
comparing the color of objects and light  emission.  In addition,  the agreement
assigned rights to a pending  utility patent  covering the color  technology and
applications  for  trademarks  and patent  protection  for the  ColorQA  and the
BronzCheck  devices  and  related  technologies.  In January  2003,  the Company
entered into a technology  transfer agreement to acquire an exclusive license to
technologies used in the measurement of ultra-violet emissions from tanning beds
used in tanning salons.

All electronic  components used within our products are readily  available.  All
optical,  mechanical and packaging  components are unique to us but use standard
injection  mold practices for  manufacturing  of these  components.  The Company
attempt to incorporate  previously  used  programming  codes and  electronics in
planning for future products.  At the present time, we do not plan to produce or
assemble products outside of our direct control.

Costs of acquiring the  exclusive  rights are  reflected as  intangibles  in the
accompanying  consolidated  financial  statements.  The costs of such rights are
recovered  at the time the rights are sold or  otherwise  disposed  of.  Related
income is recognized when earned. The license rights are amortized over ten (10)
years.

(h) Impairment of Intangible Assets

The Company  evaluates  the carrying  value of its  long-lived  assets under the
provisions of Statement of Financial  Accounting  standards No. 144,  Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of  (Statement  No. 144).  Statement  No. 144 requires  impairment  losses to be
recorded on long-lived assets used in operations,  when indicators of impairment
are present and the undiscounted  future cash flows estimated to be generated by
those  assets are less than the  assets'  carrying  amount.  If such  assets are
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or fair value,  less
costs to sell.

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 142,
"Goodwill and Other Intangible Assets" effective  February 1, 2002.  Pursuant to
SFAS No. 142, other intangible assets but must be tested for impairment at least
annually.  The Company has performed both the  transitional  impairment test and
annual  impairment  test  required  by SFAS No.  142,  using  certain  valuation
techniques,  and has  determined  that no impairment  exists at this time. It is
possible but not  predictable  that a change in the Company's  business,  market
capitalization,  operating  results or other  factors  could affect the carrying
value of intangible assets and cause an impairment write-off.

(i) Income Taxes

                                      F-12
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial  Accounting Standards No. 109, Accounting for Income Taxes (SFAS 109).
SFAS 109 requires  recognition  of deferred tax  liabilities  and assets for the
expected  future  tax  consequences  of events  that have been  included  in the
consolidated  financial statements or tax returns.  Under this method,  deferred
tax  liabilities and assets are determined  based on the difference  between the
financial  statement and tax bases of assets and  liabilities  using enacted tax
rates in effect for the year in which the differences are expected to reverse.

(j) Stock Based Compensation

The Company  accounts for  stock-based  compensation  arrangements in accordance
with Statement of Financial  Accounting  Standards ("SFAS") No. 123, "Accounting
for Stock-Based  Compensation,"  which permits  entities to recognize as expense
over the vesting period the fair value of all stock-based  awards on the date of
grant.  Alternatively,  SFAS No. 123 allows  entities  to  continue to apply the
provisions of Accounting  Principle Board ("APB") Opinion No. 25 and provide pro
forma net earnings (loss) disclosures for employee stock option grants as if the
fair-value  based method  defined in SFAS No. 123 had been applied.  The Company
has  elected to continue to apply the  provisions  of APB Opinion No. 25,  where
applicable, and provide the pro forma disclosure provisions of SFAS No. 123.

(k) Transfer Pricing of Transactions Among Related Entities

The Company  accounts for certain related party  transactions in accordance with
SEC  policies.  The SEC staff has stated that  assets  should be valued at their
historical cost in a transfer of assets between companies under common control.

(l) Earnings Per Share

Basic earnings per share are generally  calculated by dividing net income by the
weighted  average  number  of shares  outstanding.  Diluted  earnings  per share
reflect the potential dilution that would occur if all grants,  agreements,  and
contracts to issue shares were exercised or converted.  Diluted income per share
is the same as basic  income per share for the years ended  January 31, 2003 and
2002.

(m) New Accounting Pronouncements

In April 2002, the FASB approved for issuance Statements of Financial Accounting
Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of
SFAS 13, and Technical  Corrections"  ("SFAS 145").  SFAS 145 rescinds  previous
accounting guidance,  which required all gains and losses from extinguishment of
debt be classified as an extraordinary  item. Under SFAS 145  classification  of
debt  extinguishment  depends on the facts and circumstances of the transaction.
SFAS 145 is effective for fiscal years beginning after May 15, 2002 and adoption
is not expected to have a material effect on the Company's financial position or
results of its operations.

In December 2002, the FASB issued Statements of Financial  Accounting  Standards
No.148,  "Accounting for Stock-Based  compensation - Transition and Disclosure -
an amendment of FASB  Statement  123" (SFAS 123). For entities that change their
accounting for stock-based compensation from the intrinsic method to the fair

                                      F-13
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements

value   method  under  SFAS  123,  the  fair  value  method  is  to  be  applied
prospectively  to those  awards  granted  after the  beginning  of the period of
adoption  (the  prospective   method).  The  amendment  permits  two  additional
transition  methods for  adoption of the fair value  method.  In addition to the
prospective  method,  the entity can choose to either (i)  restate  all  periods
presented  (retroactive  restatement method) or (ii) recognize compensation cost
from the  beginning  of the fiscal year of adoption as if the fair value  method
had been used to account for awards (modified  prospective  method).  For fiscal
years  beginning  December 15, 2003,  the  prospective  method will no longer be
allowed.  The Company currently accounts for its stock-based  compensation using
the intrinsic value method as proscribed by Accounting  Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and plans on continuing using
this method to account for stock options, therefore, it does not intend to adopt
the  transition  requirements  as specified in SFAS 148. As of January 31, 2003,
the Company  does not have a stock  option plan in  existence,  however;  if the
Company chooses to in the future they will be subject to these guidelines.

Note 2: Acquisition of property

     (a)  In order to obtain specific intellectual property, on May 31, 2002 the
          Company  acquired 100% of the issued and outstanding  common shares of
          Color-Spec  Technologies,   Inc.  (Color-Spec)  in  a  stock-for-stock
          acquisition.  Color-Spec  has  developed  and  holds  the  rights to a
          product line of color  comparing  instruments.  Under the terms of the
          acquisition,  each shareholder of Color-Spec received one common share
          of PocketSpec for each common share of Color-Spec  owned.  The Company
          issued a total of  8,316,353  restricted  shares  of  common  stock in
          connection  with this  transaction.  As 50% of Color-Spec was owned by
          the president and controlling shareholder of Pocket-Spec, that portion
          of the  consideration  has  been  recorded  at  historical  cost.  The
          remaining 50% of the consideration issued for Color-Spec was valued at
          the market  price of the  Company's  common  stock on May 31,  2002 of
          $1,455,362.  The amount of the purchase  price  assigned to each major
          asset and liability of Color-Spec is as follows:

          Current Assets                       $     5,615
          Fixed Assets, net                          4,992
          License rights                         1,455,362
          Current liabilities                          150

          The following  unaudited  pro-forma  results of operations are for the
          Company  and  Color-Spec  as if the  acquisition  had  taken  place on
          February 1, 2002:

                                         Year Ended           Year Ended
                                         January 31,          January 31,
                                            2003                 2002
                                         -------------        --------------

          Revenue                         $    128,248         $          -
          Net (Loss)                       (1,283,712)          (3,099,544)
          Loss per share                        (0.06)               (0.18)
          Weighted average shares
            Outstanding                     20,704,181           16,896,631

                                      F-14
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


          The  amortization  period for the  license  rights  are 10 years.  The
          results of the Color-Spec  business have been  consolidated with those
          of Pocket-Spec effective May 31, 2002.

     (b)  During the third quarter of our fiscal year ended January 31, 2003 the
          Company  entered into a trademark  license  agreement with  Solartech,
          Inc. located in Michigan.  The purpose of the agreement was to acquire
          use of its hand held solar meters for use with the Company's hand held
          color-measuring  devices,  primarily  the  BronzCheckTM  product line.
          Terms  of the  agreement  include  a  non-exclusive  right  to use the
          Licensed  Mark in the  promotion  of solar  meters for a period of ten
          (10) years.  The property  was  acquired for 200,000  shares of common
          stock valued at $24,000 or $.12 per share.


Note 3: Buildings, property, equipment and depreciation.

Building,  property and equipment 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:  building,  39 years; building  improvements,  39 years;
furniture, 7 years;  equipment, 5 years; and molds, 3 years.  Depreciable assets
consisted of the following at January 31, 2003:

                  Furniture                                         $    48,842
                  Equipment                                              34,264
                  Molds                                                 114,266
                                                                    -----------
                                                                        197,372
                  Less accumulated depreciation                         (42,225)
                                                                    -----------
                                                                    $   155,147

Note 4: Intangible assets and amortization

Intangible assets consisted of the following at January 31, 2003:

                  Patent costs                                      $   168,378
                  Trademark                                              19,160
                  License agreements                                     33,999
                  PocketSpec license agreement                        1,455,362
                                                                    -----------
                                                                      1,676,899
                  Less accumulated amortization                     $  (125,896)
                                                                    -----------
                                                                    $ 1,551,003

Note 5: Related party transactions

Asset  Realization,  Inc. (ARI), B7 Brand,  LLC (B7B),  Cape Aloe Corp.,  (CAC),
Cherry Creek Cottage, LLC (CCC), Color-Spec Technologies,  Inc., (CST), Krupka &
Associates, LLC (K&A), F. Jeffrey Krupka (FJK), Janet Brophy (JB), Krupka-Brophy
Profit Sharing Plan (KBP), and Platinum  Financial Fund, LLC (PFF),  Wraith Moon
House,  LLC (WMH) are affiliates of our Company by either common ownership or by
common management.

                                      F-15
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements

     (a)  A remaining  receivable  balance from our CEO totals $2,000,  which we
          anticipate will be paid during the next fiscal quarter.

     (b)  Acquisition of property

          On March 22,  2002 we  acquired  assets  from  PFF.  The  assets  were
          purchased  at  predecessor  cost,  or net book  value in the amount of
          $53,165 per our affiliate's cost basis less accumulated  depreciation.
          FJK,  our  CEO,  acquired   additional  assets  totaling  $15,900  for
          PocketSpec  Technologies  Inc.  through  use of his  personal  line of
          credit.  For the year ended January 31, 2003, we have reimbursed FJK a
          total amount of $15,900 for depreciable asset purchases.

     (c)  The Company had  accounts  payable due to FJK in the amount of $48,507
          from  purchases  and  payments  made by FJK on behalf  of the  Company
          through use of his personal line of credit.

     (d)  Accrued  interest for the year ended January 31, 2003 totaled  $13,562
          for B7B,  $29 to WMH,  and $20 to JB for the year  ended  January  31,
          2003.

     (e)  Short term loans

          During the fourth  quarter  ended  January  31,  2003,  B7B loaned the
          Company  $23,250  and JB loaned the Company  $22,439 and $10,000  from
          FJK, which was converted into notes payable. The Company also borrowed
          $44,000  from JB for  $24,000  and  $20,000  from  CAC  for  operating
          capital,  which  remains  outstanding.   The  short-term  loans  total
          $99,689.

     (f)  Notes payable

          During the year ended January 31, 2003, the Company received  $161,937
          from  assignment  agreements  for the  sale of  specific  units  to be
          produced at a later time. The financial  arrangement covered the costs
          of  inventory  and  production,  in order to establish an inventory of
          completed units to be shipped upon receipt of orders.

          We  received  cash from ARI in the  amount of  $43,312  for 330 units,
          $113,125 from B7B for 862 units, and $5,500 from WMH for 40 units. The
          terms of the agreements  included finance charges on a per unit basis,
          or  approximately  $19 per unit.  Interest  expensed on the  financial
          arrangement totaled $23,058.

          The Company entered into an agreement with FJK to convert $40,317 from
          accounts  payable owed to FJK into a note payable.  JB also loaned the
          Company $32,438 for operating capital. B7B received an assignment from
          FJK and JB in the amount of $72,755 for the loans plus interest in the
          amount  of $495  for a total  amount  of  $73,250.  Additionally,  B7B
          received an assignment from ARI for its entitlement to future revenues
          plus interest, or $43,313 and $6,187, respectively,  or a total amount
          from ARI of $49,500 as part of the transaction. B7B also converted its
          entitlement of future revenues and interest in the amounts of $113,125
          and $15,875 for a total amount of $129,000. The amounts were converted
          into a note payable totaling $251,750. B7B also loaned the Company an

                                      F-16
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


          additional  $23,250  to  complete  the note  payable  in the amount of
          $275,000.  The $275,000 note payable to B7B bears  interest at 15% per
          annum and is due and payable in one lump sum including  interest on or
          before October 3, 2003. The total amount due and payable on October 3,
          2003 is $275,000 principal and $41,250 interest.

          The Company converted $5,500 from WMH plus interest totaling $500 into
          a note  payable to WMH. A principal  payment in the amount of $200 was
          paid to WMH  during  December  2002.  The  total of notes  payable  is
          $275,000 to B7B and $5,800 to WMH.

     (g)  General and administrative expenses

          During February 2002, the Company  received  $20,000 from CST to cover
          the cost of  additional  legal  fees paid for the  continued  costs of
          patents.  The  Company  paid legal  fees in the amount of $20,000  and
          expensed the cost in the accompanying financial statements.

          On March 5, 2002 the Company entered into a new office lease agreement
          with CCC.  The  agreement  requires  $4,000 per month rental of office
          space commencing  April 1, 2002 and continuing  through April 1, 2007.
          The agreement also requires payment of the yearly property tax. During
          the year ended  January 31, 2003 we paid CCC $40,000 for office  rent.
          We had  accrued  rent  payable in the amount of $20,000 at January 31,
          2003.

          FJK  reimbursed  the Company $2,500 for office space used for managing
          other  affiliated  companies.  The Company also reimbursed FJK $94,465
          for travel,  inventory purchases, and other expenses. The amounts have
          been recorded in the accompanying financial statements.

     (h)  Other income

          During the fiscal year ended January 31, 2003 the Company recognized a
          gain on the sale of real property in the amount of $192,336.  The gain
          had been  deferred from a prior period due to the sale of the property
          to  PFF,  an  affiliate.  The  original  agreement  with  PFF  was for
          consideration  of $2,800,000 in cash, debt  assumption and notes.  PFF
          assumed all outstanding debt obligations on the property.  We accepted
          a note  receivable  from PFF in the amount of  $644,403.  Terms of the
          note  included  monthly  principal  and  interest  payments of $30,000
          beginning  December 1, 2001 and  maturing  on  December  1, 2002.  The
          carrying value of the property  totaled  $1,941,664  and  encumbrances
          totaled $1,489,2876.

          We deferred  the gain on the sale in the amount of $192,336  until PFF
          sold the  property  or we  received  payment  in full on the  $644,403
          promissory  note either by selling the note or applying  payments from
          PFF to the note.

     (i)  Interest expense

          The Company recorded non-cash interest expense to related parties

                                      F-17
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


          totaling  $53,433  from  transactions  for the year ended  January 31,
          2003.  $23,058  interest was incurred from B7B. An additional  $30,375
          interest  expense was  incurred in a  transaction  with KBP when KBP's
          revenue entitlement was converted to stock.

     (j)  Loans between related parties

          During the year ended  January 31, 2003 the Company  loaned CST $2,000
          and FJK $497.  The  short-term  loans were repaid during the year. The
          total amount loaned to affiliates was $2,497.

          During the year ended January 31, 2003,  ARI repaid the Company $2,700
          for a loan made in a prior year.  CST repaid the Company  $2,000,  K&A
          repaid $500 for a loan made in a prior year,  and FJK $2,500 on a loan
          made in a prior year. Total proceeds from loan repayments were $7,700.

          During the year ended January 31, 2003, we received  payments from PFF
          applied to a note receivable totaling $33,054.

          Prior to the year ended January 31, 2003, the Company borrowed $25,000
          for B7B,  $48,000  from FJK,  and $2,770  from PFF.  The total  amount
          borrowed for operating capital was $75,770.

          The Company repaid  short-term  loans in the amount of $25,000 to B7B,
          $2,770 to PFF, and $48,000 to FJK.  Total amount  repaid to affiliates
          for short-term loans was $75,770.

     (k)  Revenue funding

          During the year ended January 31, 2003, the Company received  $374,562
          from  assignment  agreements  for the  sale of  specific  units  to be
          produced at a later time. The financial  arrangement covered the costs
          of  inventory  and  production,  in order to establish an inventory of
          completed units to be shipped upon receipt of orders.

          We received cash from ARI in the amount of $43,312, $113,125 from B7B,
          $212,625  from KBP, and $5,500 from WMH.  The terms of the  agreements
          included finance charges on a per unit basis, or approximately $19 per
          unit.  Total interest  expensed on the financial  arrangement  totaled
          $52,938.

     (l)  Issuance of common stock

          During the year ended  January 31,  2003 the  Company  sold a total of
          1,165,000 shares of common stock to affiliates.  AGO purchased 185,000
          shares for $18,500,  CAC purchased 555,000 shares for $55,500, and ARI
          purchased  425,000  shares  for  $42,500.  Total  cash  received  from
          affiliates was $116,500.


     (m)  During the year ended  January  31, 2003 the CEO and CFO along with an
          employee took a reduction in monthly salary in order to help reduce

                                      F-18
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                         Notes to Consolidated Financial


          operating  costs and enhance  cash flows for the  Company.  The salary
          reductions  were effective  October 15, 2002.  Cost savings created in
          the salary  reductions  total $35,963.  The  reductions  will continue
          until the Company becomes profitable.


Note 6: Transactions with non-affiliates

     (a)  For  the  year  ended  January  31,  2003  the  Company  had  accounts
          receivable  totaling $2,545. The Company acquired inventory for use in
          the production of its color measuring  product lines. The value of the
          inventory  at January  31,  2003  totaled  $250,357.  The  Company had
          payables  in the  amount  of  $271,889  net and also  acquired  assets
          totaling $121,385 and acquired intangibles totaling $34,540 for cash.

     (b)  As of January 31, 2003, the Company had accrued  interest  payable for
          notes payable to individuals totaling $9,950.

     (c)  During the year ended January 31, 2003 the Company paid debt principal
          in the  amount  of  $3,500.  The  Company  also has notes  payable  to
          individuals  totaling  $395,664.  The Company borrowed $50,000 from an
          individual  for  operating  capital  during the year ended January 31,
          2003.  The  Company  paid the debt in full during July 2002 by selling
          notes receivable and accrued interest to date for $2,401 cash, net. In
          exchange for the notes  receivable and cash, the Company acquired from
          the individual,  a note receivable from PFF in the amount of $160,857,
          which was sold.  Accrued  interest and interest expense on the $50,000
          note payable totaled $1,136.  The Company also borrowed $50,000 from a
          profit sharing plan during the fourth  quarter of this year.  Terms of
          the notes are listed below.

          Note payable to an individual for $316,164 bearing interest at 6% with
          monthly payments of $3,000 starting Feb 1, 2003 and maturing  December
          18, 2003.

          Note payable to an individual for $14,500  bearing  interest at 6% due
          with principal and interest totaling  approximately  $14,938 on June3,
          2003.

          Note payable to a profit sharing plan for $50,000 with interest at 12%
          with  payments of $1,707 due on January 31, 2003 and the principal and
          interest of $52,120 due May 10, 2003.

          Note payable to an  individual  for $15,000  with  interest at 12% due
          with  principal  and interest in the amount of $15,311 on February 17,
          2003.

     (d)  During the year ended January 31, 2003, the Company  received  $78,750
          from  assignment  for the sale of  specific  units to be produced at a
          later time.  The financial  arrangement  covers the costs of inventory
          and production,  in order to establish an inventory of completed units
          to be shipped upon receipt of orders.

                                      F-19

<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.
                         Notes to Consolidated Financial


          We received cash from individuals  totaling $78,750 for 600 units. The
          terms of the agreements  include  finance charges on a per unit basis,
          or approximately  $19 per unit. Cost of the financing  totaled $5,625.
          $39,375 of the $78,750 was  converted to sales of units  including 236
          BronzCheck  units,  20 ColorQA  units,  and 7  ColorCheck  units.  The
          individual  also paid the Company an  additional  $9,000 for the total
          amount of sale of $48,375.

          Non-cash  interest  expense in the amount of $5,625 was recorded  when
          two individuals converted their rights to receive future revenues into
          notes payable.  $26,250 of the $316,164 note payable above had accrued
          interest  due in the amount of $3,750 and $13,125 of the $15,000  note
          payable had accrued interest due in the amount of $1,875.

     (e)  Discount on sale of note receivable was recorded when the Company sold
          portions of a note receivable from PFF to individuals for cash.  Total
          cash received on the sale of the note was $293,316.  Non-cash discount
          totaled  $45,198.  Additional  notes  receivable sold for cash totaled
          $200,605.  The  $493,921  cash  acquired  from the  sales was used for
          operating capital.

     (f)  During the fiscal year for 2003, the Company reacquired 944,850 shares
          of its common stock for cash totaling  $86,206.  The Company  recorded
          the  transactions  as  treasury  stock in the  accompanying  financial
          statements.

     (g)  Other transactions during the year ended January 31, 2003 included the
          Company  entering into a lease agreement for storage space.  The lease
          agreement   requires   monthly   payments  of  $500  per  month  on  a
          year-to-year basis. Lease payments started May 1, 2002.

Note 7: Operating leases

We have an operating  lease for our office space  located at 3225 East 2nd Ave.,
Denver,  Colorado  80206.  On March 5, 2002, we signed a lease,  effective  from
April 1, 2002 to April 1,  2007,  with B7B an  affiliate  of our  President,  F.
Jeffrey  Krupka.  We pay B7B $4,000 per month on a triple net lease,  along with
real estate  taxes,  property  insurance,  maintenance  and  repairs,  telephone
expenses, and other normal expenses of the property.

We also have an operating lease for office copying equipment.  The agreement was
signed on March 4, 2003 and is effective through November 4, 2007. Monthly lease
payments total $1,318.

In addition, we have a lease for storage space that was effective on May 1, 2002
and is renewable on an annual basis. The monthly rental amount is $500.

Total monthly leases payments are  approximately  $5,818.  Total amount paid for
the year ended January 31, 2003 was $58,279.

Future minimum lease payments  under the office and equipment  leases  described
above are approximately as follows.


                                      F-20
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                         Notes to Consolidated Financial


           Year                                    Year
           ----                               --------------
           2004                               $       68,498
           2005                                       69,816
           2006                                       63,816
           2007                                       25,180
                                              --------------
                                              $      227,310
                                               =============


Note 8: Shareholders' equity

     (a)  Stock based compensation, related parties

          During the first  quarter of our fiscal year  ending  January 31, 2003
          the Company  issued 5,000 shares of its common stock to an employee as
          a bonus.  The  stock was  valued at  $1,850,  or $.37 per  share.  The
          Company also issued  5,000 shares to a director for services  provided
          to the Company. The stock was valued at $1,850 or $.37 per share.

          During the third quarter of our fiscal year ended January 31, 2003 the
          Company  issued  30,000  shares of its common stock to  employees  for
          services. The stock was valued at $6,000 or $.20 per share.

          During the fourth  quarter of our fiscal  year ended  January 31, 2003
          the Company issued 5,000 shares of its common stock to an employee for
          services. The stock was valued at $1,200 or $.24 per share.

          Total  common  stock  shares  issued for stock based  compensation  to
          related  parties  were  45,000  shares  valued at  $10,900,  which was
          expensed in the accompanying financial statements.

     (b)  Sale of shares of common stock to related parties.

          During the third quarter of our fiscal year ended January 31, 2003 the
          Company sold 1,165,000  shares of its common stock to affiliates.  AGO
          purchased  185,000  shares for cash  totaling  $18,500.  CAC purchased
          555,000 shares for cash totaling $55,500. ARI purchased 425,000 shares
          for cash totaling  $42,500.  Total cash received from the transactions
          was $116,500, which was used for operating capital.

     (c)  Exchange  of  shares of common  stock for debt and  interest,  related
          parties

          KBP  acquired  2,430,000  shares of common stock valued at $243,000 in
          exchange  for debt,  and accrued  interest  related to future  revenue
          entitlements.  KBP  entered  into an  agreement  with the  Company  to
          exchange its  entitlement to future  revenues plus interest for stock.
          The  transaction  totaled  $243,000,  or  principal  of $212,625  plus
          interest in the amount of $30,375.  2,430,000  shares of common  stock
          were issued at the closing market price of $.10 per share.


     (d)  Stock based compensation, other

                                      F-21
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                         Notes to Consolidated Financial


          During the first  quarter of our fiscal year ended  January 31,  2003,
          the Company  issued 20,000  shares of its common stock to  individuals
          for promotion of the Company. The shares were valued at $7,000 or $.35
          per share.

          During the third quarter of our fiscal year ended January 31, 2003 the
          Company  issued 48,000 shares of its common stock to  individuals  for
          promotion  of the  Company.  The shares were valued at $15,600 or $.33
          per share.

          During the third quarter of our fiscal year ended January 31, 2003 the
          Company  issued 15,000 shares of its common stock to  individuals  for
          Company  promotion.  The shares  were  valued at  $2,400,  or $.16 per
          share.

          During the fourth  quarter of our fiscal  year ended  January 31, 2003
          the Company  issued  160,771 shares of its common stock to individuals
          for  promotion  of the  Company.  The shares were valued at $25,952 or
          $.14 per share.  Total  common  stock  shares  issued for stock  based
          compensation  to  non-affiliates  of the  Company  for  services  were
          243,771   shares  valued  at  $50,952,   which  was  expensed  in  the
          accompanying financial statements.

     (e)  Sale of shares of common stock to others

          During the fiscal  year ended  January  31,  2003,  the  Company  sold
          436,996  shares of its common stock to  individuals  for cash totaling
          $61,746. The cash was used for operating capital.

     (f)  Exchange of stock for payable

          During the fiscal year ended January 31, 2003,  the Company  exchanged
          130,000 shares of its common stock to extinguish an account payable to
          a vendor. The valued of the stock at the time issued was $34,433.

     (g)  Shares issued to acquire property

          On May 31, 2002 we acquired 100% of the issued and outstanding  common
          shares  of  Color-Spec   Technologies,   Inc.  in  a   stock-for-stock
          acquisition.   The  transaction  was  approved  on  May  31,  2002  by
          shareholders of Color-Spec  Technologies,  Inc. Under the terms of the
          acquisition,   each  shareholder  of  Color-Spec  Technologies,   Inc.
          received  one common share of our stock for each common share of stock
          owned by the Color-Spec Technologies,  Inc. shareholder.  As a result,
          we own all of the assets of Color-Spec  Technologies,  Inc., including
          their intellectual property. We issued a total of 8,316,353 restricted
          shares of our common stock in connection with this transaction.

          During the third quarter of our fiscal year ended January 31, 2003 the
          Company  entered into a trademark  license  agreement with  Solartech,
          Inc. located in Michigan.  The purpose of the agreement was to acquire
          use of its hand held solar meters for use with the Company's hand held
          color-measuring  devices,  primarily  the  BronzCheckTM  product line.
          Terms  of the  agreement  include  a  non-exclusive  right  to use the
          Licensed Mark in the

                                      F-22
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


          promotion of solar meters for a period of ten (10) years. The property
          was acquired  for 200,000  shares of common stock valued at $24,000 or
          $.12 per share.

     (h)  Shares of common stock reacquired and cancelled

          During the fiscal year ended  January 31, 2003 the Company  reacquired
          244,850  shares of its common  stock for cash  totaling  $86,029.  The
          Company reacquired 700,000 shares of its common stock when it acquired
          Color-Spec  Technologies,  Inc. The Company cancelled 1,027,208 shares
          and returned the shares to authorized and not issued status.


Note 9: Income taxes

Under SFAS No. 109 deferred taxes result from temporary  differences between the
financial   statement   carrying  amounts  and  the  tax  bases  of  assets  and
liabilities. The components of deferred taxes are as follows:

                                                            Deferred Tax
                                                          Assets (Liability)
Non-Current:
     Property and equipment                                 $    (10,000)
     Net operating losses                                       1,631,000
Net non-current deferred tax asset before
     Valuation allowance                                        1,621,000
Valuation allowance                                           (1,621,000)
                                                            -------------
Total non-current deferred tax asset                        $   -
                                                            ===============

The  net  non-current  deferred  tax  assets  have  a 100%  valuation  allowance
resulting  from the inability to predict  sufficient  future  taxable  income to
utilize the assets.  The valuation  allowance for 2003 increased  $1,223,000 and
increased $741,000 in 2002.

At January 31, 2003 we have approximately  $4,395,000 available in net operating
loss  carry-forwards,  which begin to expire  from 2016 to 2017.  Usage of these
carry forwards may be limited in the future due to changes in ownership.

Total income tax expense for 2003 and 2002 differed from the amounts computed by
applying the US Federal statutory tax rates to pre-tax income as follows:

                                                            January 1, 2000
                                         Year Ended             Through
                                         January 31,          January 31,
                                            2003                 2002
                                         --------------     ----------------
U.S statutory federal rate                (34.00)%             (34.00)%
State income tax rate, net
     of Federal income tax benefit         (3.30)%              (3.30)%
Increase (reduction) in valuation
     related to net operating loss
     carry-forward and change in
     temporary differences                 37.30%               37.30%
                                         --------------     ----------------
                                            --                     --
                                         ==============     ================

                                      F-23
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


Note 10: Commitments

The Company has  employment  agreements  with Mr.  Krupka,  Ms.  Kettl,  and Ms.
Brophy.  Mr. Krupka's  agreement runs from November 1, 2002 through December 31,
2007. Under this agreement, Mr. Krupka is paid $5,000 per month with an increase
to $10,000  per month once the  Company  generates  $60,000 per month in product
sales for two consecutive  months.  Mr. Krupka will be additionally  compensated
when  the  Company  generates  $100,000  per  month  in  product  sales  for two
consecutive months.

The  Company's  agreement  with Ms.  Kettl runs from  November  1, 2002  through
December 31, 2007. Under this agreement, Ms. Kettl is paid $5,000 per month with
an increase to $6,500 per month once the Company  generates $60,000 per month in
product  sales  for two  consecutive  months.  Ms.  Kettl  will be  additionally
compensated  when the Company  achieves  $100,000 per month in product sales for
two consecutive months.

Our  agreement  with Ms.  Brophy runs from January 1, 2002 through  December 31,
2005. Under this agreement, Ms. Brophy is paid $8,630 per month.


Note 11: Concentrations

During the year ended January 31, 2003 we received a total amount of $39,375 for
the  rights  to  receive  future  revenues  from  sales  of  our  products.  The
transaction was converted to sales of units  including 236 BronzCheck  units, 20
ColorQA units,  and 7 ColorCheck  units. The individual also paid the Company an
additional  $9,000.  The total value of the sale was $48,375,  which  represents
approximately  37.7% of our sales for the year. The  transaction was cash and an
account receivable was not recorded.

During the year ended  January  31,  2003 we  purchased  significant  amounts of
inventory from several  suppliers.  We have approximately six vendors from which
we purchase  electronic  components and two suppliers for our molded housing and
battery components. We believe that if we were to lose or terminate the services
of our plastic injection molder for our housing  components,  we have sufficient
inventory  and  another  supplier  that we can  contact  in  order  to  continue
production of our necessary component parts.


Note 11: Reclassification

Certain amounts in the prior year financial  statements  have been  reclassified
for  comparative  purposes to conform with the  presentation in the current year
financial statements.


Note 12: Subsequent events.

On March 4, 2003 we signed an operating lease for office copying equipment.  The
agreement is effective  through  November 4, 2007.  Monthly lease payments total
$1,318.
                                      F-24
<PAGE>

                          POCKETSPEC TECHNOLOGIES INC.
                   Notes to Consolidated Financial Statements


On March 7, 2003  affiliates and  individuals  entered into  agreements with the
Company to extinguish debt in exchange for stock.  B7B provided the Company with
$10,000 in the form of a payment to CAC along with  extinguishments  of $275,000
debt  principal  and  interest  in the amount of $17,517  for a total  amount of
$302,517 for 4,321,673  shares of common stock. The stock was valued at $.07 per
share.  Janet Brophy, as custodian of James Andrew Krupka,  provided $8,400 cash
to acquire 120,000 shares of common stock valued at $.07 per share.

An  individual  provided  the Company  with $7,000  cash and  extinguished  debt
principal  in the amount of  $15,000  and  interest  in the amount of $399 for a
total  amount of $22,399 in exchange  for 319,992  shares of common stock valued
at$.07 per share.

An  individual  provided the Company with  $10,500  cash and  extinguished  debt
principal  in the amount of $316,164  and interest in the amount of $1,988 for a
total amount of $328,652 in exchange for 4,695,022 shares of common stock valued
at $.07 per share.

An individual provided  extinguished debt principal in the amount of $50,509 and
interest in the amount of $1,085 for a total  amount of $51,594 in exchange  for
737,064 shares of common stock valued at $.07 per share.

The Company's CFO, Cynthia Kettl, provided the Company with cash totaling $1,998
and  extinguished  an account payable in the amount of $3,000 for a total amount
of $4,998 in  exchange  for  71,400  shares of common  stock  valued at $.07 per
share.

                                      F-25
<PAGE>

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

We did not have any  disagreements on accounting and financial  disclosures with
its present accounting firm during the reporting period.

On June 5,  2002,  our  Board  of  Directors  voted  to  change  our  Certifying
Accountants from Cordovano and Harvey,  P.C. to Hein + Associates,  LLP. On June
6, 2002 Hein +  Associates,  LLP  finalized  their client  background  check and
formally  accepted  us as a client  for the fiscal  2003  audit.  Cordovano  and
Harvey,  P.C.  has  rendered  opinions on our audit for the past two years.  The
change in Certifying  Accountants was made so that we could utilize the specific
accounting experience and expertise of Hein + Associates, LLP.

There were no  disagreements  between us and  Cordovano  and Harvey,  P.C.  with
respect  to  our  accounting   principles  or  practices,   financial  statement
disclosure  or audit scope or  procedure,  which,  if not resolved to the former
Certifying Accountant's  satisfaction,  would have caused them to make reference
to the subject matter of the  disagreement in connection  with their report.  We
have authorized Cordovano and Harvey, P.C. to respond fully to inquiries of Hein
+ Associates, LLP concerning our financial statements.

                                    PART III

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

     Our Directors and Executive Officers, their ages and positions held with us
as of January 31, 2002 are as follows:


                                           YEAR BECAME            POSITION
      NAME                 AGE              DIRECTOR              IN COMPANY
-----------------          ---              -----------           -----------

F. Jeffrey Krupka          47               1999                  President,
                                                                  Director &
                                                                  Chairman of
                                                                  The Board

Cynthia Kettl              55               2000                  Treasurer &
                                                                  Director

Janet Brophy               48               2001                  Secretary &
                                                                  Director

Gregg Wagner               44               2002                  Director

Our  Directors  will serve in such  capacity  until our next  annual  meeting of
shareholders  and until their  successors  have been elected and qualified.  The
officers serve at the  discretion of our Directors.  F. Jeffrey Krupka and Janet
Brophy are husband and wife. Otherwise,  there are no family relationships among
our officers and directors,  nor are there any  arrangements  or  understandings
between any of our  directors or officers or any other person  pursuant to which
any officer or director was or is to be selected as an officer or director.

                                       21
<PAGE>

F. Jeffrey Krupka. Mr. Krupka has been our Chief Executive Officer and President
since  September  1999.  He has also been a member  and  manager  of Krupka  and
Associates,  LLC,  which is the sole owner of Platinum  Financial  Fund,  LLC, a
private  investment  company,  since 1998. From October 1995 to 1998, he was the
owner of Krupka and Associates,  LLC, a private investment  company. He has been
involved  in real  estate  in  Colorado  since  1985 and  securities  investment
activities since 1991.

Cynthia Kettl.  Ms. Kettl has been our Treasurer and CFO since  September  1999.
She has been involved with Platinum  Financial Fund,  LLC, a private  investment
company,  since 1998 and was employed by Krupka and  Associates,  LLC, a private
investment  company from October 1995 to 1998.  Ms. Kettl  received a Bachelor's
degree in  Business  Management  from  Metropolitan  State  College  in 1981,  a
Bachelor's degree in Accounting from Metropolitan  State College in 1998, and an
Associates Degree in Business from Community College North Denver in 1977.

Janet Brophy.  Ms. Brophy has been our Secretary and one of our Directors  since
May 2001.  From 1988 to 1998,  she was  involved in the off site  management  of
apartment  buildings  in  the  Denver,  Colorado  area  and  other  real  estate
activities.  She was a homemaker  from 1998 until she joined us in May 2001. She
has been  involved in real estate  oriented  businesses  since 1978.  Ms. Brophy
attended Arizona State University.

Gregg Wagner.  Mr. Wagner has been one of our Directors  since  September  2002.
From 1998 to the present,  he has been the owner and design consultant for LOMA,
Incorporated,  a private firm,  which produces  optical  products.  From 1993 to
1998, he was Senior  Mechanical  Design Engineer for IVI Corporation,  a private
mechanism,  illuminator,  and optics  design  firm.  He has been  involved  with
optical  design since 1979. He holds one patent and has five patents  pending in
the optical design area. Mr. Wagner attended the University of Colorado.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.

Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires Our
officers  and  directors  and  persons  owning  more  than  ten  percent  of the
Outstanding  Common Stock,  to file initial  reports of ownership and changes in
ownership  with the Securities and Exchange  Commission  ("SEC").  Additionally,
Item 405 of Regulation  S-B under the 34 Act requires us to identify in its Form
10-KSB  and  proxy  statement  those  individuals  for  whom  one of  the  above
referenced reports was not filed on a timely basis during the most recent fiscal
year or prior fiscal  years.  Given these  requirements,  we have the  following
report to make under this section. None of our officers or directors made timely
Form 3 or 4 filings.  All officers and directors,  except Mr.  Wagner,  did make
timely Form 5 filings. Mr. Wagner has filed his Form 5.

ITEM 10. EXECUTIVE COMPENSATION.

The  following  table sets forth the  Summary  Compensation  Table for the Chief
Executive  Officer and the other compensated  executive  officers other than the
Chief Executive Officer who was serving as executive  officers at the end of the
last three completed fiscal years.  Except as indicated in the footnotes to this
section,  no other  compensation  not covered in the following table was paid or
distributed by the Company to such persons during the period  covered.  Only our
Chairman received in excess of $100,000 in compensation, but since October 2002,
our Chairman has a $60,000 annual  compensation,  subject to adjustment based on
company performance.

                                       22
<PAGE>

<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                               Annual Compensation                                 Long Term Compensation
                           ---------------------------                          ---------------------------
                                 Awards Payouts
                                            ----------------------------
Name                                                            Other
Restricted                         All
And                                           Salary            Annual            Stock            LTIP
Other
Principal                                  Compensation         Bonus          Compensation       Award(s)
Options/
Position                       Year            ($)                ($)             ($)
----------                 ----------       ----------        ----------        ----------       ----------
<S>                        <C>              <C>               <C>               <C>              <C>
F. Jeffrey                      2002        $  169,348              --
Krupka                          2001        $  133,253              --
Chairman (1)                    2000        $     -0-

Cynthia                         2002        $   66,807              --
Kettl                           2001        $   13,982              --
Treasurer (2)                   2000        $    2,400              --

Janet                           2002        $   96,300              --
Brophy                          2001        $   14,017              --
Secretary(3)                    2000        $      -0-              --

Roger                           2002        $   32,750              --
Hutchison                       2001        $   14,017              --
Former Director(4)              1999        $      -0-              --

Gregg                           2002        $   36,000              --
Wagner                          2001        $   25,000              --
Director(5)                     2000        $      -0-              --
</TABLE>

(1) We have an employment agreement with Mr. Krupka, which runs from November 1,
2002  through  December 31, 2007.  Under this  agreement,  he is paid $5,000 per
month,  with an increase to $10,000 once the Company generates $60,000 per month
in product sales for two  consecutive  months.  Mr. Krupka will be  additionally
compensated when the Company  generates  $100,000 per month in product sales for
two consecutive months.

(2) Our  agreement  with Ms.  Kettl,  which runs From  November 1, 2002  through
December  31,  2007.  Under this  agreement  she is paid  $5,000 per month.  Ms.
Kettl's salary will be increased to $6,500 per month, once the Company generates
$60,000 per month in product sales for two consecutive months. Ms. Kettl will be
additionally compensated when the Company achieves $100,000 per month in product
sales for two consecutive months.

(3) Ms.  Brophy  became an officer and director in 2001.  We have an  employment
agreement with her,  which runs from January 1, 2002 through  December 31, 2005.
Under this agreement, she is paid $8,630 per month.

(4) Mr. Hutchison resigned in 2002.

                                       23
<PAGE>

(5) Mr. Wagner will be  compensated as required for needed product design at $75
per hour, payable in restricted stock valued at the lowest trading price for the
month of the work performed.

We have no compensation committee,  retirement,  pension, sharing, stock option,
insurance or other similar  programs but plan to establish  such programs in the
future, although there are no definitive plans to do so at this time.

We do not pay  members  of our Board of  Directors  any fees for  attendance  or
similar remuneration, but reimburse them for any out-of-pocket expenses incurred
by them in connection with our business.

2002 STOCK COMPENSATION PLAN

We have a  current  registration  statement  on Form  S-8  for  our  2002  Stock
Compensation  Plan I. A total of 700,000 shares have been  registered  under the
plan. We have issued a total of 439,177 shares and no options under this plan as
of January 31, 2003.

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

     The  following  sets  forth the number of shares of our  $.0.001  par value
common stock  beneficially owned by (i) each person who, as of January 31, 2003,
was known by us to own  beneficially  more than five  percent (5%) of its common
stock;  (ii) the  individual  Directors of the Registrant and (iii) the Officers
and Directors of the Registrant as a group. As of January 31, 2003, there were a
total of 22,998,630 shares issued and outstanding.

  NAME AND ADDRESS                  AMOUNT AND NATURE OF             PERCENT
 OF BENEFICIAL OWNER             BENEFICIAL OWNERSHIP (1)(2)          CLASS
-----------------------          ---------------------------         -------

F. Jeffrey Krupka(3)(4)                   3,302,309                   14.36%
3225 East 2nd Ave
Denver, Colorado 80206

Cynthia Kettl                               204,429                    0.89%
3225 East 2nd Ave
Denver, Colorado 80206

Janet Brophy (4)                          5,419,660                    23.57%
6195 South Akron Way
Greenwood Village, Colorado 80111

Gregg Wagner                              1,078,785                     4.69%
1368 Cedar Avenue
Boulder, CO 80304

All Officers and Directors as a Group    10,005,183                    43.50%
(four persons)

(1)    All ownership is beneficial and on record, unless indicated otherwise.

(2)    Beneficial owners listed above have sole voting and investment power with
       respect to the shares shown, unless otherwise indicated.

                                       24
<PAGE>

(3)    Includes  shares owned of record by Mr. Krupka.  Includes shares owned of
       record by B7 Brand,  LLC,  Asset  Realization,  Inc.,  Advanced Gas & Oil
       Corp, Cape Aloe Corp,  Platinum  Financial  Fund, LLC, and  Krupka-Brophy
       Profit Sharing Plan which are entities controlled by Mr. Krupka. Includes
       15,536 shares owned jointly by Mr.  Krupka and Ms.  Brophy,  but does not
       include shares owned by the  Krupka-Murr  Gift and Education  Foundation,
       for which Mr. Krupka disclaims beneficial ownership. Does not include any
       shares owned by Mr. Krupka's parents or children,  for which he disclaims
       any beneficial ownership.

(4)    Janet  Brophy is the wife of F.  Jeffrey  Krupka.  Mr.  Krupka  disclaims
       beneficial  ownership of her shares,  except for 15,536 shares, which are
       jointly owned with her and included in her total. Does not include shares
       owned by Ms.  Brophy's  children,  for  which  she  disclaims  beneficial
       ownership.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Our  business  office is  located at 3225 East 2nd Ave.,  Denver,  Colorado
80206.  On March 5,  2002,  we signed a lease,  effective  from April 1, 2002 to
April 1, 2007,  with an organization  affiliated with our President,  F. Jeffrey
Krupka. We pay this organization  $4,000 per month on a triple net lease,  along
with real estate taxes, property insurance,  maintenance and repairs,  telephone
expenses,  and other normal expenses of the property. We have granted Mr. Krupka
the  non-exclusive  use of the  leased  property  for  himself  and as an office
location for his other business interests,  as consideration for the November 1,
2002 employment agreement

     We have terminated  previous  agreements with CD ROM, USA, Inc. and CD ROM,
Inc., which are private  companies owned by Mr. Roger Hutchison,  who was one of
our  directors at the time.  Under our  agreement  with CD ROM,  Inc.,  he is an
approved supplier of products.

     We paid our  Treasurer,  Ms.  Kettl,  a total  of  $66,807  for  accounting
services during the 2003 fiscal year.

     Asset Realization, Inc. (ARI), B7 Brand, LLC (B7B), Cape Aloe Corp., (CAC),
Cherry Creek Cottage, LLC (CCC), Color-Spec Technologies,  Inc., (CST), Krupka &
Associates, LLC (K&A), F. Jeffrey Krupka (FJK), Janet Brophy (JB), Krupka-Brophy
Profit Sharing Plan (KBP), and Platinum  Financial Fund, LLC (PFF),  Wraith Moon
House,  LLC (WMH) are affiliates of our Company by either common ownership or by
common management.

     On September  28, 2001 we entered  into an agreement  with PFF, LLC to sell
our Arapahoe  County,  Colorado  property for the sale price of $2,800,000.  Our
affiliate  agreed  to  assume  all  outstanding  debt  obligations  owing on the
property and a participation  agreement with the original seller of the property
in the amount of $666,000.  Terms of the  participation  agreement state that we
agree to pay the original seller  approximately 24% of the first $2,750,000 sale
after   deducting   selling  costs  plus  20%.   Exceptions   contained  in  the
participation agreement included real estate taxes and assessments,  interest on
the  assumed   encumbrances,   interest,   points  and  costs   associated  with
refinancing,  and points and costs associated with  construction and development
loans.

     The  $2,800,000  sale  price  was  reduced  by the  $666,000  participation
agreement  since there is a potential that future sales of the property will not
be profitable. We accepted a note receivable from our affiliate in the amount of
$644,403. Terms of the agreement include monthly principal and interest payments
of $30,000 beginning December 1, 2001 and maturing on December 1, 2002.

                                       25
<PAGE>

     During the third  quarter  ended  October 31, 2001,  we sold the  Riverside
County,  California  property to Advanced Gas & Oil Corp.  for $15,000  cash. We
sold retail space to an affiliate, Color-Spec Technologies, Inc. for $54,745. We
loaned an affiliate $500 to be repaid without  interest during the first quarter
of the new fiscal  year.  In  addition,  we loaned  $2,700 to an affiliate to be
repaid during the same period. We loaned a director $30,037.

     On October 3, 2001 we signed two agreements with  Color-Spec  Technologies,
Inc. to acquire rights to the POCKETSPEC  trademarks and to license the right to
develop the POCKETSPEC color measuring devices. The second agreement provides us
with the license required in order to continue the development of the POCKETSPEC
color  measuring  devices.  We issued 700,000 of our common shares to Color-Spec
Technologies as part consideration for the license.

     During the fiscal year ended  January  2002,  we received from PFF proceeds
totaling $144,290 from the sale of its  participation  interest in American Tire
Corporation stock (ATC).

     During the third quarter ended October 31, 2001, we borrowed  $166,300 from
PFF and repaid PFF $166,300 of the amount we borrowed.  We also borrowed $25,000
from CAC and $10,000  from a  director.  We repaid the $35,000 and have paid all
indebtedness  to our affiliates.  We also borrowed  $151,000 from CST during the
first two quarters of this fiscal year.  During the third  quarter ended October
31,  2001,  the  balance  owing to CST in the amount of  $106,334  was paid.  We
borrowed  $100,000  from AGO and repaid  the  $100,000  during the same  period.
During the fourth  quarter ended January 31, 2002 we borrowed  $10,500 from PFF,
$1,500 from KBP, and $1,200 from CST for a total amount of $13,100.  All amounts
were repaid during  January,  2002.  Total amount borrowed for the twelve months
period ended January 31, 2002 was $669,400 and total amount repaid was $669,400.

     We borrowed $195,752 from the Krupka-Brophy Profit Sharing Plan for funding
our operations.  We consolidated  two notes payable and accrued interest to date
with the  $195,752  into one note  payable in the amount of  $510,000.  One note
payable in the amount of $89,836 bears  interest at 10% due in full on August 1,
2002.  One note payable in the amount of $218,499  bears  interest at 10% due in
full on August 1, 2002.  The new note  payable in the amount of  $510,000  bears
interest at 12% due in full on September 24, 2002. PFF subsequently  assumed the
note payable when we sold our Arapahoe County, Colorado property.

     During the fourth  quarter  ended  January  31, 2002 we  exchanged  100,000
shares of our common stock with a  non-affiliate  for a $30,000  promissory note
receivable  from PFF.  On  November  29, 2001 we sold one of the parcels of real
estate located in Elbert County,  Colorado to a third party.  The purchase price
of the property was  $393,000 and paid by the buyer with five  promissory  notes
receivable  from  PFF.  All of the  notes  receivable  were sold for net cash of
$96,369. The notes were discounted in the amount of $12,850.

     During the period ended January 31, 2002, we sold our property bond for net
cash of  $13,200.  The face  value  of the bond in the  amount  of  $17,600  was
discounted by $4,400. Part of the bond was sold to Mr. Krupka, while the balance
was sold to The Frederick Master Home Owners Association, an affiliate of ours.

                                       26
<PAGE>

     On May 31,  2002 we  acquired  100% of the  issued and  outstanding  common
shares of Color-Spec Technologies,  Inc. in a stock-for-stock  acquisition.  The
transaction  was  approved  on  May  31,  2002  by  shareholders  of  Color-Spec
Technologies,  Inc.  Under the terms of the  acquisition,  each  shareholder  of
Color-Spec  Technologies,  Inc.  received one common share of our stock for each
common share of stock owned by the Color-Spec Technologies, Inc. shareholder. As
a result, we own all of the assets of Color-Spec  Technologies,  Inc., including
their intellectual property. We issued a total of 8,316,353 restricted shares of
our common stock in connection with this transaction.  As PockeSpec Technologies
Inc.  and  Color-Spec   Technologies,   Inc.  were  under  common  control,  the
acquisition  was  recorded  at  historical  cost and the  historical  results of
operations have been combined for all periods presented.

     During the 1st quarter period ended April 30, 2002 the Company formed three
wholly owned limited liability companies. The Company advanced a total amount of
$7,500,  or $2,500 to each company in order to provide financing by the Company.
The names of the companies were PocketSpec  Cosmetics,  LLC,  PocketSpec Dental,
LLC, and PocketSpec Dermatology,  LLC. The purpose of the formation of the three
limited  liability  companies was to grant certain  rights to each LLC to enable
the Company and the LLC's to combine their  respective  efforts and cooperate in
the joint development of specific  color-measuring devices and ranges of visible
light,  ultra-violet,   and  infra-red  frequencies,   and  for  development  of
biomedical analytical devices.

     During December 2002, the limited liability companies were dissolved due to
issues incurred in developing markets and products  originally  intended for the
LLC's business  plans.  The Company  absorbed the debt from the LLC's since they
were  wholly  owned  subsidiaries.  Debt  totaled  $285,000 in the form of notes
payable to an individual as part of a $316,164 note payable.

     During the third  quarter of our fiscal  year ended  January  31,  2003 the
Company entered into a trademark license agreement with Solartech,  Inc. located
in Michigan.  The purpose of the  agreement  was to acquire use of its hand held
solar  meters  for use with the  Company's  hand held  color-measuring  devices,
primarily  the  BronzCheckTM  product  line.  Terms of the  agreement  include a
non-exclusive  right to use the Licensed  Mark in the  promotion of solar meters
for a period of ten (10) years.  The property was acquired for 200,000 shares of
common stock valued at $24,000 or $.12 per share.

     During  the  year  ended  January  31,  2003,  we  received  $161,937  from
assignment  agreements  for the sale of specific units to be produced at a later
time. The financial  arrangement  covered the costs of inventory and production,
in order to establish an inventory of completed units to be shipped upon receipt
of orders.

     We received cash from ARI in the amount of $43,312 for 330 units,  $113,125
from B7B for 862  units,  and  $5,500  from WMH for 40  units.  The terms of the
agreements  included finance charges on a per unit basis, or  approximately  $19
per unit. Interest expensed on the financial arrangement totaled $23,058.

                                       27
<PAGE>

     During the fiscal year ended January 31, 2003, we entered into an agreement
with  FJK to  convert  $40,317  from  accounts  payable  owed to FJK into a note
payable. JB also loaned the Company $32,438 for operating capital.  B7B received
an  assignment  from FJK and JB in the  amount of  $72,755  for the  loans  plus
interest in the amount of $495 for a total amount of $73,250.  Additionally, B7B
received an  assignment  from ARI for its  entitlement  to future  revenues plus
interest,  or $43,313 and $6,187,  respectively,  or a total  amount from ARI of
$49,500 as part of the transaction. B7B also converted its entitlement of future
revenues  and interest in the amounts of $113,125 and $15,875 for a total amount
of $129,000.  The amounts were converted into a note payable totaling  $251,750.
B7B also loaned us an  additional  $23,250 to complete  the note  payable in the
amount of $275,000.  The $275,000 note payable to B7B bears  interest at 15% per
annum and is due and  payable in one lump sum  including  interest  on or before
October 3, 2003. The total amount due and payable on October 3, 2003 is $275,000
principal and $41,250 interest.

     During the fiscal year ended January 31, 2003, we converted $5,500 from WMH
plus interest  totaling $500 into a note payable to WMH. A principal  payment in
the  amount of $200 was paid to WMH  during  December  2002.  The total of notes
payable is $275,000 to B7B and $5,800 to WMH.

     During the year ended January 31, 2003 we paid CCC $40,000 for office rent.
FJK  reimbursed  the Company  $2,500 for office  space used for  managing  other
affiliated  companies.  The  Company  also  reimbursed  FJK  $94,465 for travel,
inventory purchases,  and other expenses.  The amounts have been recorded in the
accompanying financial statements.

     During the fiscal year ended  January 31, 2002, we recognized a gain on the
sale of real property in the amount of $192,336. The gain had been deferred from
a prior  period  due to the  sale of the  property  to PFF,  an  affiliate.  The
original  agreement with PFF was for  consideration  of $2,800,000 in cash, debt
assumption  and notes.  PFF  assumed all  outstanding  debt  obligations  on the
property.  We  accepted a note  receivable  from PFF in the amount of  $644,403.
Terms of the note included  monthly  principal and interest  payments of $30,000
beginning  December 1, 2001 and maturing on December 1, 2002. The carrying value
of the property totaled $1,941,664 and encumbrances totaled $1,489,2876.

     During the fiscal year ended  January 31, 2002, we deferred the gain on the
sale in the  amount of  $192,336  until  PFF sold the  property  or we  received
payment in full on the  $644,403  promissory  note either by selling the note or
applying payments from PFF to the note.

     Prior to the year ended  January 31,  2003,  we  borrowed  $25,000 for B7B,
$48,000 from FJK, and $2,770 from PFF. The total amount  borrowed for  operating
capital was $75,770.

     During the year ended January 31, 2003, we repaid  short-term  loans in the
amount of $25,000 to B7B, $2,770 to PFF, and $48,000 to FJK. Total amount repaid
to affiliates for short-term loans was $75,770.

     During the year ended  January  31,  2003,  we borrowed  $23,250  from B7B,
$46,439 from JB, $20,000 from CAC, and $10,000 from FJK.  Total amount  borrowed
was $99,689. Amounts borrowed from B7B were consolidated into a note payable.

     During  the  year  ended  January  31,  2003,  we  received  $374,562  from
assignment  agreements  for the sale of specific units to be produced at a later
time. The financial  arrangement  covered the costs of inventory and production,
in order to establish an inventory of completed units to be shipped upon receipt
of orders.

     During the year ended  January 31, 2003,  we received  cash from ARI in the
amount of $43,312,  $113,125  from B7B,  $212,625 from KBP, and $5,500 from WMH.
The terms of the agreements  included  finance  charges on a per unit basis,  or
approximately $19 per unit. Total interest expensed on the financial arrangement
totaled $52,938.

     During the year ended January 31, 2003 we sold a total of 1,165,000  shares
of common stock to affiliates.  AGO purchased  185,000  shares for $18,500,  CAC
purchased  555,000  shares for $55,500,  and ARI  purchased  425,000  shares for
$42,500. Total cash received from affiliates was $116,500.

                                       28
<PAGE>

     During the year ended  January 31, 2003,  we acquired  inventory for use in
the production of its color measuring  product lines. The value of the inventory
at January  31, 2003  totaled  $250,357.  We also had  payables in the amount of
$271,889 and acquired assets totaling $121,385 and acquired intangibles totaling
$34,540.

     During the year ended January 31, 2003 the Company paid principal  payments
totaling $10,484.  We have notes payable to individuals  totaling  $395,664.  We
borrowed $50,000 from an individual for operating  capital during the year ended
January 31,  2003.  We paid the debt in full  during July 2002 by selling  notes
receivable  and accrued  interest to date for $2,401 cash,  net. In exchange for
the  notes  receivable  and  cash,  we  acquired  from  the  individual,  a note
receivable  from PFF in the  amount of  $160,857  which was been  sold.  Accrued
interest and interest  expense on the $50,000 note payable  totaled  $1,136.  We
also borrowed  $50,000 from a profit  sharing plan during the fourth  quarter of
this year. Terms of the notes are listed below.

         Note    payable to an individual  for $316,164  bearing  interest at 6%
                 with monthly  payments of $3,000 starting  February 1, 2003 and
                 maturing December 18, 2003.

         Note    payable to an individual for $14,500 bearing interest at 6% due
                 with principal and interest totaling  approximately  $14,938 on
                 June 3, 2003.

         Note    payable to a profit  sharing plan for $50,000 with  interest at
                 12% with  payments  of $1,707 due on January  31,  2003 and the
                 principal and interest of $52,120 due May 10, 2003.

         Note    payable to an  individual  for $15,000 with interest at 12% due
                 with  principal  and  interest  in the  amount  of  $15,311  on
                 February 17, 2003.

     During the year ended January 31, 2003, we received $78,750 from assignment
for the sale of specific  units to be produced  at a later time.  The  financial
arrangement covers the costs of inventory and production,  in order to establish
an  inventory  of  completed  units to be shipped  upon  receipt  of orders.  We
received cash from individuals  totaling $78,750 for 600 units. The terms of the
agreements include finance charges on a per unit basis, or approximately $19 per
unit. Cost of the financing totaled $5,625. $39,375 of the $78,750 was converted
to sales of units  including  236  BronzCheck  units,  20 ColorQA  units,  and 7
ColorCheck units. The individual also paid us an additional $9,000 for the total
amount of sale of $48,375.

     During the year ended January 31, 2003,  non-cash  interest  expense in the
amount of $5,625 was recorded  when two  individuals  converted  their rights to
receive future revenues into notes payable. $26,250 of the $316,164 note payable
above had  accrued  interest  due in the  amount of $3,750  and  $13,125  of the
$15,000 note payable had accrued interest due in the amount of $1,875.

     During the year ended January 31, 2003, discount on sale of note receivable
was recorded when we sold portions of a note  receivable from PFF to individuals
for cash.  Total cash received on the sales of the note was  $293,316.  Non-cash
discount  totaled  $45,198.  Additional  notes  receivable sold for cash totaled
$200,605.  The  $493,921  cash  acquired  from the sales was used for  operating
capital.

                                       29
<PAGE>

     During the year ended January 31, 2003, we reacquired 244,850 shares of its
common stock for cash totaling $86,206. The Company reacquired 700,000 shares of
its common  stock when it acquired  Color-Spec  Technologies,  Inc.  The Company
cancelled  1,027,208 shares and returned the shares to authorized and not issued
status.  We recorded  the  transactions  as treasury  stock in the  accompanying
financial statements.

     Other  transactions  during the year ended  January 31, 2003  included  the
Company  entering into a lease agreement for storage space.  The lease agreement
requires  monthly  payments  of $500 per month on a  year-to-year  basis.  Lease
payments started May 1, 2002.

     During  the year  ended  January  31,  2003 the CEO and CFO  along  with an
employee  took a reduction in monthly  salary in order to help reduce  operating
costs and  enhance  cash  flows for us.  The salary  reductions  were  effective
October 15, 2002. Cost savings created in the salary  reductions  total $35,963.
The reductions will continue until we become profitable.

     During the first  quarter of our fiscal  year  ending  January  31, 2003 we
issued 5,000 shares of its common stock to an employee as a bonus. The stock was
valued at $1,850,  or $.37 per share.  We also issued 5,000 shares to a director
for services provided to us. The stock was valued at $1,850 or $.37 per share.

     During the third quarter of our fiscal year ended January 1, 2003 we issued
30,000  shares of our common  stock to  employees  for  services.  The stock was
valued at $6,000 or $.20 per share.

     During the fourth  quarter of our fiscal  year ended  January  31,  2003 we
issued 5,000 shares of our common stock to an employee for  services.  The stock
was valued at $1,200 or $.24 per share.

     During the year ended January 31, 2003 total common stock shares issued for
stock  based  compensation  to related  parties  were  45,000  shares  valued at
$10,900, which was expensed in the accompanying financial statements.

     During the third  quarter of our fiscal year ended January 31, 2003 we sold
1,165,000 shares of our common stock to affiliates. AGO purchased 185,000 shares
for cash  totaling  $18,500.  CAC  purchased  555,000  shares for cash  totaling
$55,500.  ARI purchased  425,000  shares for cash totaling  $42,500.  Total cash
received  from the  transactions  was  $116,500  which  was  used for  operating
capital.

     During the year ended  January 31, 2003 KBP  acquired  2,430,000  shares of
common stock  valued at $243,000 in exchange for debt related to future  revenue
entitlements.  KBP entered  into an  agreement  with the Company to exchange its
entitlement to future revenues plus interest for stock. The transaction  totaled
$243,000,  or  principal  of  $212,625  plus  interest in the amount of $30,375.
2,430,000 shares of common stock were issued at the closing market price of $.10
per share.

     During the first  quarter of our fiscal  year ended  January 31,  2003,  we
issued  20,000  shares of our common stock to  individuals  for  promotion.  The
shares were valued at $7,000 or $.35 per share.

                                       30
<PAGE>

     During the third  quarter of our fiscal  year  ended  January  31,  2003 we
issued  48,000  shares of its common stock to  individuals  for  promotion.  The
shares were valued at $15,600 or $.33 per share.

     During the third  quarter of our fiscal  year  ended  January  31,  2003 we
issued 15,000 shares of our common stock to  individuals  promotion.  The shares
were valued at $2,400, or $.16 per share.

     During the fourth  quarter of our fiscal  year ended  January  31,  2003 we
issued 160,771 shares of our common stock to individuals  promotion.  The shares
were valued at $25,952 or $.11 per share.

     Total  common  stock  shares  issued for stock  based  compensation  to our
non-affiliates  for services were 243,771  shares  valued at $50,952,  which was
expensed in the accompanying financial statements.

     We sold 436,996 share of its common stock to individuals  for cash totaling
$61,746. The cash was used for operating capital.

     We exchanged  130,000  shares of its common stock to  extinguish an account
payable to a vendor. The value of the stock at the time issued was $34,433.

     During the fiscal year ended January 31, 2003 we reacquired  244,850 shares
of our common stock for cash totaling $86,206.  We reacquired  700,000 shares of
our common  stock when we acquired  Color-Spec  Technologies,  Inc. We cancelled
1,048,708 shares and returned the shares to authorized and not issued status.


                                     PART IV

ITEM 14. CONTROLS AND PROCEDURES.

     Within the 90 days prior to the date of this Annual  Report on Form 10-KSB,
we evaluated the  effectiveness  of the design and  operation of our  disclosure
controls and procedures  and our internal  controls and procedures for financial
reporting.  This  evaluation  was  done  under  the  supervision  and  with  the
participation of our management, including the President and the Chief Financial
Officer.  In accord with SEC  requirements,  the President  and Chief  Financial
Officer notes that,  since the date of the evaluation to the date of this Annual
Report,  there have been no significant changes in internal controls or in other
factors that could significantly affect internal controls, including any factors
that could  significantly  affect  internal  controls,  including any corrective
actions with regard to significant  deficiencies and material weaknesses.  Based
upon our evaluation,  the President and Chief  Financial  Officer have concluded
that our disclosure  controls are effective to ensure that material  information
relating to us is made known to  management,  including  the President and Chief
Financial  Officer,  particularly  during the period when the Company's periodic
reports are being  prepared,  and that our internal  controls  are  effective to
provide reasonable  assurance that our financial statements are fairly presented
in conformity with generally accepted accounting principles.

ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K.

The following financial information is filed as part of this report:

(1)  FINANCIAL STATEMENTS

(2)  SCHEDULES

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<PAGE>

(3)  EXHIBITS.  The following exhibits required by Item 601 to be filed herewith
     are incorporated by reference to previously filed documents:

EXHIBIT NO.       DESCRIPTION
-----------    ---------------------------------------------------------------

       3A+     Articles of Incorporation for Monument Galleries, Inc.

       3B+     Bylaws for Monument Galleries

       3C+     Articles of  Amendment changing the name to Real Estate
               Opportunities, Inc.

       3D+     Amended Bylaws for Real Estate Opportunities, Inc.

       3E      Amended and Restated Articles of Incorporation.

      10.1+    Warranty Deed dated December 27, 2000 for acquisition of Denver
               real estate

      10.2+    Deed of Trust dated December 15, 2000 for acquisition of Denver
               real estate.

      10.3+    Purchase and Sale Agreements for Frederick, Colorado real
               estate between Real Estate Opportunities, Inc. and
               Krupka-Brophy Profit Sharing Plan.

      10.4+    Combined Purchase Agreement and Settlement Agreement for
               Firestone, Colorado real estate between Real Estate
               Opportunities, Inc. and Krupka- Brophy Profit Sharing Plan
               dated February 3, 2000.

      10.5+    Modification  of Promissory  Note related to Firestone,  Colorado
               real estate transaction.

      10.6 +   Technology License Agreement from Color-Spec Technologies, Inc.

      10.7 +   Trademark License Agreement from Color-Spec Technologies,
               Inc.

      10.8 +   Employment Agreement with F. Jeffrey Krupka.

      10.9 +   Employment Agreement with Janet Brophy.

      10.10+   Employment Agreement with Cynthia Kettl.

      10.11+   Employment Agreement with Gregg Wagner.

      10.12    Wrigley Agreement

      10.13    Tyger POS Agreement

      10.14    Amendment to Agreement

      10.15    Solartech Agreement

      10.16    Solartech License Agreement

                                       32
<PAGE>

      10.17    2003 Employment Agreement with Jeff Krupka

      10.18    2003 Employment Agreement with Cynthia Kettl

      99.1     Certification  of Chief  Executive  Officer,  F. Jeffrey  Krupka,
               pursuant  to  18  USC  Section  1350,   as  adopted   pursuant
               to  the Sarbanes-Oxley  Act of 2002.  99.2  Certification  of
               Chief  Financial Officer,  Cynthia  Kettl,  pursuant to 18 USC
               Section  1350, as adopted pursuant to the Sarbanes-Oxley Act of
               2002.


+ Previously Filed

(c)  REPORTS  ON FORM 8-K.  We filed no  reports  on Form 8-K  during the fourth
     quarter of the fiscal year ended January 31, 2002.



                                   SIGNATURES

In  accordance  with  Section 12 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.


PocketSpec Technologies Inc.

CHIEF EXECUTIVE OFFICER

Dated: MAY 14, 2003                                 By: /s/ F. JEFFREY KRUPKA
       --------------                                    ----------------------
                                                         F. Jeffrey Krupka
                                                         President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.


CHIEF FINANCIAL OFFICER

Dated: MAY 14, 2003                                 By: /s/ CYNTHIA KETTL
       --------------                                    ----------------------
                                                         Cynthia Kettl
                                                         Treasurer


Dated: MAY 14, 2003                                 By: /s/ F. JEFFREY KRUPKA
       --------------                                    ----------------------
                                                         F. Jeffrey Krupka
                                                         Director


Dated: MAY 14, 2003                                 By: /s/ CYNTHIA KETTL
       --------------                                    ----------------------
                                                         Cynthia Kettl
                                                         Director

                                       33
<PAGE>

Dated: MAY 14, 2003                                 By: /s/ JANET BROPHY
       --------------                                    ----------------------
                                                         JANET BROPHY
                                                         Director


Dated: MAY 14, 2003                                By: /s/ GREGG WAGNER
       --------------                                    ----------------------
                                                         GREGG WAGNER
                                                         Director


                                       34
<PAGE>
                                 CERTIFICATIONS





     I, F. Jeffrey Krupka, certify that:


     1.   I have  reviewed the report  being filed on Form 10-KSB by  PocketSpec
          Technologies Inc.;

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

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

     4.   I and the other  certifying  officer are responsible for  establishing
          and  maintaining  disclosure  controls and procedures (as such term is
          defined in Regulation  13a-14 of the Securities  Exchange Act of 1934)
          for PocketSpec Technologies Inc and have:

          i.   Designed such  disclosure  controls and procedures to ensure that
               material  information  relating to PocketSpec  Technologies Inc.,
               including its consolidated  subsidiaries,  is made known to us by
               others within those entities,  particularly  during the period in
               which the periodic reports are being prepared;

          ii.  Evaluated the  effectiveness  of PocketSpec  Technologies  Inc.'s
               disclosure  controls and  procedures  as of a date within 90 days
               prior to the filing date of the report ("Evaluation Date"); and

          iii. Presented in the report our conclusions  about the  effectiveness
               of the disclosure controls and procedures based on our evaluation
               as of the Evaluation Date;

5.   I and the other certifying officer have disclosed, based on our most recent
     evaluation,  to the  PocketSpec  Technologies  Inc.  auditors and the audit
     committee of the board of directors (or persons  fulfilling  the equivalent
     function):

     i.   All  significant  deficiencies  in the design or operation of internal
          controls which could adversely affect PocketSpec  Technologies  Inc.'s
          ability to record,  process,  summarize and report  financial data and
          have  identified  for  PocketSpec  Technologies  Inc.'s  auditors  any
          material weaknesses in internal controls; and

                                       35
<PAGE>

     ii.  Any fraud, whether or not material,  that involves management or other
          employees  who  have  a  significant  role  in the  issuer's  internal
          controls; and

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

     Dated: May 14, 2003                By: /s/ F. JEFFREY KRUPKA
                                            -----------------------
                                                F. Jeffrey Krupka
                                                Chief Executive Officer

                                       36
<PAGE>

     I, Cynthia Kettl, certify that:


1.   I have  reviewed  the  report  being  filed on Form  10-KSB  by  PocketSpec
     Technologies Inc.;

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

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

4.   I and the other  certifying  officer are responsible for  establishing  and
     maintaining  disclosure controls and procedures (as such term is defined in
     Regulation  13a-14 of the  Securities  Exchange Act of 1934) for PocketSpec
     Technologies Inc and have:

     i.   Designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information   relating  to  PocketSpec   Technologies  Inc.,
          including its consolidated subsidiaries, is made known to us by others
          within  those  entities,  particularly  during the period in which the
          periodic reports are being prepared;

     ii.  Evaluated  the   effectiveness  of  PocketSpec   Technologies   Inc.'s
          disclosure  controls and  procedures as of a date within 90 days prior
          to the filing date of the report ("Evaluation Date"); and

     iii. Presented in the report our conclusions about the effectiveness of the
          disclosure  controls and procedures  based on our evaluation as of the
          Evaluation Date;

5.   I and the other certifying officer have disclosed, based on our most recent
     evaluation,  to the  PocketSpec  Technologies  Inc.  auditors and the audit
     committee of the board of directors (or persons  fulfilling  the equivalent
     function):

     i.   All  significant  deficiencies  in the design or operation of internal
          controls which could adversely affect PocketSpec  Technologies  Inc.'s
          ability to record,  process,  summarize and report  financial data and
          have  identified  for  PocketSpec  Technologies  Inc.'s  auditors  any
          material weaknesses in internal controls; and

                                       37
<PAGE>

     ii.  Any fraud, whether or not material,  that involves management or other
          employees  who  have  a  significant  role  in the  issuer's  internal
          controls; and

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

Dated: May 14, 2003                           By: /s/ CYNTHIA KETTL
                                                  -----------------------
                                                      Cynthia Kettl
                                                      Chief Financial Officer


                                       38