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, 2002
                           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. [X]

     Registrant's   operating  income  for  its  most  recent  fiscal  year  was
$4,632,776.  The  aggregate  market value of the voting stock of the  Registrant
held by non-affiliates as of January 31, 2002 was approximately $2,532,710.  The
number of shares outstanding of the Registrant's  common stock, as of the latest
practicable date, March 1, 2002, was 11,088,718.

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

<PAGE>

                                     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.
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.

     WE HAVE NO HISTORY OF PROFITABILITY WITH OUR NEW PRODUCTS.  OUR ACCOUNTANTS
GAVE US A GOING CONCERN QUALIFICATION. We have never had operations 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.  Our accountants have raised an issue about
our ability to exist as a going concern.  Historically, we have incurred losses.
As of January 31, 2002, our retained  earnings  deficit was $1,020,434.  For the
fiscal year ended January 31, 2002, we incurred a net loss of $1,040,934.  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,

<PAGE>


     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 on occasion.  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

                                        2
<PAGE>

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.

     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.  issued.  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.

     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

                                        3
<PAGE>

     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.


     ISSUANCE  OF  ADDITIONAL  SHARES  COULD  DEPRESS OUR STOCK  PRICE.  We have
entered   into  a  letter  of  intent  to  acquire  the  assets  of   Color-Spec
Technologies,  Inc.  with our common  shares,  which will increase the number of
outstanding  common shares by a total of approximately  8,300,000  shares.  This
potential  share  issuances may have a negative effect on the share price of our
common stock in the future.

     OUR COMMON  STOCK HAS A LIMITED  PUBLIC  TRADING  MARKET.  While our common
stock  currently  trades,  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.

                                        4
<PAGE>

     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.

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

     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.  Our  main  focus  is in the  business  of  developing  and
marketing color comparison devices.

     (c) OPERATIONS

General

     During the last fiscal year,  we changed our business plan from real estate
development to the color  comparing  business.  We still had limited real estate
activities  during this period.  However,  our  principal  thrust will now be to
develop  color  comparison  technology.  We have 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  application.  We will continue to pursue  acquisitions of
intellectual  properties,  with a  specific  focus  in  electronic  applications
relating to color comparing devices and other similar devices.  We will continue
looking  for  intellectual  properties,  which  may be  acquired  directly  from
inventors with a view toward commercializing the technology.  We plan to use our
expertise in fund raising to develop  commercial  applications  for  properties,
which we may select.

     Our recent  acquisition  of  intellectual  property  represents a long-term
commitment  on our part to the  development  of this  technology.  We have hired
technical  support to aid in our development of the color comparing  technology.
Our technical  personnel  will be responsible  for the  technology  development,
sales and marketing.

     While our focus has changed  from real  estate,  we may continue to look at
properties which lend themselves to wholesale  transactions  between  individual
inventors  and long-term  developers.  We will look at each  potential  project,
whether  short-term or long-term as an  opportunity  to maximize our share value
for our shareholders.  However,  it is important to note that the main thrust of
our company is not on real estate and real estate-related activities.

Our Proposed Products

     We have four products  currently under  development.  Our products will all
use the trademarked name,  "PocketSpecT." Our developmental  products include: a
color comparison  device; a color matching device; a color matching probe; and a
control device which will operate as a hand-held computer.

     Color Comparison Device

     We have  developed  a device  with a built-in  display,  which can  compare
millions of colors.  We call this device the "PocketSpecT  Color QA." The device
is designed  to read a target  color in a discreet  three  digit code,  which is
displayed  and stored.  The user can then take ultiple  comparative  readings of
other colors and determine if the colors match the three digit code.  The device
has space provided in the electronics to add memory to store lookup tables.  The
device will have an optional USB port,  for an additional  cost, in units of 500
or more.

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<PAGE>

     We believe  that this device  will have  numerous  potential  applications,
including uses by businesses  which require  ColorSpecific  production  runs and
consumer who wish to match colors, for any purpose.

     Color Matching Device

     We are  developing a device with the same  electronics  as the  PocketSpecT
Color QA which will  allow  multiple  color  comparison  readings  which are not
stored in the device.  We call this device the  "PocketSpecT  Color Check." This
device  will  permit  the user to take  random  readings  from any source and to
compare the readings with external color samples.

<PAGE>


     Color Matching Probe Device

     We are developing a device using our technologies for color comparison, but
incorporating a slim, probe design.  This device will be developed to be used in
dental,  cosmetic, and related applications,  where the style of the device will
be an important  consideration to the end user.  Initial prototype models are in
development  at this time.  We plan to call this device the  "PocketSpecT  Color
Probe."

     Control Device

     We are  developing a control  device which will store the software and data
to be used in  connection  with our  proposed  products.  This device will house
multiple color look up tables and associated  software for the product operating
systems.  The  device is being  designed  to plug in to our  "PocketSpecT  Color
Probe." and products  other products we may develop and will have two USB ports,
which would  permit data to be imported to the device as well as  exported.  The
device will arrange color displays,  provide storage for data, give  instruction
on uses of our products, all with a color display.

     Other

     We believe that there are numerous future  potential  applications  for our
products  which  are  currently  under  development  and  for  others  yet to be
developed.  We plan to continue our research  and  development  into other uses,
particularly in the medical device area and in the color ranges of infra-red and
ultra-violet.

     We have entered into  agreements  with CD ROM, USA, Inc. and CD ROM,  Inc.,
which are private companies owned by Mr. Roger Hutchinson,  whose has become one
of our  directors.  Under our agreement  with CD ROM,  Inc.,  who is an approved
supplier  of  products  to the  U.S.  General  Services  Administration,  it has
undertaken  to list on its web site the  Pocket  Spec for sale  within  the U.S.
General Services  Administration  vendor network. We have not begun any sales as
yet. We paid CD ROM, Inc.  $30,411.64  in the form of 121,647  shares under this
sales  agreement  and will pay them ten percent  commission on all sales by them
through March, 2004.

     Production Plans

     At the present time,  we plan to produce the first one thousand  units each
of the Color QA and Color  Check  products  in June,  2002.  We have had  strong
preliminary  interest in the products,  although no significant orders have been
made.

     As of May, 2002, we plan to have the  capability of on-line  purchasing and
credit card transactions, including American Express cards. Our web site is www.
PocketSpec.com.

Limited Liability Companies

     We plan to develop our technology through  non-exclusive license agreements
with  limited  liability  companies  that we have  formed  for the  purposes  of
developing  certain aspects of the color comparison  technology.  We have formed
three  limited  liability  companies,   which  will  focus  in  specific  areas:
PocketSpec  Cosmetic,  LLC; PocketSpec Dental, LLC; and PocketSpec  Dermatology,
LLC.  Each  limited  liability   company  will  fund  the  final   technological
development  and marketing of their product or products,  as the case may be. At
the  present  time,  each  of  these  limited  liability  companies  is  in  the
development stage and has not commenced operations.

Technology

All electronic  components used within our products are readily  available.  All
optical,  mechanical  and packaging  components  are  proprietary to us, but use
standard injection mold practices for manufacturing of these components.

                                        6
<PAGE>

     (d) MARKETS

     Our  marketing   programs   will  be  designed  to  target   consumers  and
professionals who have a need to compare color. Our plan is to develop strategic
alliances to help extend the reach of our presence in the marketplace.  Although
we have not approached any retailers and have no agreements  with any retailers,
we have developed a market analysis report which identified numerous markets for
our products, including:

Do-It-Yourself Home-Improvement Warehouse Stores

     In many instances  during a home  improvement  project,  there is a need to
match paint,  tile to paint,  wallpaper to paint,  tile to  wallpaper,  etc. For
example,  paint was purchased and used several years earlier on a home, and that
paint color is no longer available by the original  manufacturer.  Therefore,  a
match from a different  manufacturer  is needed.  Typically,  a paint  sample is
needed in order to have a match done at a paint retailer.  If a  color-comparing
instrument is not present at this location, the sample is sent to another outlet
for matching.  The present cost of such instruments is high. Therefore,  not all
outlets have a color-comparing instrument.

     A low  cost,  portable  instrument  would  allow any  outlet  to  service a
customer,  or  allow  the  consumer  to  use  the  instrument  during  the  home
improvement  project.  A consumer could purchase the instrument to verify color,
or compare colors during the project.  We plan to market the Pocket Spec through
the large hardware and home improvement centers, such as Sherwin Williams.

Professional Painters, Interior Decorators and Paint Manufacturers

Assistance  in color  matching  paint,  stucco,  or textile  swatch  samples for
professional  painters,  interior  decorators,  general  contractors  and  paint
manufacturers  can be  provided  by the  use of the  PocketSpec  on  site,  thus
avoiding  the need to bring a print  sample into a store to match it. The device
has the  capability  of being  programmed  with a color code look-up  table of a
paint manufacturing  company. This ability to add in a look-up table provides an
OEM market with paint manufacturers as well.

Plastic Injection Mold & Auto Trim Parts & Panels

     The PocketSpec, as a color comparator, will be useful as a device for color
matching quality control in injection mold and industrial  painting  facilities.
Many clients need plastic  components or metal enclosures molded or painted to a
specific or company  color.  Instead of relying  upon visual color  matching,  a
color chip is used as an  analytical  color  reference to determine a color code
related to RGB, which would be more accurate than the human eye.

     This  instrument will have the capability to provide  immediate  analytical
data to the  process  technician.  In the  injection  mold  industry,  a tool is
usually left in the  injection  mold  machine  until the client has approved the
color of the  product  being  manufactured.  Generally,  it  would be more  cost
effective to remove the tool and replace it with another tool and program in the
process than to leave the first tool in place.  However, the present practice is
to leave  the tool in  place  until  approved  by the  client.  Having a tool to
quickly verify the color  processing  would eliminate the risk of  manufacturing
the product and better utilize the injection mold machine.  At the present time,
there are instances where the color of a product has not been approved, and that
the work was completed with an incorrect  color.  This results in a large amount
of scrap, at a cost to the manufacturing company.

     We believe  that the  important  advantages  of the Pocket Spec will be the
affordable price and size of the system,  which permits each process  technician
to have a color-comparing  instrument. We believe that our proposed pricing will
be lower than comparable existing  technologies and will have either the same or
greater  features as other  technologies.  Most injection mold companies  cannot
justify the present cost of one colorimeter  product from the  competition.  The
cost  associated  with the multiple  measurement  system  would  justify its use
within  the  quality  assurance  (QA)  department.  This  instrument  is used in
situations  where it is necessary to document the color  measurements.  Multiple
measurements  can be  performed  during a  single  session  that is  immediately
downloaded into a database.

<PAGE>

     In the auto body and paint industry,  the use of a  color-comparing  device
would provide assistance in matching existing paint color. Over time, paint will
fade to a  different  shade.  The use of our  product  would  provide a means to
analytically  match the faded shade.  Time to formulate  the paint mixture would
also be reduced.  Upon completion of any repair,  the shop can use the device to
show the customer the closeness of the match.

                                        7
<PAGE>

Silk Screening and Printing

     In the graphics and silkscreen  markets,  the  Pocket-Spec  device could be
used for proofing  color,  assist in the formulation of ink color, or silkscreen
paint color, prior to starting a process, as well as to verify their work during
the course of the printing or  silkscreen  run. The  instrument  may be used for
exact  color  matching  for  brochures,  logo  or  equipment  appliques,  or pad
printing.

     Having this instrument  provides  immediate  analytical data to the process
technician.  In the silkscreen and printing  industry,  the customer must verify
and  approve  the  color.  Having a tool to verify  the color  processing  would
eliminate  the  risk of  printing  the  material,  and  verify  the  printed  or
silkscreen material upon completion.

Our Sales Program

     Our sales strategy is to pursue targeted  accounts through a combination of
direct sales for OEM  customers,  on-line  sales,  and a series of resellers and
strategic  alliances.  Through the resellers and  alliances,  we believe that we
will be able to leverage additional sales, marketing and deployment activity. We
plan to use third party  commission  salespeople,  as well as to seek  alliances
with potential sales organizations in industries in which we plan to market.

     At the  present  time,  we have  contracted  with CD ROM,  Inc.,  who is an
approved  supplier of products to the U.S. General Services  Administration.  CD
ROM,  Inc.  It has  undertaken  to list on its web site the Pocket Spec for sale
within the U.S. General Services  Administration  network. We have not begun any
sales as yet.

     We have  also  entered  into a  marketing  agreement  with  an  independent
contractor,  who has become  our  exclusive  representative  for  marketing  our
Pocket-Spec to Sherwin-Williams,  Inc., the international paint manufacturer and
seller. The independent contractor will receive a 10% commission on gross sales.
We have not begun any sales as yet.

Other Miscellaneous Markets

     We believe that there are many more markets that require some form of color
comparison which have not been 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. The largest is Xrite, Inc., which makes a product similar to ours, but
much  larger  and more  expensive.  We plan to  differentiate  our  products  by
focusing on low price,  hand-held  devices  which use color  charts from ultiple
color suppliers.  Furthermore, we believe that the market is fragmented, with no
one company dominating this business.  Nevertheless, we believe that competition
will be  intense.  We  cannot  guarantee  that  we will be able to  successfully
compete.

     (g) BACKLOG

     At January 31, 2002, we had no backlogs.

     (h) EMPLOYEES

     At as of the date hereof, we have nine 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 are involved with the engineering
and  design  of our  products.  Three 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.

                                        8
<PAGE>

     (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. 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   "PocketSpecT"   and  "PocketSpec
Technologies,  Inc. T" for a term of ten years.  We use these  trademarks in our
business.

     We  own  one  patent.  It  is  Patent  No.  6,157,454,  entitled  Miniature
Colorimeter.  We have applied for an additional  patent on this device.  We have
also applied for two patents  regarding the dental  application of the Miniature
Colorimeter.  Finally,  we have applied for a patent entitled Color  Measurement
Device.

     (j) GOVERNMENT REGULATION

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

<PAGE>

     (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 have invested significant time and resources in creating a
structured  process  for  undertaking  our  product  development.  This  process
involves  several  teams and is designed to provide a framework for defining and
addressing  activities to bring  product  concepts and  development  projects to
market  successfully.  In addition,  we have  recruited  and plan to continue to
recruit  electronic and software  engineers 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

     In April,  2002, we entered into a letter of intent to acquire  Color- Spec
Technologies,  Inc.  in a  tax-free,  stock-for-stock  transaction.  We  plan to
exchange a total of 8,295,542 shares of our common stock in exchange for 100% of
the  common  stock  of  Color-Spec  Technologies,  Inc.,  which  will  become  a
wholly-owned  subsidiary  of us.  This  transaction  is subject to a  definitive
agreement and the approval of the Color-Spec Technologies, Inc. shareholders.

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
"PocketSpecT" and "PocketSpec Technologies,  Inc. T" for a term of ten years. We
use these trademarks in our business.

     We  own  one  patent.  It  is  Patent  No.  6,157,454,  entitled  Miniature
Colorimeter.  We have applied for an additional  patent on this device.  We have
also applied for two patents  regarding the dental  application of the Miniature
Colorimeter.  Finally,  we have applied for a patent entitled Color  Measurement
Device.


ITEM 3. LEGAL PROCEEDINGS.

On  November  2, 2001 we filed a lawsuit  against  a public  relations  firm for
non-performance  under our agreement with them. On March 18, 2002, we obtained a
Default  Judgment  against Driven Financial  Group,  Inc.,  Broadband  Financial
Group,  Inc.,  and Todd Gilligan in the U.S.  District Court for the District of
Colorado.  The Judgment  awarded us damages of $12,000 and the return of 250,000
shares of our common  stock.  We are in the process of obtaining  these  shares,
which we plan to cancel and return to authorized and unissued shares.

                                        9
<PAGE>

Otherwise,  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 a shareholders meeting on December 4, 2001. At that time, we changed the
name of our company to PocketSpec Technologies Inc. and increased our authorized
common shares to 50,000,000 shares. We also elected four persons to our board of
directors:  Messrs.  F. Jeffrey Krupka and Roger  Hutchison and Ms. Janet Brophy
and Cynthia Kettl. We also approved Cordovano and Harvey,  P.C., as our auditors
for the fiscal year ended January 31,2002.  Each of the proposals at the meeting
received  the vote of  greater  than a majority  of our  issued and  outstanding
shares.


                                     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 2001.

                              Bid Price
                  -----------------------------------
                                   High              Low
                                   ----              ----
                  2001
                  ----
         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, 2002,  we had a total of  11,088,718 of our common shares
outstanding.  The number of  holders of record of our common  stock at that date
was approximately one hundred.

     (c) DIVIDENDS

     Holders of common stock are  entitled to receive  such  dividends as may be
declared by our Board of  Directors.  No dividends on the common stock were paid
by us 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.

                                       10
<PAGE>

     (e) BLUE SKY COMPLIANCE

     The trading of penny stock  companies may be  restricted by the  securities
laws ("Blue Sky" laws) of the 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.T" we believe that this will allow us to market a family of products
under the same "PocketSpec" name.

     Our acquisition of intellectual property from Color-Spec Technologies, Inc.
will  be a  long-term  development.  We have  hired  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  agreements  with  Color-Spec
Technologies,  Inc.  are our primary  focus along with the variety of other uses
for the  technology.  To that end,  we have  entered  into a letter of intent to
acquire all of the securities of Color-Spec  Technologies,  Inc. in exchange for
our common stock.

Market Opportunities

     We believe that our  technology can be used in thousands of paint stores in
the United  States and  worldwide.  We have made  presentations  to a major U.S.
paint company and a dental facility.  We anticipate  production of our device to
begin in early June, 2002.

                                       11
<PAGE>

     We  may  make  additional  technology  investments  in the  future,  but no
agreements are in place at the present time.

Results of Operations

     We have been generating operating revenues during this fiscal year and plan
to continue to do so as we broaden our operational  base. We incurred a loss for
the year ended  January 31, 2002 totaling  $1,040,934  compared to net income of
$21,500 for the year ended January 31, 2000. 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. 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 $.119 per share for the year ended  January 31,
2002,  compared  to income of $.0034  per share for the year ended  January  31,
2001.

     We had  total  revenues  of  $4,632,776  for the  year  ended  January  31,
2002,which  compares to revenues of $7,388 for year ended January 31, Total cost
of sales,  which  consisted  of cost of real  estate,  commissions,  and closing
costs, was $4,400,940,  for the year ended January 31, 2002 compared to $-0- for
the year ended January 31, 2001.  Total operating  expenses,  which consisted of
general and administrative expenses, were $1,210,390, for the year ended January
31, 2002,  compared to $154,897 for the year ended January 31, 2001. We recorded
stock-based compensation in the amount of $160,320 during the year ended January
31, 2002. The stock-based compensation represents 614,500 shares of common stock
that were issued for  services  provided to the Company,  and 250,000  shares of
common stock issued for promotion  through public  relations  organizations  and
web-site  development and  maintenance.  The 614,500 shares of common stock were
valued at the  closing  price of the stock on the date of issue.  Total  amounts
expensed  for the  614,500  shares was  $120,320  and  $40,000  for the  250,000
promotional  shares issued.  The major components of general and  administrative
expenses are research and development,  legal, accounting,  commissions,  wages,
rent and other expenses.

     We  recorded  interest  income for the year ended  January  31, 2002 in the
amount of $38 from cash held by brokerage  firms to be used for the  acquisition
of shares of our common stock as a result of our buy back program.  For the year
ended January 31, 2001 $3,000 interest income was recorded.

     We recorded  interest  expense  for the year ended  January 31, 2002 in the
amount of $169,546 as compared to  $2,378 for the year ended  January 31,  2001.
The amount of interest incurred is due to financing of real estate  transactions
and continuing business operations.

     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 totals $22,950 at January 31, 2002.

     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. The borrower on each
of the notes is PFF,  LLC, an  affiliate.  Our cost basis in the  property  sold
totals $373,752. We recorded a gain on the sale in the amount of $19,248.

     On September  28, 2001 we sold our Arapahoe  County,  Colorado  property to
PFF, LLC (an  affiliate) for the sale price of $2,800,000 as discussed in note 2
above.  We  deferred  the gain on the sale in the amount of  $192,336  until our
affiliate sells the property.

     During the third  quarter  ended  October 31, 2001,  we sold the  Riverside
County,  California  property to Advanced Gas & Oil Corp., which is an affiliate
of ours,  for $15,000 cash as discussed in note 2 above.  Our carrying  value in
the  property  was  $20,000.  We  recorded  a loss on the sale in the  amount of
$5,000.

                                       12
<PAGE>

     We were profitable in fiscal year 2001. Our profitability  came as a result
of  our  real  estate   development   operations.   Since  we  have  essentially
discontinued real estate  development as our primary business line, we must look
to our color  comparison  technology as a basis upon which to build  operations.
For the coming  fiscal year, we plan to use our limited  liability  companies to
commercialize our technology and develop our operations.

Liquidity and Capital Resources

     Our net cash and cash  equivalents  increased  to $39,895 as of January 31,
2002,  compared to $4,451 as of January 31, 2001as a result of our company being
fully operational.

     Our net cash received from  financing  activities was $487,422 for the year
ended January 31, 2002,  compared to having received $240,539 for the year ended
January 31, 2001.  Cash from financing  activities  totaled  $239,8478,  came as
loans from  affiliates and third parties for the year ended January 31 2002. All
financing activities were repaid in the total amount of $905,411.

     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 the options was $47,575.

     We have an amount  receivable  of $7,700 from  related  parties and prepaid
expenses  of $1,333 at  January  31,  2002.  The  prepaid  expenses  consist  of
remaining  consulting  fees to be expensed  during the first  quarter of our new
fiscal year, 2003.

     During the third quarter ended October 31, 2001, we cancelled stock options
representing  150,000  shares of common  stock with an option price of $.275 per
share.  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 are in the  process  of
shifting our business  focus.  As a result,  we may not be  profitable  over the
short term,  until we can develop  operations in our color comparing  technology
business.  Our accountants have raised an issue about our ability to continue as
a going concern.

     During the next twelve months, we plan to use limited  liability  companies
which we have organized as the principal method to finance the commercialization
of our  technologies.  We do not  intend  to pay  dividends  in the  foreseeable
future.


ITEM 7. Financial Statements.

                                      INDEX

                                                                       Page
                                                                       ----

Independent Auditors' Report                                            F-2

Consolidated Balance Sheet, January 31, 2002                            F-3

Consolidated Statements of Operations for the years ended
   January 31, 2002 and 2001                                            F-4

Consolidated Statement of Changes in Shareholders' Equity,
   January 1, 2000 through January 31,2002                              F-6

Consolidated Statements of Cash Flows, for the years ended
   January 1, 2002 and 2001                                             F-8

Notes to Consolidated Financial Statements                              F-10

                                       13
<PAGE>

                          Independent Auditors' Report


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, and the
related consolidated statements of income,  shareholders' equity, and cash flows
for the years  ended  January 31, 2002 and 2001.  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 audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material  respects,   the  financial  position  of  PocketSpec
Technologies  Inc. as of January 31, 2002,  and the results of their  operations
and their cash flows for the years ended January 31, 2002 and 2001 in conformity
with accounting principles generally accepted in the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue as a going  concern.  As discussed in Note 2 to the  consolidated
financial   statements,   the  Company's  significant  operating  losses  raises
substantial  doubt its  ability  to ontinue as a going  concern.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

As discussed in Note 2 to the  consolidated  financial  statements,  the Company
entered into material  transactions with related parties.  Such transactions are
not at terms equivalent to arm's-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.




/s/ Cordovano and Harvey, P.C.
------------------------------
Cordovano and Harvey, P.C.
Denver, Colorado
April 28, 2002


                                       F-2
<PAGE>

<TABLE>
<CAPTION>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                           Consolidated Balance Sheet
                                January 31, 2002


                                    Assets
<S>                                                            <C>          <C>
Current assets:
     Cash and cash equivalents                                              $      39,895
     Note receivable, related party (Note 2)                                      376,796
     Note receivable, other (Note 6)                                               22,950
     Indebtedness from related party (Note 2)                                       7,700
     Interest receivable, related party (Note2)                                       839
     Prepaid expenses                                                               1,333
                                                                            -------------
         Total current assets                                                     449,513

Intangible assets
     Patent application costs                                                      16,227
     License rights acquired from related party  (Note 2)                         140,000
                                                                            -------------
                                                                            $     605,740
                                                                            =============

                 Liabilities and Shareholders' Equity

Current liabilities:
     Accounts payable                                                       $       2,670
     Deferred gain on property sale (Note 2)                                      202,005
                                                                            -------------
         Total current liabilities                                                204,675

Commitment       -

Shareholders' equity (Note 4):
Common stock, $0.001 par value, 50,000,000 shares authorized,
         11,088,718 shares issued and 10,976,868 outstanding  $     11,089             --
     Treasury stock, $0.001 par value                                (112)         10,977
                                                               -----------

     Additional paid-in capital                                  1,439,591
     Treasury stock, excess of $0.001 par value,
         111,850 shares acquired                                  (29,069)      1,410,522
                                                               -----------

     Retained loss                                                            (1,020,434)
                                                                            -------------
             Total shareholders' equity                                           401,065
                                                                            -------------
                                                                            $     605,740
                                                                            =============
</TABLE>

                 See accompanying notes to financial statements.
                                       F-3
<PAGE>


<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                      Consolidated Statements of Operations
<CAPTION>


                                                                  Years Ended
                                                                  January 31,
                                                           --------------------------
                                                              2002           2001
                                                           -----------    -----------
<S>                                                        <C>            <C>
Sales:
   Sales of real estate                                    $ 2,478,029    $      --
   Sales of real estate, related parties (Note 2)            2,011,409           --
   Recognition of partial gain
       on exchange of real estate                              142,373           --
   Rental income                                                   965          7,388
                                                           -----------    -----------
                                                             4,632,776          7,388

Cost of sales:
   Cost of real estate                                       4,385,557           --
   Sales commissions paid to related party (Note 2)             14,720           --
   Closing costs                                                   663           --
                                                           -----------    -----------
                                                             4,400,940           --
                                                           -----------    -----------
                                            Gross profit       231,836          7,388


Operating expenses:
       General and administrative expenses:
           General and administrative                          431,234         87,972
           Research and development (Notes 4 and 6)            601,811           --
           Stock-based compensation (Note 4)                   160,320         38,275
           Related parties (Note 2)                             17,025         28,650
                                                           -----------    -----------
                             Total G&A expenses              1,210,390        154,897
                                                           -----------    -----------

                                       Operating (loss)       (978,554)      (147,509)
                                                           -----------    -----------

Other income (expense):
       Other income                                             12,900            592
       Gain on sale of collateral                                   --         50,803
       Interest income                                              38          3,000
       Gain on sale of assets acquired from
           related party (Note 2)                               94,228         51,726
       Interest (expense)                                     (169,546)        (2,378)
                                                           -----------    -----------
           Total other income (expense)                        (62,380)       103,743
                                                           -----------    -----------
           Loss before extraordinary item and
               provision for income taxes                   (1,040,934)       (43,766)

Extraordinary item (Note 2):
   Early extinguishment of related party debt, net of
       $ 14,994 in income taxes                                   --           55,006
                                                           -----------    -----------
        Income before provision for income (loss) taxes     (1,040,934)        11,240

Provision for income taxes - benefit (Note 5)                     --           10,260
                                                           -----------    -----------
                                      Net income (loss)    $(1,040,934)   $    21,500
                                                           ===========    ===========
</TABLE>

                 See accompanying notes to financial statements
                                       F-4
<PAGE>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                     Consolidated Statements of Operations


                                                         Years Ended
                                                          January 31,
                                                ------------------------------
                                                    2002               2001
                                                -----------        -----------
Net income (loss) per share:
   Basic:
       Before extraordinary item
           and income taxes                     $    (0.121)       $     *
                                                ===========        ===========
       After extraordinary item
           and income taxes                     $    (0.121)       $     *
                                                ===========        ===========
       Number of shares used for computing
           net income (loss) per share            8,580,278          6,337,371
                                                ===========        ===========
   Diluted:
       Before extraordinary item
           and income taxes                     $    (0.121)       $     *
                                                ===========        ===========
       After extraordinary item
           and income taxes                     $    (0.121)       $     *
                                                ===========        ===========
       Number of shares used for computing
           net income (loss) per share            8,580,278          6,376,615
                                                ===========        ===========

*Less than $.01 per share

                 See accompanying notes to financial statements
                                       F-5
<PAGE>

<TABLE>
                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                Consolidated Statements of Shareholders' Equity

<CAPTION>

                                             Common      Treasury            Additional     Common
                                              Stock        Stock              Paid In        Stock       Retained
                                             Shares       Shares    Amount     Capital      Options        Loss       Total
                                             ---------   --------   ------    --------      -------      -------     --------

<S>                                          <C>         <C>        <C>       <C>           <C>          <C>         <C>
Net loss for the period from
    January 31, 2000                              --      --          --          --           --         (1,000)      (1,000)

Sale of common stock net of
    offering costs of $6,000                 3,491,430    --         3,491     204,073         --           --        207,564
Shares of common stock issued
    in exchange for property                 1,686,665    --         1,687     251,313         --           --        253,000
Excess paid over historical cost
    for rights acquired from
    related parties                               --      --          --      (495,766)        --           --       (495,766)
Shares of common stock issued
    in exchange for services                   254,831    --           255      18,120         --           --         18,375
Issuance of stock options to purchase
    350,000 shares of common stock                --      --          --          --         19,900         --         19,900
Shares of common stock issued
    in exchange for debt                        84,882    --            85      12,647         --           --         12,732
Merger with MGI                              1,127,625    --         1,128       6,888         --           --          8,016
Common stock issued on options
    exercised                                  227,000    --           227      23,198       (3,400)        --         20,025
Net income for the year                           --      --          --          --           --         21,500       21,500
                                             ---------   --------   ------    --------      -------      -------     --------
           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 (Note 4)                           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 (Note 4)      64,500    --            64      10,256         --           --         10,320
July 2001, shares of common stock issued
    in exchange for property                   714,285    --           714     199,286         --           --        200,000
Exercised stock options, cash (Note 4)         173,000    --           173      47,402         --           --         47,575
Stock based compensation recognized
    on shares issued for services (Note 4)     275,000    --           275      43,725         --           --         44,000
Stock based compensation recognized
         on shares issued for promotional
         services (Note 4)                     250,000    --           250      39,750         --           --         40,000
August 2001, stock options of 150,000
         shares cancelled (Note 4)                --      --           --       16,500      (16,500)        --           --

</TABLE>


                 See accompanying notes to financial statements
                                      F-6
<PAGE>

<TABLE>
                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                Consolidated Statements of Shareholders' Equity
<CAPTION>

                                                Common      Treasury                 Additional    Common
                                                Stock        Stock                    Paid In      Stock    Retained
                                                Shares       Shares       Amount      Capital      Options    Loss       Total
                                               ----------   --------    -----------  -----------    ----  -----------  -----------
<S>                                            <C>          <C>         <C>          <C>            <C>   <C>          <C>
September 2001, shares repurchased
         (Note 4)                                 (59,500)      --              (59)     (12,199)    --          --        (12,258)
October 2001, stock based compensation
         recognized on shares issued for
         services (Note 4)                         95,000       --               95       19,705     --          --         19,800
Shares issued in exchange for intellectual
         property, related party (Note 2)         700,000       --              700      139,300     --          --        140,000
Contributed capital (Note 2)                         --         --             --        200,000     --          --        200,000
Shares repurchased (Note 4)                       (54,500)      --              (55)     (16,380)    --          --        (16,435)
November 2001, stock based compensation
         recognized on shares issued for
         services (Note 4)                         70,000       --               70       18,130                              --
                                                                                                                 --         18,200
Shares issued in exchange for note
         receivable, related party (Note 2)       100,000       --              100       29,900     --          --         30,000
Shares repurchased (Note 4)                       (16,500)      --              (16)      (5,351)    --          --         (5,367)
Share repurchased (Note 4)                           --      (17,000)           (17)      (3,720)    --          --         (3,737)
December 2001, shares repurchased
         (Note 4)                                    --      (57,000)           (57)     (15,030)    --          --        (15,087)
January 2002, stock based compensation
         recognized on shares issued for
         services (Note 4)                         60,000       --               60       19,940     --          --         20,000
Shares issued for intellectual
         property (Note 4)                      1,100,000       --            1,100      383,900     --          --        385,000
Shares repurchased (Note 4                           --      (37,850)           (38)     (10,320)    --          --        (10,358)
Net loss for the year                                --         --             --           --       --    (1,040,934)  (1,040,934)
                                               ----------   --------    -----------  -----------    ----  -----------  -----------
January 31, 2002                               11,088,718   (111,850)   $    10,977  $ 1,410,522    $--   $(1,020,434) $   401,065
                                               ==========   ========    ===========  ===========    ====  ===========  ===========

</TABLE>

                 See accompanying notes to financial statements
                                       F-7
<PAGE>

<TABLE>

                          POCKETSPEC TECHNOLOGIES INC.
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                      Consolidated Statements of Cash Flows
<CAPTION>


                                                                                         Years Ended
                                                                                          January 31,
                                                                                    2002            2001
                                                                                 -----------     ----------
<S>                                                                              <C>             <C>
Operating Activities:
     Net income (loss)                                                           $(1,040,934)   $    21,500
     Adjustments to reconcile net income (loss) to net cash
          used in operating activities:
          Common stock issued for services (Note 4)                                  160,320         18,375
          Issuance of stock options                                                     --           19,900
          Non-cash portion of research and development
                   costs (Notes 4 and 6)                                             581,385           --
          Non-cash portion of interest expense                                        34,089           --
          Non-cash discounts on notes receivable sales (Note 6)                       30,137           --
          Non-cash interest expense on note exchange (Note 3)                          7,669           --
          Gain on disposition of participation interest,
                   acquired from related party (Note 2)                              (94,228)          --
          Gain on sale of assets                                                    (227,004)          --
          (Increase) decrease in:
                   Prepaid expenses, interest receivable, and other                   (2,172)       (29,125)
                   Residential development and commercial real estate                   --       (1,520,408)
          Increase (decrease) in:
          Accounts payable, accrued interest,
                            deposits and other                                         2,670         65,334
                   Acquisition and development and commercial
                            property notes                                              --        1,318,064
          Deferred gain on sale of property, related party (Note 2)                    9,669           --
                                                                                 -----------     ----------
                       Net cash provided/used by operating activities               (538,399)      (106,360)
                                                                                 -----------     ----------
Investing Activities:
          Cash paid for rights to future revenues from the sale of
                     common stock, acquired from related party                          --          (26,480)
          Cash paid for rights to future revenues from a certain note
                     receivable, acquired from related party                            --          (14,430)
          Cash paid for rights to future revenues from real estate
                     development, acquired from related party                           --          (92,154)
          Cash paid for acquiring 242,350 shares of our
                   common stock, (Note 4)                                            (63,242)          --
          Cash paid for patents                                                      (16,227)          --
          Proceeds from sale of assets, related party (Note 2)                        62,052           --
          Proceeds from sale of assets, other (Note 6)                                45,000           --
          Proceeds from sale of notes receivable, related party (Note 2)              96,369           --
          Proceeds from sale of note receivable, related party
                   in exchange for debt principal (Note 3)                             5,066           --
          Proceeds from sale of property bond (Note 2)                                13,200           --
          Proceeds from partial assignment of note
                   receivable, other (Note 6)                                         55,845           --
          Cash paid for property additions                                          (255,932)          --
          Cash received on disposition of participation interest,
                  acquired from related party (Note 2)                               144,290           --
                                                                                 -----------     ----------
                                Net cash provided/used by investing activities        86,421       (133,064)
                                                                                 -----------     ----------
</TABLE>

                 See accompanying notes to financial statements
                                       F-8
<PAGE>

<TABLE>
                          POCKETSPEC TECHNOLOGIES INC.
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                      Consolidated Statements of Cash Flows
<CAPTION>
                                                                                        Years Ended
                                                                                         January 31,
                                                                                   2002         2001
                                                                                 ---------    ---------
<S>                                                                              <C>          <C>
         Financing Activities:
                  Proceeds from short-term borrowings,
                           related parties (Note 2)                                669,400       29,000
                  Proceeds from borrowing, related parties (Note 2)                195,752         --
                  Proceeds from borrowing, other (Notes 3 and 6)                   670,000      106,599
                  Repayment of short-term borrowings,
                           related parties (Note 2)                               (669,400)     (29,000)
                  Repayment of short-term borrowings, other                        (60,000)     (93,649)
                  Indebtedness of related parties  (Note 2)                        (33,237)        --
                  Repayment of indebtedness, related party (Note 2)                 25,537         --
                  Repayment of note receivable, related party (Note 2)              71,223         --
                  Principal payments on notes payable,
                           related parties (Note 2)                               (236,011)        --
                  Principal payments on notes payable, other                      (393,417)        --
                  Contributed capital, related party (Note 2)                      200,000         --
                  Proceeds from exercised stock options (Note 4)                    47,575         --
                  Proceeds from the sale of common stock, net of
                  Offering costs                                                      --        227,589
                                                                                 ---------    ---------
                                     Net cash provided by financing activities     487,422      240,539
                                                                                 ---------    ---------

         Net change in cash                                                         35,444        1,115
         Cash at beginning of period                                                 4,451        3,336
                                                                                 ---------    ---------
                                                        Cash at end of period    $  39,895    $   4,451
                                                                                 =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
         Cash paid during the period for:
                  Interest                                                       $ 134,480    $  57,296
                                                                                 =========    =========
                  Income taxes                                                   $   4,734    $    --
                                                                                 =========    =========

         Non-cash investing and financing activities:
                  Common stock issued for property                               $ 478,000    $ 253,000
                                                                                 =========    =========
                  Common stock issued for notes receivable                       $  30,000    $    --
                                                                                 =========    =========
                  Common stock issued for debt                                   $    --      $  12,732
                                                                                 =========    =========
                  Common stock issued for intellectual property                  $ 140,000    $    --
                                                                                 =========    =========
</TABLE>


           See accompanying notes to consolidated financial statements
                                       F-9
<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, 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 develops 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, 2002.

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

We have  raised  capital  and  engaged in certain  real  estate  activity  since
inception.  Inherent  in our  business  are  various  risks  and  uncertainties,
including our limited operating  history,  historical  operating losses, and the
success of its recent change in business plans. Our plans include  continuing to
develop our color-measuring technology and marketing our products. We anticipate
production of our products to begin during the second  quarter of our new fiscal
year.  Our  future  success  will be  dependent  upon our  ability to create and
provide an effective and competitive  color-comparing instrument on a timely and
cost-effective basis.

(b)  Use of 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.

(c)  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.  There  were cash
equivalents in brokerage accounts totalling $13,797 at January 31, 2002.

                                      F-10
<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.
                   Notes to Consolidated Financial Statements


(d)  Revenue and Cost Recognition

Costs that clearly  relate to land  development  projects are  capitalized.  Lot
acquisition,  materials,  and specific  identification methods are used whenever
possible.  Otherwise,  acquisition  costs are  allocated  based on relative fair
value before development and direct and indirect costs of developing residential
lots  and  other  direct  and  other  indirect  costs  related  to  acquisition,
development, and their construction of lots and homes are capitalized. Costs are
allocated to the project  components by  allocation to individual  lots based on
relative sales value.  Interest costs are  capitalized  while  development is in
progress.  Capitalized costs of esidential lots are charged to earnings when the
related revenue is recognized.
Costs incurred in connection  with developed lots and completed  homes and other
selling and administrative costs are charged to earnings when incurred.

Revenues from lot  development  and home building are recognized upon closing of
the sale. If a lot is sold prior to completion of development, revenue allocable
to performance after the sale is deferred. The allocation is determined based on
the percentage of cost incurred to date to estimated total costs.

(e)  Amenities

The cost of amenities that will be left with the  development are capitalized as
a cost of the project  and  allocated  to the  components  that have  benefited.
Operating  revenues  and  expenses  of  those  amenities  are  accounted  for as
decreases or increases in project costs. The cost of amenities that will be sold
separately are capitalized as separate properties,  but the cost of amenities in
excess of their fair value at completion  are allocated to the components of the
projects they have benefited.  Operating revenues and expenses of amenities that
will be sold  separately are capitalized  until the amenities are  substantially
complete and recognized in net income thereafter.

(f)  Impairment of Real Estate

Completed  lots are reported in the balance sheet at the lower of their carrying
amount  or fair  value  less  costs  to  sell.  Land to be  developed  or  under
development is assessed for impairment when  management  believes that events or
changes  in  circumstances   indicate  that  its  carrying  amount  may  not  be
recoverable.  Based on this assessment,  property that is considered impaired is
written  down to its fair  value.  Impairment  losses are  recognized  through a
charge to expense.

(g)  Intangible Assets

The Company  acquired certain  exclusive  rights to future earnings,  more fully
described in Note 4. 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.

(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. 121,  Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of  (Statement  No. 121).  Statement  No. 121 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 F-11

                                      F-11
<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


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.

(i)  Income Taxes

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

                                      F-12
<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


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, 2002 and
2001.

Note 2: Related party transactions

Advanced Gas & Oil Corp. (AGO), Asset  Realization,  Inc. (ARI), Cape Aloe Corp.
(CAC), Color-Spec Technologies,  Inc. (CST), Platinum Financial Fund, LLC (PFF),
Frederick  Master Home  Owners'  Association  (FMHOA) and  Krupka-Brophy  Profit
Sharing Plan (KBP) are affiliates of our Company.

(a)  Sale of Arapahoe County, Colorado property.

On September 28, 2001 we entered into an agreement to sell our Arapahoe  County,
Colorado  property  to  PFF  for  consideration  of  $2,800,000  in  cash,  debt
assumption  and notes.  PFF assumed all of outstanding  debt  obligations on the
property. The $2,800,000 sale price included a $666,000 participation agreement.
Under  the  terms of the  participation  agreement,  we  agree  to pay  First of
Dunkirk,  LLC  approximately 24% of the first $2,750,000 in sales proceeds 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.

We accepted a note  receivable  from our  affiliate  in the amount of  $644,403.
Terms of the note include  monthly  principal  and interest  payments of $30,000
beginning  December 1, 2001 and maturing on December 1, 2002.  Payments received
through January 31, 2002 total $71,233 in principal and interest of $8,830 for a
total amount of $80,063.  Accrued interest  receivable on the note totalled $839
through January 31, 2002. Accrued interest  receivable offset a deferred gain on
the sale of the Aurora property (see Note 6).

On September 28, 2001 the carrying value of the property totaled  $1,941,664 and
encumbrances including accrued interest totaled $1,489,286. We deferred the gain
on the sale in the amount of $192,336.  The gain will be realized when PFF sells
the  property.  Accrued  interest  applied to the  deferred  gain totals  $9,669
through January 31, 2002.

Following  is a schedule  of notes  assumed  by PFF in the sale of the  Arapahoe
County, Colorado property:

                                                Lender    Principal    Interest
                                                Assumed    Assumed       Paid
                                             ---------   -----------   ---------
Germain Investment Co                        $   70,000   $    5,913   $   8,401
  note bearing interest at 18%
  due in full on October 4, 2001

Krupka-Brophy Profit Sharing Plan               510,000        1,621        --
  note bearing interest at 14% due
  in full on December 1, 2002

Nancy M. Miller                                  69,719          168        --
  note bearing interest at 10% due
  in full on August 1, 2002

Nancy M. Miller                                 161,331         --          --
  note bearing interest at 6% due
  in full on August 1, 2002

Platinum Financial Fund, LLC                     16,307         --          --
  note bearing interest at 10% due
  in full on December 1, 2002


                                      F-13
<PAGE>

                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


Edward Herber                                    89,816         --          --
  note bearing interest at 6% due
  in full on August 1, 2002

Robert M. Singer                                 98,580         --          --
  note bearing interest at 10% due
  in full on August 1, 2002
First American State Bank note                  465,831         --          --
                                             ---------   -----------   ---------
  bearing interest at Prime plus 1.5%
  due in full on December 11, 2001

         Total                               $1,481,584   $    7,702   $   8,401
                                             ==========   ==========   =========


(b)  Sale of Riverside County, California property.

During the third quarter  ended October 31, 2001, we sold the Riverside  County,
California  property to AGO for $15,000 cash. Our carrying value in the property
was $20,000. We recorded a loss on the sale in the amount of $5,000.

(c)  Sale of Colfax Avenue property

We sold retail space to an affiliate, Color-Spec Technologies, Inc. for $54,745.
Net cash received from the affiliate totaled $47,052 during the first quarter of
our fiscal year. We recorded a gain in the amount on the sale totalling $20,441.

(d)  Loans and commissions paid to affiliates

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.  The Company received payment of $25,537 during

                                      F-14
<PAGE>

                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


the period ended July 31, 2001.  We also paid our CEO, F.  Jeffrey  Krupka,  25%
commissions  on all property  sales in accordance  with an agreement in force at
the time. Total commissions paid were $73,283.

(e)  Purchase of intellectual property

On October 3, 2001 we signed two  agreements  with CST to acquire  rights to the
POCKETSPEC(TM) trademarks and to license the right to develop the POCKETSPEC(TM)
color measuring devices.  Terms of the trademark  agreement commenced on October
3,  2001  and  continue  for a  period  of ten  (10)  years.  The  agreement  is
automatically  renewable  for  additional  five (5)  year  periods.  The  second
agreement  provides  us with the  license  required  in order  to  continue  the
development  of  the  POCKETSPEC(TM)  color  measuring  devices.  Terms  of  the
agreement  include  700,000  shares  common stock  valued at $.20 per share,  or
$140,000  which  represents  predecessor  cost,  Color-Spec  Technologies,  Inc.
provided us with $200,000 cash to be used for the budgeted expenses  anticipated
to  develop  color  measuring   technology  patents  and  products.   Color-Spec
Technologies,  Inc. will also receive  royalties payable quarterly from the sale
of the devices.  In addition,  we have filed three utility  patent  applications
from the technology used in the devices. The $200,000 was recorded in the equity
section of our financial statements as additional paid in capital.

(f)  Office space rented from an affiliate and accounting services

We rented office space from an affiliate  and paid an affiliate  for  accounting
services.  Total cost for the office space  through the period ended January 31,
2002 was  $15,750  and  total  cost for  accounting  was  $900.  We also paid an
affiliate for homeowner's association fees totaling $375. Total expenses through
January 31, 2002 are $17,025.

(g)  Participation interests

During the year ended January 31, 2002, we received from PFF,  proceeds totaling
$144,290  from  the  sale  of  our  participation   interest  in  American  Tire
Corporation  common stock  (ATC).  We recorded a total gain from the sale of the
stock by PFF for the aount of $94,228. The balance of the participation interest
as of January 31, 2002 is $-0-.

(h)  Loans from and notes payable to affiliates

During the third  quarter ended October 31, 2001, we borrowed from and repaid to
PFF $166,300. We also borrowed and repaid to CAC $25,000 and a director $10,000.
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

                                      F-15
<PAGE>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


CST in the  amount of  $151,000  was paid.  We  borrowed  from and repaid to AGO
$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 KBP 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. Terms of the notes are listed below:

Note  payable in the amount of $89,836  bearing  interest  at 10% due in full on
August 1, 2002. Accrued interest through September 30, 2001 totaled $1,723.

Note  payable in the amount of $218,499  bearing  interest at 10% due in full on
August 1, 2002. Accrued interest through September 30, 2001 totaled $4,190.

New note payable in the amount of $510,000  bearing  interest at 12% due in full
on September 24, 2002.  PFF  subsequently  assumed the note payable when we sold
our Arapahoe County, Colorado property.

(i)  Below is a table of debt  principal and interest paid during the year ended
     January 31, 2002.

                                        Principal        Interest
         Affiliate                        Paid            Paid
        ----------                      --------         -------

        AGO                             $ 61,211         $ 1,385
         refinanced note bearing
         interest at 14% due in
         full on June 13, 2002

        AGO                               12,000             299
         Note bearing interest
         at 14% due in full on
         December 1, 2002

        AGO                               26,000             648
         Note bearing interest
         at 14% due in full on
         December 1, 2002

        ARI                                5,196              70
         Note bearing interest
         at 12% due in full on
         December 1, 2002

        CAC                                3,514              79
         Note bearing interest
         at 12% due in full on
         December 1, 2002

        CST                               29,076           1,361
         Note bearing interest
         at 14% due in full on
         May 1, 2002

        CST                               46,723           2,108
         Note bearing interest
         at 14% due in full on
         August 30, 2001

        KBP                               12,000             299
         Note bearing interest
         at 14% due in full on
         December 1, 2002

        KBP                               22,000             405
         Note bearing interest
         at 14% due in full on
         December 1, 2002

        PFF                               10,000             131
         Note bearing interest
         at 10% due in full on
         December 1, 2002
                                        --------         -------
                                        $227,720         $ 6,785
                                        ========         =======

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 our  Company  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. Our cost basis in the property sold totals $373,752. Please
refer to Note 6 below.  All of the  notes  receivable  were sold for net cash of
$96,369. The notes were discounted in the amount of $12,850 which was charged to
operating expense.

(j) During the period ended  January 31, 2002 our Company sold its 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 which was charged to operating  expense.  Part of the bond
was sold to our CEO while the balance was sold to FMHOA.

                                      F-16
<PAGE>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


(k) 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.

Note 3: Notes payable, other

During the fourth  quarter ended  January 31, 2002 our Company  exchanged a note
receivable  in  the  amount  of  $202,000  from  PFF  for  debt  principal  to a
non-affiliate  totaling $190,252 and net cash in the amount of $5,066.  The note
was discounted by $6,682 which was charged to operating  expense.  This exchange
paid off the balance of a note payable owed to an individual.

During the third quarter ended October 31, 2001 we borrowed $670,000 from a non-
affiliate in order to pay off outstanding debt principal and interest.  Terms of
the loan consisted of interest at 9% and required monthly  interest  payments of
approximately  $5,100 until maturity on August 29, 2003.  Costs  associated with
the loan totaled $15,541.  Net proceeds from the loan were used to partially pay
principal  debt owed to an individual  in the amount of $375,000.  The remaining
proceeds were used to extinguish other  outstanding debt principal and interest.
The note was assumed by the buyer of our Elbert  County  property  discussed  in
Note 6 below.

We owed a note payable to an  individual  for $475,000  bearing  interest at 15%
with quarterly payments of interest only starting September 1, 2001 and maturing
July 12, The  principal  amount was paid down by $375,000 from the proceeds of a
new loan for $670,000. On January 12, 2002 we exchanged a note receivable in the
amount of  $112,000  for the debt  principal  balance of  $100,000  and  accrued
interest in the amount of $4,331 and  interest  expense in the amount of $7,669.
The balance of the note was paid in full with this exchange.

Note 4:  Shareholders' Equity

For the year ended January 31, 2002 we recorded stock-based  compensation in the
amount of $160,320.  The stock-based  compensation  represents 614,500 shares of
common  stock that were issued to  employees  and  consultants  for services and
250,000  shares of common  stock  issued to  consultants  for  public  relations
organizations  and web-site  development and  maintenance.  The was based on the
closing price of the stock on the day of issuance.

During the year ended January 31, 2002 we purchased 242,350 shares of our common
stock in our stock  buy-back  program.  Total  cost of the  242,350  shares  was
$63,242.  The cost of the shares is recorded  on our balance  sheets as treasury
stock.  On January 28, 2002 71,000  repurchased  shares were  cancelled,  and on
January 8, 2002 we re purchased and cancelled 59,500 shares of our common. Total
cost of the shares was $34,061.

During the third  quarter  October 31, 2001,  we  cancelled  options to purchase
150,000  shares of common stock with an option  price of $.275 per share.  Those
options  were  originally  granted on July 18,  2001.  We credited  the original
transaction  valued at  $16,500 to  additional  paid in  capital.  As more fully
discussed  in Note 2, we  issued  700,000  shares  of  common  stock  valued  at
$140,000,  or $.20 per share for the  rights to develop  color-measuring  device
products.  In  addition,  we  received  $200,000  from CST,  an  affiliate,  for
continuance of our licensed product research and development costs. The $200,000
was recorded as contributed capital.

During the year ended January 31, 2002 we issued a total of 1,409,285  shares of
common  stock in  exchange  for real  estate.  695,000  shares  were  valued  at
$278,000,  or $.40 per share and 714,285  shares of common  stock were valued at
$200,000 or $.28 per share.  The shares were valued  based on the quoted  market
price of our stock on the date of issuance.

                                      F-17
<PAGE>


                          POCKETSPEC TECHNOLOGIES INC.,
                      f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


During the second quarter ended July 31, 2002 a former employee  exercised stock
options  for  173,000  shares of common  stock.  Total  cash  received  from the
exercise of the stock options was $47,575.

Note 5:  Income taxes

The Company  records its income taxes in accordance  with Statement of Financial
Accounting  Standard No. 109,  Accounting for Income Taxes. The Company incurred
net operating  loss for the year ended January 31, 2002  resulting in a deferred
tax asset,  which was fully allowed for,  which  resulted in the net benefit and
expense  income tax payable in the amount of $-0- and net  operating  income for
the year ended  January 31, 2001  resulting in income tax payable for the amount
of $2,527.

A reconciliation of U.S. statutory federal income tax rate to the effective rate
follows for the year ended January 31, 2002 and 2001:

                                                                   Jan. 1, 2000
                                                  Year ended         Through
                                                  January 31,       January 31,
                                                     2002              2001
                                                  -----------      ------------
U.S. statutory federal rate                         15.00%           15.00%
State income tax rate, net of federal benefit       4.04%            4.04%
Permanent differences                               -0.99%           0.00%
Net operating loss for which no tax
   benefit is currently available                   0.00%            -19.04%
                                                  -----------      ------------
                                                    18.05%           0.00%
                                                  ===========      ============

Note 6: Other sales of real estate

On January 12,  2002 our  Company  sold the  remaining  parcel of Elbert  County
property to an individual.  We sold the parcel for $800,000. We received 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.  The Company 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.

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 on the promissory note. As of January 31, 2002, the remaining
balance on the note totaled $22,950.

During the second  quarter  ended July 31, 2002 we entered  into an agreement to
exchange fourteen (14) lots of our Frederick,  Colorado development for property
located in Elbert County, Colorado and Riverside County,  California.  The total
acquisition  price for the property was $1,325,555 of which we allocated $20,000
to the Riverside County,

                                      F-18
<PAGE>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


California  land. In the  transaction,  the Frederick  development was valued at
$612,912.  We recorded a partial  gain on the exchange in the amount of $85,595.
The  unrecognized  balance of the gain for the amount of $12,310 was recorded as
an  addition  to the cost basis of the Elbert  County  property.  As part of the
acquisition  price,  we used  695,000  shares of common stock valued at $.40 per
share for a total of $278,000,  and accepted a certificate of foreclosure in the
amount of $414, 644. We received promissory notes totaling $250,000 and accepted
liabilities for the amount of $35,000.

During our first fiscal  quarter ended April 30, 2001, we sold our Colfax Avenue
property for the total amount of $510,811.  Costs  associated  with the property
were  $271,124.  Total cash received  from the sales was  $304,700.  We recorded
gains  on  the  sale  of  the  property  totalling  $254,939.  Balances  of  the
transactions were financed directly with non-affiliates.

On July 6,  2001 we sold  our  Firestone,  Colorado  property  in  exchange  for
development  property  located in Arapahoe  County,  Colorado.  We used  714,285
shares of common stock valued at $200,000,  assumed two notes  payable  totaling
$547,000, and assumed two note payable to individuals totaling $662,000. We paid
cash in the amount of $125,000 and the buyer of our Firestone property agreed to
assume a note payable from us with a principal balance totaling $249,323.

Sale of Elbert County real estate

On November 29, 2001 our Company sold one of two parcels of real estate  located
in Elbert County, Colorado to a third party for $393,000. The buyer paid us with
five promissory  notes. The borrower on each of the notes is PFF. Our cost basis
in the property sold totals  $373,752 on November 29, 2001.  The notes and terms
are listed below.

We received a note from PFF in the amount of $202,000 that bears  interest at 0%
until April 1, 2002. On April 1, 2002 the interest rate changes to 14%. Terms of
the note include monthly  payments in the amount of $4,000  starting  January 1,
2002 until the note  matures on June 1,  2002.  On January 7, 2002 the  $202,000
note was exchanged  for cash of $5,066,  and a note  receivable  from PFF in the
amount of $190,252 and a discount totaling $6,682.

We received a note from PFF in the amount of $112,000 that bears  interest at 0%
until April 1, 2002. On April 1, 2002 the interest rate changes to 14%. Terms of
the note include monthly  payments in the amount of $2,000  starting  January 1,
2002 until the note matures on June 1, 2002.  On January 12, 2002,  the $112,000
note receivable was exchanged for debt payable to an individual in the amount of
$100,000 and accrued interest in the amount of $12,000.

We received a non-interest  bearing note  receivable  from PFF in the amounts of
$35,000,  $16,500 and $27,500.  These notes  mature on June 1, 2002.  During the
month of January,  2002, , the three notes of $35,000,  $16,500 and $27,500 were
sold for cash  totaling  $68,650 and  discounted  $10,350.  The  discount in the
amount of $10,350 was charged to operating expense in the accompanying financial
statements.

(7)  Commitments

We have employment  agreements with Mr. Krupka,  Ms. Kettl, Ms. Brophy,  and Mr.
Hutchinson.  Mr. Krupka's  agreement runs from January 1, 2002 through  December
31, 2003. Under this

                                      F-19
<PAGE>


                         POCKETSPEC TECHNOLOGIES INC.,
                     f/k/a REAL ESTATE OPPORTUNITIES, INC.

                   Notes to Consolidated Financial Statements


agreement,  Mr.  Krupka is paid  $14,335 per month and entitled to a $6,000 cash
bonus when the pending sale of our Aurora, Colorado land by PFF is completed.

Our  agreement  with Ms. Kettl runs from  January 1, 2002  through  December 31,
2003.  Under this  agreement,  she is paid $5,650 per month.  She also  received
50,000  share of our  common  stock as a bonus,  which  were  valued at $.33 per
share.

Ms. Brophy's agreement runs from January 1, 2002 through December 31, 2003.
Ms. Brophy is paid $5,000 per month, which was increased to $8,630 per month
as of April 1, 2002.

Mr.  Hutchison  became a director in 2001. Mr. Hutchison is paid under a written
agreement at the rate of $2,000 per month.  This  agreement  will continue until
September 1, 2002. He will be reimbursed for necessary travel, in addition,  and
in consideration of leads generated in the commercial retail paint industry. Mr.
Hutchison  shall be paid a salary  bonus of $10,000 if one  hundred of our color
products are sold by April 1, 2003 and on a sliding scale basis of up to $30,000
bonus if 1,000  devices are sold by April 1, 2003.  This will be valid,  even if
Mr. Hutchison does not continue employment beyond September 1, 2002.

                                      F-20
<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.


                                    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          46               1999                  President,
                                                                  Director &
                                                                  Chairman of
                                                                  The Board

Cynthia Kettl              54               2000                  Treasurer &
                                                                  Director

Janet Brophy               47               2001                  Secretary &
                                                                  Director

Roger Hutchison            50               2001                  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.

F. Jeffrey Krupka. Mr. Krupka has been our Chief Executive Officer and President
since September,  1999. He has also been the Chief Executive Officer 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 as well as securities
investment activities since 1981.

Cynthia Kettl. Ms. Kettl has been our Treasurer since  September,  1999. She has
been involved with PFF, LLC, a private  investment  company,  since 1998.  >From
October,  1995 to 1998,  she was  employed  by Krupka and  Associates,  LLC.,  a
private investment  company.  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 She has been
involved in real estate  oriented  businesses  since 1978.  Ms. Brophy  attended
Arizona State University.

Roger S. Hutchison.  Mr.  Hutchison has been one of our Directors since October,
2001. For the past thirteen  years,  he has been  President and Chief  Executive
officer of CD-Rom, Inc. and CD-Rom USA, Inc., which are private companies in the
business of developing  electronic products for the computer industry.  He has a
PhD in Advanced  Materials and  Telecommunications  from the Colorado  School of
Mines.  He has an MA in  Engineering  and Economics and a BS in Psychology  with
minors in Mechanical and Civil Engineering from the University of Maine.

                                       22
<PAGE>

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 Our
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. No filings were required by our Officers or Directors.

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  mot 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.

<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>           <C>
F. Jeffrey                      2001        $ 133,253              --                --               --             --
Krupka                          2000            $-0-
Chairman (1)                    1999            $-0-

Cynthia                         2001         $ 13,982              --                --               --             --
Kettl                           2000           $2,400              --                --               --             --
Treasurer (2)                   1999             $600              --                --               --             --

Janet                           2001          $14,017              --                --               --             --
Brophy                          2000            $-0-               --                --               --             --
Secretary(3)                    1999            $-0-               --                --               --             --

Roger                           2001         $ 14,017              --                --               --             --
Hutchison                       2000            $-0-               --                --               --             --
Director(4)                     1999            $-0-               --                --               --             --

</TABLE>

(1)  We have an employment  agreement with Mr. Krupka which runs from January 1,
     2002 through  December 31, 2003.  Under this agreement,  he is paid $14,335
     per month. He is also entitled to a $6,000 cash bonus when the pending sale
     of our Aurora, Colorado land by PFF is completed.

(2)  We have an employment  agreement  with Ms. Kettl which runs From January 1,
     2002 through December 31, 2003. Under this agreement she is paid $5,650 per
     month. She also received 50,000 of our common shares as a bonus, which were
     valued at $.33 per share.

(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,
     2003.  Under  this  agreement,  she is paid  $5,000  per  month,  which  is
     increased to $8,630 per month as of April 1, 2002.

(4)  Mr. Hutchison became an officer and director in 2001. Mr. Hutchison is paid
     under a written  agreement at the rate of $2,000 per month.  This agreement
     will continue until  September 1, 2002. He will be reimbursed for necessary
     travel.  In  addition,  and in  consideration  of  leads  generated  in the
     commercial - retail paint  industry,  Mr.  Hutchison shall be paid a salary
     bonus of $10,000 if one hundred of our color  products are sold by April 1,
     2003,  on a sliding scale basis of up to $30,000 bonus if 1,000 devices are
     sold by April 1, 2003. This will be valid,  even if Mr.  Hutchison does not
     continue employment beyond September 1, 2002.

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.

                                       23
<PAGE>

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.

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, 2001,
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, 2002,  there were a
total of 11,088,718 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)                   3,592,733                   32.4%
3225 East 2nd Ave
Denver, Colorado 80206

Cynthia Kettl                                58,925                    0.5%
3225 East 2nd Ave
Denver, Colorado 80206

Arthur W. Zarlengo Rev. Trust               681,927                    5.3%
621 17th Street
Suite 911
Denver, Colorado 80202

Marlene M. Roben Trust                      719,295                    6.5%
3961 S. Narcissus Way
Denver, Colorado 80237

Janet Brophy (4)                            170,745                    1.5%
6195 South Akron Way
Greenwood Village, Colorado 80111

Roger Hutchison                              30,000                    0.4%
7385 Bush Lake Road
Edina, Minnesota 55439

All Officers and Directors as a Group     3,852,403                   34.8%
3225 East 2nd Ave
(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.

(3)  Includes shares owned of record by Platinum Financial Fund, LLC. Mr. Krupka
     and his wife own 100% of the entity  which owns 51% of  Platinum  Financial
     Fund, LLC. Mr. Krupka is also the Manager of Platinum  Financial Fund, LLC.
     Includes shares owned of record by B7 Brand, LLC, Asset Realization,  Inc.,
     and Color-Spec  Technologies,  which are entities controlled by Mr. Krupka.
     Includes 9,256 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 9,256  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.

                                       24
<PAGE>

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.  He pays us $500 per month for this
use, plus the cost of four  telephone  lines,  including  service and applicable
service charges.

     We have entered into  agreements  with CD ROM, USA, Inc. and CD ROM,  Inc.,
which are private companies owned by Mr. Roger Hutchison,  who has become one of
our directors. Under our agreement with CD ROM, Inc., he is an approved supplier
of products to the U.S.  General Services  Administration,  it has undertaken to
list on its web site the  PocketSpec for sale within the U.S.  General  Services
Administration  vendor  network.  We have not begun any sales as yet. We paid CD
ROM, Inc.  $30,411.64 in the form of 121,647  shares under this sales  agreement
and will pay them ten percent  commission  on all sales by them  through  March,
2004.

     We paid our Treasurer,  Ms. Kettl, a total of $900 for accounting  services
during the fiscal year.

     Advanced Gas & Oil Corp. (AGO),  Asset  Realization,  Inc. (ARI), Cape Aloe
Corp.  (CAC),   Color-Spec   Technologies,   Inc.  (CST),  PFF,  LLC  (PFF)  and
Krupka-Brophy Profit Sharing Plan (KBP) are affiliates of ours.

     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.

     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.  We received  payment of $25,537  during the
period ended July 31, 2001.

     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.

     We  received  from  PFF  proceeds  totaling  $144,290  from the sale of its
participation interest in American Tire Corporation stock (ATC).

                                       25
<PAGE>

     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,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.


                                    PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

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

(1)  FINANCIAL STATEMENTS

(2)  SCHEDULES

(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.

                                       26
<PAGE>

      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 Roger Hutchison.


+ Previously Filed

(c)  REPORTS  ON FORM 8-K.  We filed one  report on Form 8-K  during  the fourth
     quarter of the fiscal year ended January 31, 2001.  The report was filed on
     December 8, 2001 to announce the results of our shareholder meeting.

                                       27
<PAGE>



                                   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.


Dated: APRIL 29, 2002                                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: APRIL 29, 2002                                By: /s/ CYNTHIA KETTL
       --------------                                    -----------------------
                                                         Cynthia Kettl
                                                         Treasurer


Dated: APRIL 29, 2002                                By: /s/ F. JEFFREY KRUPKA
       --------------                                    -----------------------
                                                         F. Jeffrey Krupka
                                                         ccccccc


Dated: APRIL 29, 2002                                By: /s/ JANET BROPHY
       --------------                                    -----------------------
                                                         JANET BROPHY
                                                         Director


Dated: APRIL 29, 2002                                By: /s/ ROGER S. HUTCHISON
       --------------                                    -----------------------
                                                         ROGER S. HUTCHISON
                                                         Director

                                       28