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

                                   FORM 10-QSB

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

          For  the  quarterly  period  ended     October  31,  2002
                                                --------------------

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

         For  the  transition  period  from__________  to  __________

         Commission  file  number:       0  -  32093
                                  ---------------------

                             HIENERGY TECHNOLOGIES, INC.
          -------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

               Delaware                           91-2022980
               --------                           ----------
       State or other jurisdiction of   (IRS Employer Identification No.)
       incorporation or organization


              1601 Alton Parkway, Unit B, Irvine, California 92606
           ------------------------------------------------------------
                    (Address of principal executive offices)


                                 (949) 757-0855
                          ---------------------------
                          (Issuer's telephone number)


   --------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                    report.)

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


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of  the latest practicable date: As of December 6, 2002, the issuer
had  24,042,360  shares  of Common Stock, par value $0.001 per share, issued and
outstanding.


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

<PAGE>
                           HIENERGY TECHNOLOGIES, INC.

                                    INDEX TO
                         QUARTERLY REPORT ON FORM 10-QSB
                     FOR THE QUARTER ENDED OCTOBER 31, 2002

<TABLE>
<CAPTION>
<S>                                                                             <C>
PART  I - FINANCIAL INFORMATION                                                 PAGE

Item  1   Financial  Statements . . . . . . . . . . . . . . . . . . . . . . . .   1

          Consolidated  Balance Sheets as of April 30, 2002 and October 31, 2002
          (unaudited)

          Consolidated  Statements  of  Operations  for the three and six months
          ended  October  31,  2002 and 2001 (unaudited) and for the Period from
          August  21,  1995  (Inception)  to  October  31,  2002  (unaudited)

          Consolidated  Statements  of  Shareholders' Equity for the Period from
          August  21,  1995  (Inception)  to  October  31,  2002  (unaudited)

          Consolidated Statements of Cash Flows for the six months ended October
          31,  2002 and 2001 (unaudited) and for the Period from August 21, 1995
          (Inception)  to  October  31,  2002  (unaudited)

          Notes  to  the  Consolidated  Financial  Statements  (unaudited)

Item  2   Management's  Discussion  and  Analysis  of  Financial Condition and
          Results  of  Operations. . . . . . . . . . . . . . . . . . . . . . .    32

Item  3   Controls  and  Procedures. . . . . . . . . . . . . . . . . . . . . .    36

PART  II- OTHER  INFORMATION

Item  1   Legal  Proceedings. . . . . . . . . . . . . . . . . . . . . . . . .     36

Item  2   Changes  in  Securities  and  Use  of  Proceeds. . . . . . . . . . .    37

Item  4   Submission  of  Matters  to  a  Vote  of  Security  Holders. . . . .    38

Item  5   Other  Information. . . . . . . . . . . . . . . . . . . . . . . . . .   39

Item  6   Exhibits  and  Reports  on  Form  8-K. . . . . . . . . . . . . . .  .   39

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41

CERTIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42


</TABLE>

<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>


                                                           HIENERGY TECHNOLOGIES, INC.
                                                       (FORMERLY SLW ENTERPRISES, INC.)
                                                                     AND  SUBSIDIARIES
                                                          (DEVELOPMENT STAGE COMPANIES)
                                                             CONSOLIDATED BALANCE SHEET
                                        APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
========================================================================================


                                        ASSETS

                                                            October 31,     April 30,
                                                               2002          2002
                                                            ------------  ------------
                                                            (unaudited)
<S>                                                         <C>           <C>
CURRENT ASSETS
  Cash and cash equivalents                                 $ 1,949,408   $ 1,078,136
  Accounts receivable                                            70,000        29,166
  Subscription receivable                                       184,000             -
  Other current assets                                          220,721         7,500
                                                            ------------  ------------

    Total current assets                                      2,424,129     1,114,802

PROPERTY AND EQUIPMENT, net                                     496,427       114,568
                                                            ------------  ------------

TOTAL ASSETS                                                $ 2,920,556   $ 1,229,370
                                                            ============  ============

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        1
<PAGE>
<TABLE>
<CAPTION>


                                                           HIENERGY TECHNOLOGIES, INC.
                                                       (FORMERLY SLW ENTERPRISES, INC.)
                                                                     AND  SUBSIDIARIES
                                                          (DEVELOPMENT STAGE COMPANIES)
                                                             CONSOLIDATED BALANCE SHEET
                                        APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
========================================================================================



           LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)



                                                             October 31,     April 30,
                                                                2002          2002
                                                            ------------  ------------
                                                            (unaudited)
<S>                                                         <C>           <C>
CURRENT LIABILITIES
  Accounts payable                                          $   525,533   $   209,895
  Accrued expenses                                               72,885       151,567
  Accrued payroll and payroll taxes                             350,000       350,000
  Accrued interest                                               30,661        29,767
  Notes payable - related parties                               312,608       621,691
  Convertible notes payable - related parties                    10,400        35,400
                                                            ------------  ------------
    Total current liabilities                                 1,302,087     1,398,320
                                                            ------------  ------------

MINORITY INTEREST IN SUBSIDIARY                                  18,923        18,923
                                                            ------------  ------------

COMMITMENTS AND CONTINGENCIES

REDEEMABLE CONVERTIBLE PREFERRED STOCK
  Preferred stock, $0.001 par value
  20,000,000 shares authorized
    Series A convertible, redeemable preferred stock
      8% dividends, voting rights, liquidation preference
      $10,000 per share, 345 shares authorized
      98 (unaudited) and 0 issued and outstanding                     1             -
  Additional paid-in capital                                    800,398             -
                                                            ------------  ------------
    Total redeemable convertible preferred stock                800,399             -
                                                            ------------  ------------
SHAREHOLDERS' EQUITY (DEFICIT)
  Common stock, $0.001 par value
    100,000,000 shares authorized
    24,042,360 (unaudited) and 22,075,200 shares
      issued and outstanding                                     24,042        22,075
  Additional paid-in capital                                 10,233,514     2,514,616
  Committed shares, 45,755 (unaudited) and 0 outstanding          7,164             -
  Deferred compensation                                      (3,981,993)            -
  Deficit accumulated during the development stage           (5,483,580)   (2,724,564)
                                                            ------------  ------------

        Total shareholders' equity (deficit)                    799,147      (187,873)
                                                            ------------  ------------

 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)       $ 2,920,556   $ 1,229,370
                                                            ============  ============
</TABLE>

The accompanying notes are an integral part of these financial statements.
                                        2

<PAGE>
<TABLE>
<CAPTION>

                                                                     HIENERGY TECHNOLOGIES, INC.
                                                                (FORMERLY SLW ENTERPRISES, INC.)
                                                                                AND SUBSIDIARIES
                                                                   (DEVELOPMENT STAGE COMPANIES)
                                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE THREE MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED),
                             FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED), AND
                 FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31, 2002 (UNAUDITED)

================================================================================================

                                                                                      For the
                                                                                    Period from
                                                                                     August 21,
                                                                                        1995
                            For the Three Months Ended  For the Six Months Ended  (Inception) to
                                  October 31,                   October 31,          October 31,
                                2002          2001          2002          2001          2002
                            ------------  ------------  ------------  ------------  ------------
                            (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
<S>                         <C>           <C>           <C>           <C>           <C>
CONTRACT REVENUES           $    40,834   $    26,000   $    40,834   $   117,000   $   366,750

OPERATING EXPENSES
  General and
    administration            1,042,562       136,187     1,764,302       271,359     4,773,521
                            ------------  ------------  ------------  ------------  ------------

LOSS FROM OPERATIONS         (1,001,728)     (110,187)   (1,723,468)     (154,359)   (4,406,771)
                            ------------  ------------  ------------  ------------  ------------

OTHER INCOME (EXPENSE)
  Interest income                 1,200             -         3,358             -         3,135
  Interest expense               (2,385)        1,385        (5,405)       (1,164)      (35,460)
  Financing expense                   -             -      (223,710)            -      (223,710)
  Forgiveness of accounts
    payable                           -             -        36,000             -        36,000
                            ------------  ------------  ------------  ------------  ------------

Total other income
  (expense)                      (1,185)        1,385      (189,757)       (1,164)     (220,035)
                            ------------  ------------  ------------  ------------  ------------

LOSS BEFORE PROVISION
  FOR INCOME TAXES           (1,002,913)     (108,802)   (1,913,225)     (155,523)   (4,626,806)

PROVISION FOR INCOME
  TAXES                               -             -             -             -        10,983
                            ------------  ------------  ------------  ------------  ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>
<TABLE>
<CAPTION>

                                                                     HIENERGY TECHNOLOGIES, INC.
                                                                (FORMERLY SLW ENTERPRISES, INC.)
                                                                                AND SUBSIDIARIES
                                                                   (DEVELOPMENT STAGE COMPANIES)
                                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                               FOR THE THREE MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED),
                             FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED), AND
                 FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31, 2002 (UNAUDITED)

================================================================================================

                                                                                      For the
                                                                                    Period from
                                                                                     August 21,
                                                                                        1995
                            For the Three Months Ended  For the Six Months Ended  (Inception) to
                                  October 31,                   October 31,          October 31,
                                2002          2001          2002          2001          2002
                            ------------  ------------  ------------  ------------  ------------
                            (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)
<S>                         <C>            <C>          <C>           <C>           <C>
NET LOSS                    $(1,002,913)  $  (108,802)  $(1,913,225)  $  (155,523)  $(4,637,789)

BENEFICIAL CONVERSION
  FEATURE GRANTED ON           (767,431)            -      (767,431)            -      (767,431)
  PREFERRED STOCK

PREFERRED STOCK
  DIVIDENDS                     (78,360)            -       (78,360)            -       (78,360)
                            ------------  ------------  ------------  ------------  ------------

NET LOSS AVAILABLE TO
  COMMON
  SHAREHOLDERS               (1,848,704)   $  (108,802)  (2,759,016)  $  (155,523)    (5,483,580)
                            ============  ============  ============  ============  ============

BASIC AND DILUTED LOSS
  AVAILABLE TO COMMON
  SHAREHOLDERS PER
  SHARE                     $     (0.08)  $     (0.01)  $     (0.12)  $     (0.01)  $     (0.45)
                            ============  ============  ============  ============  ============

BASIC AND DILUTED
  WEIGHTED-AVERAGE
  COMMON SHARES
  OUTSTANDING                22,973,597    16,222,711    22,783,343    15,833,315    12,173,702
                            ============  ============  ============  ============  ============
</TABLE>
The accompanying notes are an integral part of these financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>

                                                                                                       HIENERGY TECHNOLOGIES, INC.
                                                                                                  (FORMERLY SLW ENTERPRISES, INC.)
                                                                                                                  AND SUBSIDIARIES
                                                                                                     (DEVELOPMENT STAGE COMPANIES)
                                                                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31,2002
                                                                                                                       (UNAUDITED)
==================================================================================================================================


                                                                                             Deficit
                                                                                           Accumulated
                                                                Additional                   during the
                                          Common Stock           Paid-in     Committed       Deferred     Development
                                   --------------------------
                                      Shares        Amount       Capital       Shares      Compensation      Stage        Total
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
<S>                                <C>           <C>           <C>           <C>          <C>             <C>           <C>
BALANCE, AUGUST 21, 1995
                                    (INCEPTION)            -   $         -   $        -   $           -   $         -   $       -
RECAPITALIZATION UPON
  REVERSE MERGER                     6,470,000         6,470        (6,456)          14
ISSUANCE OF COMMON STOCK
  FOR SERVICES                         734,771           735         7,495        8,230
NET LOSS                                                                                                      (39,387)    (39,387)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
BALANCE, APRIL 30, 1996              7,204,771         7,205         1,039            -               -       (39,387)    (31,143)
ISSUANCE OF COMMON STOCK
  FOR SERVICES                           3,219             3            33           36
NET LOSS                                                                                                     (110,004)   (110,004)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------


BALANCE, APRIL 30, 1997              7,207,990         7,208         1,072            -               -      (149,391)   (141,111)
ISSUANCE OF COMMON STOCK
  FOR CASH                             596,589           597       143,955                                                144,552
ISSUANCE OF COMMON STOCK
  FOR SERVICES                       1,451,928         1,452        15,598       17,050
NET LOSS                                                                                                     (293,019)   (293,019)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
                                        5
<PAGE>
<TABLE>
<CAPTION>

                                                                                                       HIENERGY TECHNOLOGIES, INC.
                                                                                                  (FORMERLY SLW ENTERPRISES, INC.)
                                                                                                                  AND SUBSIDIARIES
                                                                                                     (DEVELOPMENT STAGE COMPANIES)
                                                                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31,2002
                                                                                                                       (UNAUDITED)
===================================================================================================================================


                                                                                             Deficit
                                                                                           Accumulated
                                                                Additional                   during the
                                          Common Stock           Paid-in     Committed       Deferred     Development
                                   --------------------------
                                      Shares        Amount       Capital       Shares      Compensation      Stage        Total
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
<S>                                <C>           <C>           <C>           <C>          <C>             <C>           <C>

BALANCE, APRIL 30, 1998              9,256,507   $     9,257   $   160,625   $        -   $           -   $  (442,410)  $(272,528)
ISSUANCE OF COMMON STOCK
  FOR CASH                             264,852           265       150,965      151,230
ISSUANCE OF COMMON STOCK
  FOR SERVICES                       2,167,620         2,167        47,592       49,759
NET LOSS                                                                                                     (272,426)   (272,426)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------

BALANCE, APRIL 30, 1999             11,688,979        11,689       359,182            -               -      (714,836)   (343,965)
ISSUANCE OF COMMON STOCK
  FOR CASH                             638,548           638       295,008      295,646
ISSUANCE OF COMMON STOCK
  FOR SERVICES                       1,914,570         1,915        83,322       85,237
NET LOSS                                                                                                     (332,131)   (332,131)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------

BALANCE, APRIL 30, 2000             14,242,097        14,242       737,512            -               -    (1,046,967)   (295,213)
ISSUANCE OF COMMON STOCK
  FOR CASH                             465,437           465       109,265      109,730
ISSUANCE OF COMMON STOCK
  FOR SERVICES                         371,035           371        36,097       36,468
NET LOSS                                                                                                     (288,067)   (288,067)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------

</TABLE>
The accompanying notes are an integral part of these financial statements.
                                        6
<PAGE>
<TABLE>
<CAPTION>

                                                                                                       HIENERGY TECHNOLOGIES, INC.
                                                                                                  (FORMERLY SLW ENTERPRISES, INC.)
                                                                                                                  AND SUBSIDIARIES
                                                                                                     (DEVELOPMENT STAGE COMPANIES)
                                                                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31,2002
                                                                                                                       (UNAUDITED)
===================================================================================================================================


                                                                                             Deficit
                                                                                           Accumulated
                                                                Additional                   during the
                                          Common Stock           Paid-in     Committed       Deferred     Development
                                   --------------------------
                                      Shares        Amount       Capital       Shares      Compensation      Stage        Total
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
<S>                                <C>           <C>           <C>           <C>          <C>             <C>           <C>

BALANCE, APRIL 30, 2001             15,078,569   $    15,078   $   882,874   $        -   $           -   $(1,335,034)  $(437,082)
ISSUANCE OF COMMON STOCK
  FOR CASH                             712,071           712       180,857                                                181,569
ISSUANCE OF COMMON STOCK
  FOR SERVICES                       5,059,560         5,060       227,110                                                232,170
PRIVATE PLACEMENT                    1,225,000         1,225     1,223,775                                              1,225,000
NET LOSS                                                                                                   (1,389,530) (1,389,530)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------


BALANCE, APRIL 30, 2002             22,075,200        22,075     2,514,616            -               -    (2,724,564)   (187,873)
ISSUANCE OF COMMON STOCK IN
  PRIVATE PLACEMENT (unaudited)        500,000           500       499,500                                                500,000
ISSUANCE OF COMMON STOCK IN
  PRIVATE PLACEMENT (unaudited)      1,349,934         1,350     1,821,057                                              1,822,407
OFFERING COSTS (unaudited)                                 -      (196,793)                                              (196,793)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        7
<PAGE>
<TABLE>
<CAPTION>

                                                                                                       HIENERGY TECHNOLOGIES, INC.
                                                                                                  (FORMERLY SLW ENTERPRISES, INC.)
                                                                                                                  AND SUBSIDIARIES
                                                                                                     (DEVELOPMENT STAGE COMPANIES)
                                                                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31,2002
                                                                                                                       (UNAUDITED)
===================================================================================================================================


                                                                                             Deficit
                                                                                           Accumulated
                                                                Additional                   during the
                                          Common Stock           Paid-in     Committed       Deferred     Development
                                   --------------------------
                                      Shares        Amount       Capital       Shares      Compensation      Stage        Total
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
<S>                                <C>           <C>           <C>           <C>          <C>             <C>           <C>



DIVIDENDS ON PREFERRED STOCK
  (unaudited)                           68,150   $        68   $    78,292                                 $  (78,360)  $       -
BENEFICIAL CONVERSION FEATURE
  GRANTED IN CONNECTION WITH
  ISSUANCE OF PREFERRED
  STOCK (unaudited)                                        -       767,431                                   (767,431)          -
ISSUANCE OF COMMON STOCK TO
  AN EMPLOYEE FOR A BONUS
  (unaudited)                           11,178            11        21,339                                                 21,350
CONVERSION OF NOTES
  PAYABLE TO COMMON
  STOCK (unaudited)                     37,898            38        37,858                                                 37,896
FINANCING EXPENSE IN
  CONNECTION WITH ISSUANCE
  OF WARRANTS (unaudited)                                  -       223,710                                                223,710
DEFERRED COMPENSATION IN
  CONNECTION WITH ISSUANCE
  OF STOCK OPTIONS TO
  CONSULTANT (unaudited)                                   -       761,007                $  (761,007)                          -
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
                                        8
<PAGE>
<TABLE>
<CAPTION>

                                                                                                       HIENERGY TECHNOLOGIES, INC.
                                                                                                  (FORMERLY SLW ENTERPRISES, INC.)
                                                                                                                  AND SUBSIDIARIES
                                                                                                     (DEVELOPMENT STAGE COMPANIES)
                                                                                   CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                                                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31,2002
                                                                                                                       (UNAUDITED)

==================================================================================================================================


                                                                                             Deficit
                                                                                           Accumulated
                                                                Additional                   during the
                                          Common Stock           Paid-in     Committed       Deferred     Development
                                   --------------------------
                                      Shares        Amount       Capital       Shares      Compensation      Stage        Total
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------
<S>                                <C>           <C>           <C>           <C>          <C>             <C>           <C>


DEFERRED COMPENSATION IN
  CONNECTION WITH ISSUANCE
  OF STOCK OPTIONS TO
  EMPLOYEE (unaudited)                                     -   $ 3,305,542                 $(3,305,542)                  $       -
STOCK OPTIONS ISSUED TO A
  CONSULTANT IN EXCHANGE FOR
  ACCOUNTS PAYABLE (unaudited)                             -        50,000                                                  50,000
WARRANTS ISSUED TO A CONSULTANT
  FOR SERVICES RENDERED OR TO BE
  RENDERED (unaudited)                                     -       349,955                                                 349,955
AMORTIZATION OF DEFERRED
  COMPENSATION (unaudited)                                                                       84,556                     84,556
EXERCISE OF STOCK OPTIONS
  IN SUBSIDIARY (unaudited)                                                  $     7,164                                     7,164
NET LOSS (unaudited)                                                                                      $(1,913,225)  (1,913,225)
                                   ------------  ------------  ------------  -----------  --------------  ------------  ----------

BALANCE, OCTOBER 31, 2002
  (UNAUDITED)                       24,042,360   $    24,042   $10,233,514   $    7,164   $  (3,981,993)  $(5,483,580)  $ 799,147
                                   ============  ============  ============  ===========  ==============  ============  ==========


</TABLE>
The accompanying notes are an integral part of these financial statements.

                                        9
<PAGE>
<TABLE>
<CAPTION>

                                                                    HIENERGY TECHNOLOGIES, INC.
                                                               (FORMERLY SLW ENTERPRISES, INC.)
                                                                               AND SUBSIDIARIES
                                                                  (DEVELOPMENT STAGE COMPANIES)
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED), AND
                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31, 2002 (UNAUDITED)
===============================================================================================



                                                                                     For the
                                                                                   Period from
                                                                                    August 21,
                                                                                      1995
                                                        For the Six Months Ended  (Inception)to
                                                                October 31,        October 31,
                                                        -------------------------
                                                           2002          2001          2002
                                                       ------------  ------------  ------------
                                                        (unaudited)   (unaudited)   (unaudited)
<S>                                                    <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                             $(1,913,225)  $  (155,523)  $(4,637,789)
  Adjustments to reconcile net loss to net cash
    used in operating activities
      Depreciation                                          40,262         2,281        47,694
      Compensation expense relating to issuance of
        common stock in exchange for services
        rendered                                                 -        47,030       428,954
      Compensation expense relating to issuance of
        common stock in exchange for services
        rendered to minority shareholders                        -             -        18,923
      Warrants issued for services rendered                349,955             -       349,955
      Common stock issued to an employee for a bonus        21,350             -        21,350
      Additional compensation of officer                         -             -        42,171
      Amortization of deferred compensation                 84,556             -        84,556
      Financing expense                                    223,710             -       223,710
      Forgiveness of accounts payable                       36,000             -        36,000
      Increase in
        Accounts receivable                                (40,834)            -       (70,000)
        Other current assets                              (213,221)            -      (220,721)
      Increase (decrease) in
        Accounts payable                                   329,641        22,779       539,536
        Accrued expenses                                   (78,682)       (5,254)       72,885
        Accrued payroll and payroll taxes                        -        15,000       350,000
        Accrued interest                                     3,790         2,549        33,557
                                                       ------------  ------------  ------------

Net cash used in operating activities                   (1,156,698)      (71,138)   (2,679,219)
                                                       ------------  ------------  ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       10
<PAGE>
<TABLE>
<CAPTION>

                                                                    HIENERGY TECHNOLOGIES, INC.
                                                               (FORMERLY SLW ENTERPRISES, INC.)
                                                                               AND SUBSIDIARIES
                                                                  (DEVELOPMENT STAGE COMPANIES)
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED), AND
                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31, 2002 (UNAUDITED)
===============================================================================================


                                                                                     For the
                                                                                   Period from
                                                                                    August 21,
                                                                                      1995
                                                        For the Six Months Ended  (Inception)to
                                                                October 31,        October 31,
                                                        -------------------------
                                                           2002          2001          2002
                                                       ------------  ------------  ------------
                                                        (unaudited)   (unaudited)   (unaudited)
<S>                                                    <C>           <C>           <C>
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                   $  (422,121)  $   (44,818)  $  (544,121)
                                                       ------------  ------------  ------------

Net cash used in investing activities                     (422,121)      (44,818)     (544,121)
                                                       ------------  ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Book overdraft                                                 -         1,772             -
  Proceeds from issuance of common stock in
    private placement                                    2,122,407             -     3,347,407
  Offering costs on common stock                          (180,793)            -      (180,793)
  Proceeds from issuance of common stock                         -        95,000       882,723
  Proceeds from issuance of preferred stock                979,300       979,300
  Offering costs on preferred stock                       (178,904)     (178,904)
  Recapitalization of reverse merger                             -             -            14
  Exercise of stock options in subsidiary                    7,164             -         7,164
  Proceeds from notes payable - related parties                  -        40,000       579,520
  Payments on notes payable - related parties             (279,803)      (15,057)     (279,803)
  Proceeds from convertible notes payable - related
    parties                                                      -             -        55,400
  Payments on convertible notes payable - related
    parties                                                (19,280)       (9,280)      (39,280)
                                                       ------------  ------------  ------------

Net cash provided by financing activities                2,450,091       112,435     5,172,748
                                                       ------------  ------------  ------------

Net increase (decrease) in cash and cash equivalents       871,272        (3,521)    1,949,408

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD           1,078,136         3,521             -
                                                       ------------  ------------  ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD               $ 1,949,408   $         -   $ 1,949,408
                                                       ============  ============  ============
</TABLE>
The accompanying notes are an integral part of these financial statements.


                                       11
<PAGE>
<TABLE>
<CAPTION>

                                                                    HIENERGY TECHNOLOGIES, INC.
                                                               (FORMERLY SLW ENTERPRISES, INC.)
                                                                               AND SUBSIDIARIES
                                                                  (DEVELOPMENT STAGE COMPANIES)
                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED OCTOBER 31, 2002 AND 2001 (UNAUDITED), AND
                FOR THE PERIOD FROM AUGUST 21, 1995 (INCEPTION) TO OCTOBER 31, 2002 (UNAUDITED)
================================================================================================



                                                                                     For the
                                                                                   Period from
                                                                                    August 21,
                                                                                      1995
                                                        For the Six Months Ended  (Inception)to
                                                                October 31,        October 31,
                                                        -------------------------
                                                           2002          2001          2002
                                                       ------------  ------------  ------------
                                                        (unaudited)   (unaudited)   (unaudited)
<S>                                                    <C>           <C>           <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  INTEREST PAID                                        $     4,511   $         -   $     4,799
                                                       ============  ============  ============

  INCOME TAXES PAID                                    $         -   $         -   $    10,983
                                                       ============  ============  ============
</TABLE>

SUPPLEMENT  SCHEDULE  OF  NON-CASH  FINANCING  ACTIVITIES
During  the  six  months  ended  October  31, 2002 and 2001, and the period from
August  21,  1995 (inception) to October 31, 2002, the Company converted $37,896
(unaudited),  $0  (unaudited)  and  $37,896  (unaudited), respectively, of notes
payable,  including  principal  and  interest, into 37,898 shares (unaudited), 0
shares  (unaudited),  and  37,898  shares  (unaudited),  respectively, of common
stock.

During  the  six  months  ended  October  31, 2002 and 2001, and the period from
August  21,  1995 (inception) to October 31, 2002, the Company converted $50,000
(unaudited),  $0  (unaudited)  and $50,000 (unaudited), respectively of accounts
payable  to  a  consultant  into stock options to purchase 45,472 (unaudited), 0
(unaudited)  and  45,472  (unaudited),  respectively,  shares  of  common stock.

During  the  six  months  ended  October  31, 2002 and 2001, and the period from
August  21,  1995  (inception)  to  October 31, 2002, the Company issued 148,151
shares  (unaudited),  0  shares  (unaudited),  and  148,151  shares (unaudited),
respectively,  of  common  stock  in  a  private  placement  in  exchange  for a
subscription  receivable  of  $184,000 (unaudited), $0 (unaudited), and $184,000
(unaudited),  respectively.  The  full  amount  was  collected in November 2002.

The accompanying notes are an integral part of these financial statements.


                                       12


<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================


NOTE 1 - ORGANIZATION  AND  LINE  OF  BUSINESS

     General
     -------
     HiEnergy Technologies, Inc. ("HiEnergy") was incorporated on March 20, 2000
     under  the  laws  of  the  state  of  Washington. In October 2002, HiEnergy
     reincorporated  under  the  laws  of  the  state  of  Delaware.

     HiEnergy and its subsidiaries (collectively, the "Company") are development
     stage companies that were organized to develop the "Atometer," commercially
     known  as  the "Supersenzor," which is technology for numerous governmental
     and  commercial  applications  and  markets,  including  airport  security
     screening;  border  patrol/customs  control  drug and contraband detection;
     bomb,  biological,  and  chemical  weapons  detection,  including  landmine
     clearance; detecting of impurities in crude oil, coal, and natural gas; and
     "fingerprinting"  of  diamonds  and  other  gemstones.  This  leading  edge
     detection  technology  can remotely and non-intrusively decipher (including
     through  metal)  the  chemical  formulas  of  concealed  biological agents,
     explosives,  drugs,  and  other  substances  and  their  locations.

     As contemplated by the Securities and Exchange Commission under Item 310(b)
     of Regulation S-B, the accompanying financial statements and footnotes have
     been  condensed  and  therefore  do not contain all disclosures required by
     accounting  principles  generally accepted in the United States of America.
     The  interim  financial  data  is  unaudited;  however,  in  the opinion of
     HiEnergy's  management,  the  interim  data  includes  all  adjustments,
     consisting  only  of  normal  recurring  adjustments,  necessary for a fair
     statement  of  the  results  for  the  interim periods. Results for interim
     periods are not necessarily indicative of those to be expected for the full
     year.

     Merger
     ------
     On  April  25,  2002,  HiEnergy Microdevices, Inc. ("Microdevices") entered
     into  a  voluntary share exchange agreement, whereby it acquired 92% of the
     outstanding  common  stock of HiEnergy in exchange for 14,380,200 shares of
     newly  issued  common  stock.  For accounting purposes, the transaction has
     been  treated  as  a recapitalization of HiEnergy, with Microdevices as the
     accounting  acquirer (reverse acquisition), and has been accounted for in a
     manner  similar  to  a  pooling  of  interests.

     Microdevices  was incorporated on August 21, 1995 in the state of Delaware.
     HiEnergy  had minimal assets and liabilities at the date of the acquisition
     and  did  not  have  significant  operations  prior  to  the  acquisition.
     Therefore,  no  pro  forma  information  is  presented.


                                       13
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 2 - GOING  CONCERN

     The accompanying financial statements have been prepared in conformity with
     accounting  principles  generally  accepted in the United States of America
     which  contemplate continuation of the Company as a going concern. However,
     during the six months ended October 31, 2002 and 2001, the Company incurred
     net  losses  of  $1,913,225  (unaudited)  and  $155,523  (unaudited),
     respectively,  and it had negative cash flows from operations of $1,156,698
     (unaudited) and $71,138 (unaudited), respectively. In addition, the Company
     had  an  accumulated  deficit  of  $5,483,580  (unaudited)  and  was in the
     development  stage  as of October 31, 2002. These factors raise substantial
     doubt  about  the  Company's  ability  to  continue  as  a  going  concern.

     Recovery  of  the  Company's  assets  is  dependent upon future events, the
     outcome  of which is indeterminable. Successful completion of the Company's
     development  program  and  its  transition  to the attainment of profitable
     operations  is  dependent  upon  the  Company  achieving  a  level of sales
     adequate  to support the Company's cost structure. In addition, realization
     of  a  major  portion  of  the assets in the accompanying balance sheets is
     dependent upon the Company's ability to meet its financing requirements and
     the  success  of  its plans to develop and sell its products. The financial
     statements  do  not  include any adjustments relating to the recoverability
     and  classification of recorded asset amounts or amounts and classification
     of  liabilities  that  might  be  necessary should the Company be unable to
     continue  in  existence.

     In  addition to the capital raised as of October 31, 2002 through a private
     placement,  the  Company  is  currently  negotiating with certain investors
     about  raising  additional  capital  through  private  placement offerings.
     Unless  the  Company  raises  additional  funds,  either  by debt or equity
     issuances,  management  believes  that  its  current  cash  on hand will be
     insufficient  to  cover its working capital needs until the Company's sales
     volume  reaches  a  sufficient  level  to  cover  operating  expenses.

NOTE 3 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     Principles  of  Consolidation
     -----------------------------
     The  consolidated financial statements include the accounts of HiEnergy and
     its  wholly  owned  subsidiaries,  Microdevices  and  VWO  II,  Inc.  All
     significant  inter-company  accounts  and  transactions  are  eliminated in
     consolidation.

     Development  Stage  Enterprise
     ------------------------------
     The  Company  is  development  stage  companies  as defined in Statement of
     Financial Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by
     Development  Stage Enterprises." The Company is devoting all of its present
     efforts  to  its  formation  and  to fundraising, and its planned principal
     operations  have  not yet commenced. All losses accumulated since inception
     have been considered as part of the Company's development stage activities.

                                       14
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 3 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     Comprehensive  Income
     ---------------------
     The  Company presents comprehensive income in accordance with SFAS No. 130,
     "Reporting  Comprehensive Income." This statement establishes standards for
     reporting comprehensive income and its components in a financial statement.
     Comprehensive income as defined includes all changes in equity (net assets)
     during a period from non-owner sources. Examples of items to be included in
     comprehensive  income,  which are excluded from net income, include foreign
     currency  translation  adjustments  and  unrealized  gains  and  losses  on
     available-for-sale securities. Comprehensive income is not presented in the
     Company's  financial  statements  since the Company did not have any of the
     items  of  comprehensive  income  in  any  period  presented.

     Cash  and  Cash  Equivalents
     ----------------------------
     The Company maintains its cash deposits at several banks located throughout
     California.  Deposits  at  each  bank  are  insured  by the Federal Deposit
     Insurance  Corporation up to $100,000. As of April 30, 2002 and October 31,
     2002,  uninsured  portions  of  the  balances  at those banks aggregated to
     $1,125,206  and  $1,852,625  (unaudited), respectively. The Company has not
     experienced  any  losses in such accounts and believes it is not exposed to
     any  significant  risk  on  cash  and  cash  equivalents.

     For  the purpose of the statements of cash flows, the Company considers all
     highly  liquid  investments  purchased  with  original  maturities of three
     months  or  less  to  be  cash  equivalents.

     Accounts  Receivable
     --------------------
     Accounts  receivable at April 30, 2002 and October 31, 2002 consisted of an
     amount  due  from  a  governmental  contract. The total accounts receivable
     balance  of  $70,000  was  collected  in  December  2002

     Property  and  Equipment
     ------------------------
     Property  and  equipment are recorded at cost and are depreciated using the
     straight-line  method  over  an  estimated  useful  life  of  five  years.

     Patents
     -------
     The  Company  has  filed several patent applications within and outside the
     United  States.  The  outcome  is  indeterminable.


                                       15
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 3 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     Fair  Value  of  Financial  Instruments
     ---------------------------------------
     For certain of the Company's financial instruments, including cash and cash
     equivalents,  accounts  receivable,  accounts  payable,  accrued  expenses,
     accrued  payroll  and  payroll  taxes,  and  accrued interest, the carrying
     amounts  approximate  fair value due to their short maturities. The amounts
     shown  for  notes payable - related parties and convertible notes payable -
     related  parties also approximate fair value because current interest rates
     offered to the Company for debt of similar maturities are substantially the
     same.

     Stock-Based  Compensation
     -------------------------
     The  Company  accounts for its stock-based compensation plans in accordance
     with  the  provisions  of  Accounting  Principles  Board  Opinion  No.  25,
     "Accounting for Stock Issued to Employees," and related interpretations. As
     such,  compensation  expense  is  recorded on the date of grant only if the
     current  market  price  of the underlying stock exceeds the exercise price.
     The  Company  adopted  the  disclosure  requirements  of  SFAS  No.  123,
     "Accounting  for Stock-Based Compensation." Under SFAS No. 123, the Company
     must  disclose  certain  pro  forma  information  related to employee stock
     option grants as if the fair value-based method defined in SFAS No. 123 had
     been  applied.

     Income  Taxes
     -------------
     The  Company  accounts  for  income  taxes in accordance with SFAS No. 109,
     "Accounting  for  Income Taxes," which requires the recognition of deferred
     tax  assets  and  liabilities  for  the expected future tax consequences of
     events  that have been included in the financial statements or tax returns.
     Under  this  method,  deferred  income  taxes  are  recognized  for the tax
     consequences in future years of differences between the tax bases of assets
     and  liabilities  and  their  financial  reporting amounts at each year-end
     based on enacted tax laws and statutory tax rates applicable to the periods
     in  which  the differences are expected to affect taxable income. Valuation
     allowances  are  established, when necessary, to reduce deferred tax assets
     to  the  amount  expected  to  be  realized. The provision for income taxes
     represents  the tax payable for the period and the change during the period
     in  deferred  tax  assets  and  liabilities.

     Loss  per  Share
     ----------------
     The  Company  calculates  loss  per  share in accordance with SFAS No. 128,
     "Earnings per Share." Basic loss per share is computed by dividing the loss
     available  to  common shareholders by the weighted-average number of common
     shares  outstanding.  Diluted  loss  per share is computed similar to basic
     loss  per  share  except  that  the denominator is increased to include the
     number  of additional common shares that would have been outstanding if the
     potential common shares had been issued and if the additional common shares
     were  dilutive.  Because  the  Company  has  incurred net losses, basic and
     diluted  loss  per  share  are  the  same.

                                       16
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 3 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     Loss  per  Share  (Continued)
     ----------------
     The  following  potential  common  shares  have  been  excluded  from  the
     computation of diluted net loss per share for the periods presented because
     the  effect  would  have  been  anti-dilutive:
<TABLE>
<CAPTION>


                                           October 31,
                                              2002
                                           ----------
<S>                                        <C>
  Stock options outstanding                 6,621,913
  Warrants outstanding                      1,815,686
  Series A, convertible preferred stock       851,565
  Microdevices minority shareholders          459,222
  Microdevices option and warrant holders     997,272
                                           ----------

      TOTAL                                10,745,658
                                           ==========
</TABLE>

     Estimates
     ---------
     The  preparation  of  financial  statements  requires  management  to  make
     estimates  and  assumptions  that affect the reported amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of  the  financial  statements  and  the  reported  amounts  of revenue and
     expenses  during  the  reporting  period.  Actual results could differ from
     those  estimates.

     Recently  Issued  Accounting  Pronouncements
     --------------------------------------------
     In June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
     "Accounting  for  Costs  Associated with Exit or Disposal Activities." This
     statement addresses financial accounting and reporting for costs associated
     with  exit  or disposal activities and nullifies Emerging Issues Task Force
     ("EITF")  Issue  No.  94-3,  "Liability  Recognition  for  Certain Employee
     Termination Benefits and Other Costs to Exit an Activity (including Certain
     Costs  Incurred  in  a  Restructuring)."  This  statement  requires  that a
     liability  for  a  cost  associated  with  an  exit or disposal activity be
     recognized  when  the  liability  is  incurred.  Under  EITF  Issue 94-3, a
     liability  for  an  exit cost, as defined, was recognized at the date of an
     entity's  commitment  to an exit plan. The provisions of this statement are
     effective for exit or disposal activities that are initiated after December
     31,  2002  with  earlier  application  encouraged.  This  statement  is not
     applicable  to  the  Company.

                                       17
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 3 - SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

     Recently  Issued  Accounting  Pronouncements  (Continued)
     --------------------------------------------
     In  October  2002,  the  FASB issued SFAS No. 147, "Acquisitions of Certain
     Financial  Institutions."  SFAS No. 147 removes the requirement in SFAS No.
     72  and  Interpretation  9 thereto, to recognize and amortize any excess of
     the  fair  value of liabilities assumed over the fair value of tangible and
     identifiable  intangible  assets  acquired  as an unidentifiable intangible
     asset.  This statement requires that those transactions be accounted for in
     accordance  with  SFAS  No. 141, "Business Combinations," and SFAS No. 142,
     "Goodwill  and Other Intangible Assets." In addition, this statement amends
     SFAS  No.  144,  "Accounting  for  the Impairment or Disposal of Long-Lived
     Assets,"  to  include  certain  financial  institution-related  intangible
     assets.  This  statement  is  not  applicable  to  the  Company.


NOTE 4  -  PROPERTY  AND  EQUIPMENT

     Property  and equipment at April 30, 2002 and October 31, 2002 consisted of
     the  following:
<TABLE>
<CAPTION>


                                October 31, April 30,
                                    2002      2002
                                  --------  --------
(unaudited)
<S>                               <C>       <C>
  Micro sensor                    $ 53,115  $ 42,127
  Laboratory equipment             401,572         -
  Web site development              14,400    14,400
  Computer equipment                17,034     7,473
  Neutron generator                 58,000    58,000
                                  --------  --------

                                   544,121   122,000
  Less accumulated depreciation     47,694     7,432
                                  --------  --------

    TOTAL                         $496,427  $114,568
                                  ========  ========
</TABLE>


     Depreciation expense for the six months ended October 31, 2002 and 2001 and
     the period from August 21, 1995 (inception) to October 31, 2002 was $40,262
     (unaudited),  $2,281  (unaudited),  and  $47,694 (unaudited), respectively.


                                       18
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 5 - NOTES  PAYABLE  -  RELATED  PARTIES

     Notes  payable  -  related  parties  at April 30, 2002 and October 31, 2002
     consisted  of  the  following:
<TABLE>
<CAPTION>


                                                       October 31,  April 30,
                                                         2002          2002
                                                       -----------  ---------
                                                       (unaudited)
<S>                                                     <C>         <C>
  Unsecured notes to a majority shareholder/officer/
    director of the Company, interest payable at 6%
    per annum, maturing in December 2002.  During
    the six months ended October 31, 2002, the
    notes were paid in full (unaudited).                $       -   $  59,083

  Unsecured note to a majority shareholder/officer/
    director of the Company as a signing bonus.
    Amount is non-interest-bearing, $50,000
    payable upon receipt of $1,000,000 or more
    from any source, and $50,000 payable upon
    revenue in excess of $500,000 or $1,000,000
    of additional funds from any source.  During
    the six months ended October 31, 2002,
    $50,000 (unaudited) was repaid.                     $  50,000   $ 100,000

  Unsecured notes to a shareholder of the Company,
    interest payable at 10.5% per annum, or 15%
    per annum if in default, and due in November
    1997.  As of October 31, 2002, the notes were
    in default (unaudited).                                40,000      40,000

  Unsecured notes to a prior officer of the Company,
    interest payable at 6% per annum, and payable
    in February and March 2002.  The Company is
    currently in litigation regarding these amounts.
    As of October 31, 2002, these notes were in
    default (unaudited).                                   27,608      27,608

  Secured note to an officer/director of the Company,
    non-interest-bearing, and due in March 2002.
    The note is secured by 7,857 shares of
    common stock.  As of April 30, 2002, the note
    was in default.  During the six months ended
    October 31, 2002, the note was paid in full
    (unaudited).                                                -      50,000
</TABLE>

                                       19
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 5  -  NOTES  PAYABLE  -  RELATED  PARTIES  (CONTINUED)
<TABLE>
<CAPTION>
                                                       October 31,  April 30,
                                                         2002          2002
                                                       -----------  ---------
                                                       (unaudited)
<S>                                                      <C>         <C>
  Secured notes to a shareholder/prior officer and
    director of the Company, non-interest-bearing,
    and due in March 2002.  The notes are secured
    by 23,571 shares of common stock.  As of April
    30, 2002, the notes were in default.  During the
    six months ended October 31, 2002, the notes
    were paid in full.  In addition, since the notes
    were in default and the principal balance of
    $150,000 was paid late, the Company granted
    the holder of the notes a warrant to purchase
    150,000 shares of common stock (unaudited).        $        -   $ 150,000

  Unsecured amount to a prior officer of the Company
    as severance, non-interest-bearing, and payable
    upon demand.  The Company is currently in
    litigation regarding this amount.  As of October
    31, 2002, this amount was in default (unaudited).      150,000    150,000

  Unsecured notes to an unrelated party, non-interest-
    bearing, and payable upon demand.                       45,000     45,000
                                                       -----------  ---------

                                                           312,608    621,691
  Less current portion                                     312,608    621,691
                                                       -----------  ---------

      LONG-TERM PORTION                                $         -  $       -
                                                       ===========  =========
</TABLE>

                                       20
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 6  -  CONVERTIBLE  NOTES  PAYABLE  -  RELATED  PARTIES

Convertible  notes  payable  - related parties at April 30, 2002 and October 31,
2002  consisted  of  the  following:
<TABLE>
<CAPTION>
                                                       October 31,  April 30,
                                                         2002          2002
                                                       -----------  ---------
                                                       (unaudited)
<S>                                                     <C>         <C>
  Secured note to a shareholder/director of the
    Company, interest payable at 8% per annum,
    and due in July 2001.  The note is secured
    by the patent application for Europe, Canada,
    and Japan.   The holder of the note has the
    option to convert the principal and interest into
    shares of common stock.  During the six
    months ended October 31, 2002, this note plus
    accrued interest of $780 was converted into
    5,780 shares of common stock (unaudited).           $       -   $   5,000

  Secured notes to a shareholder/director of the
    Company, interest payable at 8% per annum,
    $5,000 due in July 2001, and $5,400 due in
    July 2002.  The notes are secured by the
    patent application for Europe, Canada, and
    Japan.   The holder of the notes has the option
    to convert the principal and interest into shares
    of common stock.  As of October 31, 2002, the
    notes were in default (unaudited).                     10,400      10,400

  Secured note to a shareholder/director of the
    Company, interest payable at 8% per annum,
    and due in July 2001.  The note is secured by
    the patent application for Europe, Canada, and
    Japan.   The holder of the note has the option
    to convert the principal and interest into shares
    of common stock.  During the six months ended
    October 31, 2002, this note plus accrued
    interest of $1,678 was converted into 11,678
    shares of common stock (unaudited).                         -      10,000
</TABLE>

                                       21
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 6  -  CONVERTIBLE  NOTES  PAYABLE  -  RELATED  PARTIES  (CONTINUED)
<TABLE>
<CAPTION>
                                                       October 31,  April 30,
                                                         2002          2002
                                                       -----------  ---------
                                                       (unaudited)
<S>                                                     <C>         <C>
  Secured note to a shareholder/director/prior officer
    of the Company, interest payable at 8% per
    annum, and due in July 2001.  The note is
    secured by the patent application for Europe,
    Canada, and Japan.   The holder of the note
    has the option to convert the principal and
    interest into shares of common stock.  During
    the six months ended October 31, 2002, the
    notes were paid in full (unaudited).               $        -  $    5,000

  Unsecured note to a shareholder/director/prior
    officer of the Company, interest payable at
    7% per annum, and due in January 2002.  The
    holder of the note has the option to convert
    the principal and interest into shares of common
    stock.  During the six months ended October 31,
    2002, the notes were paid in full (unaudited).               -      5,000
                                                       -----------  ---------

                                                            10,400     35,400
  Less current portion                                      10,400     35,400
                                                       -----------  ---------

      LONG-TERM PORTION                                $         -  $       -
                                                       ===========  =========
</TABLE>

NOTE 7  -  COMMITMENTS  AND  CONTINGENCIES

     Employment  Agreements
     ----------------------
     In  March  2002,  the Company entered into an employment agreement with its
     Chief  Scientist/Chairman of the Board. Major terms of the agreement are as
     follows:

     -    The  Company  must  pay  a signing bonus of $100,000, of which $50,000
          (unaudited)  was  paid  during  the six months ended October 31, 2002.

     -    The  Company must pay an annual bonus, which must not be less than 20%
          of the total amount of bonuses paid to officers of the Company. If the
          pretax  profit  in  any  fiscal year exceeds $0.20 per share, then his
          bonus  in  that  year  must  not  be  less  than  $50,000.

                                       22
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 7 - COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

     Employment  Agreements  (Continued)
     ----------------------
     -    The  Company  granted  options  to purchase 2,482,011 shares of common
          stock  at  an exercise price of $0.134 per share, vesting immediately,
          and  which  are exercisable from time to time within the period ending
          November  30,  2008.

     -    The  Company  will  grant  its  Chief  Scientist/Chairman of the Board
          annually  during  the term of five years 1% per annum of the Company's
          stock  issued  and  outstanding  with an exercise price of the average
          price  for the preceding 30 days. He must not receive less than 10% of
          the  total  number  of  options granted by the Company for services in
          that  year.  As  of October 31, 2002, the Company is required to grant
          options  to  purchase  405,492  shares  of  common  stock.

     -    The  Company  will provide its Chief Scientist/Chairman of the Board a
          car,  pay  his  and  his  family's  health insurance, provide life and
          disability  insurance  and  will  reimburse  him  for  reasonable
          out-of-pocket  expenses,  not  to  exceed $20,000 in any one year, and
          reimburse  him for any personal tax liabilities arising up to $75,000.
          During the six months ended October 31, 2002, the Company paid $17,500
          (unaudited)  for  an  automobile  deposit  on  behalf  of  its  Chief
          Scientist/Chairman  of  the  Board.

     -    The  Company  must  pay  a  base  salary  payable  in cash as follows:

          -    January  1,  2002  to  December  31,  2002  $125,000  per  year
          -    January  1,  2003  to  December  31,  2003  $137,500  per  year
          -    January  1,  2004  to  December  31,  2004  $151,250  per  year
          -    January  1,  2005  to  December  31,  2005  $166,375  per  year
          -    January  1,  2006  to  December  31,  2006  $283,013  per  year

     -    In  December  2002, the Company increased its Chief Scientist/Chairman
          of  the  Board's  base salary to $175,000 per year, effective November
          2002.

     -    If  the  agreement  is  terminated  by  the Company without cause, the
          Company  shall  pay  its Chief/Scientist/Chairman of the Board, on the
          termination  date,  an amount equal to two years of the minimum annual
          base  salary.

                                       23
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 7 - COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

     Employment  Agreements  (Continued)
     ----------------------
     In  September  2002,  the  Company  entered  into  a  three-year employment
     agreement  with  its  President/Chief Executive Officer. Major terms of the
     agreement  are  as  follows:

     -    The  Company  must  pay  a  base  salary  as  follows:

          -    $135,000  per  year

          -    $175,000  per  year  when the Company receives new revenue and/or
               new  financing  in  excess  of  $2,000,000

          -    $250,000  per  year  when the Company receives new revenue and/or
               new  financing  in  excess  of  $4,000,000

          -    The  officer  is  entitled  to a bonus equal to $250,000 once the
               Company  achieves two consecutive quarters of positive cash flows
               from  operations.

          -    The  Company  granted  options  to  purchase  3,005,038 shares of
               common  stock,  which  represents  an  amount equal to 10% of the
               Company's outstanding common stock on a fully diluted basis as of
               September  30,  2002.  Of  these  options,  75%  vest  1/12  on a
               quarterly  basis  over the next 36 months. The remaining 25% vest
               on the earlier of a) the date when the Company's closing price of
               its common stock has equaled or exceeded $1.75 for 90 consecutive
               calendar  days,  b)  the date immediately preceding a sale of the
               Company for $1.75 per share of common stock or more, or c) if the
               Company's  common  stock ceased to be publicly traded on the date
               following  the closing of an offering at a deemed price per share
               of  common  stock  of  $1.75  or  more.

               The  exercise  price is fixed six months after September 25, 2002
               at  the  lesser  of  a)  $1  per  share,  b)  for any offering of
               preferred  or  common  stock  that  closes within six months from
               September  25,  2002, the following percentage of price per unit:
               (i) for preferred with warrants - 70%, (ii) for preferred without
               warrants  -  80%,  (iii) for common with warrants - 90%, (iv) for
               common  without  warrants  -  100%. The Company granted the stock
               options  below  the  fair market on the date of grant. As none of
               the  stock  options  vested  as  of October 31, 2002, the Company
               recorded  deferred  compensation  of  $3,305,542,  which  will be
               expensed  as  the  options  vest.

          -    If  the  agreement  is terminated without cause, the Company must
               pay  its President/Chief Executive Officer an amount equal to the
               executive's  annual  salary,  payable  in 12 monthly installments
               following the termination date, and health insurance benefits for
               12  months.

                                       24
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 7 - COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

     Employment  Agreements  (Continued)
     ----------------------
     In February 2002, Microdevices entered into a one-year employment agreement
     with  its  Vice  President/Corporate  Secretary.  In  May 2002, the Company
     assumed the employment agreement. Under the agreement, the Company will pay
     a salary of $91,000 per year, a car allowance of $100 per week, a quarterly
     bonus of 5,589 shares of the Company's common stock, starting May 2002, and
     a  non-qualified  stock option to purchase 89,410 shares of common stock at
     $0.157  per  share,  vesting immediately and having a five-year term. As of
     October  31,  2002,  the  11,178  shares  of  common stock given under this
     agreement  were valued at $21,350, which approximates the fair value of the
     shares.

     Consulting  Agreements  (unaudited)
     ----------------------
     In  July  2002, the Company entered into a three-year consulting agreement,
     whereby  the  consultant will assist the Company with business development,
     product  and  corporate  image advertising, and access to government grants
     and  purchases. The Company will pay the consultant $20,000 per month, plus
     5%  of  any  gross  revenues  collected  in  cash from government grants or
     business  and  other  third-party business that the consultant produces for
     the  Company.  Furthermore,  the consultant was granted options to purchase
     1,000,000  shares  of  common  stock.  Of  these  options,  500,000  vested
     immediately,  and  the  remaining 500,000 vest one year after the Company's
     Minisenzor  product is operational and ready to be shown. The stock options
     have  an  exercise  price of $1 per share and are exercisable for six years
     from  the  date  of  grant.

     The  Company  recorded  deferred  compensation  of  $761,007 related to the
     vested  options, which will be amortized over three years, which represents
     the  term  of the consulting agreement. During the six months ended October
     31,  2002,  $84,556  was  expensed  and  is  included  in  general  and
     administration  expenses  in  the  accompanying  statement  of  operations.

     In  August  2002,  the Company entered into a one-year consulting agreement
     with  an  investor  and  media  relations  firm.  Under  the  terms  of the
     agreement,  the Company will pay $10,000 per month, plus approved expenses.
     In  addition, upon execution of the agreement, the Company issued a warrant
     to  purchase  400,000  shares  of  common  stock, vesting immediately at an
     exercise  price  of  $2  per share, exercisable for two years. The warrants
     were  valued  at $187,163, of which $46,791 was expensed and is included in
     general  and  administration  expenses  in  the  accompanying  statement of
     operations.  The remaining balance of $140,372 is included in other current
     assets,  which will be amortized over the term of the consulting agreement.
     Either  party may terminate the agreement six months after the commencement
     of  this  agreement.

     In September 2002, the Company entered into a one-year consulting agreement
     with  its  prior Chief Executive Officer. Under the terms of the agreement,
     the  Company  will  pay  $5,000  per  month,  plus  out-of-pocket expenses.

                                       25
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 7 - COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

     Placement  Agent  Agreement
     ---------------------------
     In  August  2002,  the Company entered into an exclusive one-year agreement
     with  a  placement  agent to arrange the sale of debt or equity securities.
     Major  terms  of  the  agreement  are  as  follows:

     -    Upon  execution  of  the  agreement,  the  Company  issued warrants to
          purchase  100,000  shares  of  common  stock, exercisable at $0.01 per
          share.  The  warrants vest immediately and expire five years from date
          of  grant.

     -    The Company paid a placement fee equal to 8% on any gross proceeds
          received  by  the  Company.

     -    The  Company  issued  warrants  to  purchase  10%  of  the  amounts of
          securities  issued  to  investors.  The exercise price of the warrants
          were equal to the price at which the security was issued. The warrants
          vest  immediately  and  expire five years from the date of grant. Upon
          the  closing  of  the preferred stock private placement and closing of
          the  common  stock  private placement, the Company issued a warrant to
          purchase  117,994  and 161,994 shares of common stock, respectively at
          an  exercise  price  of  $1.15  per  share  and  $1.35  per  share,
          respectively.

     -    In  December  2002,  to  cancel  the  remainder  of  the terms of this
          agreement,  the Company issued a warrant to purchase 150,000 shares of
          common stock. The warrants vest immediately, with an exercise price of
          $2.48  per  share,  and  expire  five  years  from  the date of grant.

     Delinquent  Tax  Returns
     ------------------------
     The  Company  has not filed its federal and state tax returns for the years
     ended  April  30,  1995  through 2001; however, management reports that the
     minimum  tax for the state of California has been paid. While the estimated
     tax owed has been accrued, the Company will not be in compliance until such
     reporting  is  made. The Board of Directors has approved the Company filing
     these  tax  returns.

     In  addition,  the  Company has not filed certain of its 1099's, W-2's, and
     payroll  tax returns for the calendar years ended December 31, 1995 through
     2001.  As  of  April 30, 2002 and October 31, 2002, the Company has accrued
     $350,000  and  $350,000  (unaudited),  respectively,  for  payroll  taxes,
     penalties,  and  interest.  The Board of Directors has approved the Company
     filing  these  items.

                                       26
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 7 - COMMITMENTS  AND  CONTINGENCIES  (CONTINUED)

     Litigation
     ----------
     The Company is involved in certain legal proceedings and claims which arise
     in  the  normal  course  of  business. Management does not believe that the
     outcome  of  these  matters  will  have  a material effect on the Company's
     financial  position  or  results  of  operations.

     Furthermore,  the  Company  is being sued by a prior officer of the Company
     for  failure  to  pay wages, breach of contract, false representations, and
     fraud.  Management  does not believe that the outcome of these matters will
     have  a  material  effect on the Company's financial position or results of
     operations.

     Minority  Shareholders
     ----------------------
     Microdevices has 20,540 minority shares issued and outstanding. The Company
     has  agreed  that  in  the  event  of  any merger or other consolidation of
     Microdevices  with  HiEnergy,  each remaining Microdevices shareholder will
     receive  the  greater of the market value of his/her Microdevices shares or
     shares in the Company on the same terms as the voluntary share exchange. If
     all  minority  shareholders  convert, the Company will be required to issue
     459,222  additional  shares  of  common stock to the minority shareholders.

     Warrant  and  Option  Holders
     -----------------------------
     Microdevices  has granted stock options and warrants to purchase 12,365 and
     32,247  shares,  respectively,  of  common  stock.  These stock options and
     warrants  are  exercisable  at  $3.50  per  share.  If the stock option and
     warrant  holders exercise their stock options and warrants, the Company has
     agreed  to  allow  these  stock  option  and warrant holders to voluntarily
     exchange their shares in Microdevices for shares in HiEnergy at an exchange
     rate  of 22.3524 per share (or $0.157 per share). If these stock option and
     warrant  holders  exercise  and  convert  their shares, the Company will be
     required  to  issue  997,272 additional shares of common stock to the stock
     option  and  warrant  holders.

     During  the  six  months  ended  October 31, 2002, 2,047 (unaudited) of the
     above  stock  options  were  exercised  via  a  cash  payment  of  $7,164
     (unaudited),  or  $3.50 per share. The Company has agreed to exchange these
     shares  in  Microdevices  for  shares  in  HiEnergy  at an exchange rate of
     22.3524  per  share,  or  45,755  (unaudited)  shares  of  common  stock.

     During  the  six  months  ended October 31, 2002, options to purchase 4,000
     (unaudited)  shares  of  Microdevices'  common  stock  were  assumed by the
     Company  at  an  exchange  rate of 22.3524 per share (or $0.157 per share).
     Therefore,  the  Company  issued  options  to purchase 89,410 shares of its
     common  stock  at  an  exercise  price  of  $0.157  per  share.

                                       27
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 8 - PREFERRED  STOCK

     Series  A  Convertible,  Redeemable  Preferred  Stock  (unaudited)
     -----------------------------------------------------

     In  August  2002,  the  Board  of  Directors  approved  an amendment to the
     Company's  Articles  of  Incorporation  to  establish  Series A convertible
     preferred  stock  (the "Series A"), par value $0.001 per share. The Company
     is  authorized  to  issue  345  shares  of  the  Series  A.  Each  share is
     convertible  on  either  of  these  events a) any time at the option of the
     holder at $1.15 per share or b) mandatorily convertible two years following
     the  issuance  date  at  $1.15  per  share. Under certain circumstances the
     conversion  price  is  subject  to  adjustment. Furthermore, upon a certain
     major  transaction  or triggering event, the holder of the Series A has the
     right  to require the Company to redeem all or a portion of the Series A at
     a price per share equal to the liquidation preference, plus any accrued but
     unpaid  dividends  and  liquidated  damages.

     The  liquidation preference is $10,000 per share. The holders of the Series
     A  are entitled to receive, when and as declared by the Board of Directors,
     dividends  at  a  rate  of 8%, or $800 per share in advance for each of the
     first  two  years. The dividends may be paid in cash or common stock at the
     election  of  the Board of Directors. The Series A has certain class voting
     rights  and  general  voting  rights.

     In  October  2002,  the Company sold 98 shares of the Series A for net cash
     proceeds  of $800,396. At the time of issuance, the conversion price of the
     preferred  stock  was  less than the fair market value of the common stock.
     Since  the  Series  A  was  convertible immediately, the Company recorded a
     beneficial  conversion  feature  upon  issuance  of  $767,431.

     As of December 2002, the Company may be in default with a triggering event,
     therefore the holders of the Series A may be able to request the Company to
     redeem  their  shares  in cash at $10,000 per share. If all holders were to
     request redemption, the Company would be required to make a cash payment of
     $979,300.

NOTE 9 - SHAREHOLDERS'  EQUITY  (DEFICIT)

     Common  Stock  Issued  for  Cash  (unaudited)
     --------------------------------
     During  the  six months ended October 31, 2002 and 2001 and the period from
     August  21,  1995  (inception)  to  October 31, 2002, the Company issued 0,
     344,255,  and  2,677,497, shares, respectively, of common stock in exchange
     for  cash  of  $0,  $95,000,  and  $882,723,  respectively.

     Common  Stock  Issued  for  Services  Rendered  (unaudited)
     ----------------------------------------------
     During  the  six months ended October 31, 2002 and 2001 and the period from
     August  21,  1995  (inception)  to  October 31, 2002, the Company issued 0,
     1,051,318, and 11,702,703 shares, respectively, of common stock in exchange
     for services rendered valued at the fair market value of the stock given of
     $0,  $47,030,  and  $428,954,  respectively.

                                       28
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================


NOTE 9 - SHAREHOLDERS'  EQUITY  (DEFICIT)  (CONTINUED)

     Notes  Payable  Converted  into  Common  Stock  (unaudited)
     ----------------------------------------------
     During  the  six months ended October 31, 2002 and 2001 and the period from
     August 21, 1995 (inception) to October 31, 2002, the Company issued 37,898,
     0,  and  37,898  shares,  respectively,  of  common stock for principal and
     accrued  interest  of  $37,896,  $0,  and  $37,896,  respectively.

     Common  Stock  Issued  in  Private  Placements
     ----------------------------------------------
     In  April  2002,  the  Company  completed  its first closing of its private
     placement, whereby 1,225,000 shares of common stock were issued in exchange
     for  cash  of  $1,225,000.  The  private  placement offering was originally
     slated  to close at the same time as the voluntary share exchange. HiEnergy
     extended  the  term  of the offering and increased the size to a maximum of
     2,000,000  shares  of  common  stock  at  $1  per  share.

     In  June  2002,  the  Company  completed  its second closing of its private
     placement,  whereby  500,000 shares (unaudited) of common stock were issued
     in  exchange  for  cash  of $500,000 (unaudited). The private placement has
     been  closed.

     In  October  2002,  the  Company  completed  a  private  placement, issuing
     1,349,934  (unaudited)  shares  of  common  stock  in exchange for net cash
     proceeds  of  $1,625,614  (unaudited),  of  which  $184,000 (unaudited) was
     recorded  as  a  subscription  receivable  and  collected in November 2002.

     Common  Stock  Issued  for  Dividends  (unaudited)
     -------------------------------------
     In  October  2002,  the  Company  issued  68,150 shares of common stock for
     $78,360  of  dividends  accrued  on  the  Series  A.

     Common  Stock  Issued  for  Employee  Bonus  (unaudited)
     -------------------------------------------
     The  Company  issued  11,178  shares  of common stock to an employee of the
     Company  in  lieu of a cash bonus. The shares were valued at $21,350, which
     approximates  the  fair  value  of  the  shares.

     Stock  Splits
     -------------
     In  September  1998  and  May  1999,  the Company effectuated 2-for-1 stock
     splits.  All  share  and per share data have been retroactively restated to
     reflect  these  stock  splits.

                                       29
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 9 - SHAREHOLDERS'  EQUITY  (DEFICIT)  (CONTINUED)

     Stock  Options  and Warrants (unaudited) The following summarizes the stock
     options  and  warrant  transactions:
<TABLE>
<CAPTION>


                     Weighted-          Weighted-          Weighted-          Weighted-
                     Average             Average            Average           Average
                     Granted  Stock      Granted            Granted  Total    Granted
            Stock     Price   Options    Price   Warrants   Price   Options    Price
           Options     Per      Non-      Per       Non-     Per      and       Per
           Employee   Share   Employee   Share   Employee   Share   Warrants   Share
           ---------  ------  ---------  ------  ---------  ------  ---------  ------
<S>        <C>        <C>     <C>        <C>     <C>        <C>     <C>        <C>
Out-
standing,
April 30,
2002       2,482,011  $ 0.13          -  $    -          -  $    -  2,482,011  $ 0.13

Granted    3,005,038  $ 1.00  1,045,454  $ 1.00  1,815,686  $ 1.68  5,866,178  $ 1.21

Trans-
ferred        89,410  $ 0.16          -  $    -          -  $    -     89,410  $ 0.16
           ---------          ---------          ---------          ---------

OUT-
STANDING,
OCTOBER
31, 2002   5,576,459  $ 0.60  1,045,454  $ 1.00  1,815,686  $ 1.68  8,437,599  $ 0.88
           =========          =========          =========          =========

OUT-
STANDING,
OCTOBER
31, 2002   2,571,421  $ 0.13    500,000  $ 1.00  1,815,686  $ 1.68  4,887,107  $ 0.80
           =========          =========          =========          =========
</TABLE>

NOTE 10 - FINANCING  EXPENSE  -  RELATED  PARTY  (UNAUDITED)

     In  May  2002,  the  Company  issued warrants to purchase 150,000 shares of
     common  stock  to a shareholder/prior director of the Company. The warrants
     vest  immediately,  are  exercisable at $1 per share, and expire on May 31,
     2005.  Since the Company was in default on the note payable for $150,000 to
     this shareholder/prior officer/director of the Company, the Company granted
     these  warrants.  Accordingly,  the  Company  recorded financing expense of
     $223,710  during  the  six  months  ended  October  31,  2002.


                                       30
<PAGE>
                                    HIENERGY TECHNOLOGIES, INC. AND SUBSIDIARIES
                                                   (DEVELOPMENT STAGE COMPANIES)
                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 APRIL 30, 2002 AND OCTOBER 31, 2002 (UNAUDITED)
================================================================================

NOTE 11 - RELATED  PARTY  TRANSACTIONS

     During  the  six months ended October 31, 2002 and 2001 and the period from
     August  21,  1995  (inception)  to  October 31, 2002, the Company purchased
     $4,767  (unaudited),  $0 (unaudited), and $4,767 (unaudited), respectively,
     of  property  and  equipment  from  a  Board  member.

     See  Notes  5,  6,  and  10  for  additional  related  party  transactions.


NOTE 12 - SUBSEQUENT  EVENTS

     In  November  2002,  the  Company  entered  into  a  four  month consulting
     agreement  with  a public relations firm. Under the terms of the agreement,
     the  Company  will  pay  $12,500  per  month,  plus out-of-pocket expenses.

                                       31






<PAGE>


ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS

Except  for  the  historical information presented in this document, the matters
discussed  in this Form 10-QSB, and specifically in "Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations,"  or otherwise
incorporated  by  reference  into  this  document  contain  "forward  looking
statements" (as such term is defined in the Private Securities Litigation Reform
Act  of  1995). These statements can be identified by the use of forward-looking
terminology  such  as "believes," "expects," "may," "will," "intends," "should,"
or  "anticipates"  or  the  negative  thereof  or  other  variations  thereon or
comparable  terminology,  or  by  discussions of strategy that involve risks and
uncertainties.  The  safe  harbor  provisions  of  Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as  amended,  apply to forward-looking statements made by HiEnergy Technologies.
You  should  not  place  undue  reliance  on  forward-looking  statements.
Forward-looking  statements  involve risks and uncertainties. The actual results
that we achieve may differ materially from any forward-looking statements due to
such  risks  and  uncertainties.  These  forward-looking statements are based on
current  expectations,  and  we assume no obligation to update this information.
Readers  are urged to carefully review and consider the various disclosures made
by  us  in  this  report  on Form 10-QSB and in our 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.

The  following  discussion  and  analysis of our financial condition and plan of
operation  should be read in conjunction with the unaudited financial statements
and  accompanying  notes and the other financial information appearing elsewhere
in  this  report and with the audited financial statements contained in our Form
10-KSB  for  the  year  ended  April  30,  2002.

OVERVIEW

Our  parent  public  company  was  incorporated  under  the laws of the State of
Washington  on  March 20, 2000, under the name SLW Enterprises Inc. On April 30,
2002,  SLW  changed  its name to HiEnergy Technologies, Inc. in conjunction with
the acquisition of an approximately 92% interest in HiEnergy Microdevices, Inc.,
a Delaware corporation based in Irvine, California in the business of developing
a  stoichiometric-based  technology  that  can  remotely determine the empirical
chemical composition of substances, including explosives, biological weapons and
illegal  drugs.  HiEnergy  Microdevices  was  formed  on  August  21,  1995.

The  acquisition of HiEnergy Microdevices by SLW occurred on April 25, 2002. SLW
acquired  HiEnergy Microdevices pursuant to a Voluntary Share Exchange Agreement
that  provided  the  framework  for  the exchange of outstanding common stock of
HiEnergy  Microdevices  for  shares  of  common  stock  of  SLW. Pursuant to the
voluntary  share  exchange, SLW offered to exchange 22.3524 shares of its common
stock  for each outstanding share of HiEnergy Microdevices' common stock. On the
closing  date  of  the  offering,  14,380,200 shares of common stock of SLW were
issued  in  exchange for approximately 92% of HiEnergy Microdevices' outstanding
shares  of  common stock in a reverse take-over transaction. As a result of this
transaction,  former  stockholders  of  HiEnergy  Microdevices  came  to  own
approximately 65% of the outstanding equity of the parent public company and the
five  directors  of HiEnergy Microdevices comprised five of the six directors of
the  parent  public  company.  The  composition  of  our  board of directors has
subsequently evolved due to resignations and an appointment to fill a vacancy on
the  board.

On  October  22, 2002, we changed the domicile of our parent public company from
the  State  of  Washington to Delaware. Our parent public company's name remains
HiEnergy  Technologies,  Inc.,  and  our  common shares continue to trade on the
NASD's  Over-the-Counter  Bulletin  Board  under  the  symbol  "HIET".

We  plan  to  develop  three  detection  systems  based  on  our  innovative
stoichiometric  technology,  which has been proven in the laboratory to remotely
and  non-intrusively  determine  the  chemical  formulas  of  certain  concealed
substances  in  controlled  situations  and  "see  through"  metals  and  other
materials.

Prior  to  the  reverse  take-over transaction, SLW's initial efforts focused on
establishing  a  web-based  nutritional  supplement  sales  business.

                                       32
<PAGE>
BASIS  OF  PRESENTATION

For  accounting  purposes,  the  voluntary  share  exchange  transaction between
HiEnergy  Technologies  and  HiEnergy  Microdevices  has  been  treated  as  a
recapitalization  of  HiEnergy  Technologies,  with HiEnergy Microdevices as the
accounting  acquirer  (reverse  acquisition),  and  has  been accounted for in a
manner  similar  to  a  pooling  of  interests.

We  have  prepared  our  unaudited  Consolidated Financial Statements on a going
concern basis in accordance with generally accepted accounting principles in the
United  States.  This  going  concern basis of presentation assumes that we will
continue  operations  for the foreseeable future and will be able to realize our
assets  and  discharge  our  liabilities and commitments in the normal course of
business.  As  described  below  under Liquidity and Capital Resources, there is
substantial  uncertainty  about  our ability to continue as a going concern. Our
financial  statements  do  not  include  adjustments  that might result from the
outcome  of  this  uncertainty.

CRITICAL  ACCOUNTING  ESTIMATES

The discussion and analysis of our financial condition and results of operations
are  based  on  our unaudited Consolidated Financial Statements, which have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues  and  expenses,  and  related  disclosure  of  contingent  assets  and
liabilities.  On  an  ongoing  basis,  we  evaluate  our  estimates. We base our
estimates  on  assumptions  that  we  believe  to  be  reasonable  under  the
circumstances, the results of which form the basis of making judgments about the
carrying  values  of  assets  and liabilities that are not readily apparent from
other  sources.  Actual  results may differ from these estimates under different
assumptions  or  conditions.

OPERATING  RESULTS

For  the  six  months  ended  October  31,  2002,  we  incurred  a  net  loss of
approximately  $1.9 million, as compared to a net loss of approximately $156,000
for  the  same  period  in 2001. For the three months ended October 31, 2002, we
incurred  a net loss of approximately $1.0 million, as compared to a net loss of
approximately  $109,000  for  the  same period in 2001. For the six months ended
October  31,  2002,  we had negative cash flows from operations of approximately
$1.2  million.  In addition, we had an accumulated deficit of approximately $5.5
million and were in the development stage as of October 31, 2002. These factors,
among  others,  raise substantial doubt about our ability to continue as a going
concern.  Our  consolidated  financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.

THREE  MONTHS  ENDED OCTOBER 31, 2002 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
2001

     REVENUE

We  had  revenues  of  approximately $41,000 during the three-month period ended
October  31,  2002,  as compared to revenues of approximately $26,000 during the
same  period  last  year.  Our  revenues were derived from government grants for
development  and  testing  of  our  remote  detection  technology.  We  have not
commenced  selling  our  products.  Until  we complete development of one of our
detector systems, our revenues will most likely be limited to government grants.
We  cannot  predict  exactly  when  we  will complete development of our planned
detection  systems and begin production for specific applications, but we expect
that  it  will  not  be  within the fiscal year that will end on April 30, 2003.

     OPERATING  EXPENSES

Our  operating  expenses  consist  primarily of salaries and benefits, costs for
general  corporate  functions, including finance, accounting and facilities, and
fees  for  professional  services.

Our  general and administration expenses increased to approximately $1.0 million
during  the  three-month  period  ended  October  31,  2002,  from approximately
$136,000  during the same period in 2001. The increase in operating expenses was
primarily  due  to increases in administrative personnel, general office, legal,
accounting  and investor relations expenses, as well as research and development
expenses.

                                       33
<PAGE>

     DEPRECIATION

Accumulated  depreciation  for  property  and  equipment at October 31, 2002 was
approximately  $48,000.  Depreciation  expense for the three-month periods ended
October  31,  2002  and 2001 was approximately $26,000 and $1,000, respectively.

SIX  MONTHS ENDED OCTOBER 31, 2002 COMPARED TO SIX MONTHS ENDED OCTOBER 31, 2001

     REVENUE

We  had  revenues  of  approximately  $41,000  during the six-month period ended
October  31,  2002, as compared to revenues of approximately $117,000 during the
same  period  last  year.  Our  revenues were derived from government grants for
development  and  testing  of  our  remote  detection  technology.

     OPERATING  EXPENSES

Our  general and administration expenses increased to approximately $1.8 million
during  the six-month period ended October 31, 2002, from approximately $271,000
during the same period in 2001. The increase in operating expenses was primarily
due  to increases in administrative personnel, general office, legal, accounting
and  investor  relations expenses, as well as research and development expenses.

OTHER  MATTERS

     DELINQUENT  TAX  RETURNS

HiEnergy  Microdevices, our majority-owned subsidiary, has not filed its federal
and state tax returns due for the years ended April 30, 1996 through 2001. While
the  estimated  tax has been accrued as an expense, we will not be in compliance
until  such  reporting is made. The Boards of Directors of HiEnergy Microdevices
and  HiEnergy  Technologies  have  directed  that  any delinquent tax returns be
filed.

HiEnergy  Microdevices  has also not filed certain of its Forms 1099 and W-2 and
payroll tax returns for the years ended April 30, 1996 through 2002. As of April
30,  2002,  HiEnergy  Microdevices  had  accrued  $350,000  for  payroll  taxes,
penalties  and  interest.  The  Boards of Directors of HiEnergy Microdevices and
HiEnergy  Technologies  have directed that any delinquent Forms 1099 and W-2 and
payroll  tax  returns  be  filed.

     RECENT  ACCOUNTING  PRONOUNCEMENTS

The  subsection  of  Note  3  to the unaudited Notes to the Financial Statements
entitled  "Recently  Issued Accounting Pronouncements" is incorporated herein by
reference.

LIQUIDITY  AND  CAPITAL  RESOURCES;  PLAN  OF  OPERATION

During the six months ended October 31, 2002, we used approximately $1.2 million
for  operating  activities,  approximately  $422,000  to  acquire  equipment and
approximately  $300,000  to  repay related party liabilities. These uses of cash
were  funded principally through opening cash on April 30, 2002 of approximately
$1.1  million  and  private  placement  offerings  that provided net proceeds of
approximately $2.9 million. As of October 31, 2002, we had cash of approximately
$1.9  million,  funds  in  transit  from a closing of approximately $184,000 and
current  liabilities  of  approximately  $1.3  million.

We  raised approximately $2.5 million in net proceeds (after commissions) during
the  three  months  ended  October  31,  2002.  On October 7, 2002, we closed an
offering  of  our  Series  A Convertible Preferred Stock, providing net proceeds
(after commissions) of approximately $855,000. We issued approximately 98 Series
A  Preferred shares at a face value of $10,000 per share. The Series A Preferred
shares  are  convertible  into  common stock at a fixed rate of $1.15 per share.
Each  investor also received 30% warrant coverage, based on the number of common
shares their Series A Preferred can be converted into, with an exercise price of
$1.50  per  share.  We  also  paid  an  8%  dividend  on

                                       34
<PAGE>
the  Series A Preferred in advance by issuing approximately 68,000 common shares
to  the  investors.  On October 31, 2002, we completed an offering of our common
stock, providing net proceeds (after commissions) of approximately $1.7 million.
We issued approximately 1.3 million common shares at a price per share of $1.35.
Each  investor also received 20% warrant coverage, based on the number of common
shares  purchased,  with an exercise price of $2.50 per share. The offerings and
sales  of  our Series A Preferred Stock and our common stock were not registered
under  the  Securities  Act and were conducted pursuant to applicable exemptions
from  the  Securities Act's registration requirements. This disclosure is not an
offer  of  securities by us or a solicitation of an offer to buy securities from
us.  Placements were made only to accredited investors with preexisting contacts
with  HiEnergy  Technologies  and  its  authorized  representatives.

Before December 31, 2002, we plan to repay $50,000 of the approximately $323,000
of  related  party  notes payable that were outstanding. Of the remaining unpaid
balance,  approximately  $178,000  is  the subject of litigation with the former
president  of  HiEnergy  Microdevices and approximately $95,000 is in default or
due  on  demand. After filing our delinquent tax returns, we intend to negotiate
payment  schedules  with relevant taxing authorities. As of October 31, 2002, we
had  accrued $350,000 as an estimate of our liability in connection with unfiled
returns,  principally  due  to  unpaid employee withholding, social security and
medicare  taxes.

On  November 6, 2002, we filed a registration statement on Form SB-2 to register
an  offering  of  common  stock  by  some  of  our shareholders on a delayed and
continuous  basis.  The  Securities and Exchange Commission has notified us that
it will not review the registration statement.  During the course of our ongoing
due  diligence  in  connection with this filing, we have determined that certain
disclosures  should  be  updated  prior  to  requesting  that the Securities and
Exchange  Commission declare the registration statement effective.  We intend to
file  a pre-effective amendment to the registration statement that updates these
disclosures and includes updated financial statements.  Certain shareholders may
have  rights  under  their  respective  registration rights agreements to demand
payment  of  penalties because we have not requested the Securities and Exchange
Commission to declare our registration statement effective.  Although we believe
we  have valid reasons for amending our registration statement, we may be liable
for  these  penalties  nonetheless.  If  a  court determines us liable for these
penalties,  or  if we agree to pay them to avoid litigation, the penalties would
be  approximately  $28,000  for  the  first  month  (ending  in  December)  and
approximately  $42,000  per  month  thereafter.  We  cannot  predict whether the
Securities  and  Exchange  Commission  will  decide  to review our pre-effective
amendment,  but a decision to review our filing could substantially lengthen the
period  during which we will be exposed to liability for penalties.  We have the
option  to  pay  a  portion  of  these  penalties  in common stock that would be
included  in  the  registration  statement.  Although  we  believe we have valid
reasons  for  amending  our  registration  statement, it may be possible for our
Series  A  shareholders  to  claim  a right to redeem their Series A Convertible
Preferred  Stock  by  alleging  that  our  decision  to  update  and  amend  our
registration statement is a material breach of our registration rights agreement
with them.  If all of our Series A shareholders made such a claim and prevailed,
we would have to redeem their Series A shares in an amount of approximately $1.0
million.  Although  this claim is a reasonable possibility, we do not believe it
is  probable,  and  we  believe  we  have  defenses  against  it.

During  the second quarter of 2002, our monthly cash used in operations has been
around  $225,000,  and we expect our monthly cash used in operations to increase
to  approximately $250,000 per month. We have no contractual obligations to make
capital  expenditures. Thus far during the fiscal year ending April 30, 2003, we
have  made  capital  expenditures  of  approximately $680,000. We intend to make
additional  capital  expenditures  of  approximately  $400,000,  for  a total of
approximately  $1.1  million  during  the  fiscal year ending April 30, 2003, to
further  the development and testing of our technology and proposed products. If
we  make  all  of  these  capital  expenditures  and our cash used in operations
remains  steady  at  approximately  $250,000 per month, we expect to have enough
cash  to  support  our  operations  for  approximately  9  to  12  months.

The  continued  development and testing of our technology to create market-ready
products  depends  upon  raising  additional  funds.  We  anticipate  needing an
additional $3.0 million for the year ending April 30, 2004, in order to continue
our  operations at their current level. We believe we have sufficient authorized
capital  to  raise  approximately $3.0 million during the coming fiscal year, as
our  Certificate  of Incorporation authorizes 100,000,000 shares of common stock
and  20,000,000  shares  of  preferred stock. As of December 6, 2002, there were
24,042,360 shares of common stock and approximately 98 shares of preferred stock
outstanding.  There  can,  however,  be  no  assurance  that  we will be able to
continue  as  a  going  concern  or  achieve  material  revenues  or  profitable
operations.

In  August  2002,  our  project  to  develop  the  SuperSenzor was competitively
selected  by  the  Department  of  Defense  Small  Business  Innovation Research
("SBIR")  program  to receive up to $780,000 in funding over two years for Phase

                                       35
<PAGE>
II  testing and development of an anti-tank landmine detection system. The total
cost  of  the  project  is  $1,400,000, which includes private matching funds of
$550,000 and $70,000 granted by the Department of Defense for Phase I testing of
the  system  currently  being  completed.  The  private contribution consists of
approximately  $200,000  in  matching  funds  from  private  individuals  and
approximately  $350,000  worth of HiEnergy's hi-tech equipment. The selection is
subject  to  successful  contract  negotiations  and is based on availability of
government  funds. We are continuing to negotiate the contractual terms with the
Department  of  Defense.

We plan to continue to utilize a combination of equity financings and government
grants  to  fund  our  short-term  growth.  We  have  no  definitive  plans  or
arrangements  in  place with respect to additional capital sources at this time.
We  have  no lines of credit available to us at this time. There is no assurance
that  additional  capital  will  be  available  when  or  if  required.

The forecast of the period of time through which our financial resources will be
adequate  to support our operations is a forward-looking statement that involves
risks  and  uncertainties. Our actual funding requirements may differ materially
as  a  result of a number of factors, including unknown expenses associated with
the  development  and  testing  of  our  products, the cost of production of our
products  and  the  timing  of  bringing our products to market. There can be no
guarantee  that  financing  adequate  to  carry  out  our  business plan will be
available  on  terms  acceptable  to  us,  or  at  all.


ITEM  3.  CONTROLS  AND  PROCEDURES

(A)  EVALUATION  OF  CONTROLS  AND  PROCEDURES

Our  Chief  Executive  Officer  and Principal Financial Officer, Tom Pascoe, has
evaluated  the  effectiveness  of  the  design  and  operation of our disclosure
controls  and  procedures  (as  such  term  is defined in Rules 13(a) -14(c) and
15(d)-14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"))  as  of  a date within 90 days prior to the filing date of this quarterly
report (the "Evaluation Date"). Based on such evaluation, he has concluded that,
as  of the Evaluation Date, our disclosure controls and procedures are effective
to  ensure that he is alerted on a timely basis to material information relating
to  HiEnergy  Technologies (including its consolidated subsidiaries) required to
be  included  in  our reports filed or submitted under the Exchange Act and that
such  information  is  recorded,  processed  and  reported as and when required.

(B)  CHANGES  IN  INTERNAL  CONTROLS

Since  the  Evaluation  Date, there have not been any significant changes in our
internal  controls  or  in  other  factors  that could significantly affect such
controls.


                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

The  lawsuit  filed  by  Mr. Keith Cowan, a former CEO and President of HiEnergy
Microdevices,  against HiEnergy Microdevices, Dr. Maglich and Mr. Alden has been
previously reported in our Form 10-KSB for the fiscal year ended April 30, 2002,
which was filed with the Commission on July 29, 2002. A summary judgment hearing
was  held  on  October 10, 2002. The court denied Mr. Cowan's motion for summary
judgment  and  the  case is proceeding towards trial, which is scheduled to take
place  in  March  2003. As of the date of this report, no settlement has been
reached.

Except as described above and in our Form 10-KSB for the fiscal year ended April
30,  2002,  to the knowledge of our executive officers and directors, neither we
nor our subsidiaries are party to any legal proceeding or litigation and none of
our  property  is  the  subject  of a pending legal proceeding and our executive
officers  and  directors  know  of  no  other  threatened  or contemplated legal
proceedings  or  litigation.


                                       36
<PAGE>
ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

SALES OF UNREGISTERED SECURITIES DURING THE THREE-MONTH PERIOD ENDED OCTOBER 31,
2002

-    In  October  2002,  we  issued 1,349,934 shares of common stock and 269,990
     warrants  in  connection  with  a  private placement offering of our common
     stock  at  $1.35 per unit for aggregate gross proceeds from the offering of
     approximately  $1.8  million.  The warrants have an exercise price of $2.50
     and  a  term  of  3  years.  Fees  consisting of approximately $146,000 and
     warrants  to purchase approximately 162,000 shares of common stock, with an
     exercise  price  of  $1.35 per share and a term of five years, were paid to
     H.C.  Wainwright & Co., Inc., our placement agents, in connection with this
     offering. All of the investors who purchased shares of common stock through
     the  private placement were accredited investors. We believe that the offer
     and  sale  of  the  securities  through the private placement offering were
     exempt from registration under Rule 506 of Regulation D and/or Section 4(2)
     under  the  Securities  Act.  In  addition,  for those investors who reside
     outside  the  United  States and are not United States citizens, comprising
     approximately  $887,000 of the offering, we believe that the offer and sale
     of securities was exempt pursuant to Regulation S under the Securities Act.

-    In  October 2002, we issued approximately 98 shares of Series A Convertible
     Preferred  Stock,  approximately  68,000  shares  of  common  stock,  and
     approximately  256,000 warrants in connection with the closing of a private
     placement  offering  of  our Series A Convertible Preferred Stock at a face
     value  of  $10,000  per share for aggregate gross proceeds of approximately
     $930,000.  The  shares  of  Series  A Preferred are convertible into common
     stock at an exchange rate of $1.15 per share. The warrants have an exercise
     price  of  $1.50  per  share  and  a  term of two years. Fees consisting of
     approximately $74,000 and warrants to purchase approximately 118,000 shares
     of  common  stock,  with an exercise price of $1.15 per share and a term of
     five years, were paid to H.C. Wainwright & Co., Inc., our placement agents,
     in connection with this offering. All of the investors who purchased Series
     A  Preferred  shares  and  warrants  through  the  private  placement  were
     accredited  investors. We believe that the offer and sale of the securities
     through  the private placement offering were exempt from registration under
     Rule  506  of Regulation D and/or Section 4(2) under the Securities Act. In
     addition,  for those investors who reside outside the United States and are
     not  United  States'  citizens,  comprising  $190,000  of  the offering, we
     believe  that  the  offer  and  sale  of securities were exempt pursuant to
     Regulation  S  under  the  Securities  Act.

-    In  September  2002,  we issued a stock option to Tom Pascoe, our President
     and  CEO  and  a  director, to purchase 3,005,038 shares of common stock in
     connection  with  his  employment  agreement  with  us.  Mr.  Pascoe  is an
     accredited investor. We believe the issuance of securities was exempt under
     Rule  506  of  Regulation  D  and/or Section 4(2) under the Securities Act.

-    As  an accommodation to adjust amounts owing to QED Law Group, P.L.L.C., on
     September  25,  2002,  we  issued  stock  options  to Shea Wilson and Derek
     Woolston to purchase an aggregate of 45,454 shares of common stock at $1.00
     per  share.  September  25,  2002  was  the third trading day following our
     filing  of  a report on Form 10-QSB for the quarterly period ended July 31,
     2002.  The  closing sales price on September 25, 2002 was $2.10. We believe
     the issuance of securities was exempt under Rule 506 of Regulation D and/or
     Section  4(2)  under  the  Securities  Act.

-    In  September  2002, we issued a stock option to Michal Levy, our Corporate
     Secretary  and Vice President, to purchase 89,410 shares of common stock at
     $0.157 per share pursuant to her employment agreement with us. In September
     2002,  we also issued 11,178 shares of common stock to Ms. Levy pursuant to
     her  employment  agreement  with us. Ms. Levy is an accredited investor. We
     believe  the  issuances  of  securities  were  exempt  under  Rule  506  of
     Regulation  D  and/or  Section  4(2)  under  the  Securities  Act.

-    In  August  2002,  we  issued warrants to purchase 100,000 shares of common
     stock,  with an exercise price of $0.01 per share and a term of five years,
     to  H.C.  Wainwright  &  Co.,  Inc.  as a retainer fee in connection with a
     placement agent letter agreement. We believe the issuance of securities was
     exempt  under  Rule  506  of  Regulation  D  and/or  Section 4(2) under the
     Securities  Act.

                                       37
<PAGE>

-    In  August  2002,  we  issued  a warrant to Primoris Group Inc. to purchase
     400,000 shares of common stock at $2.00 per share with a term of 2 years in
     connection  with  a  consulting  agreement.  Primoris  Group  Inc. provides
     investor  relations services to us. Since Primoris Group Inc. is an Ontario
     corporation  and  has  its headquarters in Toronto, Ontario, we believe the
     issuance  of  securities  was  exempt  from registration under Regulation S
     under  the  Securities  Act.


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

On  October  10,  2002,  we  held  our annual meeting of stockholders in Irvine,
California.  At the meeting, our stockholders were asked to vote on the election
of  members  to  the  Board  of  Directors.  All  of the directors nominated for
election  served  as  directors  immediately  prior  to  the annual meeting. The
following  directors  were  elected  by  our  stockholders  as  a  result of the
following  votes:

                       Votes "For" Election     Votes "Withheld"
Bogdan C. Maglich           16,831,957              1,550
Gregory F. Gilbert          16,831,957              1,550
Barry Alter                 16,831,957              1,550
Harb S. Al Zuhair           16,831,957              1,550
Richard F. Alden            16,800,663             32,844

In  addition to the election of directors, the following matters were voted upon
at  the  annual  meeting:

-    To  ratify  the  Board  of Directors' selection of Singer Lewak Greenbaum &
     Goldstein  as our independent auditors for the fiscal year ending April 30,
     2003.  The votes were cast as follows: 16,820,578 in favor of ratification;
     954  against  ratification;  and  16,975  abstaining.

-    To  ratify  the  Board  of Directors' grant of a stock option to Dr. Bogdan
     Maglich  to  purchase  2,482,011  shares  of common stock of the Company at
     $0.134  per  share.  The  votes were cast as follows: 7,370,799 in favor of
     ratification  and  11,404  against  ratification.  8,457,359  shares  whose
     beneficial  ownership is attributed to Dr. Maglich under rules administered
     by  the  Commission were excluded from the voting group entitled to vote on
     this  proposal.

-    To  ratify  the  Board  of  Directors'  approval  of HiEnergy Technologies'
     Employment  Agreement,  as  amended, with Dr. Bogdan Maglich, including the
     issuance  of additional stock options to Dr. Maglich during the term of his
     Employment Agreement. The votes were cast as follows: 7,332,002 in favor of
     ratification  and  50,201  against  ratification.  8,457,359  shares  whose
     beneficial  ownership is attributed to Dr. Maglich under rules administered
     by  the  Commission were excluded from the voting group entitled to vote on
     this  proposal.

-    To  ratify  the  Board  of  Directors' grant of a stock option to Mr. Isaac
     Yeffet to purchase 1,000,000 shares of common stock of the Company at $1.00
     per  share.  At  the  meeting  several  stockholders  proposed  to  add  a
     performance  condition  to  Mr. Yeffet's consulting agreement with HiEnergy
     Technologies  requiring  Mr. Yeffet to provide additional and more specific
     performance  requirements  for  his  services  to  HiEnergy  Technologies,
     including  a  monthly  written  report, weekly communications and a defined
     time  commitment.  The  votes  were  cast as follows: 8,457,359 shares were
     voted  at the meeting in favor of ratifying Mr. Yeffet's option, subject to
     the Board negotiating the proposed change with Mr. Yeffet; 7,298,207 shares
     voted  by  proxy in favor of ratifying Mr. Yeffet's option, without advance
     notice of the proposed change; 7,404 voted against ratification; and 17,975
     abstained.

-    To adopt and approve the Agreement and Plan of Merger to effect a change in
     domicile of the Company from Washington to Delaware. The votes were cast as
     follows:  15,837,608  in favor of ratification; 1,954 against ratification;
     and  0  abstaining.

No  other  matters  were  submitted  to  our stockholders at the annual meeting.

                                       38
<PAGE>
ITEM  5.  OTHER  INFORMATION

RESIGNATION  OF  DIRECTOR

After  serving  on  HiEnergy  Microdevices' Board of Directors since 1997 and on
HiEnergy  Technologies'  Board  of Directors since April 2002, Mr. Richard Alden
has  resigned  as  a  director  from  both  Boards,  effective December 2, 2002.


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(A)  EXHIBITS

EXHIBIT
NUMBER    DESCRIPTION
-------   ----------------------------------------------------------------------
 2.1*     Agreement and Plan of Merger dated October 18, 2002 by and between the
          Registrant  and  its  wholly  owned subsidiary, HiEnergy Technologies,
          Inc.,  a  Delaware  corporation

 3.1*     Certificate  of Incorporation filed on October 17, 2002

 3.2*     Bylaws  adopted  on  October  18,  2002

 4.1*     Specimen  Common  Stock  Certificate

 4.2*     Specimen  Series  A  Convertible  Preferred  Stock  Certificate

 4.3      Designation  of  Relative  Rights  and  Preferences  of  the  Series A
          Convertible  Preferred  Stock  (see  Exhibit  3.1)

 4.4*     Form  of Registration Rights Agreement between the Registrant and each
          June  2002  Private  Placement  Common  Stock  investor


 4.5*     Registration  Rights  Agreement  dated  July  12,  2002  between  the
          Registrant  and  Isaac  Yeffet

 4.6*     Registration  Rights  Agreement  dated  August  19,  2002  between the
          Registrant  and  Primoris  Group  Inc.


 4.7*     Form  of  Registration  Rights Agreement dated October 7, 2002 between
          the  Registrant and the Series A Convertible Preferred Stock investors

  4.8*    Form  of  Warrant  Certificate  dated  October  7,  2002 issued by the
          Registrant  to  each  Series  A  Convertible  Preferred Stock investor

  4.9*    Form  of Registration Rights Agreement between the Registrant and each
          October  2002  Private  Placement  Common  Stock  Investor

 4.10*    Form  of  Warrant Certificate issued by the Registrant to each October
          2002  Private  Placement  Common  Stock  investor

 10.1*    Lease  Agreement  dated August 15, 2002 between the Registrant and Del
          Mar  Avionics

 10.2*    Amended  and  Restated  Nonqualified  Stock Option dated July 12, 2002
          issued  by  the  Registrant  to  Isaac  Yeffet

                                       39
<PAGE>

 10.3*    Consulting  Agreement  dated August 1, 2002 between the Registrant and
          Primoris  Group  Inc.

 10.4*    Amendment  No.  1  to  the  Consulting Agreement dated August 19, 2002
          between  the  Registrant  and  Primoris  Group  Inc.

 10.5*    Nonqualified Stock Option (Warrant) dated August 1, 2002 issued by the
          Registrant  to  Primoris  Group  Inc.

 10.6*    Letter  Employment  Agreement dated February 26, 2002 between HiEnergy
          Microdevices,  Inc.  and  Michal  Levy

 10.7*    Assignment,  Assumption  and  Amendment  of Employment Agreement dated
          September 17, 2002 by and among the Registrant, HiEnergy Microdevices,
          Inc.  and  Michal  Levy

 10.8*    Nonqualified  Stock  Option  dated  September  17,  2002 issued by the
          Registrant  to  Michal  Levy

 10.9*    Nonqualified  Stock  Option  dated  September  25,  2002 issued by the
          Registrant  to  Chapin  E.  Wilson

10.10*    Nonqualified  Stock  Option  dated  September  25,  2002 issued by the
          Registrant  to  Derek  W.  Woolston

10.11*    Employment  Agreement  dated September 25, 2002 between the Registrant
          and  Tom  Pascoe

10.12*    Nonqualified  Stock  Option effective September 25, 2002 issued by the
          Registrant  to  Tom  Pascoe

10.13*    Form  of Series A Convertible Preferred Stock Purchase Agreement dated
          October 7, 2002 between the Registrant and the investors named therein

10.14*    Consulting  Agreement  dated September 25, 2002 between the Registrant
          and  Barry  Alter

10.15*    Form  of  Subscription Agreement between the Registrant and each April
          2002  Private  Placement  Common  Stock  investor

10.16*    Form of Subscription Agreement between the Registrant and each October
          2002  Private  Placement  Common  Stock  investor

10.17     Form  of  Warrant  Certificate  dated  August  11,  2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

10.18     Form  of  Warrant  Certificate  dated  October  7,  2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

10.19     Form  of  Warrant  Certificate  dated  October  31, 2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

* Filed on November 6, 2002 as an exhibit to HiEnergy Technologies' registration
statement  on  Form  SB-2  (File  No.  333-101055)  and  incorporated  herein by
reference.


(B)  REPORTS  ON  FORM  8-K

On  September  20, 2002, we filed a report on Form 8-K dated September 20, 2002.
The  report  contained  an  Item  7,  listing exhibits, and an Item 9 disclosure
regarding  the  Section  906  Certifications  under  the  Sarbanes-Oxley  Act.


                                       40
<PAGE>
                                   SIGNATURES

In  accordance  with the requirements of the Exchange Act, the registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.

                                           HIENERGY  TECHNOLOGIES,  INC.



Date:    December  16,  2002               By:  /s/  Tom  Pascoe
      ------------------------------          ------------------------
                                           Name:  Tom  Pascoe
                                           Title: Chief Executive Officer and
                                                  Principal Financial Officer


                                       41
<PAGE>
                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                         AND PRINCIPAL FINANCIAL OFFICER
                         PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I,  Tom  Pascoe,  certify  that:
1.  I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  HiEnergy
Technologies,  Inc.;

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

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

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

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

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

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

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

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

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

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



Date:   December  16,  2002                  /s/  Tom  Pascoe
    -----------------------------          ------------------------
                                           Tom  Pascoe
                                           Chief  Executive  Officer  and
                                           Principal  Financial  Officer



                                       42
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER    DESCRIPTION
-------   ----------------------------------------------------------------------
 2.1*     Agreement and Plan of Merger dated October 18, 2002 by and between the
          Registrant  and  its  wholly  owned subsidiary, HiEnergy Technologies,
          Inc.,  a  Delaware  corporation

 3.1*     Certificate  of Incorporation filed on October 17, 2002

 3.2*     Bylaws  adopted  on  October  18,  2002

 4.1*     Specimen  Common  Stock  Certificate

 4.2*     Specimen  Series  A  Convertible  Preferred  Stock  Certificate

 4.3      Designation  of  Relative  Rights  and  Preferences  of  the  Series A
          Convertible  Preferred  Stock  (see  Exhibit  3.1)

 4.4*     Form  of Registration Rights Agreement between the Registrant and each
          June  2002  Private  Placement  Common  Stock  investor


 4.5*     Registration  Rights  Agreement  dated  July  12,  2002  between  the
          Registrant  and  Isaac  Yeffet

 4.6*     Registration  Rights  Agreement  dated  August  19,  2002  between the
          Registrant  and  Primoris  Group  Inc.


 4.7*     Form  of  Registration  Rights Agreement dated October 7, 2002 between
          the  Registrant and the Series A Convertible Preferred Stock investors

  4.8*    Form  of  Warrant  Certificate  dated  October  7,  2002 issued by the
          Registrant  to  each  Series  A  Convertible  Preferred Stock investor

  4.9*    Form  of Registration Rights Agreement between the Registrant and each
          October  2002  Private  Placement  Common  Stock  Investor

 4.10*    Form  of  Warrant Certificate issued by the Registrant to each October
          2002  Private  Placement  Common  Stock  investor

 10.1*    Lease  Agreement  dated August 15, 2002 between the Registrant and Del
          Mar  Avionics

 10.2*    Amended  and  Restated  Nonqualified  Stock Option dated July 12, 2002
          issued  by  the  Registrant  to  Isaac  Yeffet

                                       43
<PAGE>

 10.3*    Consulting  Agreement  dated August 1, 2002 between the Registrant and
          Primoris  Group  Inc.

 10.4*    Amendment  No.  1  to  the  Consulting Agreement dated August 19, 2002
          between  the  Registrant  and  Primoris  Group  Inc.

 10.5*    Nonqualified Stock Option (Warrant) dated August 1, 2002 issued by the
          Registrant  to  Primoris  Group  Inc.

 10.6*    Letter  Employment  Agreement dated February 26, 2002 between HiEnergy
          Microdevices,  Inc.  and  Michal  Levy

 10.7*    Assignment,  Assumption  and  Amendment  of Employment Agreement dated
          September 17, 2002 by and among the Registrant, HiEnergy Microdevices,
          Inc.  and  Michal  Levy

 10.8*    Nonqualified  Stock  Option  dated  September  17,  2002 issued by the
          Registrant  to  Michal  Levy

 10.9*    Nonqualified  Stock  Option  dated  September  25,  2002 issued by the
          Registrant  to  Chapin  E.  Wilson

10.10*    Nonqualified  Stock  Option  dated  September  25,  2002 issued by the
          Registrant  to  Derek  W.  Woolston

10.11*    Employment  Agreement  dated September 25, 2002 between the Registrant
          and  Tom  Pascoe

10.12*    Nonqualified  Stock  Option effective September 25, 2002 issued by the
          Registrant  to  Tom  Pascoe

10.13*    Form  of Series A Convertible Preferred Stock Purchase Agreement dated
          October 7, 2002 between the Registrant and the investors named therein

10.14*    Consulting  Agreement  dated September 25, 2002 between the Registrant
          and  Barry  Alter

10.15*    Form  of  Subscription Agreement between the Registrant and each April
          2002  Private  Placement  Common  Stock  investor

10.16*    Form of Subscription Agreement between the Registrant and each October
          2002  Private  Placement  Common  Stock  investor

10.17     Form  of  Warrant  Certificate  dated  August  11,  2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

10.18     Form  of  Warrant  Certificate  dated  October  7,  2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

10.19     Form  of  Warrant  Certificate  dated  October  31, 2002 issued by the
          Registrant  to  H.C.  Wainwright  &  Co.,  Inc.  and  Assigns

* Filed on November 6, 2002 as an exhibit to HiEnergy Technologies' registration
statement  on  Form  SB-2  (File  No.  333-101055)  and  incorporated  herein by
reference.


                                       44




<PAGE>