UNITED
        STATES
 ***SECURITIES
        AND EXCHANGE COMMISSION***
 WASHINGTON,
        D.C. 20549
 
 **______________________**
 
 **FORM
        10-KSB**
 **______________________**
 
 x
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934For the fiscal year ended December 31,
                  2004**
 
 o
              **TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934For the transition period from ______ to
                  ______**
 
 Commission
        file number: **33-17264-NY**
 
 **PATCO
        INDUSTRIES, LTD.**
 **** **** (Name
        of
        small business issuer in its charter)
 
 **Delaware**
              
              **11-2856146**(State
                  or other jurisdiction of
                incorporation
                  or organization)
              
              (I.R.S.
                  Employer
                Identification
                  Number)**295
                  East Main Street, Suite 1**
                **Ashland,
                  Oregon**
              
              **97520**(Address
                  of principal executive offices)
              
              (Zip
                  Code)Issuer’s
                  telephone number:**(541)
                  482-9106**
 
 Securities
        registered under Section 12(b) of the Act: None.
 
 Securities
        registered under Section 12(g) of the Act: None
 
 Check
        whether the issuer (1) filed all reports required to be filed by
        Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the 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 o No
x
 
 Check
        if
        disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
        is not contained in this form, and no disclosure will be contained, to the
        best
        of the issuer’s knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-KSB or any amendment
        to this Form 10-KSB. x
 
 Issuer’s
        revenues for its most recent fiscal year: $0.
 
 Due
        to a
        lack of a trading market for the common stock, the Issuer is unable to determine
        the aggregate market value of the 63,368,087 shares of voting stock held
        by
        non-affiliates of the Issuer as of July 14, 2005.
 
 There
        were 178,562,500 shares of the Company’s common stock outstanding on July 14,
        2005.
 
 Transitional
        Small Business Disclosure Format: Yes o No x
 
 Documents
        Incorporated by Reference: None
 
 
  
   **TABLE
        OF CONTENTS**
  
 **PART
        I**
  ITEM
                    1.
                DESCRIPTION
                    OF BUSINESS
                1ITEM
                    2.
                DESCRIPTION
                    OF PROPERTY
                1ITEM
                    3.
                LEGAL
                    PROCEEDINGS
                1ITEM
                    4.
                SUBMISSION
                    OF MATTERS TO A VOTE OF SECURITY HOLDERS
                1
  **PART
            II**
 ITEM
                        5.
                    MARKET
                        FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
                    2ITEM
                        6.
                    MANAGEMENT'S
                        DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
                    2ITEM
                        7.
                    FINANCIAL
                        STATEMENTS
                    2ITEM
                        8.
                    CHANGES
                        IN AND DISAGREEMENTS WITH ACCOUNTANTSON
                        ACCOUNTING AND FINANCIAL DISCLOSUREITEM
                        8A.
                    CONTROLS
                        AND PROCEDURES
                    3ITEM
                        8B.
                    OTHER
                        INFORMATION
                    3
 **PART
                III**
 ITEM
                          9.
                      DIRECTORS,
                          EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;COMPLIANCE
                          WITH SECTION 16(a) OF THE EXCHANGE ACT
                      4ITEM
                          10.
                      EXECUTIVE
                          COMPENSATION
                      4ITEM
                          11.
                      SECURITY
                          OWNERSHIP OF CERTAIN BENEFICIAL OWNERSAND
                          MANAGEMENT AND RELATED STOCKHOLDER MATTERS
                      4ITEM
                          12.
                      CERTAIN
                          RELATIONSHIPS AND RELATED TRANSACTIONS
                      5ITEM
                          13.
                      EXHIBITS
                      5ITEM
                          14.
                      PRINCIPAL
                          ACCOUNTANT FEES AND SERVICES
                      5
 
 
 
 
   
   **Forward-Looking
        Statements**
  This
        annual report contains forward-looking statements, which reflect the views
        of
        our management with respect to future events and financial performance. These
        forward-looking statements are subject to a number of uncertainties and other
        factors that could cause actual results to differ materially from such
        statements. Forward-looking statements are identified by words such as
“anticipates,”“believes,”“estimates,”“expects,”“plans,”“projects,”“targets” and
        similar expressions. Readers are cautioned not to place undue reliance on
        these
        forward-looking statements, which are based on the information available
        to
        management at this time and which speak only as of this date. The Company’s
        actual results may differ materially from results anticipated in these
        forward-looking statements. The Company undertakes no obligation to update
        or
        revise any forward-looking statements, whether as a result of new information,
        future events or otherwise.
  **PART
        I**
  **ITEM
                1.**
              **DESCRIPTION
                  OF BUSINESS**
  Patco
        Industries, Ltd., a Delaware corporation (the “Company”), has no operations and
        does not carry on business. It was incorporated in Delaware on March 20,
        1987
        under the name Redwing Ventures, Inc., and changed its name to Patco Industries,
        Ltd. on June 16, 1989.
  **ITEM
                2.**
              **DESCRIPTION
                  OF PROPERTY**
  The
        Company does not own or lease property. The address used as the Company’s
        principal executive office is that of its current Chief Executive
        Officer.
  **ITEM
                3.**
              **LEGAL
                  PROCEEDINGS**
  None.
  **ITEM
                4.**
              **SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY
                  HOLDERS**
  None.
   1
  **PART
        II**
  **ITEM
                5.**
              **MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**
  There
        was
        no market for the Company’s securities at any time during its three most recent
        fiscal years. As of December 31, 2004, the Company had approximately
        102
        stockholders of record. The Company has not paid any cash dividends on its
        common stock. Due to its present financial status, it does not contemplate
        or
        anticipate paying any dividends on its common stock in the foreseeable future.
        The Company did not repurchase any shares of its common stock during the
        year
        ended December 31, 2004.
  **ITEM
                6.**
              **MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION**
  The
        Company has no operations or income and does not carry on business. The Company
        is exploring the possibility of engaging in a reverse merger with a private
        company that has current operations. There can be no assurance that the Company
        will be successful at consummating such a transaction.
  **ITEM
                7.**
              **FINANCIAL
                  STATEMENTS**
  The
        financial statements appear in a separate section of this report as pages
        F-1
        through F-10 following the signature page.
   2
  **ITEM
                8.**
              **CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE**
  The
        Company engaged Stonefield Josephson, Inc., independent auditors, as its
        principal accountant to audit the Company’s financial statements for the year
        ended December 31, 2004.
  **ITEM
                8A.**
              **CONTROLS
                  AND PROCEDURES**
  The
        Company’s Chief Executive Officer and principal financial officer, William C.
        Patridge, has concluded, based on his evaluation as of the end of the period
        covered by this report, that the Company’s disclosure controls and procedures
        (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and
        15d-15(e)) are effective to ensure that information required to be disclosed
        in
        the reports that it files or submits under the Securities Exchange Act of
        1934
        is recorded, processed, summarized and reported within the time periods
        specified in the Securities and Exchange Commission’s rules and forms, and that
        such information is accumulated and communicated to the Company’s management,
        including William C. Patridge, its Chief Executive Officer and principal
        financial officer, as appropriate, to allow timely decisions regarding required
        disclosures.
  There
        has
        been no change in the Company’s internal controls over financial reporting
        during its most recent fiscal quarter that has materially affected, or is
        reasonably likely to materially affect, its internal controls over financial
        reporting.
  **ITEM
                8B.**
              **OTHER
                  INFORMATION**
 
 The
        Company has entered an Agreement and Plan of Reorganization (the “Agreement”)
        dated May 5, 2005 with Spectral Molecular Imaging, Inc., a Nevada corporation
        (“Spectral”), as amended effective as of June 30, 2005, pursuant to which, on
        the terms and subject to the conditions of the Agreement, the Company will
        acquire Spectral as a wholly-owned subsidiary. The acquisition will be
        accomplished through the merger (the “Merger”) of a newly formed subsidiary of
        the Company with and into Spectral, with Spectral as the surviving corporation
        and to issue shares of Company common stock to the stockholders of Spectral.
        It
        is anticipated that prior to the Merger, the Company will effect a reverse
        stock
        split of approximately .00434 for one of the outstanding shares of Company
        Common Stock so that the Company will have 825,000 shares of Company Common
        Stock issued and outstanding immediately prior to the Merger.
  Upon
        the
        effectiveness of the Merger, each share of Spectral Common Stock issued and
        outstanding immediately prior to the Merger shall be converted into one share
        of
        Company Common Stock and each outstanding option or warrant to purchase Spectral
        Common Stock, whether or not then exercisable, shall be converted into an
        option
        or warrant to purchase one share of Company Common Stock at a price equal
        to the
        exercise price in effect immediately prior to the Merger.
  Completion
        of the merger is subject to certain closing conditions, including Spectral
        completing a financing of a minimum of $850,000, which may be increased by
        Spectral in its sole discretion to up to $2,000,000, in gross offering proceeds
        from the sale of Spectral equity securities. The completion of the Merger
        is
        expected to be on or before September 30, 2005. However, there can be no
        assurance that the Company will be successful at consummating this
        transaction.
  
 
 
 
 
   3
  **PART
        III**
  **ITEM
                9.**
              **DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(A) OF THE EXCHANGE ACT**
  William
        C. Patridge, age 67, is the sole director and executive officer of the Company.
        He has served as Chief Executive Officer and Chairman of the Board since
        October
        1999. Over the past eight years, Mr. Patridge has worked as a business
        consultant through Patridge & Company Incorporated, for which he serves as
        President and Chairman.
  **Audit
        Committee.**
  The
        Company does not have an Audit Committee and does not have an audit committee
        financial expert. The Board of Directors serves as the Company’s Audit
        Committee.
  **Code
        of Ethics**
  The
        Company does not have a code of ethics that applies to its directors, officers
        and employees.
  **Compliance
        with Section 16(a) Beneficial Ownership Reporting**
  Section
        16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s
        directors, executive officers and 10% stockholders to file reports with the
        Securities and Exchange Commission on changes in their beneficial ownership
        of
        Common Stock and to provide us with copies of the reports. The Company believes
        that all of these persons filed all required reports on a timely basis in
        fiscal
        2004.
  **ITEM
                10.**
              **EXECUTIVE
                  COMPENSATION**
  No
        compensation was paid to any of the Company’s executive officers during the past
        three fiscal years. There were no stock options issued to or held by executive
        officers during 2004.
  **ITEM
                11.**
              **SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS**
  The
        following table sets forth the beneficial ownership of Common Stock as of
        July
        14, 2005 by (i) each person known by the Company to beneficially own
        5% or
        more of the outstanding shares of Common Stock, (ii) each director
        of the
        Company, (iii) each of the executive officers, and (iv) all
        directors
        and executive officers of the Company as a group.
  Name
                  and Address
              
              Amount
                  and Natureof Beneficial Ownership
              
              Approximate
                  Percentage of Ownership and Voting PowerWilliam
                  C. Patridge
                295
                  East Main Street, Suite 1
                Ashland,
                  Oregon 97520
              
              115,194,413
              
              64.5
              %All
                  directors and executive officers
                as
                  a group (1 person)
              
              115,194,413
              
              64.5
              %
 
  4
 **Equity
        Compensation Plan Information**
  The
        Company does not have any equity compensation plans.
  **ITEM
                12.**
              **CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS**
  The
        Company does not lease or rent any property. The Company’s office services are
        provided without charge by its current Chief Executive Officer.
  **ITEM
                13.**
              **EXHIBITS**
  (a)
        Exhibits
  **Exhibit**
                **Number**
              **Description**3.1
              Articles
                  of Incorporation of the Company.(1)3.3
              Bylaws
                  of the Company. (1)4.1
              Specimen
                  Stock Certificate.(1)31.1
              Certification
                  of the Chief Executive Officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act31.2
              Certification
                  of the principal financial officer pursuant to Section 302 of the
                  Sarbanes-Oxley Act32
              Certification
                  pursuant to Section 906 of the Sarbanes-Oxley
                  Act
  (1)  Previously
        filed and incorporated herein by reference.
  (b)
        Reports on Form 8-K: None.
  **ITEM
                14.**
              **PRINCIPAL
                  ACCOUNTING FEES AND
                  SERVICES**
  Stonefield
        Josephson, Inc. (“Stonefield”) audited the Company’s financial statements for
        the year ended December 31, 2004. For 2004, the fees billed for professional
        services by Stonefield were as follows:
  **Audit
        Fees**
  Fees
        of
        $6,000 in 2005 were paid to Stonefield by the Company for audit services
        which
        includes fees for the annual audit and review of the Company's reports on
        Form
        10-Q each year.
  **Audit-Related
        Fees**
  Stonefield
        did not render any audit related services to the Company.
  **Tax
        Fees**
  Stonefield
        did not render any tax services to the Company.
  **All
        Other Fees**
  Stonefield
        did not render any other services to the Company.
  All
        of
        the audit related services and tax fees were pre-approved by the Board of
        Directors which serves as the Company’s audit committee.
   5
  **SIGNATURES**
  
 In
        accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized.
  PATCO
                INDUSTRIES, INC.Date: July
                14, 2005
              By:
              /s/ William
                C. PatridgeWilliam
                C. PatridgeChief
                  Executive Officer (principal executive officer and principal financial
                  and
                  accounting officer)
   
 In
        accordance with the Exchange Act, this report has been signed below by the
        following person on behalf of the registrant and in the capacity and on the
        date
        indicated.
  Signature
              Title
              Date/s/
                  William C. Patridge
                William
                  C. Patridge
              Chairman
                  of the Board of Directors and Chief Executive Officer (principal
                  executive
                  officer and principal financial and accounting officer)
              July
                  14, 2005
 
   6
   
  **INDEX
        TO AUDITED**
 **FINANCIAL
        STATEMENTS FOR**
 **PATCO
        INDUSTRIES, LTD.**
 
  Report
                  of Independent Registered Public Accounting Firm
              
              F-2Audited
                  Financial Statements:Balance
                  Sheet
              
              F-3Statement
                  of Operations
              
              F-4Statement
                  of Cash Flows
              
              F-5Statement
                  of Stockholders’ Equity
              
              F-6Notes
                  to Financial Statements
              
              F-7
 
   F-1
  
  REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
 
 
 Board
        of
        Directors
 Patco
        Industries, Ltd.
 Ashland,
        Oregon
 
 
 We
        have
        audited the accompanying balance sheet of Patco
        Industries, Ltd. as of December 31, 2003 and December 31, 2004 ,
        and the
        related statements of operations and accumulated deficit and cash flows and
        stockholders’ equity for the years then ended.  These financial statements
        are the responsibility of the Company's management.  Our responsibility
        is
        to express an opinion on these financial statements based on our
        audit.
 
 We
        conducted our audit in accordance with the
        standards of the Public Company Accounting Oversight Board (United
        States) . 
        Those standards require that we plan and perform the audit to obtain reasonable
        assurance about whether the financial statements are free of material
        misstatement.  An audit includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial statements. 
        An
        audit also includes assessing the accounting principles used and significant
        estimates made by management, as well as evaluating the overall financial
        statement presentation.  We believe that our audit provides a reasonable
        basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Patco Industries, Ltd. as of
        December 31, 2003 and December 31, 2004, and the results of its operations
        and
        its cash flows for the period then ended in conformity with U.S.
        generally accepted accounting principles.
 
 As
        set
        forth in Note 2 to the accompanying financial statements, the company has
        not
        yet commenced operations and there are no other sources of financing to sustain
        its operations. Management’s plans are also disclosed in Note 2. These factors
        raise substantial doubt about the Company's ability to continue as a going
        concern. The accompanying financial statements do not include any adjustments
        to
        the financial statements that might be necessary should the Company be unable
        to
        continue as a going concern.
 
 /s/
        STONEFIELD JOSEPHSON INC.
 
 CERTIFIED
        PUBLIC ACCOUNTANTS
 
 Santa
        Monica, California
 June
        30,
        2005
 
 
   F-2
  
  **Patco
                  Industries, Ltd.****Balance
                  Sheet**(Amounts
                  expressed in United States dollars unless otherwise
                  stated)December
                  31,2004
              
              2003ASSETSTotal
                  Assets
              
              $
              —
              
              $
              —LIABILITIES
                  & STOCKHOLDERS’ EQUITYTotal
                  Liabilities
              
              $
              —
              
              $
              —Stockholders’
                  Equity:Common
                  Stock - 300,000,000 shares authorized;
              
              
              179
              
              
              179178,562,500
                  issued and outstandingAccumulated
                  deficit
              
              
              (179
              )
              
              (179
              )Total
                  Stockholders' Equity
              
              
              —
              
              
              —Total
                  Liabilities & Stockholders’ Equity
              
              $
              —
              
              $
              —
 
  
 
 
 
 
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-3
  
 **Patco
                  Industries, Ltd.****Statement
                  of Operations**(Amounts
                  expressed in United States dollars unless otherwise
                  stated)For
                  The Years EndedDecember
                  31,2004
              
              2003
              
              2002(Unaudited)Other
                  Income (Expense):Write
                  off of organizational costs
              
              $
              —
              
              $
              —
              
              $
              (22,760
              )Forgiveness
                  of demand note and
                accrued
                  interest
              
              
              —
              
              
              —
              
              
              13,631Forgiveness
                  of accrued
                professional
                  fees payable
              
              
              —
              
              
              —
              
              
              8,950Total
                  other income (expense)
              
              
              —
              
              
              —
              
              
              (179
              )Net
                  loss
              
              $
              —
              
              $
              —
              
              $
              (179
              )Basic
                  and diluted loss per common share
              
              $
              —
              
              $
              —
              
              $
              —Basic
                  and diluted weighted average shares
                outstanding
              
              
              178,562,500
              
              
              178,562,500
              
              
              178,562,500
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-4
  
 **Patco
                  Industries, Ltd.****Statement
                  of Cash Flows**(Amounts
                  expressed in United States dollars unless otherwise
                  stated)For
                  The Years EndedDecember
                  31,2004
              
              2003
              
              2002(Unaudited)Cash
                  flows from operations:
                Net
                  loss
              
              $
              —
              
              $
              —
              
              $
              (179
              )Adjustments
                  to reconcile net loss to net
                cash
                  (used in) provided by operating
                activities:Write
                  off of organizational costs
              
              
              —
              
              
              —
              
              
              22,760Forgiveness
                  of demand note and
                accrued
                  interest
              
              
              —
              
              
              —
              
              
              (13,631
              )Forgiveness
                  of accrued
                professional
                  fees payable
              
              
              —
              
              
              —
              
              
              (8,950
              )Net
                  cash provided by (used in) operations
              
              
              —
              
              
              —
              
              
              —Cash
                  flows from investing--
              
              
              —
              
              
              —
              
              
              —Cash
                  flows from financing--
              
              
              —
              
              
              —
              
              
              —Increase
                  (decrease) in cash
              
              
              —
              
              
              —
              
              
              —Cash,
                  beginning balance
              
              
              —
              
              
              —
              
              
              —Cash,
                  ending balance
              
              $
              —
              
              $
              —
              
              $
              —
 
 
 
 
 
 
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-5
  
 **Patco
        Industries, Ltd.**
 **Statement
        of Stockholders’ Equity**
 (Amounts
        expressed in United States dollars unless otherwise stated)
 
 
 
  Common
                  Stock
              
              AccumulatedShares
              
              Amount
              
              Deficit
              
              TotalDecember
                  31, 2001
              
              
              178,562,500
              
              $
              179
              
              $
              —
              
              
              179Net
                  loss
              
              
              —
              
              
              —
              
              
              (179
              )
              
              (179
              )December
                  31, 2002
              
              
              178,562,500
              
              
              179
              
              
              (179
              )
              
              —Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —December
                  31, 2003
              
              
              178,562,500
              
              
              179
              
              
              (179
              )
              
              —Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —December
                  31, 2004
              
              
              178,562,500
              
              $
              179
              
              $
              (179
              )
              $
              —
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-6
  **Patco
        Industries, Ltd.**
 **Notes
        to Financial Statements**
 **December
        31, 2004**
 
  NOTE
        1 -
        SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
 
 Description
        of Business
 
 The
        Company has no operations and does not carry on business. It was incorporated
        in
        Delaware on March 20, 1987 under the name Redwing Ventures, Inc., and changed
        its name to Patco Industries, Ltd. on June 16, 1989.
 
 Estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure 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.
 
 Cash
        and cash equivalents
 
 The
        Company does not maintain a cash balance. For the purpose of the statements
        of
        cash flows, all highly liquid investments with an original maturity of three
        months or less are considered to be cash equivalents.
 
 Loss
        per share
 
 Net
        loss
        per share is provided in accordance with Statement of Financial Accounting
        Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per share
        is
        computed by dividing losses available to common stockholders by the weighted
        average number of common shares outstanding during the period. The Company
        had
        no dilutive common stock equivalents, such as stock options or warrants as
        of
        December 31, 2004.
 
 Segment
        reporting
 
 The
        Company follows Statement of Financial Accounting Standards No. 130,
        "Disclosures About Segments of an Enterprise and Related Information". The
        Company operates as a single segment and will evaluate additional segment
        disclosure requirements as it expands its operations.
 
 Dividends
 
 The
        Company has not yet adopted any policy regarding payment of dividends. No
        dividends have been paid or declared since inception.
 
 Income
        taxes
 
 The
        Company follows Statement of Financial Accounting Standard No. 109, "Accounting
        for Income Taxes" ("SFAS No. 109") for recording the provision for income
        taxes.
        Deferred tax assets and liabilities are computed based upon the difference
        between the financial statement and income tax basis of assets and liabilities
        using the enacted marginal tax rate applicable when the related asset or
        liability is expected to be realized or settled. Deferred income tax expenses
        or
        benefits are based on the changes in the asset or liability each period.
        If
        available evidence suggests that it is more likely than not that some portion
        or
        all of the deferred tax assets will not be realized, a valuation allowance
        is
        required to reduce the deferred tax assets to
  F-7
  the
        amount that is more likely than not to be realized. Future changes in such
        valuation allowance are included in the provision for deferred income taxes
        in
        the period of change.
 
 Deferred
        income taxes may arise from temporary differences resulting from income and
        expense items reported for financial accounting and tax purposes in different
        periods. Deferred taxes are classified as current or non-current, depending
        on
        the classification of assets and liabilities to which they relate. Deferred
        taxes arising from temporary differences that are not related to an asset
        or
        liability are classified as current or non-current depending on the periods
        in
        which the temporary differences are expected to reverse.
 
 Recent
        pronouncements
 
 In
        November 2004, the FASB issued SFAS No. 151, “Inventory Costs, an amendment of
        ARB No. 43, Chapter 4”. The amendments made by Statement 151 clarify that
        abnormal amounts of idle facility expense, freight, handling costs, and wasted
        materials (spoilage) should be recognized as current period charges and require
        the allocation of fixed production overheads to inventory based on the normal
        capacity of the production facilities. The guidance is effective for inventory
        costs incurred during fiscal years beginning after June 15, 2005. Earlier
        application is permitted for inventory costs incurred during fiscal years
        beginning after November 23, 2004.
 
 In
        December 2004, the FASB issued SFAS No.152, “Accounting for Real Estate
        Time-Sharing Transactions, an amendment of FASB Statements No. 66 and 67
        (SFAS
        152)”. The amendments made by Statement 152 amend FASB Statement No. 66,
        Accounting for Sales of Real Estate, to reference the financial accounting
        and
        reporting guidance for real estate time-sharing transactions that is provided
        in
        AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing
        Transactions. This Statement also amends FASB Statement No. 67, Accounting
        for
        Costs and Initial Rental Operations of Real Estate Projects, to state that
        the
        guidance for (a) incidental operations and (b) costs incurred to sell real
        estate projects does not apply to real estate time-sharing transactions.
        The
        accounting for those operations and costs is subject to the guidance in SOP
        04-2. This Statement is effective for financial statements for fiscal years
        beginning after June 15, 2005, with earlier application encouraged.
 
 In
        December 2004, the FASB issued SFAS No.153, “Exchanges of Nonmonetary Assets, an
        amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions.” The
        amendments made by Statement 153 are based on the principle that exchanges
        of
        nonmonetary assets should be measured based on the fair value of the assets
        exchanged. Further, the amendments eliminate the narrow exception for
        nonmonetary exchanges of similar productive assets and replace it with a
        broader
        exception for exchanges of nonmonetary assets that do not have commercial
        substance. Previously, Opinion 29 required that the accounting for an exchange
        of a productive asset for a similar productive asset or an equivalent interest
        in the same or similar productive asset should be based on the recorded amount
        of the asset relinquished. Opinion 29 provided an exception to its basic
        measurement principle (fair value) for exchanges of similar productive assets.
        The Board believes that exception required that some nonmonetary exchanges,
        although commercially substantive, be recorded on a carryover basis. By focusing
        the exception on exchanges that lack commercial substance, the Board believes
        this Statement produces financial reporting that more faithfully represents
        the
        economics of the transactions. The Statement is effective for nonmonetary
        asset
        exchanges occurring in fiscal periods beginning after June 15, 2005. Earlier
        application is permitted for nonmonetary asset exchanges occurring in fiscal
        periods beginning after the date of issuance. The provisions of this Statement
        shall be applied prospectively.
 
 In
        December 2004, the FASB issued SFAS No.123 (revised 2004), “Share-Based
        Payment”. Statement 123(R) will provide investors and other users of financial
        statements with more complete and neutral financial information by requiring
        that the compensation cost relating to share-based payment transactions be
        recognized in financial statements. That cost will be measured based on the
        fair
        value of the equity or liability instruments issued. Statement 123(R) covers
        a
        wide range of share-based compensation arrangements including share options,
        restricted share plans, performance-based awards, share appreciation rights,
        and
        employee share purchase plans. Statement 123(R) replaces FASB Statement No.
        123,
        Accounting for Stock-
  F-8
  Based
        Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued
        to
        Employees. Statement 123, as originally issued in 1995, established as
        preferable a fair-value-based method of accounting for share-based payment
        transactions with employees. However, that Statement permitted entities the
        option of continuing to apply the guidance in Opinion 25, as long as the
        footnotes to financial statements disclosed what net income would have been
        had
        the preferable fair-value-based method been used. Public entities (other
        than
        those filing as small business issuers) will be required to apply Statement
        123(R) as of the first interim or annual reporting period that begins after
        June
        15, 2005.
 
 In
        December 2004, the FASB issued two Staff Positions, FSP FAS 109-1, Application
        of FASB Statement 109 “Accounting for Income Taxes” to the Tax Deduction on
        Qualified Production Activities Provided by the American Job Creation Act
        of
        2004, and FSP FAS 109-2 Accounting and Disclosure Guidance for the Foreign
        Earnings Repatriation Provision within the American Jobs Creation Act of
        2004.
 
 NOTE
        2 -
        GOING CONCERN
 
 These
        financial statements have been prepared in accordance with generally accepted
        accounting principles applicable to a going concern which contemplates the
        realization of assets and the satisfaction of liabilities and commitments
        in the
        normal course of business. The Company is a shell corporation with no operations
        or income. The Company is exploring the possibility of engaging in a reverse
        merger with a private company that has current operations. There can be no
        assurance that the Company will be successful at consummating such a
        transaction.
 
 These
        conditions raise substantial doubt about the Company's ability to continue
        as a
        going concern. These financial statements do not include any adjustments
        that
        might arise from this uncertainty.
 
 NOTE
        3 -
        INCOME TAXES
 
 The
        Company accounts for income taxes under Statement of Financial Accounting
        Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"), which
        requires use of the liability method. SFAS No. 109 provides that deferred
        tax
        assets and liabilities are recorded based on the differences between the
        tax
        bases of assets and liabilities and their carrying amounts for financial
        reporting purposes, referred to as temporary differences. Deferred tax assets
        and liabilities at the end of each period are determined using the currently
        enacted tax rates applied to taxable income in the periods in which the deferred
        tax assets and liabilities are expected to be settled or realized.
 
 The
        provision for income taxes differs from the amount computed by applying the
        statutory federal income tax rate to income before provision for income taxes.
        The sources and tax effects of the differences are as follows:
 
 U.S. federal statutory
                rate
              (34.0%
              )Valuation
                reserve
              34.0%Total
              -
                  %
 
 As
        of
        December 31, 2004, the Company has a net operating loss carryforward of $179
        for
        tax purposes, which will be available to offset future taxable income. If
        not
        used, this carryforward will expire in 2022. The deferred tax asset relating
        to
        the operating loss carryforward has been fully reserved.
 
 NOTE
        4 -
        FIXED ASSETS
 
 The
        Company does not own or lease fixed assets. There were no fixed asset additions
        or deletions during the year ended December 31, 2004. The Company recorded
        no
        depreciation expense for the year ended December 31, 2004.
  F-9
 
 NOTE
        5 -
        RELATED PARTY TRANSACTIONS
 
 The
        Company does not lease or rent any property. The Company’s office services are
        provided without charge by its current Chief Executive Officer. Such costs
        are
        immaterial to the financial statements and, accordingly, have not been reflected
        therein.
 
 NOTE
        6 -
        STOCKHOLDERS' EQUITY
 
 There
        were 178,562,500 shares of common stock outstanding on June 30, 2005. There
        have
        been no issuances of common stock during the past three years.
 
 NOTE
        7 -
        WARRANTS AND OPTIONS
 
 There
        are
        no warrants or options outstanding to acquire any additional shares of common
        stock.
 
 NOTE
        8 -
        SUBSEQUENT EVENT
 
 The
        Company has entered an Agreement and Plan of Reorganization (the “Agreement”)
        dated May 5, 2005 with Spectral Molecular Imaging, Inc., a Nevada corporation
        (“Spectral”), as amended effective as of June 30, 2005, pursuant to which, on
        the terms and subject to the conditions of the Agreement, the Company will
        acquire Spectral as a wholly-owned subsidiary. The acquisition will be
        accomplished through the merger (the “Merger”) of a newly formed subsidiary of
        the Company with and into Spectral, with Spectral as the surviving corporation
        and to issue shares of Company common stock to the stockholders of Spectral.
        It
        is anticipated that prior to the Merger, the Company will effect a reverse
        stock
        split of approximately .00434 for one of the outstanding shares of Company
        Common Stock so that the Company will have 825,000 shares of Company Common
        Stock issued and outstanding immediately prior to the Merger.
  Upon
        the
        effectiveness of the Merger, each share of Spectral Common Stock issued and
        outstanding immediately prior to the Merger shall be converted into one share
        of
        Company Common Stock and each outstanding option or warrant to purchase Spectral
        Common Stock, whether or not then exercisable, shall be converted into an
        option
        or warrant to purchase one share of Company Common Stock at a price equal
        to the
        exercise price in effect immediately prior to the Merger.
  Completion
        of the merger is subject to certain closing conditions, including Spectral
        completing a financing of a minimum of $850,000, which may be increased by
        Spectral in its sole discretion to up to $2,000,000, in gross offering proceeds
        from the sale of Spectral equity securities. The completion of the Merger
        is
        expected to be on or before September 30, 2005. However, there can be no
        assurance that the Company will be successful at consummating this
        transaction.
  
  F-10
   **Supplemental
        Information to be Furnished with Reports filed pursuant to Section 15(d)
        of the
        Exchange Act by Non-reporting Issuers.**
  The
        Company has not sent an annual report or proxy materials covering the Company’s
        last fiscal year to security holders.
  
   F-11