U.S. SECURITIES AND EXCHANGE COMMISSION 
  Washington, D.C. 20549

Amendment No. 1 to
  FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2002

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________
  to _______________

000-49951 
  (Commission File Number)

MPAC CORPORATION 
  (Name of small business issuer in its charter)

|NEVADA                            | 91-2084507         
|--------------------------------- | -------------------
|(State or other jurisdiction      | (IRS Employer      
|of incorporation or organization) | Identification No.)

1302 Arbutus Street, Vancouver, British Columbia, V6J 3W8 
  (Address of principal executive offices) (Zip Code)

Issuers telephone number: (604)-736-7481

Securities registered under Section 12(b) of the Exchange Act:
  None

Securities registered under section 12(g) of the Exchange Act:
  Common Stock, $.001 per share
  The Common Shares are listed on the Toronto Stock Exchange

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

Indicate by check mark if disclosure of delinquent filers
  pursuant to Item 405 of Regulation S-B is not contained herein, and will not
  be contained, to the best of the registrants knowledge, in definitive
  proxy or information statements incorporated by reference in Part III of this
  Form 10-KSB or any amendment to this Form 10-KSB. [  ]

The registrants consolidated revenues for its most recent
  fiscal year were $405,891.

Based on the closing sales price of the Common Stock on March
  1, 2002, the aggregate market value of the voting stock of registrant held by
  non-affiliates was $310,750. Shares of Common Stock held by each officer and
  director and by each person who owns 5% or more of the outstanding Common Stock
  have been excluded from this calculation as such persons may be considered to
  be affiliated with the Company.

As of December 31, 2002, the registrants outstanding common stock consisted of 8,291,518 shares.

Transitional Small Business Disclosure Format. Yes [ 
  ] No [X]

DOCUMENTS INCORPORATED BY REFERENCE: None



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TABLE OF CONTENTS

|                                       |          |                                                                        | Page | 
|-------------------------------------- | -------- | ---------------------------------------------------------------------- | ---- | 
|                                       |          |                                                                        |      | 
|PART I                                 |          |                                                                        |      | 
|                                       |          |                                                                        |      | 
|                                       | Item 1:  | Description of Business                                                | 3    | 
|                                       | Item 2:  | Description of Property                                                | 10   | 
|                                       | Item 3:  | Legal Proceedings                                                      | 10   | 
|                                       | Item 4:  | Submission of Matters to a Vote of Security Holders                    | 10   | 
|                                       |          |                                                                        |      | 
|                                       |          |                                                                        |      | 
|PART II                                |          |                                                                        |      | 
|                                       |          |                                                                        |      | 
|                                       | Item 5:  | Market for Common Equity and Related Stockholder Matters               | 11   | 
|                                       | Item 6:  | Managements Discussion and Analysis                                   | 12   | 
|                                       | Item 7:  | Financial Statements                                                   | 14   | 
|                                       | Item 8:  | Changes in and Disagreements with Accountants and Financial Disclosure | 14   | 
|                                       |          |                                                                        |      | 
|PART III                               |          |                                                                        |      | 
|                                       |          |                                                                        |      | 
|                                       | Item 9:  | Directors and Executive Officers, Promoters and Control Persons;       |      | 
|                                       |          | Compliance with Section 16(a) of the Exchange Act                      | 14   | 
|                                       | Item 10: | Executive Compensation                                                 | 16   | 
|                                       | Item 11: | Security Ownership of Certain Beneficial Owners                        | 16   | 
|                                       | Item 12: | Certain Relationships and Related Transactions                         | 18   | 
|                                       | Item 13: | Exhibits and Reports on Form 8-K                                       | 18   | 
|                                       | Item 14: | Controls and Procedures                                                | 19   | 
|                                       |          |                                                                        |      | 
|SIGNATURES                             |          |                                                                        |     
|                                       |          |                                                                        |      | 
|CERTIFICATIONS PURSUANT TO SECTION 302 |          |                                                                       
|                                       |          |                                                                        |      | 
|FINANCIAL STATEMENTS                   |          |                                                                       
|                                       |          |                                                                        |      | 
|EXHIBITS                               |          |                                                                        |     

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FORM 10-KSB

MPAC CORPORATION

PART I.

ITEM 1. DESCRIPTION OF BUSINESS

General

We sell a sulfur based fungicide that is used for commercial
  agriculture purposes. Sales of our product commenced in 2001. Currently, our
  sulfur based fungicide product is sold primarily to the agriculture industry
  in California. We are also developing a pellet form sulfur based plant nutrient
  and a dry flowable sulfur product for commercial agriculture use. Our head office
  is located at 1302 Arbutus Street, Vancouver, B.C.

We previously milled and packaged the sulfur products sold
  by us using a processing and packaging plant owned by us on land held by us
  pursuant to a lease. Due to an environmental clean-up order issued by the Province
  of Alberta relating to a previous tenants operations, and disputes with the
  landlord over our lease obligations, we were unable to utilize our production
  facility and outsourced the production of our sulfur products to a third party
  milling facility for our 2002 fiscal year. We anticipate that we will continue
  to outsource our milling production for the 2003 fiscal year. Accordingly, in
  2002 our business was the marketing and selling of our sulfur products, and
  we did not engage in production.

In November of 2002 our milling plant was seized by the landlord.
  We agreed with the landlord not to contest the seizure of the plant in exchange
  for the termination of our obligations under the lease. As the plant was inoperative
  at the time of seizure, the seizure is not expected to affect our current operations,
  which consist primarily sales of product under our brand name. We are currently
  seeking to merge our operations with another sulfur milling operation. We believe
  that our existing industry sales channels and purchase orders for our current
  sulfur products, along with our proprietary research on new agricultural use
  sulfur products, will provide value to a potential merger candidate. Since November
  of 2002, we have been in merger negotiations with a sulfur milling operation
  located in Alberta, Canada, however as at the date of this registration statement
  no agreement has been reached.

Corporate History

We were incorporated under the laws of the State of Nevada
  on June 18, 1998 for the purpose of raising capital to acquire a processing
  plant and machinery necessary to undertake production of sulfur-based plant
  nutrient fertilizers and fungicides. Our subsidiary, Micron, was incorporated
  under the laws of Alberta on August 20, 1998.

Our current business is operated primarily through our subsidiary
  Micron Milling & Packaging Company Ltd. Through Micron we sell our milled
  and packaged sulfur products to the California agriculture industry.

Prior to our 2002 production year, production and packaging
  of our sulfur products was carried out at a 10,000 square foot production facility
  consisting of a mill and packaging plant and equipment situated on five acres
  of land located in Crossfield, Alberta, Canada. The land and building was held
  by Micron through a lease.

In November of 2002, the landlord seized the milling and packaging
  plant and equipment as a result of a dispute over lease payments. Micron negotiated
  the termination of the lease in exchange for not disputing the seizure. Microns
  decision not to pursue recovery of the plant and equipment was based on a determination
  by management that considered the replacement value of the assets, the cost
  of disputing the seizure and the ability of Micron to continue sales of its
  products. Micron determined that it could meet future supply and delivery obligations
  by purchasing from third party suppliers located in Alberta, Canada and in the
  State of Texas. It was determined by management that such suppliers can supply
  sulfur products milled in accordance with our specifications and packaged under
  our brand name.

The history of our operations prior to the seizure of our
  plant and equipment by the landlord is summarized in the following paragraphs.

In October of 1998, we incorporated a wholly owned subsidiary
  in the Province of Alberta, Canada, under the name 805332 Alberta Ltd. for the
  purposes of negotiating the acquisition of a sulfur milling and packaging plant
  and

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equipment necessary to undertake production of sulfur-based
  fungicides. The plant was located in Crossfield, Alberta.

At or about this time, Micron Milling & Packaging Company
  Ltd. a Company incorporated in the Province of Alberta, was competing in our
  bid to acquire the milling and packaging plant and equipment. At the time of
  the negotiations, Micron and its principals were not associated with us or our
  operations. Micron opted out of negotiations, and we retained one of its principals
  to provide consulting services directly to us.

In January of 1999, our 805332 subsidiary successfully acquired
  the processing plant and machinery and entered into a lease with the landlord
  of the premises on which the plant was located. Due to financial difficulties
  caused by the lack of funds to meet ongoing lease obligations, 805332 was placed
  into receivership by two creditors later in 1999. We subsequently negotiated
  with the creditors and the shareholders of Micron whereby it was agreed the
  assets of 805332 would be bought from the receiver by Micron and concurrently
  we would acquire Micron.

On May 2, 2000 Micron acquired the processing plant from the
  receiver at a cost of $62,000 ($95,000 Canadian dollars). The creditors in turn
  agreed to loan the proceeds of the sale back to Micron, after deduction of the
  receivers fees. Micron concurrently entered into a new lease with the
  landlord. Since conclusion of the receivership process, 805332 has not held
  any material assets and has had no operations.

Immediately thereafter, on May 5, 2000 we entered into an
  agreement with Micron and two principal shareholders of Micron, namely David
  and Paul Uppal, whereby we acquired 76.5 shares of Micron, representing 76.5%
  of the issued and outstanding shares of Micron. In exchange for the shares of
  Micron, we issued 6,400,000 shares of our 805332 subsidiary to the Uppals,
  convertible into 6,400,000 shares of MPAC at the option of the Uppals.
  The right of conversion was agreed to for personal tax planning reasons, as
  Canadian tax law permits a tax deferral where the shares of one Canadian corporation
  are sold in exchange for shares of another Canadian corporation. Accordingly,
  no taxable sale would be realized until the Uppals convert their shares
  of 805332 into shares of MPAC, a Nevada corporation. Pending conversion, the
  Uppals have agreed that voting control of 805332 would remain with MPAC.
  In connection with the transaction the Uppals were appointed to the board
  of directors of MPAC.

Pursuant to the May 5, 2000 agreement with Micron, MPAC agreed
  to fund the operations of Micron by advancing $250,000 ($375,000 Canadian Dollars)
  as a loan convertible into shares of Micron. In February of 2001, MPAC converted
  the loan to acquire an additional 500,000 shares of Micron. This resulted in
  MPAC holding 99.99% of the issued and outstanding shares of Micron.

In connection with the above transactions, Paul and David
  Uppal personally advanced $206,540 towards the operations of Micron, as a loan
  to fund operations. MPAC subsequently guaranteed the loan by issuing promissory
  notes to the Uppals for the loan amount. The terms of the promissory note
  provide that MPAC may repay the loan in full at any time within 13 months from
  the date that demand for repayment is made. Interest is payable on the principal
  amount at Royal Bank of Canada prime rate plus one percent.

In November of 2002, our milling and packaging plant was seized
  by the landlord. At that time the plant was inoperative and we determined that
  there was no economic benefit to contesting the seizure. In 2002 our sulfur
  products were sold to the California agriculture market under our brand name
  by using third party sulfur milling and packaging services to produce and package
  our products in accordance with our specifications. We expect to meet 2003 purchase
  order requirements by outsourcing production to one or more third parties.

We are also currently seeking to merge with an operating sulfur
  mill in order to expand our business. Any merger would likely be by way of a
  share exchange rather than a cash purchase. Currently we are in early negotiations
  with a sulfur milling operation in Alberta that has excess capacity in its milling
  plant. We believe production of our current sulfur products and future products
  that we are developing, together with our purchase orders for 2003 and existing
  sales channels, would be beneficial to a sulfur milling operation with excess
  capacity in its production facilities.

Industry Overview

We compete in the plant fungicide and plant nutrient market
  servicing the commercial agriculture industry. Our niche is the processing,
  packaging and sale of pure form or elemental sulfur products for agricultural
  use. In 2002 we outsourced the processing and packaging of our proprietary sulfur
  products to third party milling facilities, which is expected to continue for
  2003, subject to completion of any possible mergers or acquisitions that we
  are currently exploring.

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Traditionally, most world-wide sulfur production comes from
  sulfur mining and from the recovery of sulfur as a byproduct of oil and natural
  gas production and refining, the latter process sometimes referred to as desulfurization.
  In North America, mining of elemental sulfur has ceased in recent years due
  to costs and environmental concerns, and this trend is being followed in the
  rest of the world. World production of sulfur has, however, remained steady
  as a result of increased oil and gas refining activity and improved desulfurization
  techniques. Recent trends towards reducing sulfur content in refined fossil
  fuels has resulted in improved desulfurization techniques in the process of
  refining oil and natural gas.

In North America, Canada and the United States produce approximately
  equal amounts of elemental sulfur per year. As sulfur is a by-product of oil
  and gas production and refining, the oil and gas endowed Provinces of Alberta
  and Saskatchewan, along with the States of Texas and Louisiana are the primary
  producers of elemental sulfur in North America. Mexico accounts for less than
  8% of the sulfur produced within the North American Free Trade zone. Canada
  accounts for approximately 68% of all sulfur imported by the United States.

Sulfur in its elemental form is a commodity and accordingly
  at the global level is priced based on demand relative to world-wide availability.
  Pricing of unprocessed elemental sulfur can vary significantly. In 2001, world
  pricing was approximately $18 per ton compared to $24 in 2000 and $37 in 1999.
  Current world prices are approximately $27 per ton. Increase in distance to
  sources of sulfur supply can add to the price of sulfur for the purchaser. However,
  oil and gas refineries may sell for significantly less than posted commodity
  trading prices depending on the costs associated with storage and their ability
  to dispose of the sulfur. Sulfur stockpiles can be a financial burden to refineries
  and accordingly stockpile holders may realize an economic benefit in paying
  to have sulfur removed from their sites.

Elemental sulfur can be used for a number of applications
  including military explosives manufacturing, fertilizers, fungicides, animal
  feed and medicines. There are generally no suitable substitutes for elemental
  sulfur for agricultural, medical or military applications. Currently, the agriculture
  and horticulture industries are the largest consumers of elemental sulfur. The
  primary use of sulfur in agriculture is as a component in the manufacture of
  potash fertilizers.

The production of sulfur fungicide and elemental sulfur plant
  nutrient is a niche business in the agricultural products industry. The use
  of sulfur by the agricultural industry provides several advantages over other
  fungicides and pesticides and is complementary to the use of other plant nutrients
  or fertilizers. Currently we produce only a sulfur based fungicide, however
  we are also developing the capability to produce a solid form sulfur based plant
  nutrient, referred to as Elemental Plant Nutrient Sulfur or EPNS, as a second
  product offering. We are also negotiating to acquire the rights to develop a
  dry flowable sulfur fungicide as an alternative to our powdered sulfur fungicide.
  A description of the industry for each of sulfur based fungicides and plant
  nutrients follows.

Sulfur Based Fungicide

Sulfur is a naturally occurring element which is widely used
  as a fungicide in both conventional and, with increasing importance, organic
  farming. Sulfur is widely used because it is relatively inexpensive, generally
  non-toxic to birds and mammals, and can be used to control both mites as well
  as fungal diseases.

Sulfur fungicide is generally available in a fine powder or
  liquid form and appears pale yellow in colour with a slight sulfur odour. Sulfur
  based fungicides typically consist of 90-99% pure elemental sulfur, with the
  balance comprised of inert materials. Application of the sulfur in its powdered
  form can be done by crop dusters that can cover a large area relatively quickly.
  Powdered fungicides are also preferable to the liquid form in hot weather agricultural
  areas where droplets from the liquid may magnify the effects of the sun and
  cause burning of plant leaves and stems. Powdered sulfur fungicide products
  can control a large number of diseases on fruits, vegetables, various flowers
  and ornamental plants. Powder form elemental sulfur is also an effective pesticide
  used to control certain plant-damaging pests such as mites.

Although the use of sulfur as a fungicide is established in
  agricultural regions around the world, our primary market is the commercial
  agriculture industry in California. In California, sulfur based fungicides accounted
  for over 33% by weight of all pesticides applied in production agriculture in
  2000. From 1991 to 1996, it had the highest use and largest increase in pounds
  applied compared to other fungicides and pesticides used in the State of California.
  It also had the highest use and greatest increase in number of applications
  and acres treated. Sulfur usage in that State continued to increase between
  1996 and 1999 and was the most highly used pesticide/fungicide in 2000, both
  in pounds applied and acres treated, representing one-third of all reported
  pesticide/fungicide use by weight.

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Based on reports from the California Department of Pesticide
  Regulation, prior to 1991 California growers relied heavily on newly developed
  chemical fungicides which resulted in reduced usage of sulfur. However, the
  development of mildew resistance to those chemical fungicides resulted in a
  return to sulfur based fungicides. In the first half of the 1990s other
  fungicides experienced the development of similar mildew resistance which led
  to further increases in sulfur usage as a fungicide. Presently, raisin growers
  rely almost exclusively on sulfur, while wine and table grape growers use both
  sulfur and chemical fungicides.

Another advantage of sulfur is that sulfur based fungicides
  are approved for use in organic farming whereas chemical fungicides are not.
  In particular, organic wine grape growers are common users of sulfur based fungicides.
  Increasing demand for organic wine has resulted in more California wine grape
  growers choosing to switch to sulfur products as a fungicide. Accordingly, the
  lack of mildew resistance to sulfur and an increasing demand for sulfur for
  organic production have resulted in an overall increase in sulfur usage. In
  addition to organic and non-organically farmed wine grapes, elemental sulfur
  fungicide is commonly used as a fungicide on over 20 different commercial crops
  including non-wine grapes, tomatoes, avocados, apples, cherries and citrus.

In North America, demand for sulfur based fungicide is cyclical
  and usually is at its peak during the early to mid spring growing season. The
  powdered fungicide is applied directly onto the growing plants. The demand in
  the Southern hemisphere, such as markets in South America and Australia is counter-cyclical
  to North American demand.

Elemental Plant Nutrient Sulfur (EPNS)

Sulfur deficiency in crops is a relatively recent world-wide
  phenomenon that is a by-product of several factors. These factors include the
  intense use of available agricultural land which results in the depletion of
  naturally occurring sulfur and other nutrients in the soil, which places reliance
  on fertilizer use to obtain satisfactory crop yields. Also, in the past, sulfur
  emissions in the atmosphere released as a byproduct of burning fossil fuels
  such as oil and coal, resulted in sulfur being available to crops in the form
  of acid rain, which is formed by sulfur emissions attaching to water droplets.
  As many modern and developing countries move to cleaner use of fossil fuels,
  sulfur emissions have decreased. These factors have resulted in a combination
  of high fertilizer dependency as well as increased sulfur availability from
  the refining of oil and natural gas. As the sulfur content in fertilizers is
  typically low, most sulfur deficiencies cannot be resolved through fertilizer
  use alone. Accordingly there exists a need for elemental sulfur as a plant nutrient
  to complement fertilizer use.

Sulfur is an essential element in plant growth. All living
  things require a balance of four major nutrient groups to stay healthy, grow
  and reproduce: nitrogen, phosphate, potassium or potash, and sulfur. Nitrogen
  promotes protein formation in plants and crops and is a major component of chlorophyll,
  which helps to promote green, healthy growth and high yields. Phosphates stimulate
  root development, promote flowering and help prevent disease and environmental
  stress. They also encourage growth and produce uniform crop yields. Potash regulates
  many different functions and is required in large quantities for healthy crop
  growth and development. Sulfur is a building block for proteins, enzymes and
  vitamins, is a key ingredient in the formation of chlorophyll and helps to improve
  the effect of other nutrients. If supplied to plants in adequate amounts, sulfur
  improves yields, promotes vegetative growth as well as protein and chlorophyll
  content. Additionally, sulfur improves fertilizer efficiency and resistance
  of plants to pests, diseases and cold weather. Symptoms of sulfur deficiency
  in crops usually appear on younger upper leaves and can result in irregular
  growth cycles and reduced crop quality and yields.

Sulfur is considered the fourth major plant nutrient after
  nitrogen, phosphorus and potassium, and is needed by many crops to the same
  extent as the other three major nutrients. In many applications, the role of
  sulfur in plant growth has previously been little known or understood. Adequate
  amounts of sulfur had been supplied to crops from sulfur previously existing
  in soil, through high sulfur emissions and through incidental amounts of sulfur
  supplied as a component of other fertilizers. However, in many parts of the
  world, sulfur deficiency has recently become problematic and use of sulfur as
  a plant nutrient is becoming necessary to meet the needs of intensive agriculture.
  Sulfur content in soil from atmospheric sulfur emissions and other incidental
  sulfur applications is diminishing, while at the same time more intensive use
  is being made of agricultural land to cope with rising production demands.

The world-wide demand for sulfur is expected to increase as
  population increases and agricultural land resources decrease. The growth of
  world population will result in continued increases in the demand for food,
  while further urbanization will place additional pressure on the amount of arable
  land available for agricultural production, which has already declined from
  1.1 acres per capita in 1965 to 0.6 acres in 2000. In the long-term, growth
  and profitability in the fertilizer industry are driven by world population
  growth and rising living standards which create an

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increasing demand for food. As the availability of arable
  land for production of food is largely fixed, it is imperative that crop yields
  are increased through application of high-analysis fertilizers and other agricultural
  inputs in order to meet this increasing demand. The optimal results from the
  application of fertilizers requires the presence and availability of the four
  major nutrients in a satisfactory physical form and at a price that makes their
  application cost effective.

Plant nutrient sulfur is growing in importance world-wide
  as food production increases and overall sulfur inputs diminish. Increasing
  crop production, reduced sulfur dioxide emissions and shifts in fertilizer sources
  have led to world-wide sulfur deficiencies. Over a twenty-year period, the amount
  of sulfur used in all fertilizers is estimated at around 10 million tons per
  year, however, nitrogen consumption has almost doubled during this period from
  approximately 39 million tons in 1973, to about 75 million tons in 1991. The
  increased consumption of sulfur free, high-analysis fertilizers is one of the
  most significant causes of sulfur deficiency.

According to the Sulphur Institute, in 1991 it was estimated
  that the total annual unrealized world market potential for sulfur as a plant
  nutrient was 6.4 million tons. The need for sulfur as a plant nutrient has shown
  steady growth since the 1960s and is expected to continue growing into the 21st
  century. The world deficit for sulfur as a plant nutrient is projected to reach
  7.5 million tons annually by 2000 and increase to 12 million tons by 2010.

In North America, demand for sulfur by the agriculture industry
  is affected by cyclical growing patterns. Accordingly, demand is greatest in
  the late fall through early spring season, as growers typically accumulate plant
  nutrients for the spring growing season.

To date, sulfur requirements have been partially satisfied
  with the application of ammonium sulfate. Granular ammonium sulfate is composed
  of approximately 24% sulfur in sulfate form. Ammonium sulfate is relatively
  low cost. Due to the lack of high-analysis sulfur fertilizers and the low cost
  of granular ammonium sulfate, this product is being applied to crops. However,
  ammonium sulfate has drawbacks including its low concentration of sulfur.

A high-analysis form of sulfur would significantly lower transportation,
  storage, and application costs and allow for the more precise application of
  sulfur than can be achieved through the use of fertilizers. As transportation
  costs account for a significant share of fertilizer costs, the increase in concentration
  of a fertilizer and the consequent drop in tons of product required significantly
  lowers the cost of usage of a fertilizer product and increases its desirability.

Pure form sulfur plant nutrients are typically mixed with
  other fertilizers prior to application. This results in a need to produce the
  sulfur in a form that will blend evenly with other fertilizers, as well as deliver
  sufficient sulfur to the crops. Currently available products are somewhat unsatisfactory
  due to their inability to blend with other fertilizers or impermeable pellets
  that result in limited surface area resulting in slow absorption rates by the
  soil. Other pellets, such as ammonium sulfate deliver lesser amounts of sulfur.
  The industry requires an EPNS pellet that can be readily blended with other
  fertilizers, and is easily absorbed into the soil.

In summary, increased demands on agricultural land, combined
  with the increased use of high-analysis fertilizers and rapidly declining sulfur
  dioxide emissions, has lead to increased incidents of sulfur deficiencies. Many
  deficiencies are acute. Based on this, the demand for sulfur-based fertilizers
  is expected to increase and such fertilizers will become a permanent fixture
  in agriculture. Many attempts to develop products to address this need have
  been made by various companies, but to date a completely satisfactory product
  has not been offered. Other products currently available offer a partial solution.
  We are seeking to develop a competitively priced solution to address the need
  for a suitable form of sulfur plant nutrient. We believe our proposed product
  is designed to be agronomically acceptable with specific physical characteristics
  required for handling and application.

Our Products

Our current product is a powdered elemental sulfur fungicide.
  Future products that we are developing are a pellet form EPNS product, and an
  alternative form of sulfur fungicide referred to as a dry flowable fungicide.
  We have suspended research and development of future products pending our review
  of potential merger opportunities and plan of operation.



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Our Sulfur Based Fungicide Product

Our fungicide is used to control powdery mildew on crops such
  as apples, cherries, citrus, grapes, peaches, plums, prunes, beans, carrots,
  cotton, onions, peas, sugar beats, and tomatoes. During the first year of production
  ending September 30, 2001 sales were approximately on thousand tons. Sales for
  the year ending September 30, 2002 saleswere approximately 2,100 tons. Orders
  as of January 10, 2003 for fungicide to be delivered during the upcoming year
  are in excess of 4,000 tons. We are currently negotiating with a sulfur milling
  facility in Alberta for production required to meet orders for the 2003 growing
  season.

Our sulfur based fungicide can be widely used on numerous
  crops. The process involved in the production of the fungicide is relatively
  straightforward and efficient.

We have historically sourced our sulfur from suppliers located
  in the Province of Alberta, Canada and the State of Texas. Alberta produces
  a significant amount of oil and gas and consequently sulfur recovered from the
  desulfurization of these fossil fuels is abundantly available. There is currently
  a surplus of raw sulfur in Alberta which is expected to last indefinitely due
  to the ongoing production of high sulfur or sour gas in the province. This surplus
  has kept the purchase price of sulfur low, and is expected to continue to keep
  downward pressure on the cost of sulfur available locally. Texas similarly produces
  significant sulfur from oil and gas extraction and desulfurization.

Our current market is primarily California. Shipment of product
  has historically been by truck. Transportation to the primary markets in California
  remains inexpensive due to the abundant availability of back-haul transport
  from trucks returning to California after delivery of products to Canada.

Our Proposed Elemental Plant Nutrient Sulfur (EPNS) Product

We have been developing the methodology and technology required
  to produce Elemental Plant Nutrient Sulfur, a solid plant nutrient product in
  pellet form. We believe that there is currently no completely satisfactory EPNS
  product offered on the market and accordingly the opportunity exists to develop
  and market a competitively priced product that has the specific physical characteristics
  required for handling and application. We are currently suspending further development
  and engineering of our EPNS product pending our efforts to locate a partner
  or merger candidate with which we can consolidate our operations.

Our EPNS product is designed as a solid pellet comprised of
  approximately 90% elemental sulfur that will be blended with the nutrients nitrogen,
  phosphate and potassium and subsequently applied to crops. We are seeking to
  develop a superior product to the sulfur-based fertilizer products currently
  available on the market. In particular, our product is being engineered to blend
  smoothly with other nutrients, and to dissolve rapidly into the soil with a
  high percentage of sulfur compound delivery for absorption by plants. Blending
  generally occurs in the region where the fertilizer will be applied and is conducted
  by an intermediary facility that blends in accordance with specifications received
  by individual crop growers. The need to have regional blending facilities that
  can blend to a requested specification means that pre-blending of the fertilizer
  is not practical.

We have previously initiated discussions on our product with
  distributors and purchasers to determine the size of our market and sales expectations.
  We initially targeted the commencement of sales of our EPNS product in the late
  fall of 2003, timed to coincide with growers preparing for the spring growing
  season. However, as a consequence of the seizure of our milling assets, the
  timing of the release of our EPNS product is dependent on when we can locate
  a suitable production partner or merger candidate with the necessary resources
  required to complete the development and implementation of our form of EPNS
  production. During the past two years, we have spent in excess of $130,000 on
  the research and development of our proposed EPNS product. We estimate that
  the commercial release of the EPNS product will require an additional $450,000
  for development, retooling, marketing and administrative costs prior to commencing
  sales of this product.

Dry Flowable Sulfur Fungicide

We have been in ongoing negotiations to acquire a license
  to certain production technology and formulations necessary to produce dry flowable
  sulfur fungicide. We have suspended these negotiations indefinitely. Should
  we be successful at locating a production partner or merger candidate, we will
  re-visit the acquisition of the license. Dry flowable sulfur fungicide is a
  form of very finely micronized sulfur with certain qualities of dispersion and
  suspension in water, that offers an alternative to our powdered form fungicide.
  This product has similar uses as our powdered sulfur fungicide, but offers certain
  characteristics that are better suited to certain commercial crop applications.
  The fine powder is readily dissolved into a liquid that can be applied to operations
  that cannot use crop-dusting techniques, such as smaller farms or orchards.

We believe the market for dry flowable sulfur fungicide in
  North America and world-wide is rapidly expanding because of its application
  advantages over powdered fungicide.

8

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Market and Marketing

The current market for our powdered fungicide is primarily
  California. Our fungicide is sold through distributors specializing in specific
  regions and products. The majority of our sales are conducted through three
  agricultural product distributors, however, we also sell directly to some commercial
  growers. It is not expected that the loss of any one distributor will have a
  material impact on our sales as current demand for sulfur is generally believed
  to be relatively constant and a decrease in sales to one purchaser or distributor
  is expected to result in an increase in sales to another, provided our pricing
  and quality remain competitive. Marketing efforts are primarily directed at
  agricultural industry distributors in California. We are reviewing the possibility
  of expanding our marketing efforts to other regions that may require a sulfur-based
  fungicide including counter-cyclical regions such as South America and Australia.
  Product demand and shipping costs are critical factors being analyzed in determining
  suitable markets. We market our product under the trade name Micron Dusting
  Sulfur 44.

We expect that the market for our proposed EPNS product is
  initially industrial canola and grain crop growers in the midwestern United
  States and Canada. These growers are thought to be the largest expected beneficiaries
  of EPNS products. We will sell our EPNS product through distributors with numerous
  points of sale. Therefore, we will concentrate marketing efforts on establishing
  relationships with these distributors. The Company will also seek to establish
  relationships with producers of fertilizer products whose product lines would
  benefit from the addition of EPNS. Numerous candidates exist in every geographic
  region, however, the initial sales of EPNS would be confined to markets within
  an economically serviceable geographic region. An economically serviceable geographic
  region refers to markets to which our sulfur products can be economically supplied
  to because transportation costs are not prohibitively high. From facilities
  in Alberta, the Northwestern and Western US as well as Western Canada can be
  served effectively due to competitive transport costs. We are also studying
  the economics of marketing our products to offshore markets.

Competition

Most of our fungicide sales are in California through distributors
  that place orders based on price, quality, and availability standards. Demand
  for packaged elemental powdered sulfur fungicide by distributors is price sensitive
  and accordingly we must be able to adjust to changes in pricing due to fluctuations
  in demand or supply.

The market for sulfur dusting powders on the west coast of
  North America is primarily supplied by a production facility owned by a competitor
  located in Fresno, California. While this competitor is located close to markets
  and has numerous established relationships, we believe that our product can
  be offered from Alberta suppliers at competitive prices for several reasons
  including the following: proximity to sulfur stockpiles allows raw sulfur to
  be obtained at a low cost per ton with low transportation cost; the availability
  of cheap transport to the California market as truck operators are willing to
  provide transport services at a reduced rate in order to fill otherwise empty
  trucks returning to the U.S.; our operating costs are paid in Canadian dollars
  which currently provides us with an exchange rate advantage; and we do not have
  a competitive relationship with many distributors in California.

We believe that there is currently no product available on
  the market today that offers a satisfactory alternative to our proposed EPNS
  product. Other products offer partial solutions to sulfur deficiency in soil
  that our product is designed to remedy. The process for developing our EPNS
  product is not proprietary to us and other potential competitors have access
  to this information. However, given the limited interest and capital and technical
  requirements in producing a competitive product, we believe that competition
  will be slow to arise. Further, we do not expect that larger fertilizer companies
  will present significant competition as the relatively small size of this niche
  market combined with the specialized requirements for production, limits the
  appeal to these companies to provide direct competition.

Our proposed dry-flowable sulfur is expected to be marketed
  initially to smaller commercial farm and orchard operations in Canada and the
  United States.



9

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Marketing of all products essentially consists of contacting
  industry distributors and creating awareness of our products.

Sources of Revenues

Currently, all revenues are derived through sales of our sulfur
  fungicide product. We are actively seeking additional avenues to market and
  sell our fungicide product. In addition, if we are successful at developing,
  producing an marketing our pellet form EPNS and our dry flowable fungicide,
  then we will generate additional revenues from the sale of those product. We
  are also exploring the market for sulfur applications among other industries.

Employees

As a result of the closure of our milling and packaging plant,
  we do not currently require employees. All sales, marketing, research and development
  services are provided directly by our directors and officers.

Item 2. DESCRIPTION OF PROPERTY.

Offices and Production Facilities

Our executive offices located at 1302 Arbutus Street, Vancouver,
  B.C. have been provided by a Director of the Company free of charge. We believe
  that our current facilities are adequate and suitable for our current use, which
  consists primarily of sales and marketing of our products, as well as reviewing
  opportunities and negotiations with potential partners and merger candidates.
  We are seeking to acquire new production facilities through a merger with a
  suitable production partner. Our facilities are adequately insured against perils.

Governmental Regulation

We have applied for and received the licenses necessary to
  export and sell our powdered sulfur-based fungicide product in the United States
  by the Environmental Protection Agency as well as the California Department
  of Pesticide Registration. In our opinion, these licenses could be of significant
  value to a potential merger candidate or partner as they allow the export and
  sale of our product to the California market.

We hold all necessary business and product approvals for the
  production and storage of sulfur products from Canadian provincial regulators,
  although we are not currently engaged in production our product. We believe
  that should we determine to restart in-house production and packaging of our
  product, the cost associated with obtaining the necessary permits and otherwise
  complying with environmental laws is minimal.

While there can be no certainty, we believe that the regulatory
  environment will continue to support our current and planned activities. However,
  any reversal of the current regulatory approvals of such products could have
  a serious and material negative effect on our business prospects.

Item 3. LEGAL PROCEEDINGS

To the best of our knowledge, there are no legal actions pending,
  threatened, or contemplated against us other than as noted in the following
  paragraphs.

We are subject of an order issued in 2001 by Alberta Environment
  and the Town of Crossfield to cease operations pending remedial work of environmental
  contamination as a result of actions of a prior tenant. The remedial work has
  been completed and documentation and inspections necessary for removal of the
  order have not been completed.

A civil action was commenced in the Supreme Court of British
  Columbia on February 10, 2003 by D. Bruce Horton, Peter Krag-Hansen, Darcy Higgs
  and BMD Financial Inc. claiming a total of $175,000 in Canadian currency as
  repayment of a working capital loan to MPAC Corp. and 805332 Alberta Ltd. Our
  director, Adam Smith is also named in the action. We are seeking to negotiate
  a settlement of the claim.

10

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Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None.

PART II.

Item 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERMATTER

The Company's Common Stock is traded in the over-the-counter
  market in the Pink Sheets under the Symbol MPCC. The over-the-counter
  market in the Pink Sheets has a limited and sporadic trading market and does
  not constitute an established trading market. There has been a single trade
  in the stock on October 10, 2002 at the price of $0.05. Quotation of bid, ask
  and trade prices on the Pink Sheets does not reflect retail markup, markdown
  or commissions and accordingly may not represent actual transactions.

The following table sets forth the range of high and low bid
  prices of the Company's Common Stock for the quarters indicated through the
  fourth quarter of 2002.

|2002 Calendar Year | High Bid | Low Bid
|------------------ | -------- | -------
|Second quarter     | $0.05    | $0.05  
|Third quarter      | $0.05    | $0.05  
|Fourth quarter     | $0.05    | $0.05  

As at December 31, 2002, there were 8,291,518 shares of our
  common stock issued and outstanding and approximately 76 stockholders of record.

As at December 31, 2002, there were 6,400,000 shares of our
  common stock reserved for issuance pursuant to the right to convert shares of
  805332 B.C. Ltd. for shares of MPAC, granted to two or our directors in connection
  with the acquisition of Micron. We have also reserved 250,000 shares of our
  common stock for issuance as a finders fee in connection with the acquisition
  of Micron, which is payable to third party finder.

Accordingly, on a fully diluted basis, our share capital would
  consist of 14,941,218 shares of common stock.

There are no contractual restrictions on the resale of any
  our outstanding common stock. As at December 31, 2002, there are shares of our
  common stock that are restricted from resale under Rule 144 promulgated under
  the U.S. Securities Act of 1933, as follows:

|Number of  |  | Description                                                                                                                                                                          
|---------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Restricted |  |                                                                                                                                                                                      
|Shares     |  |                                                                                                                                                                                      
|           |  |                                                                                                                                                                                      
|200,000    |  | Shares that may be sold beginning on May 23, 2003 in accordance
      with Rule 144.                                                                                                 
|70,000     |  | Shares that may be sold beginning May 7, 2002 in accordance
      with Rule 144.                                                                                                     
|530,000    |  | Shares that may currently be sold in
        accordance with Rule 144, and that may be sold in accordance with Rule
        144(k) on or after January 16, 2003.                     
|70,000     |  | Shares that may currently be sold in
        accordance with Rule 144, and that may be sold in accordance with Rule
        144(k) on or after October 1, 2003.                      
|6,400,000  |  | Shares issuable to affiliates upon conversion,
        that pursuant to Rule 144(d)(3)(ii) may, when issued, be sold in accordance
        with the affiliate provisions of Rule 144.
|250,000    |  | Shares reserved for issuance that pursuant
        to Rule 144(d)(3)(ii) may be sold in accordance with Rule 144(k) when
        issued.                                             
|2,191,369  |  | Shares held by affiliates that may be sold in accordance the
      affiliate rules set out in Rule 144.                                                                              

Total restricted (issued and reserved): 9,711,369 shares

Total restricted held by Affiliates (issued and reserved): 8,591,369 shares

Total restricted held by non-Affiliates (issued and reserved): 1,120,000 shares

Total non-restricted: 5,230,149

11

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In general, Rule 144 under the Securities Act provides that
  securities may be sold if there is current public information available regarding
  the issuer and the securities have been held at least one year. Rule 144 also
  includes restrictions on the amount of securities sold, the manner of sale and
  requires notice to be filed with the SEC. Under Rule 144 a minimum of one year
  must elapse between the later of the date of the acquisition of the securities
  from the issuer or from an affiliate of the issuer, and any resale under the
  Rule. If a one-year period has elapsed since the date the securities were acquired,
  the amount of restricted securities that may be sold for the account of any
  person within any three-month period, including a person who is an affiliate
  of the issuer, may not exceed the greater of 1% of the then outstanding shares
  of our common stock or the average weekly trading volume in the over-the-counter
  market during the four calendar weeks preceding the date on which notice of
  sale is filed with the SEC. If a two-year period has elapsed since the date
  the securities were acquired from the issuer or from an affiliate of the issuer,
  a seller who is not an affiliate of the issuer at any time during the three
  months preceding a sale is entitled to sell the shares without regard to volume
  limitations, manner of sale provisions or notice requirements. Affiliates of
  the issuer are subject to an ongoing volume restriction pursuant to Rule 144
  on resales of shares held by them.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock of MPAC
  is Interwest Transfer Company, Inc., 1981 East Murray Holladay Road, Suite 100,
  P.O. Box 17136, Salt Lake City, UT 84117, telephone, (801) 272-9294.

Dividends Policy

We have not paid dividends on our common stock since our inception.
  Dividends on common stock are within the discretion of the Board of Directors
  and are payable from profits or capital legally available for that purpose.
  It is our current policy to retain any future earnings to finance the operations
  and growth of our business. Accordingly, we do not anticipate paying any dividends
  on common stock in the foreseeable future.

Recent Sales of Unregistered Securities

Please refer Item 4 of Part II of our amended Form 10-SB filed
  December 13, 2002 for information concerning recent sales of unregistered securities.

Item 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS
  OF OPERATIONS AND FINANCIAL CONDITION

The following discusses the Company's financial condition
  and results of operations based upon the Company's consolidated financial statements
  which have been prepared in accordance with generally accepted accounting principles
  in the United States. It should be read in conjunction with the Company's financial
  statements and the notes thereto and other financial information included in
  the Company's Form 10-KSB for the year ended September 30, 2002.

Subsequent written and oral forward-looking statements attributable
  to the Company or persons acting on its behalf are expressly qualified in their
  entirety by the cautionary statements set forth above and contained elsewhere
  in this Annual Report on Form 10-KSB.

Results of operations for the twelve months ended September
  30, 2002 (2002) compared to the twelve months ended September 30,
  2001 (2001) .

Sales revenues for the twelve months ended September 30, 2002
  were $405,891 compared to sales of $194,427 for the twelve months ended September
  30, 2001, an increase of 108%. This increase reflects the increased recognition
  of our product, agricultural dusting sulfur, a natural fungicide preferred by
  both traditional and organic farmers, in the marketplace following our first
  year of sales in 2001. The year ended September 2002 was the second year of
  marketing of fungicidal sulfur dusting powder. Purchase orders received for
  product delivery for the ensuing fiscal year ending September 2003 indicate
  an increase over our orders received for 2002, due to a renewed order from our
  largest distributor and familiarity with our brand name within the industry.

Cost of goods sold was $415,882 the twelve months ended September
  30, 2002 versus $139,220 for the twelve months ended September 30, 2001. The
  increase reflects the outsourcing of production during 2002. It is anticipated
  that the reduction of fixed costs that this outsourcing will allow will offset
  the higher costs in the future. The Company is negotiating production outsourcing
  costs for its product for the upcoming production year.

12

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A loss of $9,991 was incurred for the twelve months ended
  June 30, 2002 $ as compared to a gross profit of $55,207 for the twelve months
  ended September 30, 2002. The change reflects the increased cost of sales incurred
  through outsourcing.

Selling, general and administrative expenses decreased to
  $288,945 during the twelve months ended September 30, 2002 from $336,974 for
  the twelve months ended September 30, 2001. Professional fees of $57,894 for
  the twelve months ended September 30, 2002 were incurred in the process of applying
  for an investment tax credit.

A reduction in the carrying value of capital assets of $162,517
  was recorded for the twelve months ended September 30, 2002 as a result of a
  consent order entered into with the companys former landlord following
  his uncontested seizure of our equipment.

Liquidity and Capital Resources

Cash and cash equivalents at September 30, 2002 totaled $43,769
  as compared with the cash and cash equivalents of $47,971 at September 30, 2001.Accounts
  receivable at September 30, 2002 was $6,676 and an investment tax credit of
  $86,920 was receivable at that time as well.

The company raised US $100,000 in additional equity financing
  during the year ending September 30, 2002 and during the first quarter of 2002
  and we received an investment tax credit of $22,984. We have funded business
  operations using cash from an additional equity financing raised during the
  first quarter of 2002, and the scientific tax funding grants received during
  the third quarter of 2002 as well as from funds received from the sale of dusting
  sulfur. For the twelve months ended June 30, 2002, there were no capital expenditures.

To date, we have not invested in derivative securities or
  any other financial instruments that involve a high level of complexity or risk.
  We expect that in the future, any excess cash will continue to be invested in
  high credit quality, interest-bearing securities. We believe cash from operating
  activities, and our existing cash resources may not be sufficient to meet our
  working capital requirements for the next 12 months. We will likely require
  additional funds to support the development and marketing of our product. There
  can be no assurance that additional financing will be available on acceptable
  terms, if at all. If adequate funds are not available, we may be unable to develop
  or enhance our products, take advantage of future opportunities, respond to
  competitive pressures, and may have to curtail operations. There are no legal
  or practical restrictions on the ability to transfer funds between parent and
  subsidiary companies.

We do not have any material commitments for capital expenditures
  as of September 30, 2002.

For the twelve months ended September 30, 2002, there were
  no capital expenditures.

Critical Accounting Policies

The Companys discussion and analysis of its financial
  condition and results of operations, including the discussion on liquidity and
  capital resources, are based upon the Companys financial statements, which
  have been prepared in accordance with accounting principles generally accepted
  in the United States. The preparation of these financial statements requires
  the Company 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, management re-evaluates its estimates
  and judgments, particularly those related to the determination of the estimated
  recoverable amount of investment tax credits, trade accounts receivable, and
  deferred tax assets. The Company believes the following critical accounting
  policies require its more significant judgment and estimates used in the preparation
  of the consolidated financial statements.

The company follows the cost reduction method of accounting
  for investment tax credits and recognizes the estimated net recoverable amount
  when reasonable assurance exists as to their collectability.

The company maintains an allowance for doubtful accounts for
  estimated losses that may arise if any of its customers are unable to make required
  payments. Management specifically analyzes the age of customer balances, historical
  bad debt experience, customer credit-worthiness, and changes in customer payment
  terms when making estimates of the uncollectability of the companys trade
  accounts receivable balances. If the company determines that the financial conditions
  of any of its customers deteriorated, whether due to customer specific or general

13

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economic issues, increases in the allowance may be made. To
  date no customer balance has been unpaid in the timeframe allowed to customers.

Income taxes are accounted for under the asset and liability
  method. Under this method, to the extent that it is not more likely than not
  that a deferred tax asset will be recovered, a valuation allowance is provided.
  In making this determination, the Company considers estimated future taxable
  income and taxable timing differences expected to reverse in the future. Actual
  results may differ from those estimates.

Recent Accounting Pronouncements

It is the companys policy to adopt all applicable new
  accounting pronouncements as they are issued, which may be in advance of the
  effective date of the pronouncement.

In August 2001 the FASB issued SFAS No 144 Accounting for
  the Impairment or Disposal of Long-Lived Assets, which supercedes SFAS No 121
  Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
  to be Disposed of. The rules in SFAS No 144 restate and establish guidelines
  for evaluating the impairment of the companys capital assets and the write
  downs to be recorded when there has been impairment. The company adopted the
  requirements of SFAS No 144 when the pronouncement was issued. There was no
  substantive change in the companys capital assets, results of operations
  or cash flows on the adoption of this pronouncement.

Item 7. FINANCIAL STATEMENTS

The financial statements are attached to this report following
  the signature page and officer certification pages.

Item 8. CHANGES IN ACCOUNTANTS AND DISAGREEMENTS WITH ACCOUNTANTS
  ON ACCOUNTING AND FINANCIAL DISCLOSURE

On March 31, 2003, we filed a report on Form 8-K announcing
  a change in our certifying accountants, which report is incorporated herein
  by reference.

PART III

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

Directors and Executive Officers

Our Board of Directors and executive officers and their respective
  ages as of January 10, 2003 are set forth in the table below. Each of the directors
  of MPAC will serve until the next annual meeting of shareholders or until his
  successor is elected and qualified.

Also provided is a brief description of the business experience
  of each director and executive officer and the key personnel during the past
  five years and an indication of directorships (if any) held by each director
  in other companies subject to the reporting requirements under the Federal securities
  laws.

The following table sets forth, as of the date of this registration
  statement, the name, age and position of the officers and directors of the MPAC.

|Name                 | Age | Position (1)                
|-------------------- | --- | ----------------------------
|Adam J.C. Smith      | 39  | Director, President, and CEO
|Paul Uppal           | 50  | Director and Treasurer      
|David R. Uppal       | 40  | Director and Secretary      
|Michael M.D. Laidlaw | 68  | Director                    

14

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|(1 | ) | Pursuant to our bylaws,
        all directors serve for a term of one year, until they resign or until
        they are removed by majority vote at a meeting of the stockholders. Officers
        are elected by MPACs directors and serve for a term of one year,
        or until such time as their successor is appointed, until they resign
        or until they are removed by the directors.
|-- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

None of the MPACs directors and officers hold positions
  with other reporting companies save for Mr. Laidlaw who is a director of Global
  Net Entertainment Corp. and Otish Mountain Exploration Inc., both publicly listed
  companies trading on the TSX Venture Exchange in Canada.

The following is a brief summary of the education and business
  experience of the following:

Adam J.C. Smith, Chief Executive Officer, President and
  Director: Mr. Smith has over 14 years experience in a variety of corporate
  finance positions most recently with Groome Capital Advisors of Montreal, Canada.
  Mr. Smith has been responsible for the acquisition, fundraising, and corporate
  duties necessary to create MPAC, has acted as an officer and director of a subsidiary
  of MPAC Corporation since its inception in 1998, and has acted as a Director
  and Chief executive officer of MPAC since 2000. Mr. Smith is responsible for
  several aspects of the operations of MPAC including the initiation of product
  marketing, application for regulatory approvals for the sale of the product,
  and the Companys research and development projects. Mr. Smith graduated
  from the University of British Columbia in 1986 receiving a Bachelor of Arts
  degree in Philosophy.

Paul Uppal, Director and Treasurer: Mr. Uppal has served
  as Director of MPAC since May 1, 2000. Mr. Uppal has owned and operated a lumber
  marketing company for over 16 years and has been the Human Resources Manager
  of Goldwood Industries since 1986. Mr. Uppal is a real estate developer who
  joined the Real Estate and Sub-Mortgage Brokers Association of British Columbia
  in 1994. He previously owned and operated a local pub for 16 years, while serving
  as director of the Neighbourhood Pub Owners Association. Mr. Uppal had served
  on the board of directors of the North Fraser Harbour Commission since 1998.
  Mr. Uppal was recently appointed to a second term as Chairman of the Board of
  the North Fraser Port Authority in 1999 that manages the operation of a large
  port and waterway.

David R. Uppal, Director and Secretary: Mr. Uppal has
  owned and operated a lumber manufacturing firm, Universal Lumber Sales Ltd.,
  for the past 15 years. Universal Lumber has 3 manufacturing facilities in the
  Canada, employing over 100 people. The manufactured products are sold in the
  U.S., predominantly in California. Sales in 1999 were in excess of $15,000,000.
  Mr. Uppal also overseas 60 employees generating $2.5 million in sales at Metrotown
  Restaurants Ltd., the operator of two restaurants. Mr. Uppal graduated from
  Simon Fraser University in 1984 with a Bachelor of Arts degree.

Michael M.D. Laidlaw, Director: Mr. Michael M. D. Laidlaw
  was appointed to the Board of the Company on May 1, 2000. He is an international
  financial consultant and advisor. Over the last ten years Mr. Laidlaw has assisted
  in achieving funding for companies trading on NASDAQ, TSX Venture (formerly
  the Canadian Venture Exchange) and TSX (formerly the Toronto Stock Exchange)
  exchanges. In 1955, he joined the London brokerage house of Angel H. Hart &
  Company in London, England, and in 1961 he moved to Vivian Gray & Company,
  also in London, England. In 1963, he became a member of the London Stock Exchange.
  In 1964 he was appointed a partner of Vivian Gray & Company and became the
  managing partner in 1980. Funds under his management during the early 1980.s
  amounted to over 2.5 Billion Pounds Sterling. In 1985, Mr. Laidlaw acquired
  Giles & Overy, a London brokerage house, and increased revenues by tenfold
  over a three-year period. In 1988, he became an independent financial advisor
  and consultant to many European and North American companies. Since September
  of 1999 Mr. Laidlaw has been a Director and President of Global Net Entertainment
  a publicly listed company trading on the TSX Venture Exchange in Canada. Mr.
  Laidlaw is also Director and President of Otish Mountain Exploration Inc., a
  publicly listed company trading on the TSX Venture Exchange in Canada.

Significant Employees

MPAC does not have any significant employees or written employment
  contracts with any employee or officer.

Family Relationships

There are no family relationships among the our directors
  or officers, except as between Paul Uppal and David R. Uppal who are related
  as second cousins.

15

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Compliance with Section 16(a) of the Exchange Act

The directors and officers of the Company filed their initial
  insider reports on Form 3 late on January 21 and 22, 2003. Information as to
  holdings of the directors and officers of the Company are available in this
  report and in the Form 10-SB filed with the SEC in July of 2002 as amended.

Item 10. EXECUTIVE COMPENSATION

The following table provides a summary of the compensation
  paid to the Chief Executive Officer for the years ended September 30, 2000,
  September 30, 2001, and September 30, 2002. No executive officer received a
  total annual salary, bonus and other compensation in excess of $100,000 in those
  periods. MPACs Chief Executive Officer has received no compensation other
  than consulting fees. No executive officer that would have otherwise been included
  in this table on the basis of salary and bonus earned for the 2002 fiscal year
  has been excluded by reason of his or her termination of employment or change
  in executive status during the fiscal year.

|SUMMARY COMPENSATION TABLE             
|---------------------------------------
|                                       
|                                       
|(a)                                    
|Name and
      Principle
      Position
|Adam J.C.Smith,PresidentandCEO         
|2001                                   
|2000                                   

* the information in the above table is presented as at September
  30 for each of the relevant years.

As of the date of this registration statement, we have not
  paid any bonuses or granted any stock awards, options or stock appreciation
  rights to any officer, director or employee. No options have been exercised.
  We have no arrangements for the compensation of directors and officers for their
  services as directors and officers.

Director Compensation

No compensation was paid to directors for services rendered
  as a director.

Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
  AND MANAGEMENT

The following table sets forth certain information regarding
  the beneficial ownership of the MPACs issued and outstanding common stock
  owned as of December 31, 2002 by (i) each person who is known to us to be the
  beneficial owner of more than 5 percent of our common stock; (ii) named directors
  and executive officers; and (iii) all directors and executive offices of MPAC
  as a group. Unless otherwise indicated in the footnotes below on the table as
  subject to community property laws, where applicable, the persons as to whom
  the information is given has sole investment power over the shares of common
  stock shown as beneficially owned.

16

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|Name and Address
      of Beneficial Owner                                                                      | Amount and nature
      of
      beneficial ownership | Percent of Class
      (1)
|--------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | --------------------------
|Teresa Lo
      183 - 1857 West Fourth Ave
      Vancouver, B.C. V6J 1M4                                        | 600,000                                               | 7.23%                     
|Adam J.C. Smith
      (Director, President and CEO)
      1302 Arbutus Street
      Vancouver, B.C. V6J 3W8     | 1,526,518(2)                                          | 18.41%                    
|Aziz Rajwani
      106  3780 Cambie Street
      Vancouver, B.C. V5Z 2X5                                       | 432,000                                               | 5.21%                     
|Valerie Orr
      38 Glenmore Drive
      West Vancouver, B.C. V7S 1A6                                          | 515,000(3)                                            | 6.21%                     
|Michael M.D. Laidlaw
      (Director)
      55 Falcon Way
      Isle of Dogs
      London E14 9VP
      England | 550,000                                               | 6.63%                     
|Paul Uppal
      (Director and Treasurer)
      11032 Scarborough Dr.
      Delta, B.C.
      V4C 7S5           | 3,300,000(4)                                          | 28.90%(5)                 
|David R. Uppal
      (Director and Secretary)
      8349 Laurel Street
      Vancouver, B.C. V6P 3V4            | 3,400,000(4)                                          | 29.77%(5)                 
|Directors and Officers
      as a Group (4 persons)                                                             | 8,476,518                                             | 59.69%(5)                 

|(1 | ) | Beneficial ownership is
        determined in accordance with the rules of the Securities and Exchange
        Commission and generally includes voting or investment power with respect
        to securities. These calculations are based on a total issued and outstanding
        share capital as at December 31, 2002 of 8,291,518 common shares, and
        for each beneficial owner assumes conversion or exercise of all convertible
        securities held by the particular beneficial owner.
|-- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2 | ) | Includes 877,667 shares
        held by Panda Management Ltd., a company controlled by Adam J.C. Smith,
        and 25,000 shares held by Marouska Schluter, a close family member.                                                                                                                                                                                                                                                                                                                         
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3 | ) | Includes 15,000 shares held by Ron Orr, a close
      family member.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4 | ) | Includes shares issuable
        upon exercise of the right to convert shares of a subsidiary of MPAC for
        a total of up to 3,200,000 of our shares, which right may be exercised
        within the next 60 days and thereafter.                                                                                                                                                                                                                                                                    
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(5 | ) | These amounts include beneficial
        ownership of securities not currently outstanding but which are reserved
        for immediate issuance on exercise of options. In particular, these amounts
        include shares issuable upon exercise of options as follows: 3,200,000
        shares issuable to Paul Uppal; and 3,200,000 shares issuable to David
        R. Uppal.                                                                                                                        

17

---

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Directors of MPAC are not currently compensated by us for
  meeting attendance or otherwise, but are entitled to reimbursement for their
  travel expenses. We do not pay additional amounts for committee participation
  or special assignments of the Board of Directors.

Adam J.C. Smith, President, Paul Uppal, Treasurer, and David
  R. Uppal, Secretary of MPAC, are currently the only full time executives of
  MPAC and are not in receipt of any salary at this time but are entitled to reimbursement
  for their travel expenses, and other expenses related to their duties as officers.
  Michael M.D. Laidlaw, a Director of MPAC, received consulting fees in the amount
  of $25,000 during fiscal 2001 for duties performed. In fiscal 2001, Mr. Laidlaw
  provided consulting services in connection with assessing capital markets, obtaining
  a quotation on the Pink Sheets trading service, and assisting with corporate
  finance initiatives.

Mr. Paul Uppal and Mr. David Uppal are the President and Secretary
  respectively of Micron Milling & Packaging Company Ltd., a subsidiary of
  MPAC, and have not received compensation to date for the services in those capacities,
  but are entitled to reimbursement for their travel expenses, and other expenses
  related to their duties as officers of the subsidiary.

During the fiscal 2001, MPAC borrowed $103,270 from Mr. Paul
  Uppal and an additional $103,270 from Mr. David Uppal by way of promissory notes.
  Both notes are due within 13 months of the date demand for repayment is made
  and otherwise have no specific terms of repayment. Interest accrues on the notes
  at the Royal Bank of Canada prime lending rate plus 1%. These notes are currently
  outstanding, and no demand for repayment has been received by us. The loans
  from David Uppal and Paul Uppal provided funds for the acquisition of capital
  equipment, the refurbishing and operation of the plant as well as for general
  and administrative purposes.

In connection with acquisition of Micron Milling and Packaging
  Ltd. during fiscal 2001, we issued 3,200,000 shares of the common stock of a
  subsidiary to Paul Uppal and 3,200,000 shares of the common stock of a subsidiary
  to David R. Uppal, who previously held 76.5% of the issued and outstanding shares
  in the capital of Micron. The shares issued to the Uppals carry the right
  of conversion into shares of MPAC on a one to one basis.

Subsequent to our September 30, 2002 year end, we issued 114,851
  shares of common stock to Adam Smith, a director and President of MPAC, in exchange
  for services rendered in connection with our operations, which we valued at
  $58,743.

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

|Exhibit No. |  | Description of Exhibit                                                                                                                                    | Manner of Filing                                                                                                                                                                                                                  
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                           |                                                                                                                                                                                                                                   
|3(i)        |  | Articles of Incorporation of MPAC Corporation                                                                                                             | Incorporated by reference to Exhibit 2.1 from
      the registrants registration statement on Form 10-SB filed with the
      Securities and Exchange Commission on July 31, 2002 and amendments thereto
      (the Form 10-SB)
|            |  |                                                                                                                                                           |                                                                                                                                                                                                                                   
|3(ii)       |  | By-Laws of MPAC Corporation                                                                                                                               | Incorporated by reference to Exhibit 2.2 on the
      Form 10-SB                                                                                                                                                                  
|4.1         |  | Promissory Notes issued by MPAC to David Uppal                                                                                                            | Incorporated by reference to Exhibit 6.1 to the
      Form 10-SB                                                                                                                                                                  
|4.2         |  | Promissory Notes issued by MPAC to Paul Uppal                                                                                                             | Incorporated by reference to Exhibit 6.2 to the
      Form 10-SB                                                                                                                                                                  
|10.1        |  | Share Exchange Agreement between 805332 Alberta Ltd., MPAC
      Corporation, Paul Uppal, David Uppal and Micron Milling and Packaging Company
      Ltd. | Incorporated by reference to Exhibit 10.2 to
      the Form 10-SB                                                                                                                                                                 
|            |  |                                                                                                                                                           |                                                                                                                                                                                                                                   
|16          |  | Letter from Hay & Watson, Chartered Accountants on change
      in certifying accountant                                                                  | Incorporated by reference to Exhibit 16 on Form
      8-K filed with the Securities and Exchange Commission on March 31, 2003.                                                                                                    

18

---

|     |  |                                                                                 |                                                                 
|---- |  | ------------------------------------------------------------------------------- | ----------------------------------------------------------------
|21.1 |  | Subsidiaries of the Registrant.                                                 | Incorporated by reference to Exhibit 21 of the
      Form 10-SB.
|99.1 |  | Certification required pursuant to section 906 of the Sarbanes-Oxley
      Act. | Filed herewith                                                  

(b) Reports on Form 8-K

No reports on Form 8-K were filed by the registrant during the fourth quarter of 2002.

Item 14. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Based on
  the evaluation of the Company's disclosure controls and procedures as of a date
  within 90 days of the filing date of this Annual Report on Form 10K-SB, our
  chief executive officer and chief financial officer have concluded that our
  disclosure controls and procedures are designed to ensure that the information
  we are required to disclose in the reports we file or submit under the Exchange
  Act is recorded, processed, summarized and reported within the time periods
  specified in the SEC's rules and forms and are operating in an effective manner.
  Changes in internal controls. There were no significant changes in our internal
  controls or in other factors that could significantly affect these controls
  subsequent to the date of their most recent evaluation.

19

---

Signatures

In accordance with Section 13 or 15(d) of the Exchange Act,
  the registrant caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized, on April 23, 2003.

By:       /s/ Adam Smith
               Adam Smith,
    President


In accordance with the requirements of the Exchange Act, this
  report has been signed by the following persons on behalf of the registrant
  and in the capacities indicated, on April 16, 2003.

|Signature            | Title                                       | Date          
|-------------------- | ------------------------------------------- | --------------
|                     |                                             |               
|                     |                                             |               
|_/s/ Adam Smith      | President, Director and Principal Executive | April 23, 2003
|Adam Smith           | Officer                                     |               
|                     |                                             |               
|                     |                                             |               
|_/s/ Michael Laidlaw | Director and Principal Accounting Officer   | April 23, 2003
|Michael Laidlaw      |                                             |               
|                     |                                             |               
|                     |                                             |               
|_/s/ Paul Uppal      | Director                                    | April 23, 2003
|Paul Uppal           |                                             |               
|                     |                                             |               
|_/s/ David R. Uppal  | Director                                    | April 23, 2003
|David R. Uppal       |                                             |               

20

---

SECTION 302 CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER

I, Adam Smith, certify that:

1.       I have reviewed this annual report
  on Form 10-KSB of MPAC Corporation.;

2.       Based on my knowledge,
  this annual 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 annual report;

3.       Based on my knowledge,
  the financial statements, and other financial information included in this annual
  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 annual 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 annual 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 annual report (the "Evaluation
  Date"); and

c)       presented in this
  annual report my 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 functions):

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 annual 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: April 23, 2003

/s/ Adam Smith
  Adam Smith 
  Chief Executive Officer

21

---

SECTION 302 CERTIFICATION BY PRINCIPAL ACCOUNTING OFFICER

I, Michael Laidlaw, certify that:

1.       I have reviewed
  this annual report on Form 10-KSB of MPAC Corporation.;

2.       Based on my knowledge,
  this annual 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 annual report;

3.       Based on my knowledge,
  the financial statements, and other financial information included in this annual
  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 annual 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 annual 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 annual report (the "Evaluation
  Date"); and

c)       presented in this
  annual report my 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 functions):

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 annual 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: April 23, 2003



/s/ Michael Laidlaw
  Michael Laidlaw 
  Principal Accounting Office

22

---







MPAC CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2002 and 2001

(Stated in US Dollars)



---



|TERRY AMISANO LTD. | AMISANO
      HANSON 
|------------------ | ---------------------
|KEVIN HANSON, CA   | CHARTERED ACCOUNTANTS







INDEPENDENT AUDITORS REPORT

To the Stockholders of
  MPAC Corporation

We have audited the accompanying consolidated balance sheets
  of MPAC Corporation and subsidiaries as of September 30, 2002 and 2001 and the
  related consolidated statements of loss, stockholders deficiency and cash
  flows for each of the years in the three year period ended September 30, 2002.
  These financial statements are the responsibility of the Company's management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with auditing standards
  generally accepted in the United States of America. Those standards require
  that we plan and perform an 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 audits provide
  a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  MPAC Corporation and subsidiaries as of September 30, 2002 and 2001 and the
  results of their operations and of their cash flows for each of the years in
  the three year period ended September 30, 2002 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been
  prepared assuming that the Company will continue as a going concern. As discussed
  in Note 1 to the consolidated financial statements, the Company has suffered
  recurring losses from operations and has a working capital deficiency that raises
  substantial doubt about its ability to continue as a going concern. Managements
  plans in regard to these matters are also described in Note 1. The consolidated
  financial statements do not include any adjustments that might result from the
  outcome of this uncertainty.

|Vancouver Canada | /s/ AMISANO HANSON   
|---------------- | ---------------------
|March 26, 2003   | Chartered Accountants
|                 |                      
|                 |                      
|                 |                      
|                 |                      



|                                  |            |                  
|--------------------------------- | ---------- | -----------------
|750 WEST PENDER STREET, SUITE 604 | TELEPHONE: | 604-689-0188     
|VANCOUVER CANADA                  | FACSIMILE: | 604-689-9773     
|V6C 2T7                           | E-MAIL:    | amishan@telus.net



---

MPAC CORPORATION 
  CONSOLIDATED BALANCE SHEETS 
  September 30, 2002 and 2001 (Stated in US Dollars)

|ASSETS                                                            |  
|----------------------------------------------------------------- | -
|                                                                  |  
|Current                                                           |  
|Cash and
      cash equivalents                                   | $
|Accounts
      receivable                                         |  
|Investment
      tax credits receivable  Note 9                  |  
|Inventory                                                         |  
|Prepaid
      expenses and deposits  Note 2                      |  
|                                                                  |  
|                                                                  |  
|Capital assets  Note 3                                           |  
|                                                                  |  
|                                                                  | $
|                                                                  |  
|LIABILITIES                                                       |  
|Current                                                           |  
|Accounts
      payable and accrued liabilities  Note 4           | $
|Deferred
      government grant                                   |  
|Current
      portion of capital lease obligation  Note 5        |  
|Current
      portion of long-term debt  Note 6                  |  
|Demand
      loans  Note 7                                       |  
|                                                                  |  
|                                                                  |  
|Capital lease obligations  Note 5                                |  
|Long-term debt  Note 6                                           |  
|                                                                  |  
|                                                                  |  
|                                                                  |  
|STOCKHOLDERS DEFICIENCY                                          |  
|Stockholders Equity                                              |  
|Common
      stock, unlimited number of authorized shares with no |  
|par value:                                                        |  
|8,291,518
      (2001: 7,906,667) shares issued and outstanding   |  
|Additional paid-in capital                                        |  
|Shares allotted                                                   |  
|Accumulated deficit                                               |  
|                                                                  |  
|Total stockholders deficiency                                    |  
|                                                                  |  
|                                                                  | $
|                                                                  |  
|Going Concern  Note 1                                            |  
|Contingencies and Commitments  Notes
      5, 6, 8 and 14        |  
|Subsequent Event  Note 6                                         |  

APPROVED BY THE BOARD:

|/s/ Adam Smith                                 |  | /s/ Michael Laidlaw                           
|---------------------------------------------- |  | ----------------------------------------------
|____________________________________, Director |  | ____________________________________, Director

SEE ACCOMPANYING NOTES

---

MPAC CORPORATION 
  CONSOLIDATED STATEMENTS OF LOSS
  for the years ended September 30, 2002, 2001 and 2000 (Stated in US Dollars)

|                                          |   | 2002    |   |   | 2001    |   |   | 2000    | 
|----------------------------------------- | - | ------- | - | - | ------- | - | - | ------- | 
|                                          |   |         |   |   |         |   |   |         | 
|Sales of product                          | $ | 405,891 |   | $ | 194,427 |   | $ | -       | 
|                                          |   |         |   |   |         |   |   |         | 
|Cost of goods sold                        |   | 415,882 |   |   | 139,220 |   |   | -       | 
|                                          |   |         |   |   |         |   |   |         | 
|Gross profit (loss)                       |   | (9,991  | ) |   | 55,207  |   |   | -       | 
|                                          |   |         |   |   |         |   |   |         | 
|Other Income                              |   |         |   |   |         |   |   |         | 
|Interest
      income                     |   | 1,921   |   |   | 661     |   |   | 441     | 
|Other income                              |   | 22,984  |   |   | -       |   |   | 27,557  | 
|Foreign
      exchange gain (loss)        |   | 393     |   |   | (557    | ) |   | 4,437   | 
|                                          |   |         |   |   |         |   |   |         | 
|                                          |   | 25,298  |   |   | 104     |   |   | 32,435  | 
|                                          |   |         |   |   |         |   |   |         | 
|Expenses                                  |   |         |   |   |         |   |   |         | 
|Accounting                                |   | 21,812  |   |   | 21,620  |   |   | 4,926   | 
|Amortization                              |   | 22,961  |   |   | 34,938  |   |   | 12,583  | 
|Automobile                                |   | 805     |   |   | 2,474   |   |   | 3,861   | 
|Consulting
      fees  Note 12           |   | 1,540   |   |   | 95,587  |   |   | 124,947 | 
|Courier                                   |   | 357     |   |   | 726     |   |   | 2,258   | 
|Equipment
      rental                    |   | (6,172  | ) |   | 1,648   |   |   | 8,038   | 
|General
      and administrative          |   | 2,010   |   |   | 5,212   |   |   | 4,600   | 
|Insurance                                 |   | 2,128   |   |   | 5,726   |   |   | 5,026   | 
|Interest
      and bank charges  Note 12 |   | 2,182   |   |   | 2,049   |   |   | 2,144   | 
|Interest
      on long-term debt          |   | 31,706  |   |   | 12,610  |   |   | 11,751  | 
|Legal                                     |   | 56,011  |   |   | 45,825  |   |   | 48,788  | 
|Management
      fees  Note 12           |   | 14,705  |   |   | 18,079  |   |   | 6,736   | 
|Meals and
      entertainment             |   | 163     |   |   | 1,302   |   |   | -       | 
|Professional
      fees                   |   | 57,894  |   |   | 1,795   |   |   | 4,623   | 
|Rent and
      property taxes             |   | 54,804  |   |   | 21,375  |   |   | 51,728  | 
|Repairs
      and maintenance             |   | -       |   |   | 5,446   |   |   | 256     | 
|Supplies
      and tools                  |   | 12,216  |   |   | 3,544   |   |   | 3,378   | 
|Telephone
      and utilities             |   | 7,204   |   |   | 14,656  |   |   | 7,868   | 
|Transfer
      agent                      |   | 967     |   |   | 2,590   |   |   | -       | 
|Travel                                    |   | 2,554   |   |   | 19,257  |   |   | 1,291   | 
|Wages                                     |   | 3,491   |   |   | 19,958  |   |   | -       | 
|                                          |   |         |   |   |         |   |   |         | 
|                                          |   | 289,338 |   |   | 336,417 |   |   | 304,802 | 
|                                          |   |         |   |   |         |   |   |         | 

/Contd.

SEE ACCOMPANYING NOTES

---



|MPAC CORPORATION                                      | Continued
|----------------------------------------------------- | ---------
|CONSOLIDATED STATEMENTS OF LOSS                       |          
|for the years ended September 30, 2002, 2001 and 2000 |          
|(Stated in US Dollars)                                |          



|                                              |   | 2002      |   |   | 2001      |   |   | 2000      |  
|--------------------------------------------- | - | --------- | - | - | --------- | - | - | --------- | -
|                                              |   |           |   |   |           |   |   |           |  
|Operating loss for the year                   |   | (274,031  | ) |   | (281,106  | ) |   | (272,367  | )
|Reduction in carrying value of capital assets |   |           |   |   |           |   |   |           |  
| Note 3                                      |   | (162,517  | ) |   | -         |   |   | -         |  
|Net loss for the year                         | $ | (436,548  | ) | $ | (218,106  | ) | $ | (272,367  | )
|                                              |   |           |   |   |           |   |   |           |  
|Basic and diluted loss per share              | $ | (0.05     | ) | $ | (0.04     | ) | $ | (0.04     | )
|                                              |   |           |   |   |           |   |   |           |  
|Weighed average number of shares outstanding  |   | 8,099,092 |   |   | 7,729,188 |   |   | 7,351,667 |  
|                                              |   |           |   |   |           |   |   |           |  





SEE ACCOMPANYING NOTES

---

MPAC CORPORATION 
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  for the years ended September 30, 2002, 2001 and 2000(Stated in US Dollars)

|                                                    |   | 2002     |   |   | 2001     |   |   | 2000     |  
|--------------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|Operating Activities                                |   |          |   |   |          |   |   |          |  
|Net loss
      for the year                         | $ | (436,548 | ) | $ | (281,106 | ) | $ | (272,367 | )
|Adjustment
      to reconcile net loss to net cash  |   |          |   |   |          |   |   |          |  
|provided
      by (used in) operating activities:   |   |          |   |   |          |   |   |          |  
|Amortization                                        |   | 22,961   |   |   | 34,938   |   |   | 12,583   |  
|Reduction
      in carrying value of capital assets |   | 162,517  |   |   | -        |   |   | -        |  
|Investment
      in tax credits                     |   | (1,510   | ) |   | (71,569  | ) |   | -        |  
|Consulting,
      interest and other non-cash items |   | 6,577    |   |   | 40,024   |   |   | 11,751   |  
|Changes
      in non-cash working capital balances  |   |          |   |   |          |   |   |          |  
|consist
      of:                                   |   |          |   |   |          |   |   |          |  
|Decrease
      (increase) in accounts receivable    |   | 23,095   |   |   | (508     | ) |   | (7,902   | )
|Decrease
      (increase) in inventory              |   | 15,071   |   |   | 4,617    |   |   | (19,688  | )
|Decrease
      (increase) in prepaid expenses and   |   |          |   |   |          |   |   |          |  
|deposits                                            |   | 52,264   |   |   | (43,241  | ) |   | (9,588   | )
|Increase
      (decrease) in accounts payable and   |   |          |   |   |          |   |   |          |  
|accrued
      liabilities                           |   | 57,669   |   |   | (5,986   | ) |   | 109,657  |  
|Increase
      in demand loans                      |   | 34,869   |   |   | 7,882    |   |   | -        |  
|                                                    |   |          |   |   |          |   |   |          |  
|Net cash used in operating activities               |   | (63,035  | ) |   | (314,949 | ) |   | (175,554 | )
|                                                    |   |          |   |   |          |   |   |          |  
|Investing Activity                                  |   |          |   |   |          |   |   |          |  
|Purchase
      of equipment                         |   | -        |   |   | (48,427  | ) |   | (78,053  | )
|                                                    |   |          |   |   |          |   |   |          |  
|Net cash used in investing activity                 |   | -        |   |   | (48,427  | ) |   | (78,053  | )
|                                                    |   |          |   |   |          |   |   |          |  
|Financing Activities                                |   |          |   |   |          |   |   |          |  
|Long-term
      debt (repayment)                    |   | (41,167  | ) |   | 177,499  |   |   | 122,790  |  
|Issue of
      common shares for cash               |   | 100,000  |   |   | 190,000  |   |   | 175,000  |  
|Decrease
      in cash overdraft                    |   | -        |   |   | -        |   |   | (335     | )
|                                                    |   |          |   |   |          |   |   |          |  
|Net cash provided by financing activities           |   | 58,833   |   |   | 367,499  |   |   | 297,455  |  
|                                                    |   |          |   |   |          |   |   |          |  

Contd.

SEE ACCOMPANYING NOTES

---



|MPAC
      CORPORATION                | Continued
|------------------------------------- | ---------
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|September 30, 2002                   
|(Stated in US Dollars)               



|                                                    |   | 2002   |   |   | 2001    |   |   | 2000    |  
|--------------------------------------------------- | - | ------ | - | - | ------- | - | - | ------- | -
|                                                    |   |        |   |   |         |   |   |         |  
|Increase (decrease) in cash and cash equivalents    |   | (4,202 | ) |   | 4,123   |   |   | 43,848  |  
|                                                    |   |        |   |   |         |   |   |         |  
|Cash and cash equivalents, beginning of year        |   | 47,971 |   |   | 43,848  |   |   | -       |  
|                                                    |   |        |   |   |         |   |   |         |  
|Cash and cash equivalents, end of year              | $ | 43,769 |   | $ | 47,971  |   | $ | 43,848  |  
|                                                    |   |        |   |   |         |   |   |         |  
|Non-cash Transactions:                              |   |        |   |   |         |   |   |         |  
|Shares
      allotted for interest payment          | $ | -      |   | $ | (9,008  | ) | $ | (11,751 | )
|Shares
      allotted for long-term debt payment    | $ | -      |   | $ | (49,735 | ) | $ | 11,751  |  
|Shares
      allotted for payment of consulting fee | $ | -      |   | $ | 34,388  | ) | $ | -       |  
|Capital
      assets                                | $ | -      |   | $ | (4,370  | ) | $ | -       |  
|Shares
      allotted for future issues  Note 8    | $ | -      |   | $ | 97,501  |   | $ | -       |  
|                                                    |   |        |   |   |         |   |   |         |  
|Supplemental disclosure of cash flow                |   |        |   |   |         |   |   |         |  
|information:                                        |   |        |   |   |         |   |   |         |  
|Cash paid
      for:                                |   |        |   |   |         |   |   |         |  
|Interest                                            | $ | 1,613  |   | $ | 1,464   |   | $ | -       |  
|                                                    |   |        |   |   |         |   |   |         |  
|Income
      taxes                                  | $ | -      |   | $ | -       |   | $ | -       |  
|                                                    |   |        |   |   |         |   |   |         |  





SEE ACCOMPANYING NOTES

---

MPAC CORPORATIONCONSOLIDATED STATEMENT OF
  STOCKHOLDERS DEFICIENCY
  for the years ended September 30, 2000 to September 30, 2002(Statedin US Dollars)



SEE ACCOMPANYING NOTES

---

MPAC CORPORATION 
  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
  September 30, 2002 (Stated in US Dollars)

|Note 1 | Summary of Significant Accounting
      Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Going Concern
      These consolidated financial statements have been prepared
        on the going concern basis, which presumes that the Company will continue
        operations for the foreseeable future and will be able to realize assets
        and discharge liabilities in the normal course of business. The Company
        has a working capital deficiency of $221,503 and a stockholders
        deficiency of $643,420 at September 30, 2002 and requires additional capital
        in order to remain a going concern. The continuation of the Company is
        dependent on its ability to obtain the necessary capital to achieve profitability
        and to meet the requirements, from time to time, of lenders, if any, who
        are willing to provide this financing. The Company believes that its operations
        will generate additional funds and that it will be able to obtain additional
        capital primarily through the issue of shares and debt from outside investors
        and management.
      These consolidated financial statements do not reflect
        the adjustments or reclassifications which would be necessary if the Company
        was unable to continue its operations.
      Operations and Basis of Consolidation
      The Company was incorporated on June 18,1998 in Nevada,
        U.S.A. and commenced operations in October 1998. The Company's wholly-owned
        subsidiary company, 805332 Alberta Ltd. ("805332"), was incorporated on
        October 29, 1998 in Alberta, Canada and its 99.99% owned subsidiary company,
        Micron Milling & Packaging Company Ltd. ("Micron"), was incorporated
        on August 20, 1998 in Alberta, Canada. These consolidated financial statements
        include the accounts of the Company, 805332 and Micron.
      In October 1998 the Company raised funds through the
        issue of shares and shareholder loans, which enabled 805332 to acquire
        a manufacturing facility located in Crossfield, Alberta, Canada in January
        1999. The facility was used to process and package an agricultural product,
        using byproduct sulphur as the primary feedstock, on a seasonal basis,
        largely between February and September each year. The Company intended
        to manufacture a sulphur-based fungicide product in the plant and market
        it in the United States of America. Due to financial difficulties caused
        by the lack of funds to meet ongoing lease obligations, 805332 was placed
        into receivership by two creditors on May 2, 2000. In consultation with
        the creditors, it was agreed that the assets of 805332 would be bought
        from the Receiver by Micron, a company then independent of MPAC and 805332.
        It was further agreed that the required funding for the refurbishing of
        the plant and operations would be provided for by funds from the two creditors,
        by investments from the principals of Micron (Messrs Uppal and Uppal)
        and by an investment from MPAC. Micron had not previously been a creditor
        of MPAC or 805332. It was also agreed on May 5, 2000 that MPAC would acquire
        the 76.5% shares of Micron owned by the two Uppals. The two Uppals would
        be appointed directors of MPAC upon completion of the acquisition.







---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 2

|Note 1 | Summary of Significant Accounting
      Policies  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | Operations and Basis of Consolidation
        - (contd)
      Micron was inactive from the date of its incorporation
        to the date it acquired the plant from the Receiver.
      Following the sale of the assets of 805332, both MPAC
        and 805332 had no significant assets. 805332 came out of receivership
        on June 1, 2000 and at this point was 100% owned by MPAC Corp.
      The Company acquired Micron by exchanging the 76.5%
        of the common shares of Micron owned equally by the two Uppals for 6,400,000
        common shares of 805332. Under the terms of the share exchange, these
        shares are convertible into 6,400,000 common shares of MPAC and have been
        recorded at a nominal value. The exchange of the Micron shares for shares
        of 805332 rather than an immediate exchange into MPAC shares is due to
        the more favorable tax treatment for the holders of the Micron shares,
        i.e., by exchanging their interest in Micron for shares in another Canadian
        corporation rather than a United States corporation, any tax consequences
        can be deferred until the ultimate conversion of their 805332 shares into
        MPAC common shares. The holders of the 805332 shares have consented to
        exercise the right of conversion at the time the Company requests it,
        subject to an acceptable tax consequence on the conversion. 805332 has
        no other assets or operations and MPAC retains a minority interest in
        the Company. Upon conversion MPAC will own a 100% interest in 805332.
      The ultimate beneficial ownership of the sulphur fungicide
        manufacturing plant has, with the exception of three days in 2000, during
        which the plant was not operating, remained with the MPAC shareholders.
        These consolidated financial statements have accordingly been prepared
        as though the operations of the Company, 805332 and Micron had been combined
        since their dates of incorporation.
      The Company conducted its operations from the manufacturing
        facility located in leased premises in Crossfield, Alberta until the conclusion
        of the 2001 production season when it received orders to cease operations
        for environmental reasons (Note 14). The Company completed the remedial
        work required under the orders but the lifting of the orders was not done
        in time for the commencement of production in March 2002. The Company
        therefore contracted all of its production during 2002 to another manufacturer.
        The Company did not maintain its obligations under the lease throughout
        2002 and the landlord therefore seized the Companys capital assets
        in November 2002. The Company has offered not to contest the seizure of
        the assets in exchange for the termination of its obligations under the
        lease. The Company has therefore reduced the carrying value of the manufacturing
        facility and related assets (Note 3) to a nominal value and intends to
        contract its future production to another manufacturer.





---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 3



|Note 1 | Summary of Significant Accounting
      Policies  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       | Revenue Recognition
      The Companys only product is a sulphur-based fungicide
        used in agriculture. Revenue from the sale of this product is recognized
        at fair value when realizable and earned. Revenue is generally realizable
        and earned when persuasive evidence of an arrangement exists, delivery
        has occurred, the selling price is fixed or determinable and collectability
        is reasonably assured. Sales discounts are netted against the related
        sales.
      Cash Equivalents
      Cash equivalents are defined as highly liquid securities
        with maturities of three months or less.
      Inventory
      Finished goods inventory is recorded at the lower of
        cost and net realizable value. Raw materials inventory is recorded at
        the lower of cost and replacement cost. Cost is determined using the average
        cost method.
      Capital Assets
      Capital assets are recorded at cost. Depreciation is
        recorded at annual rates considered adequate to amortize the cost of the
        assets over their estimated useful lives as follows:

| | Automobile                    | 30%                                
| | ----------------------------- | -----------------------------------
| | Equipment                     | 20%                                
| | Computer equipment            | 30%                                
| | Equipment under capital lease | Straight-line basis over lease term

| | Repairs and maintenance
        expenditures on capital assets are expensed when incurred unless they
        extend the productive life of the asset, In that case, they are capitalized
        and amortized over the estimated useful life of the asset in accordance
        with the methods and rates noted above.
      The Company reports the impairment of long-lived assets
        and certain identifiable intangibles in accordance with Statement of Financial
        Accounting Standards No. 144, Accounting for the Impairment or Disposal
        of Long-lived Assets. Certain long-lived assets and identifiable
        intangibles held by the Company are reviewed for impairment whenever assets
        or changes in circumstances indicate the carrying amount of an asset may
        not be recoverable. Accordingly, an impairment loss is recognized in the
        period it is determined.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 4



|Note 1 | Summary of Significant Accounting
      Policies  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       | Capital Assets  (contd)
      Management periodically reviews the recoverability of
        long-lived assets based upon anticipated future cash flows generated from
        such assets. The assets are subsequently adjusted to reflect a valuation
        of the lower of cost or the net recoverable amounts calculated on an undiscounted
        cash flow basis.
      As explained above, the Company has reduced the carrying
        value of the capital assets by $162,517 at September 30, 2002, to a nominal
        amount, as the assets have been seized by the landlord.
      Research and Development
      Research and development costs are charged to expense
        as incurred.
      Government Assistance

| | Research and
        Development Grants
      Government grants for research and development which
        are non-refundable are accounted for using the cost reduction method whereby,
        when the Company has reasonable assurance that the grants will be received,
        the grants are deducted from the related research and development expenditures.
        When the Company does not have reasonable assurance that the grants will
        be received, they are not recorded until they are actually received. They
        are deducted from the related expenditures when received, or, if they
        are received in a subsequent period when no such research and development
        expenditures have been incurred, they are recorded as other Income.
      Government grants received before the related expenditures
        are incurred or which are repayable unless specific conditions are completed
        are deferred until the Company has fulfilled all of its obligations related
        to the work and reporting requirements of the grants.
      Investment Tax Credits
      Investment tax credits are available to the Company
        on defined expenditures related to the construction and operation of the
        plant. Investment tax credits are accounted for using the cost reduction
        method whereby, when the Company has reasonable assurance that the tax
        credits will be realized, the credits are deducted from the cost of the
        related assets or the related expenses.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 5



|Note 1 | Summary of Significant Accounting
      Policies  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Foreign Currency Translation
      The Company translates its foreign currency financial
        statements (Canadian subsidiaries) from the function currency, Canadian
        dollars, into the reporting currency, US dollars, using the current rate
        of exchange method pursuant to the Statement of Financial Accounting Standards
        No. 52 Foreign Currency Translation.
      Assets and liabilities denominated in foreign currencies
        are translated into U.S. dollars, at the rate of exchange prevailing at
        the balance sheet date. Revenue and expense items are translated at exchange
        rates prevailing at the time of the transaction. Translation adjustments
        resulting from this process, if any, are reported separately and are accumulated
        as other comprehensive income, a component of shareholders' equity.
      Foreign currency transactions are transactions denominated
        in a currency other than the entities functional currency. Foreign currency
        transactions gains or losses are included in net loss for the year.
      Use of Estimates
      The preparation of financial statements in conformity
        with generally accepted accounting principles requires management to make
        estimates and assumptions that affect the amounts reported in the financial
        statements and accompanying disclosures. Although these estimates are
        based on management's best knowledge of current events and actions the
        Company may undertake in the future, actual results may ultimately differ
        from the estimates. Management believes such estimates to be reasonable.
      Basic and Diluted Loss Per Share
      The Company reports basic loss per share in accordance
        with Statement of Financial Accounting Standards No. 128, Earnings
        Per Share. Basic loss per share is computed using the weighted average
        number of shares outstanding during the year. Diluted earnings per share
        includes the potentially dilutive effect of outstanding common stock options
        and warrants which are convertible to common shares. (Diluted loss per
        share has not been provided for 2002, 2001 and 2000 as it would be anti-dilutive).



---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 6



|Note 1 | Summary of Significant Accounting
      Policies  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Income Taxes
      The Company follows Statement of Financial Accounting
        Standards No. 109, Accounting for Income Taxes(FAS 109)
        which requires the use of the asset and liability method of accounting
        of income taxes. Under the assets and liability method of FAS 109, deferred
        tax assets and liabilities are recognized for the future tax consequences
        attributable to temporary differences between the financial statements
        carrying amounts of existing assets and liabilities and loss carry-forwards
        and their respective tax bases. Deferred tax assets and liabilities are
        measured using enacted tax rates expected to apply to taxable income in
        the year in which those temporary differences are expected to be recovered
        or settled.
      Accounting Pronouncements
      The Company adopts new pronouncements relating to generally
        accepted accounting principles applicable to the Company as they are issued,
        which may be in advance of their effective date.
      Environmental Costs
      Environmental expenditures that relate to current operations
        are expensed or capitalized as appropriate. Expenditures that relate to
        an existing condition caused by past operations, and which do not contribute
        to current or future revenue generation, are expensed. Liabilities are
        recorded when environmental assessments and/or remedial efforts are probable,
        and the cost can be reasonably estimated. Generally, the timing of these
        accruals coincides with the earlier of:
      i)      completion
        of a feasibility study; or
      ii)      the
        Companys commitment to a plan of action based on the then known
        facts.
      Financial Instruments
      The carrying value of the Companys financial instruments,
        consisting of cash and equivalents, accounts receivable and accounts payable
        approximate their fair value due to the short-term maturity of such instruments.
        Amounts outstanding under long-term debt agreements are considered to
        be carried on the financial statements at their estimated fair values
        because they accrue interest at rates which generally fluctuate with interest
        rate trends. Unless otherwise noted, it is managements opinion that
        the Company is not exposed to significant interest, currency or credit
        risks arising from these financial instruments.



---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 7



|Note 2 | Prepaid Expenses and Deposits
|------ | -----------------------------

| |                                          |   | 2002 |  |   | 2001   | 
| | ---------------------------------------- | - | ---- |  | - | ------ | 
| | Prepaid rent and utilities               | $ | -    |  | $ | 9,588  | 
| | Prepaid insurance and other              |   | 565  |  |   | 877    | 
| | Prepaid legal fees                       |   | -    |  |   | 3,284  | 
| | Refundable deposit on machinery purchase |   | -    |  |   | 39,080 | 
| |                                          |   |      |  |   |        | 
| |                                          | $ | 565  |  | $ | 52,829 | 
| |                                          |   |      |  |   |        | 

|Note 3 | Capital Assets
|------ | --------------



| |                               |   | 2002    | 
| | ----------------------------- | - | ------- | 
| |                               |   |         | 
| |                               |   |         | 
| |                               |   |         | 
| |                               |   | Cost    | 
| | Automobile                    | $ | 13,194  | 
| | Equipment                     |   | 197,940 | 
| | Computer equipment            |   | 1,555   | 
| | Equipment under capital lease |   | 18,344  | 
| |                               |   |         | 
| |                               | $ | 231,033 | 
| |                               |   |         | 

| |                               |   | 2001    | 
| | ----------------------------- | - | ------- | 
| |                               |   |         | 
| |                               |   |         | 
| |                               |   | Cost    | 
| | Automobile                    | $ | 13,151  | 
| | Equipment                     |   | 172,768 | 
| | Computer equipment            |   | 1,642   | 
| | Equipment under capital lease |   | 18,342  | 
| |                               |   |         | 
| |                               | $ | 205,903 | 
| |                               |   |         | 

| | The Company
        has reduced the carrying value of the capital assets by $162,517 at September
        30, 2002, to a nominal amount, as the assets have been seized by the landlord
        (Note 1).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 8



|Note 4 | Accounts Payable and Accrued
      Liabilities
|------ | ----------------------------------------------

|       |                                                                    |   | 2002    |  |   | 2001    | 
|------ | ------------------------------------------------------------------ | - | ------- |  | - | ------- | 
|       | Trade accounts payable                                             | $ | 95,399  |  | $ | 96,921  | 
|       | Professional fees payable                                          |   | 129,619 |  |   | 64,093  | 
|       |                                                                    |   |         |  |   |         | 
|       |                                                                    | $ | 255,018 |  | $ | 161,014 | 
|       |                                                                    |   |         |  |   |         | 
|       |                                                                    |   |         |  |   |         | 
|Note 5 | Capital Lease Obligation                                           |   |         |  |   |         | 
|       |                                                                    |   |         |  |   |         | 
|       | Future minimum lease payments under a capital lease obligation are |   |         |  |   |         | 

|       |                | 2003  |                              | $ | 6,875  |  
|------ | -------------- | ----- | ---------------------------- | - | ------ | -
|       |                | 2004  |                              |   | 2,292  |  
|       |                |       |                              |   |        |  
|       |                |       |                              |   | 9,167  |  
|       |                | Less: | amount representing interest |   | (592   | )
|       |                |       |                              |   |        |  
|       |                |       |                              |   | 8,575  |  
|       |                | Less: | current portion              |   | (6,328 | )
|       |                |       |                              |   |        |  
|       |                |       |                              | $ | 2,247  |  
|       |                |       |                              |   |        |  
|       |                |       |                              |   |        |  
|Note 6 | Long-term Debt |      

| |                                                                   |   | 2002    |   |   | 2001    |  
| | ----------------------------------------------------------------- | - | ------- | - | - | ------- | -
| |                                                                   |   |         |   |   |         |  
| | Bank loan payable with interest at 9.55% per
      annum,         |   |         |   |   |         |  
| | repayable in blended monthly payments of $275
      per month,    |   |         |   |   |         |  
| | secured by an automobile                                          | $ | 3,780   |   | $ | 6,615   |  
| |                                                                   |   |         |   |   |         |  
| | Loans, payable to shareholders without interest
      and with no |   |         |   |   |         |  
| | specific repayment terms (effective November,
      2002 the      |   |         |   |   |         |  
| | loans are payable within 13 months of demand
      and bear       |   |         |   |   |         |  
| | interest at prime plus 1% per annum). These
      loans represent |   |         |   |   |         |  
| | cash advances used for the purpose of construction
      of the   |   |         |   |   |         |  
| | plant and for working capital. Loans in the
      amount of       |   |         |   |   |         |  
| | $195,499 are secured by a general security
      agreement over   |   |         |   |   |         |  
| | the assets of Micron.                                             |   |         |   |   |         |  
| |                                                                   |   | 418,882 |   |   | 419,493 |  
| |                                                                   |   |         |   |   |         |  
| |                                                                   |   | 422,662 |   |   | 426,108 |  
| | Less:    current portion                                          |   | (2,988  | ) |   | (2,766  | )
| |                                                                   |   |         |   |   |         |  
| |                                                                   | $ | 419,674 |   | $ | 433,342 |  
| |                                                                   |   |         |   |   |         |  



---

MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 9



|Note 6 | Long-term Debt - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Principal repayment of
        long-term debt during the 2003 fiscal year is expected to be $2,988 and
        $792 during the 2004 fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 7 | Demand Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The demand loans bear interest at 10% per annum,
      are unsecured and are payable on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 8 | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Commitments
      On May 5, 2000 the Company allotted, as part of a series
        of transactions related to the acquisition of Micron (Note 1), 6,400,000
        common shares to be issued on the conversion of 6,400,000 shares of 805332
        into common shares of the Company. The common shares may be issued at
        the request of the owners of the 805332 shares or at the request of the
        Company and have not been issued to date due to possible Canadian tax
        consequences to the owners of 805332 shares. The allotment of these common
        shares has been recorded as a nominal value.
      On May 5, 2000, the Company allotted 250,000 common
        shares to be issued as a finder's fee related to the acquisition of Micron
        (Note 1). These common shares will be issued when the 805332 shareholders
        exercise their conversion rights and have been valued on the same basis
        as the 805332 conversion right, at nominal value.
      On October 4, 2000, 70,000 common shares were allotted
        for the future Issue to a financing consultant in conjunction with services
        rendered. These common shares are valued on the basis of the fair value
        of the consulting work and cash consideration received by the Company
        for common shares at the time agreement for the services was reached and
        were issued when the services were completed.
      The debt amounting to $58,743, which was payable to
        a company owned by a shareholder, has been repaid by the issue of 114,851
        common shares. The valuation was based on the accrued principal and interest
        owing and the cash consideration received by the Company for common shares
        at the time agreement for the share repayment was reached.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 9 | Research and Development Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The Company's research
        and development costs are primarily composed of external engineering consulting
        fees and are classified as consulting fees in these financial statements.
        The amount of research and development consulting fees incurred were $Nil,
        $53,325 and $27,356 for the years ended September 30, 2002, 2001 and 2000
        respectively. During the year ended September 30, 2002 the Company received
        government grants of Nil (2001: $25,259; 2000: $Nil) relating to these                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                







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MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 10



|Note 9  | Research and Development Costs - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | expenditures, which were
        recorded as a reduction of consulting fees.
      During the year ended September 30, 2002 the Company
        recorded investment tax credits receivable from the Government of Canada
        amounting to $86,920 (2001: $85,410; 2000: $41,423). $Nil (2001: $13,841;
        2000: $10,136) which were deducted from the cost of the related capital
        asset purchases and $44,428 (2001: $71,569; 2000: $31,287) were deducted
        from the cost of the related expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Note 10 | Deferred Tax Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | The Financial Accounting
        Standards Board issued Statement Number 109 in Accounting for Income Taxes
        (FAS 109) which is effective for fiscal years beginning after
        December 15, 1992. FAS 109 requires the use of the asset and liability
        method of accounting of income taxes. Under the assets and liability method
        of FAS 109, deferred tax assets and liabilities are recognized for the
        future tax consequences attributable to temporary differences between
        the financial statements carrying amounts of existing assets and liabilities
        and loss carryforwards and their respective tax bases. Deferred tax assets
        and liabilities are measured using enacted tax rates expected to apply
        to taxable income in the years in which those temporary differences are
        expected to be recovered or settled.
      The following table summarizes the significant components
        of the Companys deferred tax assets:

|        | Deferred Tax Assets                                                                                                                                                                                                                                                                                                                                                               |   |          |  
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------- | -
|        | Net operating loss carryforward                                                                                                                                                                                                                                                                                                                                                   | $ | 652,000  |  
|        |                                                                                                                                                                                                                                                                                                                                                                                   |   |          |  
|        |                                                                                                                                                                                                                                                                                                                                                                                   |   |          |  
|        | Gross deferred tax assets                                                                                                                                                                                                                                                                                                                                                         | $ | 187,480  |  
|        | Valuation allowance for deferred tax asset                                                                                                                                                                                                                                                                                                                                        |   | (187,480 | )
|        |                                                                                                                                                                                                                                                                                                                                                                                   |   |          |  
|        |                                                                                                                                                                                                                                                                                                                                                                                   | $ | -        |  
|        |                                                                                                                                                                                                                                                                                                                                                                                   |   |          |  
|        |                                                                                                                                                                                                                                                                                                                                                                                   |   |          |  
|        | The amount taken into income as deferred
        tax assets must reflect that portion of the income tax loss carryforwards
        which is likely to be realized from future operations. Management of the
        Company has chosen to provide an allowance of 100% against all available
        income tax loss carryforwards, regardless of their time of expiry.          
|        |                                                                                                                                                                                                                                                                                                                                                                                  
|Note 11 | Income Taxes                                                                                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                  
|        | The Company has incurred losses for Canadian
        income tax purposes of approximately $377,000 which can be carried forward
        to reduce taxable income in future years to 2007. The Company has incurred
        losses for US income tax purposes of approximately $275,000 which can
        be carried forward to reduce taxable income in future years to 2023. The



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MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 11

|Note 11 | Income Taxes - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | potential income tax benefits
        of these losses have not been recognized in these consolidated financial
        statements.
      The Company also has available unclaimed investment
        tax credits of approximately $3,539 which have a three year carry-back
        and a ten year carry-forward from the year that they were incurred, to
        reduce income taxes in Canada and unclaimed research and development expenses
        of approximately $373,346 which may be carried forward indefinitely and
        used to reduce future income taxes in Canada.
      Investment tax credits that the Company is eligible to
        receive in any year are recorded for tax and accounting purposes when
        receipt is more certain than not, either as a reduction of capital assets
        additions or of expenses.
      The statutory tax rates applicable to the Company's manufacturing
        and sale of operations in Canada are:

| |                                                                                                                 | Taxable income up to $127,000        | 18% | 
| | --------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --- | 
| |                                                                                                                 | Taxable income greater than $127,000 | 29% | 
| |                                                                                                                 |                                      |     | 
| | The statutory tax rates applicable to
        the Companys manufacturing and sale of operations in the US are:

|        |                                                                                                                                                                                                     | Taxable income up to $50,000                       | 15% | 
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | --- | 
|        |                                                                                                                                                                                                     | Taxable income greater than $50,000 up to $75,000  | 25% | 
|        |                                                                                                                                                                                                     | Taxable income greater than $75,000 up to $100,000 | 34% | 
|        |                                                                                                                                                                                                     | Taxable income greater than $100,000 up to$335,000 | 39% | 
|        |                                                                                                                                                                                                     |                                                    |     | 
|Note 12 | Related Party Transactions - Note 6                                                                                                                                                                
|        |                                                                                                                                                                                                    
|        | During the years ended September 30,
        2002, 2001 and 2000, the Company incurred the following expenses charged
        by companies with common directors and with directors of the Company:

| |                                          |   | 2002   |  |   | 2001   |  |   | 2000   | 
| | ---------------------------------------- | - | ------ |  | - | ------ |  | - | ------ | 
| | Interest on long-term debt related to    |   |        |  |   |        |  |   |        | 
| | principal shareholder loans              | $ | -      |  | $ | 4,718  |  | $ | 4,279  | 
| | Management fees paid to a company with a |   |        |  |   |        |  |   |        | 
| | common director                          |   | 14,705 |  |   | 18,079 |  |   | 6,736  | 
| | Consulting fees paid to a director       |   | 1,540  |  |   | 17,500 |  |   | 7,500  | 
| |                                          |   |        |  |   |        |  |   |        | 
| |                                          | $ | 16,245 |  | $ | 40,296 |  | $ | 18,515 | 
| |                                          |   |        |  |   |        |  |   |        | 



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MPAC Corporation 
  Notes to the Consolidated Financial Statements
  September 30, 2002(Stated in US Dollars)  Page 12



|Note 12 | Related Party Transactions
      - Note 6  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | These charges were measured
        by the exchange amount, which is the amount agreed upon by the transacting
        parties and are on terms and conditions similar to non-related entities.
      Included in long-term debt at September 30, 2002, is
        a $223,383 (2001: $221,139) loan payable to a significant shareholder
        and director, without interest, unsecured and with no specific terms for
        repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 13 | Segmented Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | The Company produces its
        sulphur-based fungicide at plants located in Canada and the United States
        of America and the sales of this product are primarily in the United States
        of America. The Company had one dominant customer, who contributed more
        than 10% of the consolidated sales in 2002 and 2001 (2002: $397,864; 2001:
        $176,789). The accounting policies of the operating segment are the same
        as those described in Note 1. The Company evaluates the performance of
        its operating segments based primarily on operating profit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 14 | Contingencies and Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | The Company entered into
        a premises lease agreement with Finnie Holdings Ltd. ("Finnie") on March
        1, 2000, pursuant to which the Company will be required to pay $31,676
        to Finnie if it does not comply with all the covenants, conditions and
        obligations of the lease. Finnie will waive payment of the $31,676 at
        the end of the lease if the Company complies with all the covenants, conditions
        and obligations of the lease. The initial lease term was for one year
        and the lease is renewable on a year-to-year basis until February 28,
        2010. The Company did not maintain all its obligations under the lease
        throughout 2002 and Finnie seized the Company's capital assets in November
        2002. The Company has offered not to contest the seizure of the assets
        in exchange for the termination of its obligations under the lease.
      Orders to cease operations for environmental contamination
        were issued in 2001 for the premises the Company operates from by Alberta
        Environment and the Town of Crossfield.
      The Alberta Environment order related to the operations
        of a previous tenant and it was expected that all costs relating to remedial
        work will be borne by Finnie. The order from the Town of Crossfield related
        to the Company's operations. The remedial work was completed prior to
        the year-end but the required documentation and inspections have not been
        completed.



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