SECURITIES AND EXCHANGE COMMISSION
                    Washington, DC 20549

                         FORM 10-KSB
  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                    EXCHANGE ACT OF 1934

For the year ended December 31, 2001
Commission File No. 000-25485





                          PTS, INC.
   (Exact name of registrant as specified in its charter)




Nevada                                            88-0380544
(State of organization) (I.R.S. Employer Identification No.)

3220 Westleigh Ave.; Las Vegas, NV  89102
(Address of principal executive offices)

Registrant's telephone number, including area code (702) 878-
3388

Securities registered under Section 12(g) of the Exchange
                                   Act: Common stock, $0.001
                                   par value per share

Check whether the issuer (1) filed all reports required to
be file by Section 13 or 15(d) of the Exchange Act during
the past 12 months and (2) has been subject to such filing
requirements for the past 90 days.  Yes X

Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this
form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-KSB or any amendments to this Form 10-KSB.     [ X ]

Issuer's Revenue during the year ended December 31, 2001:
$ 0

Aggregate market value of the voting and non-voting common
equity (1,616,770 shares of common stock) held by non-
affiliates based on the price of $0.075 per share (the
average of the bid and asked price as of May 17, 2002):
$121,257.75

            DOCUMENTS INCORPORATED BY REFERENCE:

None

                           PART I

ITEM 1.   DESCRIPTION OF BUSINESS

Development of the Company.

The Company was incorporated in the State of Nevada on
November 5, 1996 under the name Med Mark, Inc. In 1998,
Elast Technologies Corporation, A Delaware Corportion,
merged with and into Elast Merger, Inc., a Nevada
Corporation, which was a wholly owned subsidiary of Med
Mark, Inc. On or about June 29, 1998, the Company filed a
Certificate of Amendment to its Articles of Incorporation
changing the name of the Company to Elast Technologies, Inc.
Pursuant to the Acquisition Agreement, entered into on June
11, 2001, Elast Technologies, Inc. acquired one hundred
percent (100%) of the issued and outstanding shares of
common stock (Common Stock) of PTS, Inc., a Nevada
corporation from all of the shareholders of the issued and
outstanding Common Stock of PTS, in exchange for a total of
9,000,000 shares of common stock. The executive offices of
the Company are located 3220 Westleigh Ave., Las Vegas,
Nevada 89102. The Company's telephone number is
702.878.3388.

On or about June 30, 1998, the Company acquired all of the
issued and outstanding capital stock of Elast Technologies
Corporation, a Delaware corporation ("Elast Delaware"), and,
as specified above, changed the Company's name from Med
Mark, Inc. to Elast Technologies, Inc. The Company entered
into a licensing agreement with Dr. Robert D. Milne and
acquired the rights to develop, test, manufacture, and
market Dr. Milne's patented allergy-testing device ("ELAST
Device", U.S. Patent No. 5413113, issued on or about May 9,
1995). Dr. Milne is a board-certified family practice
physician with extensive experience in allergy testing and
preventative medicine. The Company has spent significant
amounts of time during its last two fiscal years on research
and development activities relating to the ELAST Device.

Effective June 2001, the Company issued 450,000 shares of
common stock to acquire all of the issued and outstanding
common shares of PTS, Inc. ("PTS").  PTS was inactive until
June 2001.  PTS' only asset is a note receivable in the
amount of $1,000,000, with a present value of $950,000,
which was received by PTS as consideration for the issuance
of 150,000 shares of common stock.  The balance of the note
receivable is shown in the consolidated financial statements
as a reduction of stockholders' equity.

Effective July 2001, the Company issued 20,000,000 shares of
common stock, valued at $2,000,000, to acquire 70% of the
issued and outstanding common shares of PTS Hong Kong Ltd.
("PTS HK").  The principal assets of PTS HK consists of an
agreement with Shanghai Information Investment Technology
Development, Inc. ("SIIT"), a subsidiary of Shanghai
Information Investment, Inc. to do business, participate
with, acquire, and/or Joint Venture with various business in
Mainland China.  The license had a fair market value of
$2,000,000 at the date of issuance and has been fully
impaired at December 31, 2001, due to the uncertainty of the
ultimate realization of the carrying amount of the asset.

Business of the Company.

The Company is engaged in the development of two separate
diagnostic tools: Its allergy testing device and its
chiropractic outcome-measuring instrument. These instruments
stem from the Company's identification of commercial
applications for worldwide patents secured by Robert D.
Milne, M.D. A primary application is the innovative
Electronic Allergo Sensitivity Test ("ELAST Device") The
ELAST Device is a no-invasive medical tool designed to
accurately diagnose allergies, as well as food and chemical
sensitivities. The Company holds the patents, trademarks and
legal rights to manufacture and sell and lease its
electronic allergy-testing device and is continually
striving to achieve refinement of its prototype.

A second and more readily available commercial application
of the Company's technologies is the Life Force Analyzer.
While working towards the perfection of the ELAST Device,
the Company's engineer realized a chiropractic application
of its technology. Specifically, they discovered that the
measurement of the body's electrical responses could be
applied to measuring chiropractic outcome. The Life Force
Analyzer can provide doctors of chiropractic with the means
to measure the damage of vertebral subluxations, small
misalignments of the vertebrae, which interfere with the
normal nerve flow, as well as the normalizing effect of
chiropractic adjustments. In its present stage of
development, management believes that the instrument is
capable of providing such assessments. With functional input
from a chiropractic perspective, it is being tailored into
an objective outcome-measuring instrument for use by the
chiropractic profession.

Allergy Division

Estimates from the Second National Health and Nutrition
Examination Survey suggest that allergies affect as many as
40 to 50 million people in the United States. Key to the
treatment of allergies is the proper identification of the
offending allergens. Therefore it is not surprising that
allergy testing was identified by the Centers for Disease
Control and Prevention as the reason for 1.4 million office
visits to physicians in 1991 alone.

Annoying reactions to foods were first documented by
Hippocrates (460- 370 BC) and some 600 years later by Galen
(131-210 AD). However, it was not until the 20th century
when fulminating reactions attributable to specific foods
were linked, that systematic inquiries were initiated. In
the 1920's, two German scientists discovered the immediate-
type hypersensitivity reactions in humans.

Over the subsequent decades increasing numbers of cases of
allergic reactions to foods were documented and the spectrum
of the clinical abnormalities expanded to include the slower
onset reactions of targeted organs. However, the cause-
effect relationship between the exposure to the food and the
manifestation of the clinical abnormalities was often not
established.

                        ELAST DEVICE

The technology of the Electronic Allergo Sensitivity Test
(ELAST Device) is based on:

     (1)  the physiological fact that the human body has an
     electric current; and,

     (2)  the clinical observation that the body's
          electrical current changes when it is exposed to a
          substance to which the body is sensitive or
          allergic.

The ELAST Device detects, measures and records perturbations
of normal micro-voltage upon a patent's exposure to an
offending substance. The Device charts the electrical flow,
processes the signal via analog-to-digital conversion, and
presents it graphically on a PC screen. This process is made
possible by sophisticated software developed by the Company,
resulting in documentation similar to an EKG.

ELAST Technologies holds patents, trademarks and legal
rights to the ELAST Device in all worldwide target markets
and, upon its perfection, the ELAST Device is expected to be
a significant aid in the diagnoses of allergies and
sensitivities.

The ELAST Device detects, measures and records perturbations
of normal micro-voltage upon a patent's exposure to an
offending substance. The Device charts the electrical flow,
processes the signal via analog-to-digital conversion, and
presents it graphically on a PC screen. This process is made
possible by sophisticated software developed by the Company,
resulting in documentation similar to an EKG.

The Company holds the patents, trademarks and legal rights
to the ELAST Device in all worldwide target markets and,
upon its perfection, the ELAST Device is expected to be a
significant aid in the diagnoses of allergies and
sensitivities.

Human therapeutic products are subject to rigorous pre-
clinical and clinical testing and other approval procedures.
The FDA and comparable foreign government regulatory
agencies require laboratory and clinical testing and other
costly and time- consuming procedures before medical
products such as the ELAST Device can be marketed. Various
federal, state and foreign statutes also govern or affect
the manufacturing, safety, labeling, storage, and marketing
of such products, as well as record-keeping incidental to
such marketing. Obtaining such approvals, and maintaining
ongoing compliance with these requirements can require the
expenditure of significant resources. To date, the Company
has not determined what procedures, if any, will be required
in this regard and has not begun any of these procedures.
The Company is currently investigating the possibility that
the ELAST Device falls under a category for which FDA
approval has already been given. The Company anticipates
that the ELAST Device may be included in such a category,
but research is currently being done by the Company to
determine regulatory requirements. In addition, regulatory
testing and approval would require significant funding and,
in the event that such funding exceeded the present
financial resources of the Company, the Company would have
to raise additional capital to market the ELAST Device.

In the event the FDA or other domestic or foreign regulatory
agency requires approval and testing of the ELAST Device,
prior to its commercial exploitation, the Company cannot
provide any assurances that testing procedures will be
successfully completed, or if completed, demonstrate that
the ELAST Device is safe and efficacious. Further, there can
be no assurances that any required government approvals will
be obtained. Accordingly, there can be no assurance that the
Company will be able to market the ELAST Device in the
United States or any foreign country. Any failure by the
Company, its subsidiary, collaborators or licensees to
obtain any required regulatory approvals or licenses would
adversely affect the ability of the Company to market its
products and would have a significant adverse affect on the
Company's revenues.

Allergy Testing Market

Management believes that the prospective market for the
ELAST Device is vast. The number of people affected by
allergies and food and chemical sensitivities is staggering
and the early and accurate identification of offending
allergens is critical to efficacious treatment.

The American College of Allergy, Asthma and Immunology
estimates that allergies, including hay fever, asthma and
skin disorders, affect 25% of the population. Notably,
allergies are the sixth-leading cause of chronic disease in
the United States and are estimated to cost the health-care
system more than $18 billion annually.

Currently, the same types of blood tests that are used to
detect food allergies are being used for other types of
allergies. The accuracy level for these tests is higher than
for food allergies, but management believes that the ELAST
Device's ease of use, non-invasiveness, real-time
quantifiable results and much lower costs make ELAST a
potential leader in the larger market segment.

Because of physical changes in our bodies as we age and
because of increased usage of prescription drugs, adults
over the age of 60 are much more susceptible to adverse
reactions. Of the nearly 45 million Americans 60 and older,
approximately 90% are taking one or more medications.
According to the book Worst Pills, Best Pills, in 1990, an
estimated 659,000 older Americans adults (60 and older) were
hospitalized because of adverse reactions to drugs they were
taking before their hospitalization. For these reasons,
management believes there is great potential for the
Electronic Allergo Sensitivity Testing device when testing
for adverse reactions to prescription drugs.

Management also believes that the ELAST Device can benefit
the 15% of the population that the National Academy of
Sciences estimates suffer from a variety of disabling
symptoms as a result of exposure to chemicals.

The following statistics are illustrative of the enormity of
the allergy testing market.

     *    In 1998 prescription drug expenditures for allergy
          related therapeutic agents exceeded $6 billion. 34

     *    From 1993 to 1998 the annual expenditures for
          antihistamines increased more than 600% from $317
          million to $2.3 billion.

     *    Contact dermatitis and other eczema were diagnosed
          during more than 7.1 million office visits to
          physicians and 430,000 outpatient visits.

     *    Between 2 to 3% of hospitalized patients have
          allergic drug reactions.

     *    Eight percent of children younger than six years
          experience food intolerances. Of this group, 2 to
          4% appear to have allergic reactions to food. In
          adults, an estimated 1 to 2% is sensitive to food
          or food additives.

Competition

The ELAST Device offers a completely unique approach to the
diagnosis of allergies and sensitivities than any allergy
testing method currently employed by the health care
industry. The science underlying the ELAST Device represents
a paradigm shift from biochemistry to bioelectricity.
Accordingly, PTS' competition will not be other firms
offering a similar product, which is the competitive norm,
but rather existing testing methods. There are several
including the skin-prick, Oral Challenge Test and various
types of blood testing. But, these allergy-testing methods
suffer, as a group, from being insufficiently accurate
and/or invasive, painful, time consuming and expensive.
Worst of all, they are too often diagnostically inaccurate,
leaving patients' conditions untreated, to the frustration
of both patient and doctor.

In fact allergists agree that results of available blood
testing are not a good indication of allergies. For example,
a clinically significant maladaptive response to a specific
food (or other allergic substance) cannot be diagnosed by
the presence of a positive serological or skin prick test
alone; neither can the diagnosis be invalidated by their
absence. Even when the food allergy is of the immediate
type, skin prick tests and measurement of allergen-specific
IgE may be negative. Furthermore, it is clear that IgE
mediated immune responses do not explain many food
reactions.

Clinical reports have shown that, in addition to typical
allergic responses such as asthma, skin rashes, and
rhinitis, other disorders such as vascular headache,
irritable bowel syndrome, Crohn's Disease, arthritis, and
neurological problems including attention deficit disorder
and hyperactivity may be attributed to food sensitivities.

Additionally, for most foods, true standardization is not
yet available. Radioallergosorbent Testing ("RAST") testing
is usually inferior to other means of allergen
quantification.

Because of the inaccuracies and inconsistencies present in
current clinical allergy tests, the elimination diet
continues to be the "gold standard" for diagnosing food
allergies and food intolerance.

Currently, the market for allergy testing devices (skin-
prick test kits, RAST and cytotoxic testing) and products
(allergens, solutions, syringes, etc.) consists of companies
of varying size and capabilities, ranging from small
privately held companies to divisions of multibillion dollar
international companies. According to its 1994 Annual
Report, Bayer Corporation (formerly Miles, Inc.) holds over
50% of the worldwide allergy testing market, exclusive of in
vitro testing. In 1994, Pharmacia (now Pharmacia & Upjohn,
Inc.) held a 73% worldwide market share for in vitro allergy
tests. Additional competitors in this area include Sanofi,
Ciba Corning and Diagnostic Products Corporation. This list
of competitors is not exhaustive.

International Sales and Marketing

Outside the US, where the FDA does not have jurisdiction,
regulatory approval of the ELAST Device is expected to be
granted more readily (if approval is even required). Thus,
ELAST plans to aim to introduce its ELAST Device in selected
overseas markets prior to its anticipated introduction in
the US.

Product Placement

The Company plans to place the ELAST Device with physicians
and hospitals through a lease program as opposed to a direct
sale. The current plan calls for a three-year lease with a
forfeitable lease payment of $3,000 each term. Test revenues
will be in addition to, and separate from, the cost of
leasing the device.

This model will have advantages for both the Company as well
as the physician and health care facility. The lessee of the
device will receive training, maintenance, service and
software/hardware upgrades and the Company will receive the
recurring revenue of the lease payments and the retention of
ownership, including ownership and control of test data.

Chiropractic Division

Since its founding PTS, Inc. has focused its energies on
perfecting the ELAST Device. In pursuing that goal the
Company's engineers realized a chiropractic application for
PTS' technology. More specifically, the Company discovered
that it had the capability to objectively measure the
outcome of a chiropractic spinal adjustment. After further
exploration, PTS' Board of Directors concluded that the
Company would establish a chiropractic division to market
its chiropractic device, transforming PTS from a purely
research and development company to a
manufacturing/marketing company and providing a mechanism to
generate revenue to further the refinement of the allergy
diagnostic device.

Upon his resignation as a member of the board of directors,
Dr. Milne accepted positions as Director of the Chiropractic
Division and Director of the Allergy Division of PTS, Inc.

The ELAST Device derives its diagnostic capabilities from
its ability to measure, non-invasively and in real-time, the
body's electrical responses to external stimuli. For the
chiropractic profession the patented technology should prove
valuable when applied to measuring the outcome of the
chiropractic event. Doctors of chiropractic have long sought
an objective means to measure outcome of the correction of
vertebral subluxation. Until now, however, the technology to
quantify this phenomenon has not existed. Elast's Life Force
Analyzer will measure the electrical flow of the patient and
show changes in real time, both assisting in establishing
care parameters, and encouraging patient understanding of
the efficacy of subluxation corrective care.

By providing doctors of chiropractic with the means to
measure the positive indications of vertebral subluxations,
small misalignments of the vertebrae which interfere with
the normal nerve flow and homeostasis, and the correction of
a vertebral subluxation through chiropractic spinal
adjustments, the Life Force Analyzer offers an objective
outcome assessment to doctors of chiropractic. In its
present stage of development, the Life Force Analyzer is
capable of providing such an assessment, and with
appropriate input from a chiropractic perspective, the
device is being tailored into an objective outcome-measuring
instrument for use by the chiropractic profession.

Chiropractors will measure their patients with the device
pre and post delivery of the spinal adjustment to correct
the vertebral subluxation(s). The patients will be able to
see for themselves the immediate results of correcting or
reducing the spinal nerve interference by measuring any
change in the outcome of electrical potential. Management
believes that the Instrument will eliminate any uncertainty
regarding the efficacy of rendering chiropractic spinal
adjustments to correct vertebral subluxations.

We believe that the chiropractic application of the device
will provide significant revenues in the near future.
Through expansion into this field, increased product
recognition will lead to future applications for the device
in other health care fields such as reflexology and
acupuncture, whose industry leaders are also active in the
search for objective methods to justify their costs and
treatments. ELAST will be well positioned to become the
leader in the field of health care outcome measurement and
assessment methods.

                     LIFE FORCE ANALYZER

The Life Force Analyzer (formerly called the Bio-Potential
Instrument) is a patented, non-invasive, diagnostic device
based on the physiological fact that the body has an
electrical current and the clinical observation that the
body's current changes when exposed to an external stimulus
(such as a chiropractic spinal adjustment). The device
detects, measures, and records the body's electrical current
in real time. By running the micro-voltage measurements
through the Company's proprietary software, the current is
then represented graphically on a PC screen similar to an
EKG. The Instrument is vastly different and superior to any
other device that claims to do something similar because it
puts nothing (i.e. a guard voltage) into the body, and the
electrical measurements are not dermal in origin.

The Life Force Analyzer consists of a number of
interdependent components. The first is a dual sensor
electrode, which is a proprietary development of the
Company, in combination with an analog to digital conversion
unit. This is the portion of the device that is in contact
with the test subject. A fiber-optic communication system
connects the sensing unit to the second part of the system,
the test module. Rechargeable power cells provide a medical
grade power supply, which achieves accuracy and stability of
the system. The test module can support and record multiple
(30) sensing units simultaneously. The test module then
sends the readings to a server of the PTS network, a
designated computer running the PTS software, which converts
the measurements to a graphic format that can be stored,
analyzed, and transmitted over the Internet. The resulting
graphic file of the test is then transmitted back to a
screen in the practitioner's office where it can be printed
out for the test subject and become a permanent part of the
patient's record.

The Life Force Analyzer in its current state of development
successfully measures the change in the body's electrical
flow following the metabolic event of a chiropractic spinal
adjustment. The final modifications to this device are
desirable more from a marketing standpoint than as a result
of technological necessity.

Product Placement

The current chiropractic-application business model calls
for a 3-year renewable lease with a forfeitable lease
payment of $3,000 per device. Another lease payment will
become due upon renewal of the lease in the fourth year and
at the beginning of each subsequent lease period.

In order to encourage doctors of chiropractic to incorporate
use of the Analyzer into their practices, Elast anticipates
charging a nominal fee (i.e. one dollar per patient) for
testing. At that cost, the chiropractor will not have to
alter his patient fee rates to add the Analyzer to his
practice. Each individual test will be transmitted over the
Internet from the Analyzer to the central data center where
the results will be collected in the database and then
instantaneously transmitted back for use by the doctor of
chiropractic.

The advantages of leasing the Analyzer accrue to both PTS
and the practitioner. PTS will receive more revenue (through
lease renewal) as well as retain the rights and privileges
of ownership, especially as these rights would pertain to
the database of test results. This database should prove a
most valuable asset of PTS. The practitioner would receive
the benefits of training, service, maintenance, and software
or hardware updates as they became available.

Competition

The Life Force Analyzer is based on a new and exclusive
technology developed by PTS, Inc. The instrument satisfies a
need of the chiropractic profession that has never before
been met; accordingly there is no current competition for
PTS. Through patent protection and PTS' business plan, PTS
will protect its proprietary property for as long as
possible. PTS will have taken control of the market and be
the industry standard before competition has the opportunity
to present itself. In this way, PTS will limit future
competition as well.

                 Operating and Manufacturing

The Company has presently put the research of the non-
invasive allergy testing on hold due the test results in
2000 indicated that this application is not feasible without
extensive additional research. However, the testing
indicated that the basic technology might have an
application in chiropractic medical procedures.

The initial testing of The Life Force Analyzer chiropractic
device was satisfactory, the Company had 25 units of the
device manufactured however with further trail testing the
Company found that certain part of the device need to be
replaced and further testing will be needed before deliver
to a select group of chiropractic medical practitioners. The
operating plan is to develop the production device as a
stand-alone unit, which is user-friendly and fully self-
contained.

The Company plans to negotiate and enter into marketing
agreements with appropriate distributors and marketing
agents. In addition, it may acquire the right to sell or
distribute products, or obtain licensing, marketing,
distribution or other rights to compatible products.

The Golden Gate Technologies (S) PTE LTD had an agreement
with the Company to purchase one hundred units of the LF
Analyzer, subject to their initial satisfaction review and
use of the initial order of ten units. The Company cannot
deliver the first 10 units until the devices are fully
tested, but has accepted a deposit towards an initial
purchase of the devices from Golden Gate Technologies (S)
PTE LTD.

Government Regulation

A significant factor in the production and marketing of the
Company's products, and in its research and development
activities, is the Regulation by governmental authorities in
the United States and other countries. The FDA regulates
medical devices and categorizes them into three regulatory
classifications subject to varying degrees of control:

     Class I:    Subject to the least regulatory control.
           Require compliance with labeling and record
           keeping regulations.

     Class II:   Subject to performance standard and other
           general controls.

     Class III:  Require clinical testing to assure safety
           and effectiveness. Subject to other general
           controls

Management believes that the ELAST Device should be
classified by the FDA as a Class II medical device similar
to an EKG. The Company has prepared a 510K application for
approval but has not yet submitted it to the FDA pending
consultations with leading consultants in the field.
Management is still in the decision-making process regarding
regulatory approval for the chiropractic Life Force
Analyzer. A 510K could be submitted, using a Surface
Electromyography (SEMG) device as a predicate, however, the
Company may be limited in its marketing claims and uses if
it takes that approach. Another alternative would be to
simply use a disclaimer and not seek FDA approval.

The decisions in this area are made more complex due to the
unique and exclusive nature of the company's technology and
diagnostic devices. The FDA makes approval processes much
simpler for companies who just want to copy and compete with
existing technologies. PTS has a brand new technology
however, and for that reason, does not fit neatly into the
FDA's guidelines. The Company is consulting with leaders in
this field in order to determine the best course of action
in this regard. If deemed the right course, the Life Force
Analyzer may be marketed without FDA approval. The allergy
device requires approval and in a worse case scenario, the
FDA would require large-scale clinical trials, which the
Company plans on undertaking anyway. In addition to human
health care products and medical devices, the FDA also
regulates the processes and facilities used to manufacture
such products.

Among the conditions for marketing products approved by the
FDA, is the requirement that the prospective manufacturer's
quality control and manufacturing procedures conform to the
FDA's Good Manufacturing Practice (GMP) regulations which
must be followed at all times. These regulations require
adherence to strict quality control procedures, including
documentation of all aspects of manufacturing process, to
demonstrate that a "controlled" process that ensures
consistency and reliability of the end product. Any
significant changes to the manufacturing process require
notification and documentation to the FDA.

The FDA has the right to conduct inspections of the
manufacturing facility at any time and at its discretion. To
ensure full technical compliance to FDA regulations, the
Company will continually spend time, money and effort in all
areas of production and quality control.

Compliance with Federal, State, and local provisions which
have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the
protection of the environment, have not had a material
effect upon the capital expenditures, earnings or
competitive position of the Company nor are they expected to
be significant in the future.

Employees.

PTS currently has two employees. Outside of theBoard of
Directors, Management has and is using consultants for
business, accounting, engineering and legal services until
anticipated revenues become realized. Further, the Company
plans to make extensive use of licensing and manufacturing
agreements with third parties.

Compliance with Environmental Laws.

The Company's management believes that no toxic or hazardous
materials will be byproducts of the manufacturing processes
of the ELAST Device; accordingly, management of the Company
believes that the Company will not incur unforeseen material
expenditures related to the cost of compliance with
applicable environmental laws, rules or regulations. The
Company believes that it is presently in compliance with all
applicable federal, state, and local environmental laws,
rules and regulations. Furthermore, in the event the Company
licenses the manufacturing rights, of the ELAST Device, to
third parties, the Company will not become subject to any
such restrictions. However, at some time in the future, the
research, development, manufacturing and production
processes of the Company may involve the controlled use of
hazardous materials. The Company may be subject to various
laws and regulations governing the use, manufacture,
storage, handling, and disposal of such materials and
certain waste products. The risk of accidental contamination
or injury from hazardous materials cannot be completely
eliminated. In the event of such an accident, the Company
could be held liable for any damages that result and any
such liability could exceed the financial resources of the
Company. In addition, there can be no assurance that in the
future the Company will not be required to incur significant
costs to comply with environmental laws and regulations
relating to hazardous materials. The Company cannot estimate
the potential costs of complying with local, state, and
federal environmental laws.

ITEM 2.   DESCRIPTION OF PROPERTY.

Management has elected to keep overhead expenses as  low  as
possible to further research and development activities.  In
furthering  that effort the company contracts  with  various
engineers to provide research and development support on  an
as needed basis thus precluding the need for facilities.

Property held by the Company.

The  consolidated financial statements filed as exhibits  to
this  Registration  Statement include the  accounts  of  the
Company  and  its subsidiary PTS Hong Kong. All  significant
intercompany transactions have been eliminated.  As  of  the
dates specified in the following table, the Company held the
following property:

-----------------------------------------------------------
------------------------
          Property             Dec. 31, 2001    Dec. 31,
                                                  2000

Cash and equivalents                 $1,255          19,194
-----------------------------------------------------------
------------------------

The Company defines cash equivalents as all highly liquid
investments with a maturity of 3 months or less when
purchased. The Company does not presently own any interests
in real estate. The Company does not presently own any
inventory or equipment.

ITEM 3.   LEGAL PROCEEDINGS

In February, 2000 we registered 100,000 shares of our common
stock  for  sale  on  a "best efforts" basis.  We  deposited
80,000  of those shares into DTC, one of the world's largest
security depositories and a national clearinghouse  for  the
settlement  of trades in corporate and municipal securities.
On  March  7,  2000, we were informed by the Securities  and
Exchange  Commission that our financial statements  on  file
were  not current, so we directed that the 80,000 shares  be
returned  to  certificate  form and  not  delivered  to  any
purchaser.  Unfortunately, Crescent Partners L.P.,  and  its
principal, Jeffrey Stone, accessed those shares and tried to
sell  them,  against  our orders.  We  were  forced  to  sue
Crescent  Partners  L.P.  in Dallas County,  Texas  District
Court and we obtained a restraining order freezing 66,900 of
those shares. We later learned that Jeffrey Stone is a felon
convicted  of  securities fraud in  United  States  District
Court in New York. We are continuing to prosecute this  case
and we believe Mr. Stone has been returned to prison, as his
conduct with our shares violated his probation. There  is  a
risk  that  we will not be able to recover all  the  shares,
which could affect the market and value of our common stock.

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

No  such matters were submitted during the fourth quarter of
the Company's fiscal year ending December 31, 2001.

                           PART II

ITEM 5.   MARKET  FOR  COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS.

Reports to Security Holders.

The  Company is a reporting company with the Securities  and
Exchange  Commission ("SEC"). The public may read  and  copy
any  materials  filed  with the  SEC  at  the  SEC's  Public
Reference  Room  at 450 Fifth Street N.W., Washington,  D.C.
20549.  The  public  may  also  obtain  information  on  the
operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.  The  SEC maintains an  Internet  site  that
contains  reports,  proxy  and information  statements,  and
other information regarding issuers that file electronically
with    the   SEC.   The   address   of   that    site    is
http://www.sec.gov. The Company currently maintains its  own
Internet address at www.elast.com.

The  Company  participates in the  OTC  Bulletin  Board,  an
electronic  quotation medium for securities  traded  outside
the  Nasdaq Stock Market. The Company's common stock  trades
on  the  OTC Bulletin Board under the trading symbol "PTSO".
This  market  is  extremely limited and the prices  for  the
Company's  common stock quoted by brokers is not necessarily
a  reliable indication of the value of the Company's  common
stock.  The  Company  was  listed  with  Standard  &  Poor's
Corporation  Records by publication on or about December  3,
1998.

There  have been no cash dividends declared on the Company's
common  stock since the Company's inception. Dividends  will
be declared at the sole discretion of the Company's Board of
Directors.

The Company's Board of Directors has approved and adopted  a
stock  option plan ("Stock Option Plan"), pursuant to  which
500,000 shares of the Company's $.001 par value common stock
will  be  reserved for issuance to satisfy the  exercise  of
options.  The Stock Option Plan will be designed  to  retain
qualified  and competent officers, employees, and  directors
of  the  Company.  The Company's Board of  Directors,  or  a
committee  thereof, shall administer the Stock  Option  Plan
and will be authorized, in its sole and absolute discretion,
to grant options thereunder to all eligible employees of the
Company, including officers, and to the Company's directors,
whether  or  not those directors are also employees  of  the
Company.  Options will be granted pursuant to the provisions
of  the  Stock  Option Plan on such terms, subject  to  such
conditions  and  at  such  exercise  prices  as   shall   be
determined  by  the  Company's Board of  Directors.  Options
granted  pursuant  to the Stock Option  Plan  shall  not  be
exercisable after the expiration of ten years from the  date
of grant.

Recent Sales of Unregistered Securities

During the fourth quarter, PTS issued 370,000 shares of  its
common  stock. Subsequent to these issuances, PTS  cancelled
80,000 shares during this same period. These issuances  were
exempt  from  registration pursuant to Section 4(2)  of  the
Securities Act of 1933, as amended.

In   general,  under  Rule  144  adopted  pursuant  to   the
Securities  Act of 1933, a person (or persons  whose  shares
are aggregated) who has satisfied a one year holding period,
under certain circumstances, may sell within any three-month
period  a number of shares which does not exceed the greater
of  one percent of the then outstanding Common Stock or  the
average weekly trading volume during the four calendar weeks
prior  to  such  sale. Rule 144 also permits, under  certain
circumstances,  the  sale  of shares  without  any  quantity
limitation by a person who has satisfied a two-year  holding
period  and  who is not, and has not been for the  preceding
three months, an affiliate of the Company.

ITEM 6.   MANAGEMENT'S PLAN OF OPERATION

        Management's Discussion And Plan Of Operation

Forward-looking statements are statements that estimate  the
happening  of future events and are not based on  historical
facts.  Forward-looking statements may be identified by  the
use  of forward-looking terminology, such as "could", "may",
"will",   "expect",   "shall",   "estimate",   "anticipate",
"probable",  "possible", "should", "continue",  "intend"  or
similar terms, variations of those terms or the negative  of
those  terms.  The forward-looking statements  specified  in
this  prospectus  have been compiled by  management  of  the
company  on the basis of assumptions made by management  and
considered by management to be reasonable. Future  operating
results  of the company, however, are impossible to  predict
and  no  representation, guaranty,  or  warranty  is  to  be
inferred from those forward-looking statements.

The  assumptions  used for purposes of  the  forward-looking
statements  represent  estimates of future  events  and  are
subject  to uncertainty as to possible changes in  economic,
legislative, industry, and other circumstances. As a result,
the  identification and interpretation  of  data  and  other
information  and  their  use  in  developing  and  selecting
assumptions  from and among reasonable alternatives  require
the  exercise  of judgment. To the extent that  the  assumed
events do not occur, the outcome may vary substantially from
anticipated  or  projected  results,  and,  accordingly,  no
opinion  is expressed on the achievability of those forward-
looking  statements. No assurance can be given that  any  of
the  assumptions relating to the forward-looking  statements
specified  in  this report are accurate, and  we  assume  no
obligation to update any such forward-looking statements.

General Overview

The  Company  is engaged in the development of two  separate
diagnostic  tools:  its  allergy  testing  device  and   its
chiropractic outcome-measuring instrument. These instruments
stem   from   the  Company's  identification  of  commercial
applications  for  worldwide patents secured  by  Robert  D.
Milne,   M.D.  A  primary  application  is  the   innovative
Electronic Allegro Sensitivity Test or the ELAST Device,  is
a  non-invasive medical tool designed to accurately diagnose
allergies,  as well as food and chemical sensitivities.  PTS
holds   the   patents,  trademarks  and  legal   rights   to
manufacture  and  sell  and lease  its  electronic  allergy-
testing  device and is making great strides in refining  the
prototype. While working towards the perfection of the ELAST
Device,  the Company's discovered a chiropractic application
of  its technology, Life Force Analyzer. Specifically,  PTS'
engineers  discovered  that the measurement  of  the  body's
electrical  responses  could  be  successfully  applied   to
measuring chiropractic outcome and therefore prove  valuable
to  the chiropractic profession. The Life Force Analyzer can
provide  doctors of chiropractic with the means  to  measure
the damage of vertebral subluxations, small misalignments of
the  vertebrae, which interfere with the normal nerve  flow,
as   well   as   the  normalizing  effect  of   chiropractic
adjustments.  In  its  present  stage  of  development   the
instrument  is  capable of providing such  assessments,  and
with functional input from a chiropractic perspective it  is
being   tailored   into   an   objective   outcome-measuring
instrument for use by the chiropractic profession.

We  have  established a chiropractic division to market  its
chiropractic device, transforming PTS from a purely research
and  development  company to a manufacturing  and  marketing
company.

As  a development stage company, we have incurred net losses
since  inception through December 31, 2001 of  approximately
$(10,975,425). However, we expect that we should be able  to
generate   revenue,  due  principally   to   marketing   the
chiropractic  applications of the Life Force Analyzer  after
completion of testing. To date, however, the Company has not
generated  revenues  from  the  commercialization   of   any
products.

The Company does not anticipate significant expenditures on
acquisition or development of other products during this
year. Subsequent to successful chiropractic medical
practitioner testing the Company will focus its initial
marketing and distribution efforts on development and
commercial distribution of the device. The plan calls for
the lease or license of the devices.

It will be necessary to raise funds to complete the limited
clinical trials of the chiropractic device. However, if the
device performs as anticipated, the Company's management
believes that will be able to raise funds necessary to begin
production of the devices through the sale of the Company's
stock, issuance of debt, and/or licensing certain
proprietary rights.

The Company may not able to raise the necessary funds to
complete the testing to enable of the LF Analyzer device to
be completed and brought to market.

The Company is continuing its efforts to acquire certain
companies in China, the acquisition of which the Company
believes will be accretive and complimentary to the
Company's existing business efforts. As the transactions
have not yet been completed there exists the possibility
that the acquisitions will not be concluded.

Results of Operations

Comparison of the Year Ended December 31, 2001 with the Year
Ended December 31, 2000.

Research  and  development expenses  include  the  costs  of
engineering,  manufacturing, clinical  trials,  and  related
activities conducted in connection to the further  prototype
development  of the ELAST Device to meet the functional  and
technical requirements for economic viability as well as the
marketing  and  delivery of the Life  Force  Analyzer  after
completion of testing. Research and development decreased by
$282,892 to $80,027 in 2001 from $362,919 in 2000.

Officers'  compensation decreased by $449,949 to $54,525  in
2001 from $504,474 in 2000.

Liquidity and Capital Resources.

At  December  31, 2001, the Company had cash and equivalents
of  $1,255. Because we are not generating any revenues  from
the  sale  or  licensing of our products, our only  external
source of liquidity is the sale of our capital stock.

Over  the past three years, the Company incurred significant
operating losses and utilized significant amounts of cash to
fund operations.  The Company is in a critical stage in  its
growth  as  it  continues to transition from a research  and
development company to a manufacturing company with complete
marketing and production capabilities.

ITEM 7.   FINANCIAL STATEMENTS.

The  Audited Financial Statements as of December, 31,  2001,
and December 31, 2000

                              PTS, INC.
                 (FORMERLY ELAST TECHNOLOGIES, INC.)
                    (A Development Stage Company)

                                INDEX




                                                              PAGE

          Independent Auditors' Report                            1

          Balance Sheets                                          2

          Statements of Operations                                3

          Statements of Shareholders' Deficit                4 - 10

          Statements of Cash Flows                          11 - 12

          Notes to the Financial Statements                 13 - 27









                    INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF PTS, INC.
 (FORMERLY ELAST TECHNOLOGIES, INC.)

We  have  audited  the  accompanying balance  sheet  of  PTS,  Inc.
(formerly  Elast Technologies, Inc.) (A Development Stage  Company)
as  of December 31, 2001, and the related statements of operations,
stockholders'  deficit  and cash flows for  the  year  then  ended.
These  financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion  on  these
financial statements based on our audit.  The balance sheet of PTS,
Inc.  as  of  December  31,  2000, and the  related  statements  of
operations, stockholders' equity and cash flows for the period from
March  12,  1996 (inception) to December 31, 2000, were audited  by
other   auditors  whose  report  thereon,  dated  March  31,  2001,
expressed   an  unqualified  opinion  on  those  statements.    The
financial  statements  for the period March  12,  1996  (inception)
through December 31, 2000, reflect total revenue and a net loss  of
$-0-  and  $5,312,445, respectively, of the  related  totals.   The
other  auditors' report has been furnished to us, and  our  opinion
insofar  as  it  related  to the amounts included  for  such  prior
period, is based solely on the report of such other auditors.

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

In  our  opinion, based on our audit and the report  of  the  other
auditors,  the  financial  statements  referred  to  above  present
fairly,  in all material respects, the financial position  of  PTS,
Inc.  as  of  December  31,  2001 and  2000,  the  results  of  its
operations and its cash flows for the years then ended, and for the
period  from  March 12, 1996 (inception) to December 31,  2001,  in
conformity  with  accounting principles generally accepted  in  the
United States of America.

The  accompanying financial statements have been prepared  assuming
that the Company will continue as a going concern.  As discussed in
Notes  1  and  13  to  the financial statements,  the  Company  has
suffered   losses   since   inception  during   its   developmental
operations, has negative working capital, and the implementation of
its  business  plan  has  been limited  by  its  ability  to  raise
necessary  operating capital through the sale of its common  stock.
The  Company's  future  operations are dependent, in part, upon its
ability to raise sufficient capital to pay its obligations as  they
come  due,  complete  development  and  testing  of  its  prototype
chiropractic  units,  finalize  the  commercial  device,  establish
commercial  production, and then successfully market  its  product.
These  matters raise substantial doubt about the Company's  ability
to  continue  as a going concern.  Management's plan in  regard  to
these matters  is described in Note 13.  The accompanying financial
statements do not include any adjustments  that  might result from
the outcome of these uncertainties.


                        MERDINGER, FRUCHTER, ROSEN  &  CORSO, P.C.
                        Certified Public Accountants
New York, New York
May 10, 2002



                              PTS, INC.
                    (A Development Stage Company)
                     CONSOLIDATED BALANCE SHEETS
                     DECEMBER 31, 2001 AND 2000

<Table>

                                                  <c>            <c>
                                                           December 31,
                                                         2001         2000
                                                      ---------      -------
        ASSETS
CURRENT ASSETS
 Cash and cash equivalents                               $1,255        $19,194
   Advances to officer                                        -         26,893
                                                     ----------      ---------
       Total current assets                               1,255         46,087

 Equipment, net of accumulated depreciation
  of $35,257 and $14,022                                 64,508         78,628
   Other assets                                           2,922          2,922
                                                     ----------      ---------
       TOTAL ASSETS                                     $68,685       $127,637
                                                     ==========      =========
       LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
 Accounts payable - trade                               176,379        $54,753
 Accrued payroll taxes                                   88,638         79,638
 Due to related party                                    44,500          4,000
 Short-term notes payable                                22,000              -
 Current portion of capital leases                            -          7,913
                                                     ----------      ---------
      Total current liabilities                         331,517        146,304

Capital leases, net of current portion                        -          5,555
                                                     ----------      ---------
      Total liabilities                                 331,517        151,859
                                                     ----------      ---------
STOCKHOLDERS' DEFICIT
 Common stock, $0.001 par value; 25,000,000 shares
  authorized; 22,258,626 and 1,611,655 shares
  issued and outstanding                                 22,259          1,612
 Additional paid-in capital                          11,036,714      5,172,611
 Additional paid-in capital for warrants                205,000        205,000
 Deficit accumulated during the development stage  (10,975,425)    (5,312,445)
                                                     ----------      ---------
                                                        288,548         66,778
 Notes receivable                                    ( 551,380)      ( 91,000)
                                                     ----------      ---------
      Total stockholders' deficit                    ( 262,832)      ( 24,222)
                                                     ----------      ---------
      TOTAL LIABILITIES AND STOCKHOLDERS'DEFICIT        $68,685       $127,637
                                                     ==========      =========
</Table>






The accompanying notes are an integral part of the consolidated
financial statements.

                                - 2 -



                              PTS, INC.
                    (A Development Stage Company)
                CONSOLIDATED STATEMENT OF OPERATIONS
                     DECEMBER 31, 2001 AND 2000


<Table>

                                   <c>             <c>          <c>
                                                                   Period from
                                                                  June 12, 1996
                                           For the Year Ended      (Inception) to
                                              December 31,        December 31,
                                           2001          2000         2001
                                        ----------    ---------   ------------
Operating costs
   Officers compensation                  $54,525        $504,474   $1,107,418
   Research and development                80,027         362,919      949,011
   Legal fees                              72,137         323,205      967,496
   Professional fees                       16,886          92,222      157,482
   Consulting services                  2,664,762          44,597    2,961,617
   Investor relations                     244,297       1,325,432    1,720,161
   Travel and entertainment               133,667          83,793      218,944
   Debt conversion expense                      -         115,284      115,284
   Other operating costs and expenses     419,752         264,724      816,905
                                      -----------    ------------ ------------
Total operating costs                   3,686,053       3,116,650    9,014,318

Impairment of long-lived assets       (2,000,000)               -  (2,000,000)
Interest income                            23,073           8,989       63,344
Interest expense                                -       ( 24,451)    ( 24,451)
                                      -----------    ------------ ------------
Loss before provision for income
taxes                                $(5,662,980)    $(3,132,112) $(10,975,425)

Provision for income taxes                      -               -            -
                                      -----------    ------------ ------------
Net loss                             $(5,662,980)    $(3,132,112) $(10,975,425)
                                      ===========    ============
Loss per common share - basic and
diluted                                 $ ( 0.41)      $ ( 65.80)
                                      ===========    ============
</Table>












The accompanying notes are an integral part of the consolidated
financial statements.

                                - 3 -



                                    PTS, INC.
                          (A Development Stage Company)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT


<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated      Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development   Subscription
                            Shares     Amount     share      Capital      Warrants       Stage       Receivable     Total
                          ---------   ---------  ---------- ---------- ------------- ------------ ----------------- --------
Balance, December 31,
1999                         796,167     $  796             $ 2,137,653      205,000  $(2,180,333)      $      -    $ 163,116
Shares sold in registered
offering                      18,333         18     $14.00      256,650            -             -             -      256,668
Shares sold in a
registered offering            9,000          9      11.11       99,991            -             -             -      100,000
Shares issued in investor                     5      17.69       88,445            -             -             -       88,450
relation services              5,000
Shares issued in investor
relation services              5,000          5      23.13      115,620            -             -             -      115,625
Shares issued in investor
relation services                640          1      24.38       15,600            -             -             -       15,601
Shares issued to officer
for compensation              12,500         13      21.25      265,613            -             -             -      265,626
Shares issued to officer
for compensation               1,900          2      12.65       24,033            -             -             -       24,035
Shares subject to             26,600         27                    (27)            -             -             -            -
litigation
Shares issued in
settlement of a dispute        4,000          4        .10       28,396            -             -             -       28,400
Shares issued in investor
relation services             13,800         14       7.17       98,986            -             -             -       99,000
Shares issued in investor
relation services             30,000         30       7.23      216,870            -             -             -      126,900
Shares sold in private
placement                      5,000          5      10.00       49,995            -             -             -       50,000
Shares issued for
research and development      10,000         10       5.00       49,990            -             -             -       50,000
consulting
Shares issued in investor
relation services             15,000         15       9.00      134,985            -             -             -      135,000
Shares issued for legal
services                      10,000         10       9.00       89,990            -             -             -       90,000
</Table>


The accompanying notes are an integral part of the consolidated financial
statements.
                                      - 4 -



                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)

<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated      Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development   Subscription
                            Shares     Amount     share      Capital      Warrants       Stage       Receivable     Total
                          ---------   ---------  ---------- ---------- ------------- ------------ ----------------- --------
Shares issued for debt
conversion                    50,000         50      11.77      588,552            -             -             -      588,602
Shares sold in a
registered offering            5,000          5       5.00       24,995            -             -             -       25,000
Shares issued in investor
relation services             40,000         40       4.20      167,960            -             -             -      168,000
Shares issued in investor
relation services             34,000         34       8.75      297,465            -             -             -      297,499
Shares sold in a
registered offering            5,000          5       5.00       24,995            -             -             -       25,000
Shares issued in investor
relation services              2,500          3       7.81       19,522            -             -             -       19,525
Shares sold in a
registered offering            6,429          6       3.50       22,494            -             -             -       22,500
Shares sold in a
registered offering            6,061          6       3.30       19,994            -             -             -       20,000
Shares sold in a
registered offering, net
of $10,080 commission         21,938         22       2.74       60,098            -             -             -       60,120
Shares sold in a
registered offering, net
of $1,500 commission           4,762          5       1.78        8,495            -             -             -        8,500
Shares sold in a
registered offering, net
of $3,000 commission          11,111         11       1.53       16,988            -             -             -       16,999
Shares sold in a
registered offering, net
of $300 commission             1,081          1       1.57        1,699            -             -             -        1,700
Shares sold in a
registered offering, net
of $1,500 commission           5,333          5       1.59        8,495            -             -             -        8,500
Shares issued in investor
relation services              7,500          8       2.50       18,742            -             -             -       18,750
Shares sold in a
registered offering, net
of $2,250 commission          12,000         12       10.6        2,738            -             -             -       12,750
Shares sold in a
registered offering, net
of $3,150 commission          15,000         15       1.19       17,835            -             -             -       17,850
</Table>


The accompanying notes are an integral part of the consolidated financial
statements.
                                      - 5 -



                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)

<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated      Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development   Subscription
                            Shares     Amount     share      Capital      Warrants       Stage       Receivable     Total
                          ---------   ---------  ---------- ---------- ------------- ------------ ----------------- --------
Shares sold in a
registered offering for      260,000        260       0.35       90,740            -             -      (91,000             -
notes receivable
Shares sold in a
registered offering           10,000         10       0.68        6,740            -             -            -         6,750
Shares sold in a
registered offering           10,000         10       0.70        6,990            -             -            -         7,000
Shares sold in a
registered offering            5,000          5       0.75        3,745            -             -            -         3,750
Shares sold in a
registered offering           26,000         26       0.70       18,149            -             -            -        18,175
Shares sold in a
registered offering           10,000         10       0.65        6,490            -             -            -         6,500
Shares issued for legal
services                     100,000        100       0.56       55,900            -             -            -        56,000
Net loss                           -          -                       -            -   (3,132,112)            -   (3,132,112)
                           ---------     ------      ------   ---------     ---------  -----------     --------   -----------
Balance, December 31,
2000                       1,611,655       1612               5,172,611      205,000   (5,312,445)     (91,000)      (24,222)
</Table>


The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 6 -

                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)

<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated      Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development   Subscription
                            Shares     Amount     share      Capital      Warrants       Stage       Receivable     Total
                          ---------   ---------  ---------- ---------- ------------- ------------ ----------------- --------
Balance, December 31,      1,611,655     $1,612              $5,172,611     $205,000  $(5,312,445)    $(91,000)     $(24,222)
2000
Shares sold in a
registered offering
during the three months       10,000         10       1.00        9,990                                                10,000
ended March 31, 2001
Shares sold in a
registered offering
during the three months      278,000        278       0.50      138,722                                               139,000
ended March 31, 2001
Shares sold in a
registered offering
during the three months      122,500        123       0.40       48,877                                                49,000
ended March 31, 2001
Shares sold in a
registered offering
during the three months      128,158        128       0.35       44,727                                                44,855
ended March 31, 2001
Shares sold in a
registered offering
during the three months       66,875         67       0.32       21,333                                                21,400
ended March 31, 2001
Shares sold in a
registered offering
during the three months       16,667         17       0.30        4,983                                                 5,000
ended March 31, 2001
Shares sold in a
registered offering
during the three months       20,000         20       0.25        4,980                                                 5,000
ended March 31, 2001
Shares sold in a
registered offering
during the three months       60,000         60       0.17        9,942                                                10,002
ended March 31, 2001
Shares sold in a
registered offering
during the three months       62,500         63       0.16        9,937                                                10,000
ended March 31, 2001
Shares issued for
services during the three
months ended March 31,        41,666         42       0.53       22,091                                                22,133
2001
Shares issued for
services during the three
months ended March 31,       269,285        269       0.48      109,083                                               109,352
2001
Shares issued for
services during the three
months ended March 31,        50,000         50       0.44       21,825                                                21,875
2001
Shares issued for
services during the three
months ended March 31,       160,715        161       0.28       45,032                                                45,193
2001
Shares issued for
services during the three
months ended March 31,       121,500        122       0.25       30,253                                                30,375
2001
Shares issued for
services during the three
months ended March 31,       159,375        159       0.19       29,724                                                29,883
2001
</Table>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 7 -



                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)

<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated     Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development  Subscription
                            Shares     Amount     share      Capital      Warrants       Stage      Receivable      Total
Shares subscribed during
the three months ended
March 31, 2001               750,000        750       0.47      349,250                               (350,000)             -
Shares sold in a
registered offering
during the three months       66,667         67       0.15        9,933                                                10,000
ended June 30, 2001
Shares sold in a
registered offering
during the three months      100,000        100       0.10        9,900                                                10,000
ended June 30, 2001
Shares sold in a
registered offering
during the three months      150,000        150       0.08       11,850                                                12,000
ended June 30, 2001
Shares sold in a
registered offering
during the three months       83,333         83       0.06        4,917                                                 5,000
ended June 30, 2001
Shares sold in a
registered offering
during the three months      100,000        100       0.05        4,900                                                 5,000
ended June 30, 2001
Shares sold in a
registered offering
during the three months      200,000        200       0.03        5,800                                                 6,000
ended June 30, 2001
Shares issued for
services during the three
months ended June 30,         61,000         61       0.66       40,199                                                40,260
2001
Shares issued for
services during the three
months ended June 30,        270,000        270       0.38      100,980                                               101,250
2001
Shares issued for
services during the three
months ended June 30,        100,000        100       0.31       30,900                                                31,000
2001
Shares issued for
services during the three
months ended June 30,        575,500        576       0.21      120,279                                               120,855
2001
Shares issued for
services during the three
months ended June 30,        775,000        775       0.18      138,725                                               139,500
2001
Shares issued for
services during the three
months ended June 30,        125,000        125       0.12       14,875                                                15,000
2001
Shares issued for
services during the three
months ended June 30,        325,000        325       0.08       25,675                                                26,000
2001
Shares issued for
services during the three
months ended June 30,        600,000        600       0.06       35,400                                                36,000
2001
</Table>



The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 8 -

                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)


<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated     Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development  Subscription
                            Shares     Amount     share      Capital      Warrants       Stage      Receivable      Total
Shares issued for
services during the three
months ended June 30,        225,000        225       0.10       22,275                                                22,500
2001
Reverse Stock Split 1:20                                                                                                    -
on June 30, 2001         (7,301,126)    (7,304)                   7,304
                         -----------    -------     -------   ---------    ---------   -----------    ---------     ---------
Balance, June 30, 2001
(Post stock-split)           384,270        384               6,657,272      205,000   (5,312,445)    (441,000)     1,109,211
Shares sold in a
registered offering
during the three months
ended Sept 30, 2001           60,000         60       0.83       49,940                                                50,000
Shares sold in a
registered offering
during the three months
ended Sept 30, 2001           24,096         24       0.83       19,976                                                20,000
PTS - Hong Kong asset
 purchase acquisition     20,000,000     20,000       0.10    1,980,000                                             2,000,000
Shares issued for
services during the three
months ended September
30, 2001                     246,725        247       2.45      604,229                                               604,476
Stock subscription           450,000        450       2.11      949,550                               (950,000)             -
Shares issued for
services during the three
months ended September
30, 2001                      50,000         50       1.01       50,450                                                50,500
Shares issued for
services during the three
months ended September
30, 2001                     205,333        205       0.95      194,861                                               195,066
Shares issued for
services during the three                             0.85       21,225
months ended September
30, 2001                      25,000         25                                                                        21,250
Shares issued for
services during the three
months ended September
30, 2001                     375,000        375       0.80      299,625                                               300,000
Shares issued for
services during the three
months ended September
30, 2001                      10,000         10       0.72        7,190                                                 7,200
Shares issued for
services during the three
months ended September
30, 2001                      95,000         95       0.67       63,555                                                63,650
Shares issued for
services during the three
months ended September
30, 2001                      60,000         60       0.55       32,940                                                33,000
</Table>


The accompanying notes are an integral part of the consolidated financial
statements.

                                      - 9 -


                                    PTS, INC.
                          (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT (Continued)



<Table>

                       <c>         <c>       <c>         <c>         <c>           <c>          <c>              <c>
                                                                                        Deficit        Less:
                                                                         Detachable   Accumulated      Common
                                    Common Stock            Additional      Stock     During the       Stock
                                                Price per    Paid-in      Purchase    Development   Subscription
                            Shares     Amount     share      Capital      Warrants       Stage       Receivable     Total
                          ---------   ---------  ---------- ---------- ------------- ------------ ----------------- --------
Shares issued for
services during the three
months ended December 31,     20,000         20       0.45        8,980                                                 9,000
2001
Shares issued for
services during the three
months ended December 31,     50,000         50       0.43       21,450                                                21,500
2001
Shares issued for
services during the three
months ended December 31,    220,000        220       0.40       87,780                                                88,000
2001

Cancelled share issuances
- various                   (16,798)       (16)       0.70     (12,309)                                              (12,325)

Net loss                                      -                       -                (5,662,980)                (5,662,980)
Payments made to
subscription receivable                       -                       -                                 398,620       398,620
Subscription receivable
 written-off                                  -                       -                                  91,000        91,000
Subscription receivable
settled with services                         -                                                         350,000       350,000
                         -----------    -------    -------- -----------    --------- -------------   -----------   ----------
Balance,
December 31, 2001         22,258,626    $22,259             $11,036,714      205,000 $(10,975,425)   $(551,380)    $(262,832)
                         ===========    =======    ======== ===========    ========= =============   ===========   ==========
</Table>





The accompanying notes are an integral part of the consolidated financial
statements.

                                     - 10 -




                              PTS, INC.
                    (A Development Stage Company)
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                     DECEMBER 31, 2001 AND 2000


<Table>

                                     <c>          <c>         <c>
                                                                  Period from
                                                                  June 12, 1996
                                           For the Year Ended     (Inception) to
                                              December 31,        December 31,
                                            ---------------        --------
                                           2001         2000         2001
                                         ---------     -------     ---------
Cash flows from operating activities:
Net loss                               $(5,662,980) $(3,132,112) $(10,975,425)
Adjustments to reconcile net loss to
net
 Cash used in operating activities:
  Depreciation and amortization              21,235       12,038       36,749
  Issuance of shares for services         2,172,493    1,660,008    4,766,935
  Impairment of long-lived asset          2,000,000            -    2,000,000
  Bad debt expense                          104,425            -      104,425
  Expenses paid by officer                   44,500            -       44,500
  Subscription receivable settled with      350,000            -      350,000
services
  Shares issued in settlement of                  -       28,400            -
dispute
  Loss on sale of asset                           -            -        2,608
  Debt conversion expense                         -      115,284      115,284
Decrease (increase) in assets:
  Advances to officer                             -    ( 26,893)    ( 26,893)
  Other assets                                    -     ( 2,922)    (  2,922)
Increase (decrease) in liabilities:
  Accounts payable - trade                  121,626       40,140      176,379
  Due to related party                    (  4,000)        4,000            -
  Accrued payroll taxes                       9,000       63,226      111,125
                                       ------------ ------------ ------------
Cash used in operating activities        ( 843,701)  (1,238,831) ( 3,297,235)
                                       ------------ ------------ ------------
Cash flows provided by (used in)
investing activities:
Purchase of equipment                     (  7,115)    ( 57,554)    ( 85,866)
Sale of property and equipment                    -            -        5,000
                                       ------------ ------------ ------------
Cash used in investing activities          ( 7,115)     (57,554)     (80,866)
                                       ------------ ------------ ------------
Cash flows provided by (used in)
financing activities:
Proceeds from issuance of convertible             -      450,832      450,832
debt
Payments on capital lease obligations             -     ( 8,732)    (  8,732)
Acquisition of MedMark, Inc.                      -            -       30,726
Proceeds from the exercise of warrants            -            -      189,990
Payment of common stock subscription        398,620            -      408,620
receivable
Proceeds from the issuance of common        412,257      667,764    2,280,253
stock
Proceeds from issuance of note               25,000            -       25,000
Payments on note                          (  3,000)            -    (  3,000)
Contribution to additional paid-in
capital                                           -            -        5,667
                                       ------------ ------------ ------------
Cash provided by financing activities       832,877    1,109,864    3,379,356
                                       ------------ ------------ ------------
</Table>


The accompanying notes are an integral part of the consolidated
financial statements.

                               - 11 -



                              PTS, INC.
                    (A Development Stage Company)
          CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                     DECEMBER 31, 2001 AND 2000



<Table>

                             <c>           <c>          <c>
                                                           Period from
                                                          June 12, 1996
                                   For the Year Ended      (Inception) to
                                      December 31,         December 31,
                                    ----------------       ------------
                                    2001         2000          2001
                                 ---------    ---------    -----------
Net increase (decrease) in cash    ( 17,939)   ( 186,521)         1,255

Cash at beginning of period           19,194      205,715             -
                                ------------ ------------   -------------
Cash at end of period                 $1,255      $19,194        $1,255
                                ------------ ------------   -------------
SUPPLEMENTAL SCHEDULE OF CASH
FLOW
   INFORMATION:
Interest paid                           $  -         $  -      $  1,375
                                ============ ============   =============
Income taxes paid                       $  -         $  -      $  1,973
                                ============ ============   =============
NON-CASH INVESTING AND
FINANCING
   ACTIVITIES
Assets acquired in non-cash       $2,000,000         $  -
transaction

Issuance of common stock for       1,300,000       91,000
notes receivable

Assets acquired through capital            -       22,200
lease

Common stock issued upon debt              -      473,318
conversions

Assumed liabilities by officer        13,468            -
</Table>















The accompanying notes are an integral part of the consolidated
financial statements.

                               - 12 -

                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          Development Stage Operations
          PTS, Inc. (formerly Elast Technologies, Inc.) (a company in
          the development stage) has a limited operating history with
          no  revenues  and no products or operable technology  ready
          for  the  market.  The Company is engaged  in  the  ongoing
          development of its first marketable product, a non-invasive
          medical  device  to test for human bio-voltage  measurement
          with  real time, quantifiable, visually displayed  results.
          Management's efforts to date have focused primarily on  the
          raising  of  equity capital through the sale of its  common
          stock  and  on the development of the medical  device.   As
          such, the Company is subject to the risks and uncertainties
          associated  with  a  new  business.   The  success  of  the
          Company's future operations is dependent, in part, upon the
          Company's  ability to raise sufficient capital to  complete
          development  and  testing  of  its  prototype  chiropractic
          units, finalize the commercial device, establish commercial
          production,  and  then  successfully  market  its  product.
          Management's plans are discussed further in Note 13.

          Principles of Consolidation
          The  accompanying consolidated financial statements include
          the   accounts  of  PTS,  Inc.  (the  "Company")  and   its
          subsidiary,  Elast  Technologies  Corporation  (a  Delaware
          corporation)    ("Elast   Delaware").    All    significant
          intercompany transactions have been eliminated.

          Revenue Recognition
          Revenue sales will be recognized upon the shipment  of  the
          Company's  medical  devices.  Provision for  discounts  and
          allowances  will  be provided for in the  same  period  the
          related medical devices sales are recorded.

          Cash and Equivalents
          The  Company  considers  all  highly   liquid  investments
          purchased with original maturities of three months  or less
          to be cash equivalents.

          Equipment
          Equipment  is  recorded at cost and depreciated  using  the
          straight-line  method  over  the  expected  useful   lives.
          Expenditures for normal maintenance and repairs are charged
          to   operations.    The   cost  and   related   accumulated
          depreciation  of assets are removed from the accounts  upon
          retirement  or other disposition, and the resulting  profit
          or reflected in the statement of operations.

          Renewals and betterments that materially extend the life of
          the  assets  are capitalized.  The Company's  property  and
          equipment  consists  of equipment, computers  and  software
          with expected useful lives of 3 - 5 years.

                               - 13 -
                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Intangible Asset
          The   Company  records  its  intangible  assets  at   cost.
          Intangible  assets consisting of licenses and  patents  are
          amortized on a straight-line method over the shorter of its
          contractual term or the estimated useful life.

          Research and Development Costs
          Research  and  development  expenditures  are  charged   to
          operations as they are incurred.

          Impairment of Long-Lived Assets

         Long-lived assets are reviewed  for   impairment    whenever
         events  or  changes  in  circumstances  indicate  that   the
         related  carrying  amount may not be recoverable.   Recovery
         of  assets  to be held and used is measured by a  comparison
         of  the carrying amount of the assets to the future net cash
         flows  expected  to  be generated by  the  asset.   If  such
         assets are considered to be impaired, the impairment  to  be
         recognized  is measured by the amount by which the  carrying
         amount  of the assets exceeds the fair value of the  assets.
         Assets  to be disposed of are reported at the lower  of  the
         carrying amount or fair value less the cost to sell.

          Income Taxes
          The  Company accounts for income taxes using the  liability
          method.  Under the liability method, deferred income  taxes
          are  determined based on differences between the  financial
          reporting  and  tax bases of assets and liabilities.   They
          are measured using the enacted tax rates and laws that will
          be  in effect when the differences are expected to reverse.
          The   Company  is  required  to  adjust  its  deferred  tax
          liabilities in the period when tax rates or the  provisions
          of  the  income tax laws change.  Valuation allowances  are
          established  to reduce deferred tax assets to  the  amounts
          expected to be realized.

          Disclosures about Fair Value of Financial Instruments
          The carrying amount of the Company's financial instruments,
          which  include cash and equivalents, advances to  officers,
          accounts  payable-trade,  and capital  leases,  approximate
          their fair values at December 31, 2001 and 2000.  The notes
          receivable  included  in  the  statement  of  shareholders'
          equity  are not considered financial instruments.







                               - 14 -



                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          Stock-Based Compensation

         SFAS No. 123, "Accounting for  Stock-Based    Compensation",
         encourages,  but  does  not  require  companies  to   record
         compensation  cost  for  stock-based  employee  compensation
         plans at fair value.  The Company has chosen to account  for
         stock-based compensation using  the  intrinsic value  method
         prescribed in Accounting  Principles  Board Opinion  No. 25,
         "Accounting for Stock  Issued to Employees",   and   related
         Interpretations.  Accordingly,  compensation cost  for stock
         options is measured as the excess,  if  any, of  the  quoted
         market  price  of  the  Company's  stock at the date  of the
         grant over the amount an employee must  pay  to  acquire the
         stock.

          Earnings (Loss) per Common Share

         SFAS No. 128, "Earnings Per Share" requires presentation  of
         basic  loss  per  share ("Basic LPS") and diluted  loss  per
         share ("Diluted LPS").


         The computation of basic loss per share   is   computed   by
         dividing  loss  available  to  common  stockholders  by  the
         weighted average number of outstanding common shares  during
         the  period.   Diluted loss per share gives  effect  to  all
         dilutive  potential  common shares  outstanding  during  the
         period.   The  computation of diluted IPS  does  not  assume
         conversion,  exercise or contingent exercise  of  securities
         that would have an anti-dilutive effect on losses.

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

          Reclassification
          Certain  reclassifications  have  been  made  to  the  2000
          financial  statements  in order  to  conform  to  the  2001
          financial statement presentation.









                               - 15 -


                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000

NOTE 2 -  EQUIPMENT

          Equipment at December 31, 2001 and 2000 consists of the
     following:

                                  2001          2000
                                --------    -----------
Test equipment                 $  61,028        $  61,028
Computers                         27,963           20,848
Computer software                 10,774           10,774
                               ---------      -----------
                                  99,765           92,650
Less: accumulated
depreciation                    (35,257)         (14,022)
                               ---------      -----------
Total property and equipment,
net                            $  64,508        $  78,628
                               =========      ===========

          Depreciation expense for the years ended December 31,  2001
          and 2000 was $23,459 and $11,798, respectively.

NOTE 3 -  INCOME TAXES

          At December 31, 2001 and 2000, the components of the
          provision for income taxes are as follows:

                             2001        2000
                          ---------    ---------
Current tax expense:
  Federal                       $  -         $  -
  State                            -            -
                          ----------  -----------
                                   -            -
                          ----------  -----------
Deferred tax expense:
  Federal                          -            -
  State                            -            -
                          ----------  -----------
                                   -            -
                          ----------  -----------
  Total provision               $  -         $  -
                          ==========  ===========

          Significant components of the Company's deferred income tax
          assets at December 31, 2001 and 2000 are as follows:

                                            2001         2000
                                        ---------   ----------
Deferred income tax asset:
Net operating loss carry forward       $3,012,000    $1,716,022
Impairment expense                        629,000	      -
Other                                      44,000        43,829
                                      -----------    ----------
Total deferred income tax asset         3,685,000     1,759,851
  valuation allowance                 (3,685,000)   (1,759,851)
                                      -----------   -----------
Net deferred income tax asset          $        -          $  -
                                      ===========     ==========

                               - 16 -




                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 3 -  INCOME TAXES (Continued)

          The  Company, based upon its history of losses  during  its
          development  stage  and  management's  assessment  of  when
          operations are anticipated to generate taxable income,  has
          concluded that it is more likely than not that none of  the
          net  deferred  income tax assets will be  realized  through
          future  taxable  earnings and has established  a  valuation
          allowance for them.

          Reconciliation of the effective income tax rate to the U.S.
     statutory rate is as follows:

                                        2001        2000
                                      --------    --------
Tax expense at the U.S. statutory
  income tax rate                        (34.0)%    (34.0)%
Increase in the valuation allowance         34.0       36.2
Other                                          -    (  2.2)
                                      ----------  ---------
Effective income tax rate                     -%         -%
                                      ==========  =========

          The  Company  has determined that there will be significant
          limitations on the future utilization of the net  operating
          loss  carry  forward due to the ownership  changes  in  the
          Company.

NOTE 4 -  CAPITAL LEASE OBLIGATIONS

          The  Company leased certain equipment under agreements that
          are  classified  as capital leases during  the  year  ended
          December 31, 2000.  The $22,200 cost of the equipment under
          capital  leases  is  included  in  equipment.   Accumulated
          depreciation of the leased equipment at December  31,  2001
          and 2000 was approximately $9,413 and $5,098, respectively.
          Depreciation  of  the  leased  property  is   included   in
          depreciation expense.

          During  2001,  a former officer assumed the  capital  lease
          obligation in lieu of paying a related party receivable.

NOTE 5 -  CONVERTIBLE DEBT

          On March 13, 2000, the Company entered into two convertible
          note  agreements.   Each  note had  an  original  principal
          balance  of  $225,416 and earned interest at 9%  per  annum
          with  a  maturity date of March 31, 2002.  The  notes  were
          convertible into the Company's common stock.  On  September
          30,  2000, the Company induced the conversion of both notes
          at  a  discounted  rate and issued a total of 2,500 shares.
          The Company recognized debt conversion expense of $115,284.



                               - 17 -



                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 6 -  RELATED PARTY TRANSACTIONS

          Licensing Agreement
          In 1996 the Company entered into a licensing agreement with
          an  individual  who  is  an officer and  major  shareholder
          whereby  the  Company  received  the  exclusive  right   to
          develop, manufacture, and market an allergy detection, non-
          invasive,  medical  device (Electronic  Allergo-Sensitivity
          Test  Device, U.S. Patent No. 5413113).  The Company issued
          16,001  shares  of  Company common stock with  a  value  of
          $800.  The licensing agreement does not require any royalty
          payments.   The licensing agreement is for a term  of  five
          years,  with  the  Company holding options  to  extend  the
          agreement  for  two  additional  five-year  terms   at   no
          additional cost.

          Advances to Officer
          During  2000, the Company advanced amounts totaling $26,893
          to an officer and shareholder of the Company.

          Due to Related Party
          In  2000,  an entity that was controlled by an officer  and
          shareholder of the Company loaned $4,000 to the Company.

          In  2001,  an  officer and shareholder of the Company  paid
          $44,500 of operating expenses in behalf the Company.

NOTE 7 -  COMMITMENTS AND CONTINGENCIES

          Patent Technology
          In  1996,  the Company entered into a technology  licensing
          agreement that provided for its use of certain intellectual
          property  described  by  a  United  States  patent.   Since
          obtaining  the  license rights, the  Company  has  expended
          significant research and development efforts in conjunction
          with  the  intellectual  property  that  has  resulted   in
          significant modifications and enhancements.  The  Company's
          efforts  to  date,  plus  its anticipated  efforts  in  the
          future,  raise doubt that the final technology involved  in
          the  medical  device  will  be protected  by  the  original
          patent.    Therefore,   the  Company   has   expensed   the
          unamortized costs associated with the licensing agreement.

          Stock Options Dispute
          A dispute between the Company and a former director existed
          relating  to  options to purchase common stock  granted  by
          Elast Delaware, prior to its merger with the Company.   The
          dispute  was  resolved  in 2000, and  the  former  director
          received  200  shares with a fair value of $28,400  at  the
          time the shares were issued.



                               - 18 -



                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 7 -  COMMITMENTS AND CONTINGENCIES (Continued)

          Employment Taxes
          The  Company, in its fiduciary capacity as an employer, has
          the primary responsibility for deducting and remitting both
          the employer and employee portions of payroll related taxes
          to the appropriate governmental agencies.  Since inception,
          the Company paid $1,052,893 in compensation to three of its
          officers upon which taxes were not withheld nor remitted to
          the  appropriate governmental authorities.  If, as a result
          of not withholding employment taxes, the employees incur an
          income   tax  liability  that  ultimately  results   in   a
          deficiency,  the Company becomes contingently  responsible,
          if  the  employees cannot or do not satisfy that liability.
          Since  inception,  the Company is contingently  liable  for
          these  taxes,  penalties, and interest,  which  approximate
          $390,000.   The  employer  portion of  the  payroll-related
          taxes has been recorded as a liability by the Company.

          Termination Dispute
          A  dispute exists between the Company and a former  officer
          and director of the Company (see Note 11).

          Operating Leases
          The  Company  has  certain  operating  leases  with  future
          minimum lease payments at December 31, 2001 as follows:

     2002                           $   4,897
                                     --------
     Total minimum lease payments   $   4,897
                                     ========

          Rent  expense for operating leases for the two years  ended
          December  31,  2001  and  2000, was  $32,063  and  $29,379,
          respectively.

NOTE 8 -  STOCK-BASED COMPENSATION

          During  1999,  the Company's Board of Directors  adopted  a
          Stock  Option  Plan and granted options to purchase  15,000
          shares of the Company's common stock to two members of  the
          Board  of Directors.  The maximum number of shares issuable
          under  the plan may not exceed 500,000 shares.  The options
          were  issued  with  an  exercise price of $300  with  5,000
          expiring  in  July 2002 and 10,000 expiring in March  2003.
          As  the directors are employees of the Company, the options
          were accounted for under APB No. 25.  The exercise price of
          the  options  equaled or exceeded the  fair  value  of  the
          Company's common stock at the date of grant.  Consequently,
          no  compensation expense was recognized in connection  with
          the issuance of these options.



                               - 19 -


                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 8 -  STOCK-BASED COMPENSATION (Continued)

          On  February  13,  1998, the Board of  Directors  of  Elast
          Delaware granted 10,000 options to purchase common stock to
          each  of  the  three members of the Board of  Directors  of
          Elast Delaware in recognition of their service to it.   The
          30,000  options have a three-year term and are  exercisable
          at  $400  per  share.  Two  of the Directors were employees
          of  Elast  Delaware, and their options were  accounted  for
          under  APB  No.  25.  The options were granted  at  prices,
          which   equaled  or  exceeded  the  fair  value  of   Elast
          Delaware's   common   stock   at   the   date   of   grant.
          Consequently,  no  compensation expense was  recognized  in
          connection with the issuance of these 20,000 options.   The
          10,000  options  issued  to the directors  were  valued  in
          accordance  with  the  provision  of  SFAS  No.   123   and
          determined  to  have  no value; therefore  no  compensation
          expense was recognized or pro forma expense disclosed.

          The following summarizes information about stock options of
          the Company granted and outstanding at December 31, 2001:

                                           Exercise
                                Options     Price
                               ---------   --------
Outstanding at beginning of
 year                              15,000     $ 300
Granted                                -          -
Exercised                              -          -
Forfeited                              -          -
Outstanding at end of year        15,000      $ 300

          The   following  summarizes  information  about  the  stock
          options  of  Elast  Delaware  granted  and  outstanding  at
          December 31, 2001:

                                Exercise
                                Options       Price
                                --------     ------
Outstanding at beginning of
year                              30,000         $ 400
  Granted                              -             -
  Exercised                            -             -
  Forfeited /Expired            (30,000)           400
                                --------     ---------
Outstanding at end of year             -         $   -
                                ========     =========








                               - 20 -
                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 8 -  STOCK-BASED COMPENSATION (Continued)

          Summary information about the Company's options outstanding
          at December 31, 2001:

     Exercise price                                     $    300
     Options outstanding, December 31, 2001               15,000
     Weighted average remaining contractual life       1.0 years
     Weighted average exercise price                    $    300
     Options exercisable, December 31, 2000               15,000
     Weighted average exercise price                    $    300

NOTE 9 -  STOCK PURCHASE WARRANTS

          The  Company's private placement offering of stock in  1999
          was accomplished with the sale of 2,500 units  comprised of
          one  share of common stock and one stock purchase warrants.
          The  stock  purchase warrants were immediately  exercisable
          upon issuance.  The stock purchase warrants provide for  an
          exercise  price of $480 and expire in July 2004.  To  date,
          none  of  the stock purchase warrants have been  exercised.
          At  December  31,  2001 and 2000, 50,000 shares  of  common
          stock, respectively, were reserved for this purpose.

NOTE 10 -      LOSS PER COMMON SHARE

          Basic  and diluted loss per common share has been  computed
          by  dividing  the loss available to common shareholders  by
          the weighted-average number of common shares for the period
          presented.  The computations of basic and diluted loss  per
          common share for the years ended December 31, 2001 and 2000
          are as follows:

                                               Year Ended
                                              December 31,
                                              ------------
                                           2001         2000
                                        ----------    --------
 Net loss available to common
 stockholders                         $(5,662,980)   $(3,132,112)
 Weighted-average shares,
   basic and diluted                    13,905,273         47,659
 Loss per common share,                ===========   ============
   basic and diluted                      $( 0.41)      $( 65.71)
                                       ===========   ============

          The  effect  of the potentially dilutive securities  listed
          below  was not included in the computation of diluted  loss
          per share because to do so would have been antidilutive for
          the periods presented.



                               - 21 -
                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 10 -      LOSS PER COMMON SHARE (Continued)

                                                 Year Ended
                                                December 31,
                                               --------------
                                              2001        2000
                                           ---------    --------
    Shares of common stock issuable
    under:
    Stock options of the Company               15,000      15,000
    Stock options of consolidated
    subsidiary                                      -      30,000
    Stock purchase warrants of the
    Company                                    50,000      50,000
                                             --------    --------
                                               65,000      95,000
                                             ========    ========

NOTE 11 -      STOCK TRANSACTIONS

          Stock Split
          On  December  12,  2000, the Company's Board  of  Directors
          authorized   a   one-for-ten   reverse   stock   split   to
          shareholders of record on December 22, 2000.

          On   June   1,  2001,  the  Company's  Board  of  Directors
          authorized   a  one-for-twenty  reverse  stock   split   to
          shareholders of record on June 30, 2001.  All references in
          the  notes  to  financial statements to number  of  shares,
          weighted  average  shares, per share  amounts,  and  market
          prices of the Company's common stock have been adjusted  to
          give retroactive effect for the reverse stock splits.

          Shares Issued for Acquisition
          Effective  June 2001, the Company issued 450,000 shares  of
          common  stock to acquire all of the issued and  outstanding
          common shares of PTS, Inc. ("PTS").  PTS was inactive until
          June  2001.   PTS' only asset is a note receivable  in  the
          amount  of  $1,000,000, with a present value  of  $950,000,
          which was received by PTS as consideration for the issuance
          of 150,000 shares of common stock.  The balance of the note
          receivable   is   shown   in  the  consolidated   financial
          statements as a reduction of stockholders' equity (see Note
          12).

          Shares Issued to Acquire a License Agreement
          In  2001,  the  Company issued  20,000,000 shares of common
          stock for  $2,000,000 to obtain a 70% interest in PTS, Inc.
          (HK) Limited,  a  Company controlled by a stockholder  (see
          Note 12).

          Shares Issued for Services
          In  2000  the  Company issued 4,345 restricted  shares  and
          10,047 registered shares for services as follows:



                               - 22 -



                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 11 -      STOCK TRANSACTIONS (Continued)

          Shares Issued for Services (continued)
               During  2000,  the  Company  issued  3,750  restricted
               shares   and  3,922  registered  shares  for  investor
               relations services.  The value of the shares and  were
               based  on  market value of the shares at the  date  of
               issuance.

               The  Company  issued  95  restricted  shares  and  625
               registered  shares  to officers as compensation.   The
               value of the shares and compensation was based on  the
               market price of the Company's common stock at the date
               of issuance.

               The Company issued 500 restricted shares of its common
               stock  for consulting services in connection with  its
               research  and  development efforts.   The  shares  and
               services  were valued at the fair value of the  shares
               at  the  date  of issuance.  The Company  also  issued
               5,500  common shares for legal services.   The  shares
               and  the  related services were valued at  the  market
               price  per share of the Company's common stock at  the
               date of issuance.

          During the period from January 1, 2001 through December 31,
          2001,  the  Company issued 2,020,712 additional  shares  of
          common stock for services received.  Shares were issued for
          the following:

                                       Number of      Value
                                         Shares      Acquired
                                       ---------   -----------
          Notes acquired                 450,000     $  950,000
          Services:
            Investor relations         1,556,129      2,457,870
            Research and development       8,333         50,850
            Lawsuit settlement             5,000          8,000
            Director compensation          1,250          6,275
                                       ---------    -----------
             Total services            1,570,712      2,552,995
                                       ---------    -----------
            Total common stock issue   2,020,712     $3,502,995
                                       =========    ===========

          Private Placement Offerings
          In 2000, the Company, in a private placement offering, sold
          for  cash  250  shares  of common  stock  for  proceeds  of
          $50,000.

          During  2001, the Company, in private placement  offerings,
          sold  an  aggregate of 157,331 shares of common  stock  for
          proceeds of $412,250.




                               - 23 -
                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 11 -      STOCK TRANSACTIONS (Continued)

          Shares Issued in Registered Offerings
          During 2000, the Company issued 34,649 shares of its common
          stock  including  the  10,047 shares  issued  for  services
          described above, pursuant to registration statements  filed
          on Forms SB-2 and S-8 as follows:

               The  Company sold 9,102 common shares and realized net
               proceeds of $617,763 after commissions of $21,780.

          In  addition, on December 29, 2000, the Company sold 13,000
          common shares for unsecured promissory notes issued by four
          individuals.  The promissory notes and the related interest
          earned  is  payable on or before December  29,  2002.   The
          promissory  notes  have a fixed interest  rate  of  5%  per
          annum.   The face amount of the promissory notes is subject
          to adjustment based upon the trading price per share of the
          Company's common stock at the time the promissory notes are
          paid.   The  terms of the promissory notes do  not  require
          their  payment  prior to their maturity in  the  event  the
          13,000  shares or any portion of those shares  is  sold  or
          transferred.    Therefore,  the  ultimate   cash   proceeds
          resulting  from the issuance of the 13,000 shares  for  the
          promissory  notes  will not be known until  the  promissory
          notes are paid. Accordingly, the notes will be treated as a
          reduction  of  shareholders' equity and adjusted  to  their
          calculated  value  at  the  end of  each  financial  period
          reported upon.

          As  of December 31, 2001, the Company deemed the promissory
          notes  uncollectible and wrote-off the amount as  bed  debt
          for a value of $91,000.

          On January 24, 2001, the Company sold 900,000 common shares
          for  an  unsecured  promissory  note  issued  by  a  Nevada
          corporation.  The promissory note and the related  interest
          earned is payable on or before January 23, 2003.

          The  promissory note has a fixed interest rate  of  5%  per
          annum.   The face amount of the promissory note is  subject
          to adjustment based upon the trading price per share of the
          Company's common stock at the time the promissory  note  is
          paid.  The terms of the promissory note do not require  its
          payment  prior  to  its maturity in the event  the  900,000
          shares   or  any  portion  of  those  shares  is  sold   or
          transferred.    Therefore,  the  ultimate   cash   proceeds
          resulting from the issuance of the 900,000 shares  for  the
          promissory note will not be known until the promissory note
          is  paid.   Accordingly, the note  will  be  treated  as  a
          reduction  of  shareholder's equity  and  adjusted  to  its
          calculated  value  at  the  end of  each  financial  period
          reported upon.

          As  of  December  31, 2001, the Company  settled  the  note
          receivable  through professional services rendered  by  the
          stockholder for a value of $350,000.

                               - 24 -



                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000


NOTE 11 -      STOCK TRANSACTIONS (Continued)

          Shares Issued in Registered Offerings (continued)
          During  2000, notes payable totaling $450,832 plus  accrued
          interest  were  converted  to 2,500  registered  shares  of
          common stock of the Company.

          Share Issued, Currently in Litigation
          In  December  1999, the Company entered into  a  Consulting
          Agreement   ("Agreement")  with  Crescent  Partners,   L.P.
          ("Crescent")  whereby Crescent was to act as  a  finder  of
          capital and a public relations consultant.  Pursuant to the
          Agreement,  the  Company issued, in  February  2000,  4,000
          shares of the Company's common stock to Crescent.  In turn,
          Crescent was to find investors to purchase those shares  at
          prices  approved  by  the Company.  Subsequently,  Crescent
          sold  a portion of the common stock Company's approval  and
          diverted the proceeds from the Company.  The Company  filed
          suit  against Crescent on March 30, 2000 for breach of duty
          and  contract.   The Company also filed  an  injunction  to
          recover  the  4,000  shares  and  through  that  injunction
          recovered  2,670 of the shares.  The remaining  unrecovered
          shares are recorded at par value given that the outcome  of
          the litigation is uncertain.

          Shares Issued as Settlement of Termination Dispute
          A  dispute  arose between the Company and a former  officer
          and  director the Company.  In December 1999,  this  former
          officer  and  director  was  removed  from  the  Board   of
          Directors  and  terminated  as  an  officer.   The  Company
          engaged  in  discussions  with this  individual  seeking  a
          settlement  of  this  matter provided  the  terms  of  such
          settlement were reasonable and in the best interests of the
          Company.  In this connection, the Company entered  into  an
          agreement  in  which  the Company issued 625 shares of  the
          Company's  common  stock as settlement of  the  termination
          dispute  between  the  Company and  a  former  officer  and
          director  of  the  Company regarding his removal  from  the
          Board  of  Directors and termination as  an  officer.   The
          Company  recognized compensation expense of $265,625  based
          on  the  fair value of the shares at the time of  issuance.
          Subsequently,  the  Company  believes  the  former  officer
          breached the settlement agreement and in August 2000, filed
          suit against him.

          Shares Issued as Settlement of Stock Option Dispute
          A  dispute between the Company and a former director  arose
          relating  to  options to purchase common stock  granted  by
          Elast  Delaware prior to its merger with the Company.   The
          former  director claimed the 10,000 options granted to  him
          by  Elast Delaware were options to purchase shares  of  the
          Company.  The Company reviewed this matter and the relevant
          documentation and believed the former director's claim  was
          without merit.  To resolve this matter, the Company  issued
          200 shares  of  the Company's common stock in settlement of
          this  dispute in 2000.  The Company recognized a settlement
          expense of $28,400 based on the fair value of the shares at
          the time of issuance.

                               - 25 -




                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 12 -      ACQUISITIONS

          Effective  June 2001, the Company issued 450,000 shares  of
          common  stock to acquire all of the issued and  outstanding
          common shares of PTS, Inc. ("PTS").  PTS was inactive until
          June  2001.   PTS' only asset is a note receivable  in  the
          amount  of  $1,000,000, with a present value  of  $950,000,
          which was received by PTS as consideration for the issuance
          of 150,000 shares of common stock.  The balance of the note
          receivable   is   shown   in  the  consolidated   financial
          statements as a reduction of stockholders' equity.

          Effective  July 2001, the Company issued 20,000,000  shares
          of  common stock, valued at $2,000,000, to acquire  70%  of
          the  issued and outstanding common shares of PTS Hong  Kong
          Ltd.  ("PTS HK").  The principal assets of PTS HK  consists
          of   an  agreement  with  Shanghai  Information  Investment
          Technology  Development,  Inc. ("SIIT"),  a  subsidiary  of
          Shanghai  Information  Investment,  Inc.  to  do  business,
          participate  with,  acquire,  and/or  Joint  Venture   with
          various business in Mainland China.  The license had a fair
          market value of $2,000,000 at the date of issuance and  has
          been  fully  impaired  at December 31,  2001,  due  to  the
          uncertainty  of  the ultimate realization of  the  carrying
          amount of the asset.

NOTE 13 -      GOING CONCERN

         The accompanying financial statements have been prepared in
         conformity  with generally accepted accounting  principles,
         which  contemplate continuation of the Company as  a  going
         concern.  However, the Company has no established source of
         revenue,   has   experienced  net   operating   losses   of
         $10,975,425 since inception, has a working capital  deficit
         of  $330,262  and  has negative cash flow from  operations.
         These  factors raise substantial doubt about the  Company's
         ability to continue as a going concern.

          The  Company  continues to develop and test  its  principal
          products.   The  Company  does not  anticipate  significant
          expenditures  on  acquisition  or  development   of   other
          products   during  this  year.   Subsequent  to  successful
          chiropractic medical practitioner testing the Company  will
          focus  its  initial marketing and distribution  efforts  on
          development and commercial distribution of the device.  The
          plan calls for the lease or license of the devices.

          It will be necessary to raise funds to complete the limited
          clinical  trials of the chiropractic device.   However,  if
          the   device   performs  as  anticipated,   the   Company's
          management  believes that will be able to raise  the  funds
          necessary  to begin production of the devices  through  the
          sale  of  the  Company's stock, issuance  of  debt,  and/or
          licensing certain proprietary rights.



                               - 26 -




                              PTS, INC.
                    (A Development Stage Company)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     DECEMBER 31, 2001 AND 2000



NOTE 13 -      GOING CONCERN (Continued)

          The  Company may not able to raise the necessary  funds  to
          complete  the  testing to enable the  Life  Force  Analyzer
          device to be completed and brought to market.

          The  Company  is continuing its efforts to acquire  certain
          companies  in China, the acquisition of which  the  Company
          believes  will  be  accretive  and  complimentary  to   the
          Company's  existing business efforts.  As the  transactions
          have  not  yet been completed, there exists the possibility
          that the acquisitions will not be concluded.






                               - 27 -


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

On May 1, 2001, PTS engaged the accounting firm of
Merdinger, Fruchter, Rosen & Corso, P.C. to serve as its new
principal independent accountant.  Merdinger, Fruchter,
Rosen & Corso, P.C. replaces Kelly & Company as the
Company's principal auditor.

The dismissal of Kelly & Company was approved by PTS' board
of directors on May 7, 2001.

The former accountant's report on the financial statements
for the fiscal year 2000 did not contain an adverse opinion
or disclaimer of opinion, and was not qualified as to
uncertainty, audit scope or accounting principles.

During the two most recent fiscal years and the subsequent
interim period preceding the dismissal of Kelly & Company,
there were no disagreements with the former accountant on
any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which
disagreement(s), if any, if not resolved to the satisfaction
of the former accountant would have caused it to make
reference to the subject matter of the disagreement(s), if
any, in connection with its reports.

                          PART III

ITEM 9.   DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS,   AND
          CONTROL PERSONS

The members of the Board of Directors of PTS serve until the
next  annual  meeting of the stockholders,  or  until  their
successors  have  been elected. The officers  serve  at  the
pleasure of the Board of Directors.

Name                             Position

Peter Chin                       President/TreasurerDi
                                 rector

Thomas Krucker                   Secretary/Director

Peter Chin is the President, Treasurer and a director of the
Company.

From  1966  through present, Mr. Chin has been  involved  in
various  forms of the entertainment industry including  film
production,  and stage entertainment production  development
and   distribution.    Concurrent  with  his   entertainment
activities,  Mr.  Chin has been involved in the  hospitality
industry with investments in hotels and various restaurants.
Mr.  Chin  is  a  member  of  several  boards  of  directors
including  Fatchoy, Inc., Global Herbs, Inc., SWI consulting
and is the chairman of his own personal holding company.

Thomas  Krucker  is  the Secretary and  a  director  of  the
Company.

Mr. Krucker graduated from the University of Arizona in 1962
and  received  a  Juris  Doctorate  degree  from  Pepperdine
University in 1969. Mr. Krucker served with Toyota  USA  for
approximately 20 years. Mr. Krucker was formerly  the  chief
operating  officer  of  Fun City  Popcorn,  Inc.,  a  Nevada
corporation  which  recently  changed  its  name   to   Tone
Products.  Mr.  Krucker  left Tone Products  to  accept  the
office of President of the Company.

There  is no family relationship between any of the officers
or directors of the Company. There are no orders, judgments,
or  decrees of any governmental agency or administrator,  or
of   any  court  of  competent  jurisdiction,  revoking   or
suspending for cause any license, permit or other  authority
to  engage  in the securities business or in the sale  of  a
particular    security   or   temporarily   or   permanently
restraining  any  officer or director of  the  Company  from
engaging   in   or  continuing  any  conduct,  practice   or
employment  in  connection with  the  purchase  or  sale  of
securities,  or  convicting such person  of  any  felony  or
misdemeanor  involving a security,  or  any  aspect  of  the
securities  business or of theft or of any felony,  nor  are
any  of  the  officers or directors of  any  corporation  or
entity affiliated with the Company so enjoined.

ITEM 10.  EXECUTIVE COMPENSATION

Any   compensation  received  by  officers,  directors,  and
management personnel of the Company will be determined  from
time  to  time  by  the Board of Directors of  the  Company.
Officers, directors, and management personnel of the Company
will  be  reimbursed for any out-of-pocket expenses incurred
on  behalf  of the Company. Officers' compensation,  in  the
aggregate,  decreeased from$504,474 during  the  year  ended
2000 to $54,525 during the year ended 2001.

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

The following table sets forth each person known to the
Company, as of May 17, 2002, to be a beneficial owner of
five percent (5%) or more of the Company's common stock, by
the Company's directors individually, and by all of the
Company's directors and executive officers as a group.

Ownership of Officers and Directors:
Common Stock  Thomas Krucker (1)                501,337       2.25%
              2505 Rancho Bel Air
              Las Vegas, NV 89107
Common Stock  Peter Chin (2)                    859,500       3.86%
              3220 Westleigh Ave.
              Las Vegas, NV 89102
Common Stock  All directors and officers      1,360,837       6.11%
              as a group(2 persons)

(1) Includes (i) 900 shares of the Company's common stock
are held by Mr. Krucker; (ii) 437 shares held in a trust in
the name of Mr. Krucker's spouse, Katherine; and (iii)
500,000 shares Mr. Krucker has a right to acquire within 60
days pursuant to a warrant agreement.

(2)  Shares  of the Company's common stock are held  by  (i)
Peter Chin; and (ii) Peter Chin's spouse, Sandy Chin.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions.

Licensing Agreement

In  1996 the Company entered into a licensing agreement with
an  individual  who  is  an officer  and  major  shareholder
whereby the Company received the exclusive right to develop,
manufacture,  and market an allergy detection, non-invasive,
medical  device (Electronic Allergo-Sensitivity Test Device,
U.S. Patent No. 5413113).  The Company issued 320,019 shares
of Company common stock with a value of $800.  The licensing
agreement  does  not  require  any  royalty  payments.   The
licensing  agreement is for a term of five years,  with  the
Company  holding  options to extend the  agreement  for  two
additional five-year terms at no additional cost.

Due to Related Party

In  2001,  an  officer and shareholder of the  Company  paid
$44,500 of operating expenses in behalf the Company.

ITEM 13.  EXHIBITS.

EXHIBITS

     3.1      Articles  of  Incorporation  (incorporated  by
               reference  to  the Registration Statement  on
               Form  SB-2  filed  with  the  Commission   on
               December 7, 1999).

     3.2      Articles   of   Amendment   to   Articles   of
               Incorporation. (incorporated by reference  to
               the   Registration  Statement  on  Form  SB-2
               filed  with  the  Commission on  December  7,
               1999).

     3.3      By-laws  of  the  Registrant (incorporated  by
               reference  to  the Registration Statement  on
               Form  SB-2  filed  with  the  Commission   on
               December 7, 1999).
                         SIGNATURES

In  accordance  with Section 13 or 15(d) of  the  Securities
Exchange Act, the Registrant caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
                           PTS, Inc.


                           By: /s/ Peter Chin
                              Peter Chin, President

                           Date: May 20, 2002

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


                           By: /s Peter Chin
                              Peter Chin, Director


                           Date: May 20, 2002


                           By: /s/ Thomas F. Krucker
                              Thomas F. Krucker, Director


                           Date: May 20, 2002