SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                Annual Report Pursuant to Section 13 or 15(d) of
             The Securities Exchange Act of 1934 For the fiscal year
                   ended December 31, 2002


                          LASERLOCK TECHNOLOGIES, INC.
                         ------------------------------
             (Exact name of registrant as specified in Its charter)

           NEVADA                                   23-3023677
      -------------------------------             -------------------
      (State or other jurisdiction of               (IRS Employer
       Incorporation or Organization)             Identification No.)

                      837 Lindy Lane, Bala Cynwyd, PA    19004
          ------------------------------------------------------------
               (Address of Principal Executive offices) (Zip Code)


        Registrant's telephone number, with area code: (610) 668 - 1952

           Securities registered pursuant to Section 12(b) of the Act:
                                      None

         Securities registered pursuant to Section 12(g) of the Act:
                  Common stock of $0.001 par value per share

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

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of Regulation S-B 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  amendment to
this Form 10-KSB. X

     State  Issuer's  Revenues  for  its  most  recent  fiscal  year:  $126,299.
Aggregate market value of the voting stock held by non-affiliates of registrant:
$2,017,421 as of December 31, 2002.

Number of shares outstanding as of December 31, 2002: 19,334,742

     Documents  incorporated by reference:  None.




<PAGE>



Part I.
Item 1   DESCRIPTION OF BUSINESS


ORGANIZATION  AND  CHARTER


     LaserLock  Technologies,  Inc., (the "Company" or  "LaserLock")  was formed
under the laws of Nevada on November 10,  1999.  The Company was formed in order
to develop and market  technologies  which will both allow for easy  product and
document authentication, and to prevent product and document counterfeiting. The
initial amount of authorized  capital was $50,000.  This consisted of 40,000,000
shares of Common Stock  authorized,  $0.001 par value, and 10,000,000  shares of
Preferred Stock  authorized,  $0.001 par value. A copy of the Company's  initial
Articles of  Incorporation  is attached hereto and is incorporated by reference.
See Part III, Item 1.

     The Company is fully reporting  under The Securities  Exchange Act of 1934.
As a fully  reporting  company under The  Securities  Exchange Act of 1934,  the
Company is required to file  quarterly  and annual and certain  event  triggered
reports  with  the  Securities   and  Exchange   Commission.   These   reporting
requirements add to the expense and timeliness of certain business  transactions
which the Company may endeavor to undertake in the future -- such as a merger or
any other material business undertaking.

     The Company's Common Stock trades on the OTC Bulletin Board (OTC:BB), under
the trading symbol "LLTI."

     The public may read and copy this  document,  and any other  materials  the
Company files with the Commission at the Commission's Public Reference Room, 450
Fifth Street,  N.W.,  Washington,  D.C.  20549.  Information is available on the
operation  of  the  Public   Reference   Room  by  calling  the   Commission  at
1-800-SEC-0330.   Additionally,   the  Commission  maintains  an  internet  site
(http://www.sec.gov)   that   contains  all  reports,   proxy  and   information
statements, and other information regarding companies which file electronically.
LaserLock currently has a web site at www.laserlocktech.com.


<PAGE>



BUSINESS OF THE COMPANY

Background

     LaserLock  Technologies,   Inc.  was  organized  to  utilize  a  technology
discovered  by its founder,  Norman A. Gardner,  which allows for  non-intrusive
document and product  authentication that can reduce losses caused by fraudulent
document  reproduction  and by product  counterfeiting  and/or  diversion.  This
technology  involves  the  utilization  of an ink  activating  system  which  is
completely  compatible with currently used printing systems (it is a part of the
ink and can be used in offset, flexographic,  silkscreen, gravure, and laser ink
systems) and based upon Mr. Gardner's experience, the Company believes it can be
incorporated into existing manufacturing processes.

     Since September of 2001, the Company has a 4 year exclusive  license in the
casino and gambling  industry from NoCopi  Technologies,  Inc.  which allows the
Company to utilize a patented  technology  called Rub & Reveal.  This technology
utilizes an ink activating system which changes to certain specified colors when
scratched.

     In December of 2001,  the Company's  wholly owned  subsidiary,  LL Security
Products, Inc. acquired E.D.S. Marketing,  Inc. in a cash and equity transaction
which gave the  Company  ownership  of  personal  computer  based  security  and
profiling   technology   (such   as   software   based   fingerprint   character
identification).

     The Company  intends to be involved in the business of product and document
authentication and security.  It plans to develop and market its technology in a
variety of applications.  The Company believes that the proprietary technologies
it owns or  licenses  will  enable  businesses  to  re-construct  their  overall
approaches  to  corporate  security  - from  counterfeit  identification  and/or
diversion to employee or customer  monitoring.  Potential  applications  for the
Company's  technologies  are  available  in  different  types  of  products  and
industries - e.g.  gaming,  tobacco,  perfume,  compact disks,  pharmaceuticals,
event and transportation tickets, drivers licenses,  insurance cards, passports,
etc.  Sales are  intended to be made  either  through  licensees  or directly to
end-users.

     The first industry in which the Company is pursuing commercial  application
of its technology is the casino and gaming  industry.  The Company believes that
its  technologies are applicable to the industry in a variety of ways - from the
detection of counterfeit  dice,  cards, and chips, to internal employee security
verification via thumbprints for use in locks,  computer systems,  and to verify
cashless tickets from slot machines for fraud.

     The Company also intends to be involved in the  advertising  and  promotion
business as it pertains to the gaming  industry.  The Company has  acquired  the
exclusive rights to advertise on the reverse side of slot tickets which are used
in cashless slot  machines.  The Company  acquired  this right from  Translucent
Technologies, the largest manufacturer of slot tickets in the U.S.

Anti-Counterfeiting and Anti-Diversion Technologies and Products

     Recent developments in copying and printing  technologies have made it even
easier to counterfeit a wide variety of documents.  Currency,  lottery  tickets,
gift certificates,  event and transportation  tickets,  casino fraud, travelers'
checks  and the like are all  susceptible  to  counterfeiting,  and the  Company
believes that losses from such counterfeiting have increased  substantially with
improvements   in   technology   ("Latest   Use  for  One's   DNA  -   Thwarting
Counterfeiters",   San  Francisco  Chronicle,  page  C1,  September  11,  2000).
Counterfeiting  has long caused losses to  manufacturers of brand name products,
and the Company believes these losses have also increased as the  counterfeiting
of labeling and packaging has become easier.

     The Company's document authentication technologies are useful to businesses
desiring to authenticate a wide variety of printed materials and products. These
include a technology  with the ability to print invisibly in specific areas of a
document which can then be activated or revealed by use of an inexpensive  laser
light  when  authentication  is  required,  and a  technology  which can allow a
certain code,  message or emblem to self-reveal when rubbed.  These technologies
are intended to be  substantially  different  than pen systems  currently in the
marketplace. Pen systems work by a similar invisible ink which is activated by a
special marker.  If the item is an original and not an  illegitimate  copy, then
the ink will be activated  and show a visible mark as a different  color than on
an illegitimate  copy.  LaserLock believes that its technologies are superior to
the pen system technology  because in the case of its laser technology,  it will
not result in a permanent mark on the  merchandise  which generally leads to the
disposal of the  merchandise or its sale as a "second"  rather than best quality
goods,  and in the case of its rubbed ink  technology  it does not  require  any
special tools to reveal the counterfeit.

<PAGE>
     Other possible  variations of the Company's laser based technology  involve
multiple color  responses  from a common laser,  visible marks of one color that
turn another color with a second laser or visible and invisible  marks that turn
into a multicolored image. These technologies  provide users with the ability to
authenticate products and detect counterfeit documents. Applications include the
authentication  of documents having intrinsic value,  such as currency,  checks,
travelers' checks,  gift certificates and event tickets,  and the authentication
of product labeling and packaging. When applied to product labels and packaging,
such  technologies can be used to detect  counterfeit  products whose labels and
packaging would not contain the  authenticating  marks invisibly  printed on the
packaging  or labels of the  legitimate  product,  as well as to combat  product
diversion   (i.e.,  the  sale  of  legitimate   products  through   unauthorized
distribution channels or in unauthorized markets).

     The Company believes that its  technologies  could also be used in a manner
which permits  manufacturers  and distributors to track the movement of products
from production to ultimate consumption when coupled with proprietary software.

     The  Company  has been  initially  focused  on the  widespread  problem  of
counterfeiting  in the gaming industry.  The product is to be incorporated  into
traditional gaming accessories such as playing cards, chips, and dice as well as
gaming based machinery such as slot machines with cashless gaming systems.  This
is accomplished  during the regular  manufacturing and printing  processes.  The
protected  items can be viewed with the laser to reveal the  authenticity of the
item. These covert authenticating  technologies are also intended to be marketed
to   manufacturers   of  compact   discs  to  identify  CD's  produced  by  that
manufacturer.   The  Company  believes  that  this  technology  can  provide  CD
manufacturers  and  publishers  with a tool to  combat  the  significant  losses
sustained as a result of illegal pirating and  counterfeiting of data, music and
video discs.


Marketing

     The marketing approach of the Company is to have sufficient  flexibility in
its products and  technologies  so as to provide  cost-effective  solutions to a
wide  variety of  counterfeiting,  diversion  and copier  fraud  problems.  As a
technology  company,  the Company  intends to  generate  revenues  primarily  by
collecting  license  fees  from  manufacturers  who  incorporate  the  Company's
technologies  into their  manufacturing  process and their products,  and in the
case of cashless gaming systems via the right to sell advertising on the back of
cashless gaming tickets.

     The Company has  identified a number of major markets for its  technologies
and products,  including gaming,  document security  printers,  manufacturers of
labels and packaging  materials and distributors of brand name products.  Within
each market, key potential users have been identified.  Within North America and
Europe,  sales are  intended  to be  effected  via  direct  selling  by  company
personnel or consultants to create end user demand and selling through  licensee
sales forces with support from  company  personnel.  The Company has  determined
that  technical  sales support by its personnel  will be of great  importance to
increasing  its  licensees'  sales  of  products   incorporating  the  Company's
technologies  and,  therefore,  plans to be very  committed  to  providing  such
support.  The  Company  anticipates  that  should  European  sales be made,  the
technical  support could  initially be handled from the United  States,  and the
Company could  eventually open a European  support  division and/or  establish a
sales/marketing  relationship  with a European  company should  consumer  demand
justify the associated costs.

     As continued improvements in color copier and desktop publishing technology
make  counterfeiting  and fraud  opportunities  less  expensive and the internet
makes  these  products  more  available,  the  Company  intends to  maintain  an
interactive  product development and enhancement program whereby it will utilize
its R&D and marketing  skills in order to constantly  upgrade and improve on its
technology with the combined efforts of marketing,  applications engineering and
research  and   development.   The  Company   believes  that   utilizing   these
methodologies - whereby a product is developed by the company,  delivered to the
client,  feedback  is received  from the client,  and the product is changed and
enhanced to reflect the client feedback,  will lead to faster development cycles
for the  Company's  products.  The  Company's  objective is to  concentrate  its
efforts on developing  market-ready  products with the most beneficial ratios of
market potential to development time and cost.

     The Company  intends to utilize the  extensive  contacts of its  President,
Norman A.  Gardner,  in the  counterfeit  prevention  and  detection  and gaming
industries to effectuate sales.

<PAGE>
Manufacturing

     The Company does not have manufacturing facilities.  The Company intends to
subcontract  the  manufacture  of its  technology to third party  manufacturers.
Applications  of the  Company's  technology  are expected to be effected  mainly
through  printing and coating.  The inks are to be custom  manufactured  for the
Company by a third party. Because some of the processes that the Company intends
to use  in  its  applications  are  based  on  relatively  common  manufacturing
techniques,  there appears to be no technical or economic reason for the Company
to invest capital in its own manufacturing facilities at this stage.

     The Company  intends to establish a quality  control  program that includes
laboratory analysis of developed technologies. The Company intends to include as
part of this  quality  control  program the  placement  of a  specially  trained
technician  on  site  at  third  party  production  facilities  to  monitor  the
manufacturing process, when or if warranted.


Regulation

     The  Company  is not  currently  aware  of any  regulations  affecting  its
products;  however,  the  Company's  technology  is dependant  upon an ink based
product.  Therefore,  it is possible that the Company's products will be subject
to environmental regulations in the future.


Patents and Licenses

     The Company  acquired the rights to a pending U.S.  patent  application and
its equivalent international Patent Cooperation Treaty (PCT) application via its
employment  contract with its  President,  Norman A. Gardner.  The United States
patent application was assigned to LaserLock Technologies, Inc. upon filing, and
the  Assignment  has been  recorded at the US Patent and Trademark  Office.  The
Assignment by its terms  conveys the entire right,  title and interest in and to
the invention of the pending patent application (entitled "Counterfeit Detection
System") and all improvements  thereon which may be made,  conceived or acquired
by  Norman  Gardner  during  the  course  of  his  association   with  LaserLock
Technologies, Inc. and for one year thereafter. The PCT application was filed by
the Company as  applicant.  Patent  applications  for the  Company's  technology
(including  improvements in the technology) are intended to be filed in selected
jurisdictions  where commercial usage is foreseen,  including Europe,  Australia
and the Far East, if funds permit. There can be no assurance, however, that such
protection  will be obtained,  or that if obtained  that they can be  maintained
once obtained.

     The subject patent  application  was filed December 10, 1999 and the patent
was issued in November, 2002, as patent No. 6,483,576. The allowed claims define
the invention as a process  involving  latent  marking that is excited at plural
excitation wavelengths outside of the visible spectrum.

     The  international  PCT  application  was filed in June, 2002.

     The LaserLock  technology  according to the allowed patent application is a
process whereby uniquely formulated normally-invisible code markings are applied
to a product and can be activated or revealed by an activation  device which the
company  intends to have  manufactured  and  supplied to users.  The Company has
filed  two new  patent  applications  for two new  methods  of  counterfeit  and
diversion protection in 2002.


<PAGE>
     When a new  product or  process is  developed,  the  developer  may seek to
preserve for itself the  economic  benefit of the product or process by applying
for a patent in each  jurisdiction  in which the product or process is likely to
be exploited. Generally, for a patent to be granted, the product or process must
be new and be inventively  different from what has been  previously  patented or
otherwise known anywhere in the world.  Patents  generally have a duration of 20
years from the date of  application  depending  on the  jurisdiction  concerned,
after which time any person is free to exploit the product or process covered by
a patent.  A person who is the owner of a patent has, within the jurisdiction in
which the  patent  is  granted,  the  exclusive  right to  exclude  others  from
practicing the subject matter defined in the patent claims.

     LaserLock Technologies,  Inc. intends to extend its patent filings to other
countries insofar as reasonably possible in view of the considerable  expense of
foreign patent applications and the increasing level of activity of the company.
Currently,  the Company  believes  that the only foreign  countries for which it
will be filing for  patent  protection  are  Europe,  Australia  and one or more
countries  in the Far East.

     The  granting of a patent  does not  prevent a third  party from  seeking a
judicial  determination  that the  patent is  invalid.  Such  challenges  to the
validity of a patent are not uncommon and are occasionally successful. There can
be no  assurance  that a  challenge  will  not be  filed  to one or  more of the
Company's  patents , if granted,  and that, if filed, such challenge(s) will not
be successful.  The granting of a U.S.  patent does not ensure that patents will
be granted in other countries where protection is sought. Standards for granting
patents vary and there is a possibility  that prior art not yet discovered could
arise and could prevent the grant of a foreign  patent and/or cast into question
the validity of any U.S. patent.

     Additionally,  the Company has licensed "Rub and Reveal"  technology  via a
license  agreement  with NoCopi  Technologies,  Inc.  The  Agreement  covers the
exclusive use of this patented  technology in gaming,  and the non-exclusive use
of this patented technology elsewhere.


Research and Development

     The  Company  has been  involved  in  research  and  development  since its
inception,  and intends to continue  its research  and  development  activities,
funds  permitting.  The Company hopes to expand its technology into new areas of
implementation and to develop unique customer applications.

     For the period from  inception  at November  10, 1999 to December 31, 2002,
the  Company  spent  $375,878 on research  and  development.  For the year ended
December  31,  2002,  the Company  spent a total of  $141,748  on  research  and
development  - all of  which  was  spent on the  enhancement  of its ink and its
activation  product,   and  the  application  of  its  Rub  and  Reveal  license
technology. At the current time, the Company hopes to spend about $35,000 in R&D
over the 2003 fiscal year.

     The Company's research and development is done in Glen Mills,  Pennsylvania
at the  facilities  of its research and  development  consultant.  The Company's
quality  control  program is run in Saranac,  New York at the  facilities of its
technical  consultant.  The consulting fees paid cover all costs associated with
facility and equipment usage.

<PAGE>
Product Development

     To date, the Company has only made very limited sales of its products.  The
Company has done independent  testing and commercial  trials have been completed
at several manufacturers and have been successful from a production perspective.

     The Company has also developed  what it believes to be a proprietary  trade
secret  enabling it to offer its  clients the ability to change the  combination
lock on its lasers to prevent any breach of security by counterfeiters.  This is
accomplished by changing the reaction between the Company's uniquely  formulated
code markings in its  products,  and the laser which reacts with it. The changes
are made via direct  interaction  by the Company  with the client to make slight
modifications to the Company's products. Management believes that the Company is
the only company offering such a protection to its product line.


Description of the Industry

     Recent developments in copying and printing  technologies have made it ever
easier to  counterfeit  a wide  variety  of  documents.  Lottery  tickets,  gift
certificates,  event and transportation tickets,  travelers' checks and the like
are all susceptible to counterfeiting, and the Company believes that losses from
such   counterfeiting   have  increased   substantially   with  improvements  in
technology. Counterfeiting has long caused losses to manufacturers of brand name
products,  and the Company  believes  these  losses have also  increased  as the
counterfeiting of labeling and packaging has become easier.

     The Company's document authentication technologies are useful to businesses
desiring to authenticate a wide variety of printed documents and products. These
include a technology  with the ability to print  invisibly on certain areas of a
document which can be activated or revealed by use of a special laser light when
authentication  is required.  This is intended to be different  than pen systems
currently in the  marketplace  because it will not result in a permanent mark on
the merchandise, which generally leads to the disposal of the merchandise or its
sale as a "second" rather than best quality goods.

     Other  possible  variations of the Company's  technology  involve  multiple
color  responses  from a common  laser,  visible  marks of one  color  that turn
another  color with the laser or visible  and  invisible  marks that turn into a
multicolored  image.  These  technologies  provide  users  with the  ability  to
authenticate  documents and detect counterfeit  documents.  Applications include
the  authentication  of  documents  having  intrinsic  value,  such  as  checks,
travelers' checks,  gift certificates and event tickets,  and the authentication
of product labeling and packaging. When applied to product labels and packaging,
such  technologies can be used to detect  counterfeit  products whose labels and
packaging would not contain the  authenticating  marks invisibly  printed on the
packaging  or labels of the  legitimate  product,  as well as to combat  product
diversion   (i.e.,  the  sale  of  legitimate   products  through   unauthorized
distribution channels or in unauthorized markets).

     The Company  believes  that the  technology  could also be used in a manner
permitting manufacturers and distributors to track the movement of products from
production to ultimate consumption when coupled with proprietary software.

     The Company has focused initially on the widespread problem of fraud in the
gaming  industry.  Via initial  agreements which the Company has with some large
suppliers to the gaming  industry,  the  Company's  products will be used in ink
which is then incorporated  into dice, chips, and playing cards.  These products
can  be  viewed  with  the  laser  to  reveal  the  authenticity  of  the  item.
Additionally,  the Company has reached  agreement to have its technology used on
slot tickets in cashless gaming slot machines.  In this scenario,  the Company's
Laser Lock or Rub and Reveal  technologies  or a  combination  thereof  would be
utilized to reveal the  authenticity of a slot ticket prior to its redemption at
the cashier.


<PAGE>
Competition

     In the area of document and product  authentication and serialization,  the
Company  is  aware  of other  competing  technologies,  both  covert  and  overt
surface-marking techniques, requiring decoding elements or analytical methods to
reveal  the  relevant  information.  These  technologies  are  offered  by other
companies  for the same  anti-counterfeiting  and  anti-diversion  purposes  the
Company markets its covert technologies. These include, among others, biological
DNA  codes,  microtaggants,  thermochronic,  UV and  infrared  inks,  as well as
encryption,  2D symbology and laser engraving.  The Company is aware of at least
twenty companies which will be competing with it in these markets.  However, the
Company believes that it has proprietary technologies which provide a unique and
cost-effective solution to the problem of counterfeiting and gray marketing. The
Company is aware of a limited number of competitors which are attempting similar
approaches to the same problems which the Company's products address.

     Other indirect  competitors are marketing  products  utilizing the hologram
and "copy void"  technologies.  The hologram,  which has been  incorporated into
credit  cards to foil  counterfeiting,  is  considerably  more  costly  than the
Company's  technology.  Copy void  technologies  are security devices which have
been developed to indicate whether a document has been photocopied.

     The Company  has  limited  resources,  and there can be no  assurance  that
businesses with greater resources than the Company will not enter the market and
compete with the Company.


Employees

     The Company currently has a five year employment contract in place with its
President,  Norman A. Gardner, which commenced October 1, 2001. Pursuant to this
agreement, Mr. Gardner's compensation is $10,000 per month, and will increase to
$12,500 per month on commencing  October 1, 2003. In order to help the Company's
cash position, Mr. Gardner only took salary of $105,000 during 2002. Pursuant to
the  agreement,  Mr. Gardner has options to purchase up to 500,000 shares of the
Company's  stock at prices  ranging  from $0.17 to $0.35.  In  addition  to base
salary the Company will from time to time pay Mr. Gardner  incentive bonuses and
reasonable  expenses  incurred in connection with the performance of his duties.
Throughout the term of this employment  agreement,  the Company will furnish Mr.
Gardner with an automobile and automobile  expenses and will reimburse travel on
Company  business as well as reimburse  employees  for the expenses  incurred in
connection with the Company's operation.

     Additionally,  pursuant to its acquisition of the assets E.D.S.  Marketing,
Inc., the Company has entered into employment  agreements with Edward J. Fishman
- the Company's  Vice Chairman of the Board of Directors,  Steven W. Meistrich -
the Company's  Executive  Vice  President,  and Doug Wise - the  Company's  Vice
President  of Sales and  Marketing.  Pursuant  to the  acquisition  of EDS,  the
Company pays certain overhead expenses and limited guaranteed salaries (draws on
commission)  which  total in the  aggregate,  $20,000  per month.  All  expenses
associated  with the  E.D.S.  marketing,  Inc.  acquisition  were  curtailed  in
September, 2002.

     If and when the Company hires full time employees  other than the Company's
president  Norm Gardner,  all full time  Employees  shall be entitled to health,
life,  accident or disability  insurance plans, any profit sharing or retirement
plans and stock option plans the Company  makes  available.  The Company has two
part time  employees,  its  book-keeper,  who is a part time  employee,  and its
secretary, also a part time employee.

Outside Sales Agents / Independent Contractors

     The Company has consulting  contracts with several outside sales agents and
independent  contractors  who are being  compensated  via stock  options,  stock
grants,  and for the sales agents,  commissions on sales to various customers of
the Company. The Company's outside sales agents and independent contractors will
also receive payment for certain expenses.

<PAGE>
RISK FACTORS


                 STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor" for forward-looking statements. The Company desires to take advantage of
certain "Safe Harbor" provisions of the Reform Act and is including this special
note to enable the  Company to do so.  This  document  contains  forward-looking
statements  that reflect the views of the Company's  management  with respect to
future events and financial  performance.  These forward-looking  statements are
subject to  uncertainties  and other factors that could cause actual  results to
differ  materially from such statements.  These  uncertainties and other factors
include,  but  are  not  limited  to,  the  words   "anticipates",   "believes",
"estimates",  "expects", "plans", "projects", "targets", and similar expressions
that  identify  forward-looking  statements.  Readers are cautioned not to place
undue reliance on these  forward-looking  statements  which speak only as of the
date the statement was made.  The Company  undertakes no obligation to update or
revise any forward-looking  statements,  whether as a result of new information,
future events or otherwise.


Absence of Trading Market

     There is no trading  market for the Company's  Common Stock and there is no
assurance that such a market will develop, or if such a market develops, that it
will be maintained.  Holders of the Shares may,  therefore,  have  difficulty in
selling  their stock should they desire to do so and should be able to withstand
the risk of holding their Shares indefinitely.


Penny Stock Rules.

     The Company  believes  its Common  Stock will be subject to the Penny Stock
Rules  promulgated  under the  Securities  Exchange Act of 1934 due to its price
being less than $5.00 per share. If the Company were to meet the requirements to
exempt its securities from application of the Penny Stock Rules, there can be no
assurance  that such price will be maintained if a market  develops and thus the
Penny Stock Rules may come into effect.

     These  rules   regulate   broker-dealer   practices  in   connection   with
transactions  in "penny  stocks." Penny stocks  generally are equity  securities
with a price of less than $5.00  (other than  securities  registered  on certain
national  securities  exchanges or quoted on the NASDAQ  system,  provided  that
current  price and  volume  information  with  respect to  transactions  in such
securities is provided by the exchange or system). The Penny Stock Rules require
a  broker-dealer,  prior to a transaction in a penny stock not otherwise  exempt
from the rules, to deliver a standardized  risk disclosure  document prepared by
the Commission that provides  information  about penny stocks and the nature and
level of risks in the penny stock market.  The  broker-dealer  also must provide
the customer  with  current bid and offer  quotations  for the penny stock,  the
compensation of the  broker-dealer  and its salesperson in the transaction,  and
monthly account  statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations,  and the broker dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the  transaction and must be given to the customer in
writing before or with the customer's confirmation.

     In addition, the Penny Stock Rules require that prior to a transaction in a
penny stock not otherwise exempt from such rules, the broker-dealer  must make a
special written  determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's  written agreement to the transaction.
These  disclosure  requirements  may have the  effect of  reducing  the level of
trading activity in the secondary market for the Company's securities. While the
Company's  Common Stock remains subject to the Penny Stock Rules,  investors may
find it more difficult to sell such securities.


Need for  Subsequent  Funding;  No Assurance of Future Offering

     In order to finance  expansion  of our business  operations,  to attempt to
patent our  technologies,  and to implement our business plans, we need to raise
more capital. Our ability to continue in business and effectively  implement its
plans  may  depend  upon our  ability  to raise  additional  funds.  There is no
assurance that additional funding, if required, will be obtainable in amounts or
on terms favorable or acceptable to the Company.  The capital resources required
to develop each new product are significant.  The Company believes combined cash
on hand and cash generated from future operations, will provide the Company with
the financing required to conduct its business at least through June,  2003, but
there is no  guarantee  that the Company is correct,  or that it will be able to
raise additional capital, if required.  The Company completed Private Placements
raising $690,600 in 2002.

<PAGE>
Lack of Dividends

     We have not paid any cash  dividends  since our inception and do not intend
to pay dividends in the foreseeable future. We intend to retain all earnings, if
any, for use in our business operations.


Risks Associated With Our Being A New Business.

     Our  operations  are subject to all of the risks inherent in a new business
enterprise.  We currently have limited revenue,  limited operating history,  and
limited salable product. We are subject to the same types of risks that many new
business face - like  shortages of cash,  under-capitalization,  and expenses of
new product  development.  We do not anticipate  positive cash flow on a monthly
basis  until  the end of 2003 at the  earliest,  and even  then we  cannot  give
assurances that we will be operating at break-even levels at that time or in the
future. Various problems, expenses,  complications and delays may be encountered
in  connection  with  our  development  both in terms  of our  products  and our
business.  Future  growth  beyond  present  capacity  will  require  significant
expenditures for expansion,  marketing, research and development. These expenses
must either be paid out of the  proceeds of this or future  offerings  or out of
our  generated  revenues and profits,  if any.  The  availability  of funds from
either of these sources cannot be assured.


General Risks Of The Counterfeit Prevention Industry

     The  industry  in which we intend to compete is subject to the  traditional
risks faced by any business of adverse changes in general  economic  conditions,
the  availability  and expense of liability  insurance,  and adverse  changes in
local markets.  However, we will also be subject to industry specific risks such
as  counterfeiters  learning how to  circumvent  new and existing  technologies;
evolving consumer  preference and health-related  concerns;  federal,  state and
local chemical processing controls;  consumer product liability claims; risks of
product tampering.


Competition In Our Industry

     In  the  area  of  document   security  and  product   authentication   and
serialization,  we are aware of other companies and other similar  technologies,
both  covert  and overt  surface  marking  techniques,  which  require  decoding
elements  or  analytical  methods  to reveal  the  relevant  information.  These
technologies are offered by other companies for the same anti-counterfeiting and
anti-diversion purposes to which we plan to market our technologies.

     Other  competitors are marketing  products  utilizing the hologram and copy
void technologies.  The hologram,  which has been incorporated into credit cards
to foil  counterfeiting,  is considerably more costly than our technology.  Copy
void is a  security  device  which  has been  developed  to  indicate  whether a
document has been photocopied.

     It is anticipated that a significant  number of companies of varying sizes,
which may ultimately include divisions or subsidiaries of larger companies, will
be vying for the same  market  segment as we are. A number of these  competitors
may have substantially  greater financial and other resources available to them.
There can be no  assurance  that we can  compete  successfully  with such  other
companies.  Competitive pressures or other factors could cause us to lose market
share if it develops at all, or result in significant  price erosion,  either of
which would have a material adverse effect on our results of operations.


Governmental Regulation Of Our Fields

     Our operations may be subject to varying degrees of federal, state or local
laws and  regulations.  Operations  such as those we  intend to  conduct  may be
subject  to  federal,  state  and local  laws and  regulations  controlling  the
development of technologies related to privacy protection,  to the protection of
the  environment  from  materials  that we may  use in our  inks,  and  advanced
algorithm  formulations or encryption tactics that we may develop.  Any of these
regulations may have a materially adverse effect upon our operations.


Technology Staffing

     We anticipate that staffing will represent one of our largest expenses.  We
will compete with other copy security prevention  technologies in attracting and
retaining  qualified or skilled  personnel.  A shortage of trained  personnel or
general economic  inflationary  pressures may require us to enhance our wage and
benefits  package in order to  compete  with  other  employers.  There can be no
assurance that our labor costs will be  sustainable.  Our failure to attract and
retain  qualified  employees to control our labor costs or to match increases in
our labor  expenses  with  corresponding  increases  in  revenues  could  have a
material adverse effect on the business.  Due to our financial  situation,  over
the last  fiscal  year we have  reduced the number of staff which we employed as
part of our  purchase  of EDS.  If we are unable to hire or  maintain  similarly
positioned  staff again in the future,  the Company  could  experience  material
adverse affects.

<PAGE>
Rapidly Changing Market.

     We believe  that the  market for our  products  is  rapidly  changing  with
evolving  industry  standards.  Our future  success will depend in part upon our
ability to  introduce  new  products  and  features  to meet  changing  customer
requirements and emerging industry standards.  There can be no assurance that we
will  successfully  complete  the  development  of future  products  or that our
current or future products will achieve market acceptance.  Any delay or failure
of these  products  to achieve  market  acceptance  would  adversely  affect our
business.  In addition,  there can be no assurance that products or technologies
developed by others will not render our products or technologies non-competitive
or obsolete.


Patents; Intellectual Property

     Pursuant to an employment agreement with our president,  Norman A. Gardner,
we have  received  all  rights  in a pending  U.S.  patent  application  and any
improvements,  and we have  additionally  filed two patent  applications  in the
United  States.  The initial  application  has been allowed and a  corresponding
international  (PCT) application has been found to meet the PCT requirements for
novelty, inventive step and industrial applicability.  There can be no assurance
that any patent,  or any other  patents  which we may obtain or apply for in the
future,  will be granted or will be granted with claims of  commercially  useful
breadth, or will be safe from challenge.  Until such time as a patent is issued,
we will not have the right to bring a patent infringement action against a third
party who makes a product or uses a process identical or similar to a product or
process that we employ. Even if patents were granted, there is no assurance that
such patents  would not be attacked by third parties or that, if any such attack
were made, it would not be successful.  The costs involved in defending a patent
or prosecuting a patent infringement action could be substantial.  At present we
do not have the resources to pursue or defend such an action.

     We plan to rely on confidentiality, non-compete and licensing agreements to
establish  and  protect  our rights in any  proprietary  technologies.  While we
intend to actively  protect these rights,  our  technologies  could  possibly be
compromised  through  reverse  engineering  or  other  means.  There  can  be no
assurance  that we will be able to protect  the basis of our  technologies  from
discovery by unauthorized third parties,  thus adversely  affecting our customer
and licensee relationships.


Prior Relationships Of Our President.

     Norman  A.  Gardner,  our  President,  founded  Nocopi  Technologies,  Inc.
('NoCopi'),  and  served as its  President  and  Chief  Executive  Officer  from
October,  1985,  until  October,  1997,  and as its  Chairman of the Board until
March,   1998.   Currently,   Mr.  Gardner  has  no  relationship   with  Nocopi
Technologies, Inc.

     We view Nocopi as one of our competitors in our marketplace in that we plan
to develop and sell  technology  to  prospects  and  clients  that we believe is
completely different from, but competitive with, that sold by Nocopi to the same
or similar  prospects and clients.  Mr.  Gardner's  termination  agreement  with
Nocopi does not impose a post-termination restrictive covenant upon Mr. Gardner,
and Mr. Gardner has assured us that he has not and will not,  divulge,  furnish,
or make  accessible to anyone any  confidences or secrets of Nocopi in violation
of the  Agreement.  Furthermore,  the  Company has a working  relationship  with
NoCopi,  and has  licensed  certain  technologies  from  NoCopi  for a four year
period.



<PAGE>
Rule 144 Shares

     A  majority   of  the  shares  of  Common   Stock   presently   outstanding
(approximately  12,100,000  shares,  or 63.15%)  were  issued on the date of the
company's inception or later and are considered "restricted  securities".  These
shares may be publicly  resold in  compliance  with Rule 144  adopted  under the
Securities  Act of 1933,  as amended.  Rule 144  provides,  in part,  that after
holding  restricted  securities  for a  period  of one (1)  year  non-affiliated
shareholders (affiliates include officers, directors, and ten percent or greater
shareholders) may sell, during any three months, in a brokerage transaction,  or
to a market  maker,  an amount  equal to the greater of one percent  (1%) of the
Company's  outstanding  Common Stock, or the average weekly trading  volume,  if
any, in the Common Stock during four  calendar  weeks  preceding the filing of a
Form 144 relating to such sale. After two (2) years non-affiliated  shareholders
(who have been  non-affiliates  for at least three months) may sell an unlimited
amount of the Company's  outstanding  Common Stock.  Rule 144 also provides that
after holding restricted securities for a period of two (2) years, affiliates of
the  company may sell every  third  month in a  brokerage  transaction,  or to a
market  maker,  an  amount  equal  to the  greater  of one  percent  (1%) of the
Company's  outstanding  Common Stock, or the average weekly trading  volume,  if
any, in the Common Stock during four  calendar  weeks  preceding the filing of a
Form 144 relating to such sale. Such sales, if made under certain circumstances,
would  depress the market price and render  difficult  the sale of the Company's
securities  purchased  hereunder.  Certain  of the  outstanding  shares  were be
eligible for sale pursuant to Rule 144 as of November, 2000.


Dependence on Key Personnel

     We will be dependent on our current management for the foreseeable  future.
The loss of the  services of any member of these  persons  would have a material
adverse effect on our operations and prospects. Our success will be dependent to
a substantial  degree on our Chief  Executive  Officer,  Norman A. Gardner.  Mr.
Gardner's continued involvement is particularly critical to us. In the event Mr.
Gardner  were  unavailable,  it would  have a  material  adverse  effect  on our
operations.  At this time, we have an employment  agreements  with Mr. Norman A.
Gardner, our Chief Executive Officer and President, and Ed Bell, our Director of
Research and Development.  We have only obtained "key man" insurance policies on
Mr.  Gardner.  The expansion of our business  will be largely  contingent on our
ability to attract and retain a highly  qualified  management  team. There is no
assurance  that we can find suitable  management  personnel or that we will have
the financial resources to attract or retain such people if found.


Indemnification

     The Company's  By-Laws  include  provisions  that indemnify any director or
officer  made a party  to any  action,  suit or  proceeding  for  negligence  or
misconduct in the performance of his duties made in good faith, by reason of the
fact that he is or was a director,  officer or  employee of the Company  against
reasonable expense including legal fees, actually or necessarily incurred by him
in  connection  with the  defense  of such  action,  suit or  proceedings  or in
connection  with any appeal  therein.  Currently,  the Company spends $3,500 per
month on its Directors and Officers liability insurance for a policy which has a
limit of $1,000,000.  The Company is considering  canceling this policy if it is
unable to increase  revenues or raise  capital by the second  fiscal  quarter of
2003.

Dependence Upon Third Parties.

     We  intend  to  pursue  a  policy  of  licensing   our   technologies   for
incorporation  into products made and distributed by third parties.  Although we
plan to negotiate  guaranteed  minimum royalties in our licensing  arrangements,
our  revenues  will  be   substantially   dependent  on  the  sale  of  products
incorporating our technologies by third parties.  We intend to provide technical
marketing support to our licensees.  However,  the successful  marketing of such
products and, therefore, our revenues and operating income, depend substantially
on the marketing efforts of such third parties,  over which we will have little,
if any, control.


Technical Obsolescence.

     The value of our  technology  and any products  derived from our technology
could be  substantially  reduced as new or  modified  techniques  for  combating
document and product  counterfeiting  and product  diversion  are  developed and
become  widely   accepted.   We  can't   guarantee  that  future   technological
developments will not result in the obsolescence of our technologies.


Dependence Upon Marketing.

     While we believe that our products  hold  unsatisfied  market  demand,  our
ability to  generate  sales will  depend  upon  developing  and  implementing  a
marketing strategy.  There can be no assurance that we can successfully develop,
promote and maintain an active market for our products.

<PAGE>
Management Of Growth.

     If we are successful in increasing demand for our products,  of which there
can be no assurance,  our growth could create certain  additional  risks.  Rapid
growth can be expected to place a substantial burden on our management resources
and financial controls. Our ability to manage growth effectively will require us
to continue to implement and refine our  operational,  financial and information
management systems and to train, motivate and manage our employees.  Our ability
to attract and retain qualified  personnel will have a significant effect on our
ability to establish and maintain our position in our various  markets,  and our
failure to manage our growth  effectively could have material adverse effects on
our results of operations.


Risks Associated With  The Company's Ability To Continue As A Going Concern.

     The Company has no  operating  history,  limited  sales,  and has  incurred
operating losses since inception and requires additional capital to continue its
operations  and to  implement  its  business  plans.  The  Company's  certifying
accountants  have issued a going concern  qualification  in their report for the
year ended  December  31,  2002.  Although  the Company  intends to raise money,
implement sales, and become profitable,  if the Company fails to achieve any one
of these goals,  then it is unlikely  that the Company will be  successful,  and
very likely that the Company will become  insolvent or otherwise forced to close
its doors. If this occurs, it will have a material adverse affect on the Company
and any results of operations.


Lack Of Diversification.

     The  Company's  proposed  operations,  even  if  successful,  will  in  all
likelihood result in the Company's  engaging in a business which is concentrated
in only one industry.  Consequently, the Company's activities will be limited to
the  anti-counterfeiting  industry.  The  Company's  inability to diversify  its
activities  into  a  number  of  areas  may  subject  the  Company  to  economic
fluctuations within a particular  business or industry and, therefore,  increase
the risks associated with the Company's operations.







<PAGE>

Item 2.  DESCRIPTION OF PROPERTY

     The Company's  east coast offices are presently  located in 1000 sq. ft. of
office space in the home of its president, Norman A. Gardner, at 837 Lindy Lane,
Bala Cynwyd, PA 19004. The Company pays no rent for the use of this space.

     As part of cost cutting  measures  instituted  in fiscal 2002,  the Company
closed its west coast  offices  in  February,  2003.  The  Company's  west coast
offices had been located in 1725 sq. ft. of office space at 2659  Townsgate Rd.,
Suite  113,  Westlake   Village,   California  91361.  The  Company  was  paying
approximately $3,000 per month for the rent of this space.

     The Company has been assigned one patent,  and the rights to two additional
patent applications  submitted by its President,  Norman A. Gardner. The Company
believes that the granting of its patent  application will enhance the Company's
position in the market place, but that even if not granted,  the Company will be
able to compete effectively in the market place by utilizing non-competition and
confidentiality  terms in contracts it will enter into with any  employees,  and
non-disclosure and non-analysis agreements given to every potential supplier and
customer of the Company.

Item 3.  LEGAL PROCEEDINGS

     The  are no  material  legal  proceedings  pending  or,  to  the  Company's
knowledge, threatened against the Company.

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

     The Company  submitted no matters to a vote of its security  holders during
its fiscal year ended December 31, 2002.

<PAGE>

Part II.


Item  4.     RECENT  SALES  OF  UNREGISTERED  SECURITIES

     From  inception  in November  of 1999  through  December,  1999 the Company
issued  7,600,000 common shares to its founder,  Norman Gardner;  several people
who assisted Mr.  Gardner in the  formation of the Company and its  technology -
Michael J. Prevot, a director,  and George Hess and his children,  Eric J. Hess,
Mark A. Hess, and Brian K. Hess; its attorneys,  Jay Hait and Tom Schneider, and
several business  associates and friends of Mr. Gardner's,  who are not involved
in the day to day business  operations of the Company in exchange for assets and
services valued at $120,533.

     From  April,  2000,  to  September  2000,  the  Company  issued  a total of
5,449,999  shares  of  its  common  stock  at  $0.17  per  share,  for  a  total
consideration  of  $926,500,  in an  offering  done  pursuant  to  Rule  504  as
promulgated  under Regulation D of the Securities Act of 1933, and registered in
the  State  of  New  Jersey.   No  commission  was  paid  on  these  sales.  The
determination as to whether or not the shares are restricted or free trading was
made based upon whether the purchaser (a)was an accredited investor, as based on
the results of a questionnaire,  and (b)lived in a state in which the securities
were  registered  with a  qualitative  review,  or (c) lived in a state with the
appropriate  applicable  exemption  after the shares had been  registered with a
qualitative review in a different state.

     From July,  2000, to September,  2000 the Company  issued 240,000 shares of
Common Stock to a total of nine non-employee consultants, for services valued at
$40,800,  pursuant to Rule 701 promulgated  under Section 3(b) of the Securities
Act of 1933. The Company relied on the following facts in determining  that Rule
701 was available:  (a) the shares were issued  pursuant to a written  agreement
between the consultants and the Company,  (b) the consultants  rendered bonafide
services  not in  connection  with the offer or sale of  securities  in  capital
raising transactions,  (c) the shares were issued pursuant to a written contract
relating to the issuance of shares paid as compensation  for services  rendered,
and (d) the amount of shares  offered  and sold in  reliance on Rule 701 did not
exceed  $500,000 and all securities sold in the last 12 months have not exceeded
$5,000,000.

     In July of 2000 the Company issued options to purchase  1,135,000 shares of
the Company's  common stock to sales  employees and  consultants.  In October of
2001, the Company entered into a new employment contract with its President, and
pursuant to the new employment contract it has granted him options to purchase a
total 500,000  shares of it's common stock,  250,000  shares at $0.17 per share,
and 250,000 shares at $0.35 per share.

     In March of 2001, pursuant to Rule 506 as promulgated under Regulation D of
the  Securities  Act of 1933,  the  Company  sold an option  for  $15,000 to PFK
Acquisition Group II, LLC, a California  Limited Liability  Corporation,  and an
accredited  investor,  which gives it the right to purchase  1,500,000 shares of
the  Company's  common stock at a price of $0.16 per share by May 22, 2001.  PFK
paid to the  Company  $85,000 of the option  execution  price,  and the  Company
extended  the  option  until June 22,  2001,  by which  date PFK  exercised  the
options.

     On December 31, 2001,  pursuant to section  4(2) of the  Securities  Act of
1933,  the Company  issued  2,000,000  common shares as part of the  acquisition
price for E.D.S. Marketing, Inc, at a valuation of $0.035 per share. On November
1, 2002,  the holders of these shares  cancelled  one million of these shares as
part of a purchase price adjustment.

     In March of 2002, pursuant to Rule 506 as promulgated under Regulation D of
the Securities Act of 1933, the Company sold 1,350,000  common shares at a price
of $0.32 per share for a total of $432,000.  The shares were sold to  accredited
investors who were personal  acquaintances  of the Company's  President,  Norman
Gardner, and its Vice-Chairman, Edward Fishman.

     In October of 2002,  pursuant to Rule 506 as promulgated under Regulation D
of the Securities  Act of 1933,  the Company sold  2,026,875  common shares at a
price of $0.125  per  share for a total of  $258,000.  The  shares  were sold to
accredited investors who were personal acquaintances of the Company's President,
Norman Gardner, and its Vice-Chairman, Edward Fishman.

<PAGE>
Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)  The Company's Common Stock is quoted on the bulletin board under the symbol
     "LLTI"  The  following  table  sets  forth  the high and low bid  prices as
     reported by the National  Association of Securities  Dealers (NASD) for the
     periods ending December 31, 2002.  These  quotations  reflect  inter-dealer
     prices,  without  retail  mark-up,  mark-down or  commissions,  and may not
     reflect   actual   transactions.   As  of   December  31, 2002  there  were
     approximately 125 shareholders of Common Stock.


                                             High              Low
                                            -----              ----
                  2002
                  -----
                  First Quarter             0.50                0.30

                  Second Quarter            0.50                0.35

                  Third Quarter             0.41                0.25

                  Fourth Quarter            0.35                0.11

                  2001
                  -----
                  First Quarter             0.55                0.25

                  Second Quarter            0.50                0.30

                  Third Quarter             0.50                0.35

                  Fourth Quarter            0.60                0.32


(b)  As of  December  31,  2002,  there were  approximately  125 holders of the
     Company's Common Stock.

(c)  No dividends were paid during the fiscal year ending December 31, 2002.




<PAGE>
Item 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS OR PLAN OF OPERATION

     The following  discussion and analysis  should be read in conjunction  with
LaserLock's  financial  statements and the Notes thereto contained  elsewhere in
this   registration    statement.    This   registration    statement   contains
forward-looking  statements  that involve risks and  uncertainties.  LaserLock's
actual results may differ significantly from the result discussed in the forward
looking statements.  Factors that might cause such a difference are discussed in
"Risk Factors."

Overview

     Due to the lack of cash flow to the Company's operations,  which stem from,
among other things,  a lower than projected amount of sales for fiscal 2002, the
Company has taken a number of steps to lower its monthly negative cash flow from
$90,000 to $35,000.  We believe that these steps are temporary,  and that as the
economy strengthens so will the Company's sales and we will be able to implement
these  programs  once  again.  We  believe  that our laser  and ink  combination
products are ready for commercial  production and we have been soliciting orders
for our products.  We had previously entered into licensing  agreements with the
Bud Jones  Company,  Bourgogne  et  Grasset,  and Slot  Tickets to  utilize  our
technology  in the gaming  industry.  These  contracts  have  generated  limited
operating  revenues  during 2002,  and we expect them to generate  greater sales
during fiscal 2003.

     From  its  inception  in 1999,  LaserLock  has been  engaged  primarily  in
activities  devoted  towards  obtaining  the  patent  rights to the  technology,
general business operations, research and development,  negotiating licenses and
agreements   with   potential   customers,   creating  a  sales  and  management
infrastructure by hiring consultants and independent contractors , and obtaining
financing.  The  Company  intends  to spend  between  $25,000  to  $50,000  for
consultant  services  during  the 2003  fiscal  year.  There  have been  limited
revenues from sales to date.

     The Company is a technology licensing Company which licenses its technology
to both third parties who incorporate it into their products for resale to their
customers,  and also directly to end users who  incorporate  the technology into
their products at their manufacturing facilities.  The Company receives per unit
royalties on volume  usage of its  technology.  The Company  intends to require,
whenever  possible,  minimum  annual  royalties  to enter into  these  licensing
agreements.

     The Company  believes  that its current  office  space,  which  consists of
approximately  1,000  square feet located in the home of its  President,  Norman
Gardner,  and for  which  it pays no  rent,  will be  sufficient  to  house  its
operations for the next year.

     Results of Operations  for the year ended  December 31, 2002 as compared to
the year ended December 31, 2001

     It  is  difficult  for  LaserLock  to  forecast  its  revenue  or  earnings
accurately.  We  believe  that  period-to-period  comparisons  of our  operating
results may not be meaningful.  We believe that we will start generating  larger
amounts  of  revenue in the  coming  fiscal  year due to the sales and  products
infrastructure  which we have  been  attempting  to create  over the past  year,
including our asset purchase of EDS Marketing, Inc.

     As a result of our  extremely  limited  operating  history,  we do not have
historical  financial data for a significant  number of periods on which to base
planned operating  expenses.  Our expense levels are based upon our expectations
concerning future revenue.  Thus, annual revenue and results of operation are
difficult to project.

     For the year ending  December 31, 2002, the Company had Sales and Royalties
revenues of $126,299,  as opposed to Sales and Royalties revenues of $11,803 for
the year ending  December 31, 2001. The increase in sales and revenues is due to
the  Company's  delivery  of  materials  pursuant to  contracts  the Company has
entered into.

<PAGE>
     The Company's  general and  administrative  costs aggregated  approximately
$385,990  for the year ended  December  31, 2002 as compared to $422,700 for the
year ended December 31, 2001  representing  an decrease of $36,710.  These costs
reflect a tax offset  benefit of $145,000.  Without the tax offset,  general and
administrative costs would have been $108,290 higher for the year ended December
31, 2002 as compared to the year ended December 31, 2001 due to costs associated
with the  acquisition of EDS Marketing,  Inc., the Company's Los Angeles office,
and staff and commission advances to Ed Fishman, Steve Meistrich, and Doug Wise

     The Company's sales and marketing costs aggregated  approximately  $583,339
for the year ended  December 31, 2002 as compared to $625,641 for the year ended
December 31, 2001 representing a decrease of $42,302.  This decrease  represents
decreased spending related to the Company's  marketing after the purchase of the
assets EDS Marketing,  Inc..  Specifically,  the Company continued marketing its
products in earnest this year by attending  trade  shows,  creating  promotional
materials, adding sales staff, and building a web site, but lowered costs in its
staffing. The Company's research and development costs aggregated  approximately
$141,748  for the year ended  December  31, 2002 as compared to $173,412 for the
year ended December 31, 2001 representing an decrease of $31,664.  This decrease
represents  decreased  spending related to the Company's research team which has
resulted in two additional patents during the year. Finally, the Company's legal
and  accounting  costs  aggregated  approximately  $67,753  for the  year  ended
December 31, 2002 as compared to $146,845  for the year ended  December 31, 2001
representing  an decrease of $79,092.  This  decrease  represents  the decreased
legal costs the Company  incurred  this year since it did not have costs similar
to 2001's one time costs  involved in the  Company's  purchase of the assets EDS
Marketing, Inc, and its license acquisition from Nocopi Technologies, Inc.


Liquidity and Capital Resources

     The Company  decreased its cash balance by $ 146,391 from a cash balance at
December 31, 2001 of $268,984 to $112,593 at December 31, 2002.  Working capital
at December  31, 2002 is positive at $124,465.

     LaserLock  has  incurred  negative  cash  flows  from  operation  since its
inception. The Company has begun to solicit business, and expects to continue to
expend sums to market and sell its products.

     Our future capital  requirements  and the adequacy of available  funds will
depend on numerous factors,  including the successful  commercialization  of our
existing products, cost of filing, prosecuting,  defending and enforcing current
and any future patent claims and other intellectual  property rights,  competing
technological  and  market  developments,   and  the  development  of  strategic
alliances  for the  development  and  marketing  of our  products.  In the event
LaserLock's plans change or its assumptions  change or prove to be inaccurate or
the funds  available  prove to be insufficient to fund operations at the planned
level (due to further unanticipated  expenses,  delays,  problems or otherwise),
LaserLock  could be required to obtain  additional  funds through equity or debt
financing,  strategic  alliances with corporate  partners and others, or through
other  sources  in order to bring its  products  through  to  commercialization.
LaserLock does not have any committed sources of additional financing, and there
can be no assurance that additional funding, if necessary,  will be available on
acceptable  terms,  if at all. If adequate  funds are not  available,  we may be
required to further  delay,  scale-back,  or  eliminate  certain  aspects of our
operations or attempt to obtain funds through  arrangements  with  collaborative
partners or others that may  require us to  relinquish  rights to certain of our
technologies, product candidates, products, or potential markets.

     Specifically,  the Company may have to delay its anticipated  marketing and
delivery dates, or scale back its third party  production  capabilities if it is
unable to consummate  sales, or to eliminate  certain areas of further  research
and  development.  If adequate  funds are not available,  LaserLock's  business,
financial condition,  and results of operations will be materially and adversely
affected.


<PAGE>
     The actual research and development and related activities of LaserLock may
vary significantly  from current plans depending on numerous factors,  including
changes in the costs of such activities from current  estimates,  the results of
LaserLock's research and development programs,  the results of clinical studies,
the timing of regulatory submissions,  technological advances, determinations as
to commercial  potential  and the status of  competitive  products.  The Company
expects  to expend  $70,000  on its  research  and  development  program  in the
upcoming year and the Company's  research and development  plans to perform over
the next year includes the  application of its product to additional  materials,
as well as improving its existing  products in conjunction with client feedback.
The focus and direction of  LaserLock's  operations  will also be dependent upon
the establishment of collaborative  arrangements with other companies, and other
factors.

     The Company has no plans to change the number of employees  or  independent
contractors  it employs  at this  time,  and plans to  continue  to utilize  its
current employees and contractors for at least the duration of 2003. The Company
intends to third party  manufacture  all of its  products,  and does not believe
that it will be making any plant and  equipment  purchases  during the  upcoming
year.

     Until  required for  operations,  LaserLock's  policy is to invest its cash
reserves in bank deposits,  certificates of deposit, commercial paper, corporate
notes,   U.S.   government   instruments  or  other   investment-grade   quality
instruments.

     There can be no assurance that LaserLock will be able to commercialize  its
technologies,  or that  profitability  will ever be achieved.  LaserLock expects
that its operating results will fluctuate significantly from year to year in the
future  and will  depend  on a number  of  factors,  most of which  are  outside
LaserLock's control.


<PAGE>
ITEM 7. FINANCIAL STATEMENTS

The financial statements are attached hereto at page 17.

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

     The Company's former accountants,  Larson, Allen, Weishair & Co., LLP, P.C.
('Larson')  resigned from their  position as the Company's  auditor as of August
23, 2002.

     Larson's  report  on the  Company's  financial  statements  for the  period
November 10, 1999 (date of inception) to December 31, 2000 and 2001 contained an
unqualified  opinion  modified for  uncertainty  as to the Company's  ability to
continue as a going  concern.  Other than that,  their  report on the  Company's
financial  statements  since  inception  did not  contain  an  adverse  opinion,
disclaimer of opinion,  or any  qualifications  or modifications  with regard to
uncertainy,  audit scope, or accounting  principles.

     For the Company's last two fiscal years, and any subsequent  interim period
prior to their  resignation,  the  Company did not have any  disagreements  with
Larson with respect to accounting  and auditing  issues of the type discussed in
Item 304(a)(iv) of Regulation S-B.

     As of October 10, 2002, the Company has retained the public accounting firm
of Cogen Sklar, LLP, ('Cogen'), whose principal business address is 150 Monument
Rd., Suite 500, Bala Cynwyd, PA 19004, to perform its annual audit for inclusion
of its  report  in  Form  10-KSB,  and  perform  SAS  71  reviews  of  quarterly
information in connection with Form 10-QSB filings.

     The Company had not previously consulted with Cogen on any matters, and for
the year ended  December  31, 2002 has not had any  disagreements  with Cogen on
accounting or financial disclosure.



Part III.

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

     The Board of  Directors  of the Company is  comprised  of only one class of
director.  Each director is elected to hold office until the next annual meeting
of shareholders and until his successor has been elected and qualified. Officers
are elected  annually by the Board of Directors and hold office until successors
are duly elected and qualified. The following is a brief account of the business
experience of each director and executive officer of the Company.

     The position(s)  held by each Officer and Director of the Company are shown
on the following table. Directors Norman Gardner and Michael Prevot were elected
in November,  1999, and Directors Ed Fishman, Steven Meistrich,  and Joel Pinsky
were elected  during 2001.  All  Directors  will serve for one year or until the
next annual  meeting of the  Company's  Shareholders  and until a  successor  is
elected and has qualified.


Name               Age        Position
Norman A. Gardner  60         CEO,  and Chairman of the Board of Directors
Ed Fishman*        59         Vice Chairman of the Board of Directors
Steven Meistrich*  44         Executive Vice President and a Director
Ed Bell            54         Director of Research and Development
Joel A. Pinsky     66         Director
Michael J. Prevot  47         Vice President and a Director
Doug Wise*         57         Vice President of Sales and Marketing
------------------------------
*    Messrs. Fishman,  Meistrich,  and Wise have all handed in letters resigning
     from their board and/or executive  positions with the Company effective May
     1, 2003 for personal reasons. Although they will no longer be involved with
     the  Company  in their  executive  and/or  board  positions,  they have all
     indicated they they intend to remain on the Company's Board of Advisors.


NORMAN A. GARDNER

     Norman A. Gardner has been the President of the Company since  inception on
November 11, 1999. From 1974 to 1985 Mr. Gardner served as President of Polymark
Management, Ltd., a Canadian public relations firm. In 1982, Mr. Gardner founded
Nocopi Technologies,  Inc. of West Conshohocken,  PA, a publicly traded company.
He served as  President  and Chief  Executive  Officer of Nocopi from 1985 until
1997, and as Chairman of its board until March,  1998. Mr. Gardner  received his
B.A. in English from McGill University in 1963.


ED FISHMAN

     Mr.  Fishman has been the Company's Vice Chairman of the Board of Directors
since the Company's acquisition of EDS Marketing, Inc, where he was the Chairman
of the board since 2000.  Prior to that,  Mr.  Fishman had been the Chairman and
CEO of Players International,  Inc., which he founded, built and eventually sold
to  Harrah's.  Mr.  Fishman  received  his B.A.  degree  from  California  State
University, Northridge, in 1966.


STEVEN MEISTRICH

     Mr.  Meistrich  has been  the  Company's  Executive  Vice  President  and a
Director since the Company's acquisition of EDS Marketing,  Inc, in Los Angeles,
where he was the  Chief  Executive  Officer  since  2000.  Prior  to  that,  Mr.
Meistrich had been the founder of Best Bet TV of Los Angeles, since 1999, CEO of
Entertainment  Marketing  Technology of Los Angeles since 1998,  and founder and
CEO of the Lab-e-rinth  Group of Los Angeles since 1989. Mr. Meistrich  received
his Masters degree from Johns Hopkins in 1979.


<PAGE>
ED BELL

     Mr. Bell has been the Company's  Director of Research &  Development  since
2000. From 1989 to 1999, Mr. Bell was  Vice-President of Olde Philadelphia Mint.
In 1999, Mr. Bell formed  Educational  Computer Company which consults with Coin
Mechanisms  Inc.  and  Kilmartin  Industries  Inc.  Mr.  Bell holds over a dozen
patents in the fields of fluidics, mechanics and electronics.

JOEL PINSKY

     Mr.  Pinsky has been  International  Counsel of the Company  since  October
2001.  Mr. Pinsky is a founding  partner with the law firm of GROSS,  PINSKY and
has practiced his profession in Montreal,  Canada on full-time basis for over 40
years.  He received his B.A.  degree from McGill  University in 1957, his B.C.L.
degree  from  McGill  University  in 1960 and his B.Com  degree  from  Concordia
University in 1961.

MICHAEL J. PREVOT

     Michael  Prevot has been the  Vice-President  of Sales of the Company since
inception.  From 1985 to 1999,  Mr.  Prevot  has  served as  President  of Vista
Security  Papers,  a San Francisco based company which sells security  products.
Mr.  Prevot  studied  business  at the  College  of  San  Mateo  in  San  Mateo,
California,  in 1974-1975,  and at Skyline  College in San Bruno,  California in
1975-1976. Mr. Prevot dedicates 10 - 20 percent of his time performing his tasks
for the Company. These tasks include approaching potential clients and arranging
for sales meetings and presentations.

DOUG WISE

     Mr. Wise has been the Company's Vice President of Sales and Marketing since
the Company's acquisition of EDS Marketing, Inc, where he was the Executive Vice
President of Sales since 200.  Prior to that, Mr. Wise had been the Director and
Vice President of Marketing for Entertainment  Marketing  Technology since 1988,
and Senior Vice President of Development and Marketing for Players International
since 1986.  Mr. Wise  received his B.B.A degree from  University  of Memphis in
1968.

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth the compensation paid during the fiscal year
ended December 31, 2002, to the Company's  Chief  Executive  Officer and each of
the Company's  officers and  directors.  No other person  received  compensation
equal to or exceeding $100,000 in fiscal 2002 and no bonuses were awarded during
fiscal 2002.


<TABLE>
<CAPTION>

                                         Annual  Compensation               Awards             Payouts
                                   ------------------------------  -------------------------  ---------
                                                           Other                                            All
                                                           Annual   Restricted    Securities               Other
                                                          compen-      Stock      Underlying     LTIP     Compen-
                                                           sation    Award(s)    Options/SAR   Payouts    sation
Name and Principal Position  Year  Salary ($)  Bonus ($)    ($)         ($)          (#)          ($)        ($)
- ----------                   ----  ----------  ---------  -------  -----------  ------------  ---------  --------
<S>                          <C>   <C>         <C>        <C>       <C>          <C>           <C>       <C>
Norman Gardner(1)            2002  105,000         -0-     15,600       -0-             -0-      -0-         -0-
President,                   2001  86,250(3)       -0-     15,600(2)(3) -0-             500,000  -0-         -0-
Director                     2000  75,000          -0-     15,600(2)    -0-             -0-      -0-         -0-
                             1999      -0-         -0-         -0-      -0-             -0-      -0-         -0-

Michael Prevot               2002      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Vice President of Marketing, 2001      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director                     2000      -0-         -0-         -0-      -0-             -0-      -0-         -0-
                             1999      -0-         -0-         -0-      -0-             -0-      -0-         -0-

Ed Fishman,                  2002  32,000          -0-         -0-      -0-             -0-      -0-         -0-
Vice Chairman of             2001   8,000(4)       -0-         -0-      -0-             500,000  -0-         -0-
Board of Directors

Steven Meistrich,            2002  32,000          -0-         -0-      -0-             -0-      -0-         -0-
Executive Vice President     2001   8,000(4)       -0-         -0-      -0-             500,000  -0-         -0-
Director

Ed Bell,                     2002      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director of                  2001      -0-         -0-         -0-      -0-             500,000  -0-         -0-
Research and Development

Joel Pinsky,                 2002      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director                     2001      -0-         -0-         -0-      -0-             -0-      -0-         -0-
Director

Doug Wise,                   2002  32,000          -0-         -0-      -0-             -0-      -0-         -0-
Vice President               2001   8,000(4)       -0-         -0-      -0-             500,000  -0-         -0-
Sales and Marketing


<FN>

---------------------------------------------

1.   On October 1, 2001 the Company entered into a new employment agreement with
     its President,  Norman Gardner, which provides for compensation of $120,000
     annually,  commencing  October 1, 2001, and escalating to $150,000 per year
     from October 1, 2003,  and which expires on September 30, 2006. In addition
     the agreement  grants Mr. Gardner 500,000 options to purchase the Company's
     common  stock,  250,000  shares at $0.17 per share,  and 250,000  shares at
     $0.35 per share.  In all other  respects,  the  contract is the same as his
     employment agreement from January 1, 2000.

2.   Company car, insurance, repairs and expenses.

3.   Computed as funds expended as of the date of this filing.

4.   Advances against commissions.
</FN>
</TABLE>

<PAGE>



Item 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS


     The  following  table sets forth certain  information  known to the Company
regarding the  beneficial  ownership of Common Stock as of December 31, 2002, by
(i) each Director of the Company,  (ii) each  executive  officer of the Company,
(iii) all  directors  and  executive  officers as a group,  and (iv) each person
known  to  the  Company  to be the  beneficial  owner  of  more  than  5% of its
outstanding shares of Common Stock.



<TABLE>
<CAPTION>
                                     Shares Beneficially Owned
                                     -------------------------
                                                   Percentage
Directors and Executive Officers      Shares Held   Owned (1)
- --------------------------------      -----------   ---------
<S>                                     <C>          <C>
Norman Gardner                           3,150,000    16.29%
President
837 Lindy Lane
Bala Cynwyd, PA 19004

Michael J. Prevot                        106,500       0.5%
419 Buena Vista Ave.
San Mateo, CA 94403

Ed Fishman                               250,000       1.29%
27234 Pacific Coast Highway
Malibu, CA 90265

Steven Meistrich                         250,000       1.29%
4312 Manorview Court
Moorpark, CA 93021

Doug Wise                                250,000       1.29%
5318 Old Hwy 96
Franklin, TN 37064

Joel Pinsky                                    0          0%
2 Place Alexis Nihon
Suite 1000
3500 de Maisonneuve Boulevard West
Montreal, QC, Canada
H3Z 3C1

Ed Bell                                   45,010       0.26%
5 Alexandra Court
Glenn Mills, PA 19342



Directors and Officers as a Group      4,051,510      22.09%

(1) Percentage of ownership is based on 19,334,742 shares of Common Stock issued
and outstanding as of December 31, 2002.


</TABLE>

<PAGE>


Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

TRANSACTIONS  WITH  MANAGEMENT  AND  OTHERS

     On December 23, 2001, the Company purchased the assets of E.D.S. Marketing,
Inc. for 2,000,000 shares of restricted  stock.  Prior to the  transaction,  the
Company  had no  relationship  with  that  Company  or with  management  of that
Company.  As a result  of the  acquisition,  three  former  employees  of E.D.S.
Marketing,  Inc. became management employees of the Company. These people are Ed
Fishman,  the  Company's  Vice  Chairman  of  the  Board  of  Directors,  Steven
Meistrich, the Company's Executive Vice President and a Director, and Doug Wise,
the Company's  Vice  President of Sales and  Marketing.  In addition to becoming
employees  of the  Company,  pursuant  to the  transaction  each of these  three
persons  received  500,000 of the total  2,000,000  shares used to purchase  the
assets E.D.S.  Marketing,  Inc.,  and received  grants of options to purchase an
additional  500,000  shares each.  During 2002,  in order to adjust the purchase
price of E.D.S. Marketing,  Inc. , each of the persons who received common stock
as part of the  Company's  acquisition  of E.D.S.  Marketing,  Inc. (Ed Fishman,
Steven  Meistrich,  Doug Wise, and Howard Goldberg)  cancelled  250,000 of their
common shares,  lowering the Company's then issued and outstanding common shares
by 1,000,000 shares.

     There  have  been  no  other  material  transactions,   series  of  similar
transactions, or currently proposed transactions, to which the Company was or is
to be a party,  in which the amount  involved  exceeds  $60,000 and in which any
director  or  executive  officer,  or any  security  holder  who is known to the
Company to own of record or beneficially more than five percent of the Company's
Common  Stock,  or any member of the  immediate  family of any of the  foregoing
persons, had a material interest.

CERTAIN  BUSINESS  RELATIONSHIPS

     There have been no material  transactions,  series of similar transactions,
currently proposed transactions, or series of similar transactions, to which the
Company was or is to be a party,  in which the amount  involved  exceeds $60,000
and in which any director or executive  officer,  or any security  holder who is
known to the Company to own of record or beneficially  more than five percent of
the Company's  Common Stock, or any member of the immediate family of any of the
foregoing  persons,  had a  material  interest  other  than  the one  listed  in
Transaction with Management and Others section, above.


Item 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K

     (a) All required  exhibits are  incorporated  herein by reference  from the
Company's Form 10-SB filed on November 14, 2000, and Amendments thereto.

ITEM 14.  CONTROLS AND PROCEDURES

         Evaluation of Disclosure Controls and Procedures
         ------------------------------------------------

     Within the 90 days  prior to the date of this  report,  we  carried  out an
evaluation of the  effectiveness  of the design and operation of our "disclosure
controls and  procedures"  (as defined in the Exchange Act Rules  13a-14(c)  and
15d-14(c))  under the supervision and with the  participation of our management,
including  Norman  Gardner,  our Chief  Executive  Officer  and Chief  Financial
Officer.  Based upon that evaluation,  Mr. Gardner concluded that our disclosure
controls and procedures are effective.

     Disclosure  controls and procedures are controls and other  procedures that
are designed to ensure that information  required to be disclosed in our reports
filed or submitted  under the Exchange Act are recorded,  processed,  summarized
and reported,  within the time periods  specified in the Securities and Exchange
Commission`s  rules.   Disclosure  controls  and  procedures  include,   without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is  accumulated  and
communicated  to  management  to  allow  timely  decisions   regarding  required
disclosure.

         Changes in Internal Controls
         -----------------------------

     There were no  significant  changes  in our  internal  controls  or, to our
knowledge,  in other  factors  that could  significantly  affect our  disclosure
controls and procedures subsequent to the date we carried out this evaluation.

<PAGE>
Financial Statements
<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES

                          (A DEVELOPMENT STAGE COMPANY)

                           DECEMBER 31, 2002 AND 2001





<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)








                                 C O N T E N T S
                                -------------------



                                                                    PAGE
                                                                   ------
INDEPENDENT AUDITORS REPORTS ................................... F-1 and F-2

CONSOLIDATED BALANCE SHEETS .................................... F-3

CONSOLIDATED STATEMENTS OF OPERATIONS .......................... F-4

CONSOLIDATED STATEMENTS OF CHANGES IN .......................... F-5
STOCKHOLDER'S EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS .......................... F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ..................... F-7 to F-17






<PAGE>

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors
LaserLock Technologies, Inc.
(A Development Stage Company)
Bala Cynwyd, Pennsylvania


We have  audited  the  accompanying  consolidated  balance  sheet  of  LaserLock
Technologies, Inc. and Subsidiaries (a development stage company) as of December
31, 2002,  and the related  consolidated  statements of  operations,  changes in
stockholders'  equity  and cash flows for the year then ended and for the period
November 10, 1999 (date of inception) to December 31, 2002.  These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit. The company's financial  statements as of and for
the year ended December 31, 2001, and for the period  November 10, 1999 (date of
inception) through December 3, 2001 were audited by other auditors whose report,
dated March 26, 2002, on those statements included an explanatory paragraph that
described the  substantial  doubt about the  Company's  ability to continue as a
going  concern  discussed in Note 2 to the financial  statements.  The financial
statements for the period November 10, 1999 (date of inception) through December
31,  2001  reflect  total  revenues  and net  loss of  $11,803  and  $1,474,241,
respectively,  of the  related  totals.  The  other  auditors'  report  has been
furnished to us, and our opinion,  insofar as it relates 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. 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 consolidated financial statements.
An audit also includes assessing the accounting  principles used and significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

In our  opinion,  based on our  audit  and the  report  of other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material   respects,   the   consolidated   financial   position  of   LaserLock
Technologies, Inc. and Subsidiaries (a development stage company) as of December
31, 2002 and the  consolidated  results of their operations and their cash flows
for the year then ended and for the period November 10, 1999 (date of inception)
to December  31,  2002,  in  conformity  with  accounting  principles  generally
accepted in the United States.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated  financial statements,  the Company's losses from development stage
activities  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  actions in regard to this matter are also  described  in
Note 2. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.





                                COGEN SKLAR, LLP


Bala Cynwyd, Pennsylvania
March 12, 2003


                                      F-1
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors
LaserLock Technologies, Inc.
(A Development Stage Company)
Bala Cynwyd, Pennsylvania

We have audited the accompanying balance sheets of LaserLock Technologies,  Inc.
and Subsidiaries (a development  stage company) as of December 31, 2001, and the
related statements of operations, changes in stockholders' equity and cash flows
for the year then ended and for the period November 10, 1999 (date of inception)
to  December  31,  2001.  These  consolidated   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material   respects,   the  financial  position  of  LaserLock
Technologies, Inc. and Subsidiaries (a development stage company) as of December
31, 2001 and the results of its  operations and its cash flows for the year then
ended and for the period  November 10, 1999 (date of  inception) to December 31,
2001 in conformity with U.S. generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated  financial statements,  the Company's losses from development stage
activities  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  actions in regard to this matter are also  described  in
Note 2. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.


                                  /s/LARSON, ALLEN, WEISHAIR & CO., LLP
                                     LARSON, ALLEN, WEISHAIR & CO., LLP

Blue Bell, Pennsylvania
March 26, 2002
                                      F-2
<PAGE>
                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001
<TABLE>
<CAPTION>



                                                                                            2002               2001
                                                                                      ------------------ ------------------
                  ASSETS
<S>                                                                                     <C>                 <C>
Current Assets
      Cash and cash equivalents                                                               $ 122,593          $ 268,984
      Receivables                                                                                27,358              5,593
      Note receivable                                                                                 -             15,000
      Prepaid expenses                                                                           11,250             26,250
                                                                                      ------------------ ------------------
           Total Current Assets                                                                 161,201            315,827
                                                                                      ------------------ ------------------

Property and Equipment
      Capital equipment                                                                           9,445                  -
      Less: accumulated depreciation                                                              1,889                  -
                                                                                      ------------------ ------------------
                                                                                                  7,556                  -
                                                                                      ------------------ ------------------

Other Assets
      Intangible assets, net of accumulated amortization of $114,383 and
           $13,305 as of December 31, 2002 and 2001                                             114,617            744,694
      Patent costs, net of accumulated amortization of $1,022 and $-0-
           as of December 31, 2002 and 2001                                                      23,376                  -
                                                                                      ------------------ ------------------
                                                                                                137,993            744,694
                                                                                      ------------------ ------------------

      Total Assets                                                                            $ 306,750         $1,060,521
                                                                                      ================== ==================


                         LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
      Accounts payable and accrued expenses                                                    $ 36,736           $ 19,312
      Deferred revenue                                                                                -             21,042
                                                                                      ------------------ ------------------
           Total Current Liabilities                                                             36,736             40,354
                                                                                      ------------------ ------------------


Stockholders' Equity
      Preferred stock, $.001 par value; 10,000,000 shares authorized,
           no shares issued and outstanding                                                           -                  -
      Common stock, $.001 par value; 40,000,000 shares authorized,
           19,334,742 shares outstanding at December 31, 2002 and
           16,957,867 shares outstanding at December 31, 2001                                    19,335             16,958
      Additional paid-in capital                                                              2,920,673          2,477,450
      Deficit accumulated during the development stage                                      (2,669,994)        (1,474,241)
                                                                                      ------------------ ------------------
           Total Stockholders' Equity                                                           270,014          1,020,167
                                                                                      ------------------ ------------------

      Total Liabilities and Stockholders' Equity                                              $ 306,750         $1,060,521
                                                                                      ================== ==================

</TABLE>


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


                                      F-3
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
    AND THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2002

<TABLE>
<CAPTION>




                                                                   Cumulative      Year Ended       Year Ended
                                                                     Since        December 31,      December 31,
                                                                   Inception          2002             2001
                                                             -------------        --------------   -------------
<S>                                                             <C>                <C>               <C>
REVENUES
      Sales                                                      $ 46,117          $ 39,522          $  6,595
      Royalties                                                    91,985            86,777             5,208
                                                             -------------        --------------   -------------
           Total revenues                                         138,102           126,299            11,803

COSTS AND EXPENSES
      Research and development                                    375,878           141,748           173,412
      Patent costs                                                 50,989                 -            25,989
      Legal and accounting                                        251,533            67,753           146,845
      Sales and marketing                                       1,358,336           583,339           625,641
      General and administrative                                  982,570           385,990           422,700
                                                             -------------        --------------   -------------
           Total costs and expenses                             3,019,306         1,178,830         1,394,587
                                                             -------------        --------------   -------------

LOSS BEFORE OTHER INCOME                                      (2,881,204)       (1,052,531)       (1,382,784)

OTHER INCOME
      Interest income                                              46,210             1,778            20,485
                                                             -------------        --------------   -------------

LOSS BEFORE INCOME TAX BENEFIT                                (2,834,994)       (1,050,753)       (1,362,299)

INCOME TAX BENEFIT (PROVISION)                                    165,000         (145,000)           310,000
                                                             -------------        --------------   -------------

NET LOSS                                                     $(2,669,994)      $(1,195,753)      $(1,052,299)
                                                             =============        ==============   =============



BASIC AND DILUTED NET LOSS PER
      COMMON SHARE                                                                $  (0.06)         $  (0.07)
                                                                                 ================ =============

BASIC AND DILUTED WEIGHTED AVERAGE
      COMMON SHARES OUTSTANDING                                                  18,361,695        14,105,028
                                                                                 ================ =============


</TABLE>

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



                                      F-4
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
    FOR THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2002

<TABLE>
<CAPTION>

                                                                                                        Accumulated
                                                        Common Stock                     Additional     during the
                                                  Number of                  Consulting  Paid-In        Development
                                                   Shares       Amount       Fees        Capital         Stage         Total
                                                --------------  ----------   --------- -------------  ---------------  ------------
<S>                                               <C>            <C>          <C>         <C>             <C>           <C>
Issuance of initial 4,278,000 shares
     on November 10, 1999                           4,278,000    $  4,278      $    -      $ 16,595          $     -      $ 20,873
Issuance of shares of common stock in
     exchange for services                          1,232,000       1,232           -        35,728                -        36,960
Issuance of shares of common stock                  2,090,000       2,090           -        60,610                -        62,700
Stock issuance costs                                        -           -           -      (13,690)                -      (13,690)
Net loss                                                    -           -           -             -         (54,113)      (54,113)
                                                --------------  ----------   --------- -------------  ---------------  ------------
Balance, December 31, 1999                          7,600,000       7,600           -       99,243          (54,113)        52,730

Issuance of shares of common stock                  5,449,999       5,450           -       921,050               -        926,500

Issuance of shares of common stock in
     exchange for services                            240,000         240    (40,800)        40,560                -             -
Stock issuance costs                                        -           -           -       (16,335)               -      (16,335)
Fair value of non-employee stock
     options grants                                         -           -           -        50,350                 -       50,350
Amortization of deferred consulting fees                    -           -      20,117             -                 -       20,117
Net loss                                                    -           -           -             -         (367,829)     (367,829)
                                                --------------  ----------   --------- -------------  ---------------  ------------

Balance, December 31, 2000                         13,289,999      13,290    (20,683)     1,094,868        (421,942)       665,533

Issuance of shares of common stock                    217,500         218           -        77,723                -        77,941
Issuance of shares of common stock and stock
     options for acquisition of subsidiary          2,000,000       2,000           -       736,000                -       738,000
Issuance of stock options                                   -           -           -        15,000                -        15,000
Exercise of options                                 1,450,368       1,450           -       230,609                -       232,059
Fair value of non-employee stock options                    -           -           -       323,250                -       323,250
Amortization of deferred consulting fees                    -           -      20,683             -                -        20,683
Net loss                                                    -           -           -             -      (1,052,299)   (1,052,299)
                                                --------------  ----------   --------- -------------  ---------------  ------------
Balance, December 31, 2001                         16,957,867      16,958           -     2,477,450      (1,474,241)     1,020,167

Issuance of shares of common stock                  3,376,875       3,377           -       687,223               -        690,600
Fair value of non-employee stock options                    -           -           -        94,000               -         94,000
Salary due to stockholder contributed to capital            -           -           -        15,000               -         15,000
Return of shares of common stock related to
 purchase price adjustment                        (1,000,000)     (1,000)           -     (353,000)               -      (354,000)
Net loss                                                    -           -           -             -      (1,195,753)   (1,195,753)
                                                --------------  ----------   --------- -------------  ---------------  ------------
Balance, December 31, 2002                         19,334,742    $ 19,335      $    -    $2,920,673    $ (2,669,994)     $ 270,014
                                                ==============  ==========   ========= =============  ===============  ============





</TABLE>

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



                                      F-5
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
    AND THE PERIOD NOVEMBER 10, 1999 (DATE OF INCEPTION) TO DECEMBER 31, 2002

<TABLE>
<CAPTION>


                                                                          Cumulative          Year Ended          Year Ended
                                                                            Since            December 31,        December 31,
                                                                          Inception           2002                  2001
                                                                    ----------------------  ----------------    ------------------
<S>                                                                     <C>                   <C>                 <C>
Cash Flows From Operating Activities
      Net Income                                                             $(2,669,994)      $(1,195,753)          $(1,052,299)
      Adjustments to reconcile net loss to net cash flows
        used in operating activities:
           Fair value of options issued in exchange for services                  467,600            94,000               323,250
           Salary due to stockholder contributed to capital                        15,000            15,000                     -
           Amortization and depreciation                                          292,293           278,988                13,305
           Stock issued in exchange for services                                   36,960                 -                     -
           Amortization of deferred consulting fees                                40,800                 -                20,683
           (Increase) decrease in assets
           Receivables                                                           (27,358)          (21,765)                 (868)
           Prepaid expenses                                                      (11,250)            15,000              (22,000)
           Increase (decrease) in liabilities
           Accounts payable and accrued expenses                                   36,737            17,424                19,068
           Deferred revenue                                                             -          (21,042)                21,042
                                                                    ----------------------  ----------------    ------------------
Net cash used in operating activities                                         (1,819,212)         (818,148)             (677,819)
                                                                    ----------------------  ----------------    ------------------

Cash Flows From Investing Activities
      Purchase of capital equipment                                               (9,445)           (9,445)                     -
      Purchase of intangibles                                                    (20,000)                 -              (20,000)
      Purchase of patent costs                                                   (24,398)          (24,398)                     -
      Decrease (increase) in notes receivable                                          -             15,000              (15,000)
                                                                    ----------------------  ----------------    ------------------
Net cash used in investing activities                                            (53,843)          (18,843)              (35,000)
                                                                    ----------------------  ----------------    ------------------

Cash Flows From Financing Activities
      Proceeds from issuance of common stock                                    1,778,614           690,600                77,941
      Proceeds from exercise of stock options                                     232,059                 -               232,059
      Proceeds from issuance of stock options                                      15,000                 -                15,000
      Stock issuance costs                                                       (30,025)                 -                     -
                                                                    ----------------------  ----------------    ------------------
Net cash provided by financing activities                                       1,995,648           690,600               325,000
                                                                    ----------------------  ----------------    ------------------

Net Increase (decrease) in Cash and Cash Equivalents                              122,593         (146,391)             (387,819)

Cash and Cash Equivalents, Beginning of Period                                          -           268,984               656,803
                                                                    ----------------------  ----------------    ------------------

Cash and Cash Equivalents, End of Period                                        $ 122,593         $ 122,593   $-        $ 268,984
                                                                    ======================  ================    ==================

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
      Return of shares of common stock related to purchase
        price adjustment:
        Common stock                                                           $  (1,000)        $  (1,000)              $      -
        Additional paid-in capital                                              (353,000)         (353,000)                     -
                                                                    ----------------------  ----------------    ------------------
        Intangible assets                                                     $ (354,000)       $ (354,000)              $      -
                                                                    ======================  ================    ==================
      Issuance of common stock and stock options
        for acquisition of subsidiary                                           $ 738,000          $      -             $ 738,000
                                                                    ======================  ================    ==================








</TABLE>

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

                                      F-6
<PAGE>
                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business
-------------------
The  Company is a  development  stage  enterprise  incorporated  in the state of
Nevada on November 10, 1999. Since inception,  substantially  all of the efforts
of the Company have been developing  technologies  for the prevention of product
and document counterfeiting.  The Company is in the development stage of raising
capital,  financial  planning,  establishing  sources of supply,  and  acquiring
property,  plant and equipment. The Company anticipates establishing markets for
its technologies in North America and Europe.

Principle of Consolidation
--------------------------
The  accompanying  consolidated  financial  statements  include the  accounts of
LaserLock  Technologies,  Inc. and its  wholly-owned  subsidiaries,  LL Security
Products, Inc. and EDS Marketing, Inc. All inter-company  transactions have been
eliminated in consolidation.

Use of Estimates
-----------------
The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting   principles   generally  accepted  in  the  United  States  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 these
estimates.

Comprehensive Income
---------------------
The Company follows the Statement of Financial  Accounting Standard ("SFAS") No.
130, "Reporting  Comprehensive Income." Comprehensive income is a more inclusive
financial  reporting  methodology that includes  disclosure of certain financial
information that  historically has not been recognized in the calculation of net
income.  Since  the  Company  has  no  items  of  other  comprehensive   income,
comprehensive income (loss) is equal to net income (loss).

Fair Value of Financial Instruments
------------------------------------
The Company's  financial  instruments  consist of cash  receivables and accounts
payable.  The  carrying  values  of  cash,   receivables  and  accounts  payable
approximate fair value because of their short maturities.

Concentration of Credit Risk Involving Cash
--------------------------------------------
At December 31,  2002,  the Company has  deposits  with a financial  institution
which exceed Federal Depository Insurance limits. This financial institution has
a strong credit rating and management believes that credit risk related to these
deposits is minimal.

Cash and Cash Equivalents
--------------------------
For purposes of reporting cash flows,  the Company  considers all cash accounts,
which are not subject to withdrawal restrictions or penalties,  and certificates
of deposit and commercial  paper with original  maturities of 90 days or less to
be cash or cash equivalents.

Property and Equipment
-----------------------
Capital equipment are stated at cost.  Depreciation is computed using applicable
methods over the estimated useful lives of the assets, principally five to seven
years.

                                      F-7
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001



NOTE 1 -SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property and Equipment (Continued)
------------------------------------
Maintenance  and  repairs  of  property  are  charged to  operations,  and major
improvements are capitalized.  Upon  retirement,  sale, or other  disposition of
property and equipment,  the costs and accumulated  depreciation  are eliminated
from the  accounts,  and any resulting  gain or loss is included in  operations.
Depreciation for 2002 and 2001 was $1,899 and $-0-.

Patents
---------
Patents are capitalized and amortized over an estimated useful life of 17 years.
Patent amortization expense for 2002 and 2001 was $1,022 and $-0-.

Revenue Recognition
---------------------
The  Company  recognizes  revenue  from  the sale of  counterfeiting  prevention
technology  when  shipped.  Revenue  from  licensing  fees  will  be  recognized
proportionately over the period of the licensing agreement.

Income Taxes
----------------
The Company  follows SFAS 109,  "Accounting for Income Taxes," which requires an
asset and liability  approach to financial  accounting  and reporting for income
taxes.  Deferred  income tax assets and  liabilities  are computed  annually for
temporary  differences  between the financial  statement and tax bases of assets
and liabilities that will result in taxable or deductible  amounts in the future
based on  enacted  tax laws and rates  applicable  to the  periods  in which the
differences  are expected to affect  taxable  income.  Valuation  allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to be  realized.  Income tax  expense is the tax payable or  refundable  for the
period  plus or minus the change  during the period in  deferred  tax assets and
liabilities.

Loss Per Share
---------------
The  Company  follows  SFAS No.  128,  "Earnings  Per  Share"  resulting  in the
presentation  of basic and  diluted  earnings  per share.  Because  the  Company
reported a net loss in 2002 and 2001, common stock equivalents,  including stock
options and warrants were  anti-dilutive;  therefore,  the amounts  reported for
basic and dilutive loss per share were the same.

Research and Development Costs
-------------------------------
Research and development costs are expensed when incurred. Total amount expensed
for the years  ending  December  31, 2002 and 2001 was  $141,748  and  $173,412,
respectively.

Reclassification
-----------------
Certain costs and expenses in the 2001  consolidated  financial  statements have
been  reclassified  to  conform  to the  presentation  in the 2002  consolidated
financial statements.

Intangibles
---------------
In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
No.  141,  "Accounting  for  Business   Combinations"  and  Statement  No.  142,
"Accounting  for  Goodwill  and Other  Intangible  Assets."  The  provisions  of
Statement No. 141 apply to business  combination  transactions  that occur after
June  30,  2001.  Implementation  of  Statement  No.  141 has not  effected  the
consolidated  financial  statements of the Company.  The provisions of Statement
No. 142, implemented effective January 1, 2002, eliminated goodwill amortization
and  provides  for  standards  on testing the  impairment  of goodwill and other
intangible  assets at least  annually.  The adoption of this standard has had no
effect on the Company's consolidated financial statements.


                                      F-8
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001




NOTE 1 -SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment
-----------
In October 2001, the Financial  Accounting  Standards Board issued Statement No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (Statement
144"),  effective in fiscal years  beginning after December 15, 2001, with early
adoption permitted,  and in general are to be applied  prospectively.  Statement
144  establishes  a single  accounting  model for the  impairment or disposal of
long-lived assets, including discontinued  operations.  Statement 144 superseded
Statement No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
Long-Lived  Assets To Be Disposed  Of," and APB Opinion No. 30,  "Reporting  the
Results of  Operations  -  Reporting  the  Effects of Disposal of a Segment of a
business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions."  The Company adopted Statement 144 effective January 1, 2002. The
adoption  of  this  statement  has  had no  effect  on the  Company's  financial
statements.

Recently Issued Accounting Principles
--------------------------------------
In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based
Compensation."  SFAS No. 148 provides  alternative  methods of transition  for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation,  and amends  Statement  No.  123.  The  adoption of this
standard  is not  expected  to  have an  effect  of the  Company's  consolidated
financial  statements.  The Company did not adopt this voluntary change for year
ended December 31, 2002.


The  following  recently  issued  accounting  pronouncements  are  currently not
applicable to the Company.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Correction." This Statement  eliminates  extraordinary  accounting treatment for
reporting  gain or  loss  on debt  extinguishment,  and  amends  other  existing
authoritative  pronouncements  to make various  technical  corrections,  clarify
meanings, or describe their applicability under changed conditions.

In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and
Disclosure  Requirements  for  Guarantees,   Including  Indirect  Guarantees  of
Indebtedness of Others." This Interpretation  expands the disclosures to be made
by a guarantor about its obligations under certain guarantees and requires that,
at the inception of a guarantee,  a guarantor recognize a liability for the fair
value of the  obligation  undertaken in issuing the  guarantee.  The  disclosure
requirements are effective immediately.  The initial recognition and measurement
provisions  of this  Interpretation  are  effective  for  guarantees  issued  or
modified after December 31, 2002.


NOTE 2 - GOING CONCERN

The accompanying  consolidated  financial statements have been prepared assuming
that the Company  will  continue as a going  concern.  The Company has  incurred
significant  losses and  negative cash flow during the  development
stage.  These conditions raise  substantial doubt about the Company's ability to
continue  as a going  concern.  The  consolidated  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

The  Company  is in the  development  stage at  December  31,  2002.  Successful
completion of the Company's development program and, ultimately,  the attainment
of profitable  operations is dependent upon future events,  including  obtaining
adequate  financing to fulfill its development  activities and achieving a level
of sales  adequate  to support the  Company's  cost  structure.  The Company has
entered  into an  agreement  with an equity  firm to raise  additional  capital.
However,  there can be no  assurances  that the  Company  will be able to secure
additional equity investment.

                                      F-9
<PAGE>

                 LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                         (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001



NOTE 3 - CONVERTIBLE PROMISSORY NOTE RECEIVABLE

On November 30, 2001 LaserLock loaned an unrelated corporation $15,000,  bearing
10% interest per annum,  due and payable sixty (60) days from the date the money
was  received  by the  corporation.  The note was  satisfied  in full in 2002 in
accordance with the terms of the note.


NOTE 4 - DEFERRED REVENUE

At December 31, 2001,  LaserLock  was in the process of  negotiating  a contract
with an unrelated third party. As part of the negotiations,  the unrelated third
party agreed to advance  LaserLock $60,000 and LaserLock agreed that the advance
would be credited  against  future  royalties  if an  agreement  was  finalized.
LaserLock  received  $20,000 in 2001 and the remaining  $40,000 during the first
quarter 2002. The entire $60,000 of revenue was earned in 2002.


NOTE 5 - INCOME TAXES

Under the  provisions  of Statement of Financial  Accounting  Standards No. 109,
"Accounting  for Income  Taxes," an entity  recognizes  deferred  tax assets and
liabilities  for future tax  consequences  or events  that have been  previously
recognized in the Company's  consolidated  financial  statements or tax returns.
The measurement of deferred tax assets and liabilities is based on provisions of
the enacted tax law. The effects of future  changes in tax laws or rates are not
anticipated.

Deferred tax liabilities  would arise  principally from intangible assets in the
consolidated  financial  statements  and  compared to the tax  treatment of such
costs  (these  assets  have  no  tax  basis).   Additionally,   differences   in
depreciation  methods for  financial  statement  purposes  and for income  taxes
result in temporary differences, as well.

At December  31,  2002,  the  Company  has a net  operating  loss  ("NOL")  that
approximates  $1,830,000.  Consequently,  the  Company  had NOL  carry  forwards
available  for  federal  income  tax  purposes,  which  begin to expire in 2019.
Deferred tax assets would arise from the recognition of anticipated  utilization
of these net operating losses to offset future taxable income.

Finally,  valuation allowances are provided against both deferred tax assets and
liabilities in assessing the likelihood of ultimate  realization of the deferred
tax consequence or benefit.

The income tax benefit (provision) consists of the following:

                                   2002               2001
                                -----------        ----------
Current                            $      -          $      -
Deferred                            307,000           303,000
Change in Valuation allowance      (452,000)            7,000
                                -----------        ----------
                                   (145,000)          310,000
                                ===========        ==========


                                      F-10
<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001



NOTE 5 - INCOME TAXES (Continued)

The  following  is a  reconciliation  of the tax  derived by  applying  the U.S.
Federal  Statutory Rate of 35% to the earnings before income taxes and comparing
that to the recorded income tax provisions.

<table>
<caption>

                                        2002                               2001
                                      -----------------------------    -------------------------------
                                       Amount          Percentage         Amount          Percentage
                                      -----------     -------------    -------------     -------------

U.S. federal income tax benefit at
<S>                                   <C>             <C>                <C>               <C>
Federal statutory rate                 $(418,000)              (35)       $(477,000)              (35)
State tax, net of federal tax effect     (77,000)               (7)         (47,000)               (3)
Non-deductible excess purchase price      53,000                 5          109,000                 8
Non-deductible options                    33,000                 3          112,000                 8
Non-deductible amortization               97,000                 8                -                 -
Non-deductibel salary consolidated         5,000                 -                -                 -
Change in valuation allowance            452,000                38           (7,000)               (1)
                                      -----------     -------------    -------------     -------------
                                       $ 145,000                12        $(310,000)              (23)
                                      ===========     =============    =============     =============
</TABLE>


The primary  components  of the  Company's  2002 and 2001  deferred  tax assets,
liabilities and the related valuation allowance are as follows:

                                                2002                2001
                                              -----------        ------------

Deferred tax asset for NOL carry forwards       $759,000            $452,000
Deferred tax liability for intangibles          (160,000)           (305,000)
Valuation allowance                             (599,000)           (147,000)
                                              -----------        ------------

                                                   $   -               $   -
                                              ===========        ============




Management has determined  that the realization of the net deferred tax asset is
not assured and has created a valuation  allowance for the entire amount of such
benefits.


NOTE 6 - COMMON STOCK

In  connection  with two private  placements  that occurred in March and October
2002,  the  Company  sold  3,376,875  shares of its common  stock for a total of
$690,000. In addition, on or about November 1, 2002, as part of a purchase price
adjustment  associated  with the 2001  acquisition of EDS  Marketing,  Inc., one
million  shares of the  Company's  common  stock was returned to the Company and
cancelled (Note 12).

During 2001,  the Company sold 217,500 shares of its common stock for a total of
$77,941.  In  addition,  1,450,368  shares of common  stock were issued upon the
exercise of options for net  proceeds of $232,250.  On December  31,  2001,  the
Company issued two million shares of its common stock for the acquisition of EDS
Marketing, Inc. (Note 12).


                                      F-11

<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE 7 - STOCK OPTION PLAN

During 1999, the Board of Directors  ("Board") of the Company adopted,  with the
approval of the stockholders, a Stock Option Plan. In 2000, the Board superseded
that plan and created a new Stock Option Plan (the "Plan"), pursuant to which it
is authorized  to grant  options to purchase up to 1.5 million  shares of common
stock to the Company's employees,  officers,  directors,  consultants, and other
agents and  advisors.  The Plan is intended to permit stock  options  granted to
employees under the Plan to qualify as incentive stock options under Section 422
of the Internal  Revenue Code of 1986, as amended  ("Incentive  Stock Options").
All  options  granted  under the Plan,  which are not  intended  to  qualify  as
Incentive Stock Options, are deemed to be non-qualified options  ("Non-Statutory
Stock Options").

The Plan is administered by a committee of the Board of Directors ("Stock Option
Committee")  which  determines  the persons to whom awards will be granted,  the
number of awards to be granted and the specific  terms of each grant,  including
the vesting thereof, subject to the provision of the Plan.

In connection  with Incentive  Stock Options,  the exercise price of each option
may not be less than 100% of the fair  market  value of the common  stock on the
date of grant (or 110% of the fair market value in the case of a grantee holding
more than 10% of the  outstanding  stock of the  Company).  The  aggregate  fair
market  value  (determined  at the  time of the  grant)  of stock  for  which an
employee may exercise  Incentive  Stock  Options  under all plant of the company
shall not exceed  $1,000,000  per calendar  year. If any employee shall have the
right to exercise any options in excess of $100,000  during any  calendar  year,
the  options in excess of  $100,000  shall be deemed to be  Non-Statutory  Stock
Options,   including  prices,  duration,   transferability  and  limitations  on
exercise.

Stock option transactions for employees during 2002 and 2001 were as follows:

                                                              Exercise Price
                                  Option        Vested          Per Common
                                  Shares        Shares         Share Range
                                 -----------   -----------   -----------------

Balance, December 31, 2000           25,000        25,000    $0.17
Granted/vested during the year      500,000       500,000    $0.17 to $0.35
Exercised during the year                 -             -                 -
                                 -----------   -----------   -----------------

Balance, December 31, 2001          525,000       525,000    $0.17 to $0.35
Granted/vested during the year            -             -                 -
Exercised during the year                 -             -                 -
                                 -----------   -----------   -----------------

Balance, December 31, 2002          525,000       525,000    $0.17 to $0.35
                                 ===========   ===========   =================



                                      F-12

<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE 7 - STOCK OPTION PLAN (Continued)

Information  with respect to employee  stock  options  outstanding  and employee
stock options exercisable at December 31, 2002 is as follows:

<TABLE>
<CAPTION>

                      Employee Options Outstanding
                   ----------------------------------------------------------------------------------
<S>                <C>                      <C>                                 <C>
                                                                                 Weighted Average
                                                                                 Exercise Price of
     Range of       Number Outstanding       Weighted Average Remaining          Options Currently
  Exercise Prices  at December 31, 2002      Contractual Life                       Exercisable
-----------------  --------------------   ---------------------------------    ----------------------
  $0.17 to $0.35            525,000             2.98 years                        $0.26

</TABLE>

The Company  accounts for  stock-based  compensation in accordance with SFAS No.
123. Accounting for Stock-Based  Compensation,  which for employee stock options
permits  the use of  intrinsic  value  method  described  in APB opinion No. 25,
Accounting  for Stock Issued to Employees,  and requires the Company to disclose
the pro forma effects for accounting for stock-based compensation using the fair
value method as described in the optional  accounting  requirements  of SFAS No.
123. As  permitted  by SFAS No. 123,  the Company  will  continue to account for
stock-based  compensation  under APB Opinion No. 25, under which the Company has
recognized no compensation expense for employee granted options.

Had compensation  cost for the Company's stock option plan been determined based
on the fair value of the Company's common stock at the dates of awards under the
fair value method of SFAS No. 123, the Company's  2001 net loss and net loss per
common share would have been increased to the pro forma amounts indicated below.
In 2001 the fair value amounts were estimated  using the  Black-Scholes  options
pricing  model with the  following  assumptions:  no  dividend  yield,  expected
volatility of 30%,  risk-free  interest  rate of 5% and expected  option life of
five years. There were no employee stock options issued during 2002.

                                                     December 31,
                                                         2001
                                                    -------------------
Net loss:
As reported                                              $1,052,299
Pro froma                                                 1,072,299

Net loss per common share basic and diluted:
As reported                                                $   0.07
Pro forma                                                  $   0.08


                                      F-13

<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE 7 - STOCK OPTION PLAN (Continued)

In addition to options granted to employees under the plans,  the Company issued
stock  options  pursuant to  contractual  agreements to  non-employees.  Options
granted under the agreements are expensed when the related service or product is
provided.

Stock  option  transactions  for  non-employees  during  2002 and  2001  were as
follows:
<TABLE>
<CAPTION>

                                                                                      Exercise Price
                                              Option                Vested              Per Common
                                              Shares                Shares              Share Range
                                           --------------       ---------------      ------------------
<S>                                        <C>                   <C>                <C>
Balance, December 31, 2000                     1,110,000             1,110,000       $0.17 to $0.35
Granted/vested during the year                 3,650,000             1,650,000       $0.16 to $0.35
Exercised during the year                     (1,450,368)           (1,450,368)      $0.16
                                           --------------       ---------------      ------------------

Balance, December 31, 2001                     3,309,632             1,309,632       $0.16 to $0.35

Granted/vested during the year                   585,000             1,060,000       $0.40 to $0.75
Exercised during the year                              -                     -                       -
                                           --------------       ---------------      ------------------

Balance, December 31, 2002                     3,894,632             2,369,632       $0.16 to $0.75
                                           ==============       ===============      ==================

</TABLE>

Included in options granted during 2001 are the 2,000,000 options shares granted
in connection with the  acquisition of EDS Marketing,  Inc. as disclosed in Note
13.

Total expense  recognized by the Company  during 2002 and 2001 for  non-employee
granted  options was $94,000 and $323,250.  The 2002 and 2001 fair value amounts
of the  non-employee  options were  estimated  using the  Black-Scholes  options
pricing model with the  following  assumptions:  no dividend  yield for 2002 and
2001,  expected  volatility of 60% for 2002 and 30% for 2001, risk free interest
rate of return of approximately 5% and expected option life of two to five years
for 2002 and 2001.

Information  with  respect  to  non-employee   stock  options   outstanding  the
non-employee stock options exercisable at December 31, 2002 is as follows:

<TABLE>
<CAPTION>


                                 Non-Employee Options Outstanding
                        ----------------------------------------------------------------------------------------

                      <C>                           <C>                                 <C>
                                                                                            Weighted Average
                                                                                            Exercise Price of
     Range of              Number Outstanding           Weighted Average Remaining          Options Currently
  Exercise Prices         at December 31, 2002          Contractual Life                       Exercisable
--------------------    --------------------------   ----------------------------------   ----------------------
  $0.16 to $1.00                  2,369,632                2.28 years                        $0.34

</TABLE>


                                      F-14

<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001




NOTE 7 - STOCK OPTION PLAN (Continued)

In conjunction with a 2002 contractual agreement, the Company granted options to
a customer.  The number of options to be granted are  contingent  upon the gross
amount of product  sales during each of four years in the period ended  December
31,  2006,  at  exercise  prices  ranging  from $1.25 to $2.25.  The  contingent
issuable  options will be valued in accordance with EITF 96-18,  "Accounting for
Equity  Instruments That Are Issued To Other Than Employees for Aquiring,  Or In
Conjunction With Selling, Goods Or Services," which generally will be at the end
of each reporting date when the amount of the product sales are known.


NOTE 8 - RELATED PARTY TRANSACTIONS

The Company  leases its sales office located in Los Angeles,  California  from a
company owned by officers and minority  stockholders  of LaserLock.  The Company
incurred expenses associated with the Los Angeles, California office of $170,000
and $40,000 for 2002 and 2001.

In October 2000, the Company entered into a four-year  employment agreement with
its  President  effective  January 1, 2001.  The  agreement  provides for annual
compensation of $90,000 and payment of certain fringe benefits, including use of
an  automobile.  Additionally,  the  agreement  provides  for  the  issuance  of
Non-Statutory  Stock Options (not covered by the Stock Option Plan  discussed in
Note 7) to  purchase  250,000  shares  of  common  stock at $0.17  per share and
250,000  shares at $.35 per  share.  Effective  October  1,  2001,  the  Company
modified its employment agreement with its President.  The modifications include
raising the annual compensation to $120,000 until September 30, 2003 and then to
$150,000 per annum during the period  October 1, 2003 to September 30, 2006. All
other terms of employment remains the same.

The Company  maintains its office at the home of its President.  No formal lease
agreement exists and no rent expense has been incurred.

During 2002 and 2001, the Company paid approximately $7,000 and $5,000 to one of
its minority stockholders for general legal services.


NOTE 9 - COMMITMENTS

Office Lease
------------
The Company leases office space in Los Angeles, California (Note 8.) The current
lease  expired in  February  2003.  The lease was not renewed and the office was
closed in February 2003.

During  2000,  the  Company  entered  into  commission   agreements  with  sales
representatives.  Under the terms of the  contracts,  expiring on various dates,
the  representatives  are entitled to commissions based on certain percentage of
sales,  as  defined  in the  agreements  which  may  be  renewed  annually.  The
commissions  from sales will be expensed as sales are  generated.  However,  the
commission from sales will be paid over 4-year terms at defined percentages.

The  Company  entered  into a  consulting  agreement  with  one of its  minority
stockholders  to manage the  Company's  sales  force  effective  June 2000.  The
contract expired in May 2001 and was not renewed.


                                      F-15
<PAGE>

                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001



NOTE 10 - LICENSING AGREEMENT

In October 2001, the Company  entered into a licensing  agreement with a company
located in the  United  States and a company  located  in France  (together  the
Licensee which grants the Licensee the non-exclusive rights to use the company's
technology  to  market,   promote,   sell,  manufacture  and  have  manufactured
non-exclusive products or components of non-exclusive products in the licensee's
territory. The Licensee's territory is the world.

In consideration of the rights granted to the Licensee under the agreement,  the
Licensee  agrees  to  pay  to the  Company  royalties  in  accordance  with  the
agreement.  The  minimum,  annual  royalty  fee of $25,000  shall be paid by the
Licensee to the company by way of four quarterly payments of $6,250. The Company
received  $25,000 in 2002 and $6,250 in 2001.  The agreement is for one year and
may be automatically renewed from year to year by the Licensee.  The license was
renewed in October 2002.


NOTE 11 - PATENTS

The Company has acquired the rights to a patent application in the United States
via its employment contract with its President,  Norman A. Gardner.  The pending
United States patent  application was assigned to LaserLock  Technologies,  Inc.
upon filing, and the Assignment has been recorded at the US Patent and Trademark
Office. The Assignment by its terms conveys the entire right, title and interest
in and to the invention of the pending patent application (entitle  "Counterfeit
Detection System") and all improvements  thereon which may be made, conceived or
acquired by Norman Gardner during the course of this  association with LaserLock
Technologies,  Inc. and for one year  thereafter.  Patent  applications  for the
Company's technology (including  improvements in the technology) are intended to
be filed in other  jurisdictions  where commercial usage is foreseen,  including
countries in Europe.  There can be no assurance,  however,  that such protection
will be obtained.

The subject patent application was filed December 10, 1999 and notification that
it will be granted was received March 12, 2002.


NOTE 12 - ACQUISITIONS

EDS Marketing, Inc.
-----------------------
On December 31, 2001 the Company acquired 100% of EDS Marketing,  Inc.'s ("EDS")
common  stock for $20,000,  2,000,000  shares of its common stock and options to
purchase 2,000,000 shares of its common stock. The value of the 2,000,000 shares
of common stock was $708,000 and the value of the options to purchase  2,000,000
shares of common stock was $30,000. The total consideration for the common stock
of EDS was $758,000.

EDS is a  recently  formed  corporation  consisting  of a  collection  of assets
transferred into the corporation  prior to the merger.  EDS Marketing,  Inc. was
not  an  operating  business  prior  to the  acquisition.  At  the  time  of the
acquisition,  three of EDS's officers entered into employment  contracts whereby
they are employed at will and one officer  entered  into a consulting  agreement
that terminated on March 31, 2002.

                                      F-16
<PAGE>


                  LASERLOCK TECHNOLOGIES, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE 12 - ACQUISITIONS (Continued)

EDS  assigned  four  marketing  agreements  with  unrelated  enterprises  to the
Company. The agreements were for 120 days with options to renew for 24 months.

The  companies  are  engaged in  security  technology  involving  the  following
activities:

o        Biometric security and profiling
o        Anonymous internet shopping
o        Anonymous telecommunications
o        Offsite supervision through the internet

Management believes that these technologies have gaming industry applications.

EDS also  assigned an  agreement  to market and sell slot  machine  tickets with
third  party  advertising  thereon  to casinos  and other  engaged in the gaming
industry.

Management  originally  assigned the purchase price to the intangible assets and
lives to the intangible assets as follows:


                                    Value                Life
                                 ------------         ------------
Employment contracts                $100,000           24 months
Four marketing agreements            300,000           24 months
Slot machine tickets agreement       358,000           36 months
                                 ------------
                                    $758,000
                                 ============


The assets acquired have no tax basis. Accordingly,  a deferred tax liability of
$310,000 was recorded upon  acquisition.  The difference  between the net assets
acquired,  after considering the deferred tax liability,  and the purchase price
was immediately  expensed.  In addition,  the deferred tax liability reduced the
need for a valuation  allowance  in the same amount  resulting  in a tax benefit
during 2001.

On  November 1, 2002,  one million  shares of the  original  two million  shares
issued in the EDS  acquisition  were  returned to the Company as the result of a
purchase price adjustment.  The returned shares were canceled upon receipt.  The
shares  were  valued at the  original  price  per share at the time  acquisition
($0.35 per share) and the carrying value of the  intangible  assets were reduced
by $354,000,  leaving a carrying value of $114,617, which will be amortized over
the  following  23 months.  The  reduction  in the  purchase  price of  $354,000
resulted in a deferred tax expense of $145,000 and a credit to operations.

Amortization expense totaled $276,078 in 2002 and $13,305 in 2001.

LL Security Products, Inc.
---------------------------
In July 2001, the Company formed LL Security  Products,  Inc. with an investment
of $50,000. LL Security Products, inc. was incorporated to operate the Company's
marketing aspects of its business.



                                      F-17


<PAGE>













                       THIS PAGE LEFT INTENTIONALLY BLANK


<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


DATE:   3-10-03                          By: /s/ Norman A. Gardner
                                            Norman Gardner
                                            President


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and dates indicated.


Signature               Title                                 Date


/s/ Norman A. Gardner                                         3-10-03
Norman A. Gardner       Pres. CEO,  Chairman Bd of Dir.

/s/ Ed Fishman                                                3-10-03
Ed Fishman              Vice Chairman Bd of Dir.

/s/ Steven Meistrich                                          3-10-03
Steven Meistrich        Executive V.P., Director

/s/ Joel Pinsky                                               3-10-03
Joel Pinsky             Director

/s/ Michael J. Prevot                                         3-10-03
Michael J. Prevot       V.P., Director


<PAGE>

                        LASERLOCK TECHNOLOGIES, INC.


                         OFFICERS STATEMENT PURSUANT TO
                   REQUIREMENTS OF SARBANES-OXLEY ACT OF 2002

     Each  of the  undersigned,  the  Chief  Executive  Officer  and  the  Chief
Financial  Officer,   respectively,   of  LaserLock   Technologies,   Inc.  (the
'Company'),  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002 and 18
U.S.C. Section 1350, hereby certifies as follows:

     To my knowledge:  (1) the periodic report of the Company  accompanying this
statement fully complies with the  requirements of section 13(a) or 15(d) of the
Securities  Exchange Act of 1934 (15 U.S.C.  Section 78m or 78o(d);  and (2) the
information  contained in the periodic report fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.



Date:  March 10, 2003             /s/ Norman Gardner
                                   ----------------------------------
                                   Norman Gardner,  Chief Executive Officer


Date:  March 10, 2003             /s/ Norman Gardner
                                   ----------------------------------
                                   Norman Gardner,  Chief Financial Officer



<PAGE>


                                                            CERTIFICATIONS

         I, Norman Gardner, certify that:

     I have reviewed this annual report on Form 10-KSB of December 31, 2002.

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

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

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

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

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

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

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

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

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

     The  registrant's  other  certifying  officers and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.


April 12, 2003


               By:/s/ Norman Gardner
                    Norman Gardner
                    Chief Executive Officer and Chief
                    Financial Officer