SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2002

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

                        Commission file number: 333-87293

                              SENSE HOLDINGS, INC.
                          -----------------------------
                 (Name of Small Business Issuer in Its Charter)

           FLORIDA                                         82-0326560
           -------                                         ----------
(State or Other Jurisdiction of                          (I.R.S. Employer
 Incorporation or Organization)                         Identification No.)


             4503 NW 103RD AVENUE, SUITE 200, SUNRISE, FLORIDA 33351
             -------------------------------------------------------
               (Address of Principal Executive Offices)(Zip Code)

                                 (954) 726-1422
                (Issuer's Telephone Number, Including Area Code)

           Securities registered under Section 12(b)of the Securities
                             Exchange Act of 1934:

                                      None

           Securities registered under Section 12(g)of the Securities
                             Exchange Act of 1934:

                                      None

Check whether the registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the 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 disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]

State registrant's revenues for the year ended December 31, 2002: $145,363.

State the aggregate market value of the voting stock held by non-affiliates of
the registrant computed by reference to the closing bid price of its Common
Stock as reported by the OTC Bulletin Board on April 4, 2003 ($.32):
$4,467,400.

The number of shares outstanding of the registrant's Common Stock, par value
$.10 per share (the Common Stock), as of April 4, 2003, was 16,687,155.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE) YES NO X

Documents Incorporated By Reference: None.
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                                TABLE OF CONTENTS
                                                                            Page
PART I

Item 1.  Description of Business..............................................2

Item 2.  Description of Properties...........................................10

Item 3.  Legal Proceedings...................................................10

Item 4.  Submission of Matters to a Vote of Security Holders.................10


PART II

Item 5.  Market for Common Equity and Related Shareholder Matters............10

Item 6.  Management's Discussion and Analysis or Plan of Operation...........12

Item 7.  Financial Statements................................................14

Item 8.  Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure Statements.....................................14


PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16(a) of the Exchange Act...................15

Item 10. Executive Compensation..............................................17

Item 11. Security Ownership of Certain Beneficial Owners and Management......20

Item 12. Certain Relationships and Related Transactions......................21

Item 13. Exhibits and Reports on Form 8-K....................................21

Item 14. Controls and Procedures ............................................22

Signatures ..................................................................23

Certifications ..............................................................24

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                                     PART 1

This Annual Report Form 10-KSB and documents Incorporated by reference contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
in or incorporated by reference into this Form 10-KSB, are forward-looking
statements. In addition, when used in this document the words anticipate,
estimate, intends, project and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are subject to
certain risks, uncertainties and assumptions. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Although the Company believes that the expectations we include in
such forward-looking statements are reasonable, we cannot assure you that these
expectations will prove to be correct.

ITEM 1. DESCRIPTION OF BUSINESS

Sense Holdings, Inc. ("Sense Holdings", "Sense", "we", "us", "our"), is a
Florida corporation. We design, develop, manufacture and sell products that use
biometric technology to verify a person's identity. Unique physical traits such
as fingerprints, retina lines, voice waves and palm prints are known as
biometric traits, and they are used to verify a person's identity. In addition,
Sense Holdings, Inc., has integrated smartcard technology into its biometric
applications. Applications, such as time and attendance and access control are
developed around the biometric identification technology and smartcard
technology.

Our time and attendance systems, which are marketed under the name CheckPrint(R)
T/A, are human resource systems that permit an employee's time and attendance
records to be tracked using our fingerprint identification hardware and software
suite. The technology operates as a stand alone unit or a system residing on a
user's network. The software generates reports and can automatically port all
payroll information to the client's payroll service. We currently have several
installations utilizing our CheckPrint (R) T/A solution and have partnered with
several payroll services to promote the solution. The solution has recently been
upgraded in order to perform on an enterprise level and is currently being
installed for use by a customer which employes over 50,000 people. The upgraded
system will allow for the centralized collection of payroll data for large
numbers of employees in remote locations. The system is designed to eliminate
fraudulent time entries and assures management the employees are only being paid
for actual hours worked.

Our access control systems, which are marketed under the name CheckPrint(R) A/C,
are security systems that permit access to locked buildings, offices or other
secured areas to those whose identities can be verified, using our fingerprint
identification software. We currently have several installations using our
CheckPrint (R) A/C solution and continue research and development efforts to
refine the solution.

Our prisoner work release systems, which are marketed under the name
CheckPrint(R) W/R, are security systems that permit prison facilities to monitor
inmates that are released into the public through work release programs. Under
these programs, prisoners report back to the facilities for incarceration when
they are not working. The system allows the prison facility to identify the
prisoner as a work release candidate and verify their status as to release times
and return times. The prisoner's identities can be verified, using our
fingerprint identification software. The system has been installed and is in use
at a prison facility in Georgia. We are currently marketing the solution to
other prison facilities.

Sense Holdings, Inc., is also a research and development company specializing in
biometric security and explosive detection. We continue to develop our biometric
line of products to meet the needs of today's security market. Our subsidiary,
Micro Sensor Technologies, Inc., is exclusively engaged in the acquisition and
development of explosive detection technology.

In development are systems directed toward the health care industry, the cruise
ship industry and the data security industry. Also, in development are
enhancements and improvements to our hardware offerings, including the design of
an embedded biometric system, iris recognition as the biometric means of
identification and the development of a hand held explosive detection unit
through our license from Oak Ridge National Laboratory. Other development
projects are driven by market and customer demands.

Our modest revenue-generation to date is, in substantial part, a result of a
lack of capital necessary to commence aggressive marketing programs. While we
have funded our growth to date through the sale of our equity securities, we
require operating revenues or alternative financing in order to fully implement
our business plan and achieve profitability.

Our fiscal year end is December 31. Our executive offices are located at 4503 NW
103rd Avenue, Sunrise, Florida 33351, and our telephone number is: (954)
726-1422.

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INDUSTRY

The use of unique physical traits to verify a person's identity is known as
biometric identification. Biometric identification types include fingerprint,
hand geometry, iris scanning, signature verification and voice analysis.
Biometric technology has been used for decades in government and law enforcement
applications, but, until recently, these systems were too expensive to
manufacture and be commercially viable. With the introduction of more powerful
computers and the development of new and more advanced software applications,
biometric identification techniques can be adapted for commercial purposes on an
economically feasible basis. In addition, there is currently a higher level of
awareness with regard to biometrics as it relates to security applications.

There are many alternatives in the biometric industry that include, but are not
limited to, fingerprint recognition, facial recognition, voice recognition and
palm recognition. Many providers have used the different methods in different
applications. To date, applications include time and attendance, access control,
crowd scanning and computer access. The industry is in its infancy stages
regarding applications, however the technology regarding biometric
identification is a rapidly maturing science. Presently, there are many
companies entering the biometric identification and application industry while
many other companies have failed at trying to create a marketable product. There
are few companies that have been in the industry for multiple years and continue
to use their experience to market biometric identification devices and
applications.

We believe that fingerprint identification is far more effective in
authenticating employees' actual attendance at work than traditional time clock
verification. By authenticating a person's identity, biometric identification
can substantially reduce incidents of employee fraud inherent in the use of
other forms of employee identification and attendance verification, such as
punch clocks. We also believe that fingerprint verification is less intrusive,
more widely accepted and more cost effective than other available forms of
biometric identification. Also, the use of biometrics for access control is
becoming widely accepted in the marketplace. This is especially true for access
to sensitive workspaces like an airport tarmac. In addition, increasing needs in
security has prompted the use of biometrics in many areas, including but not
limited to: health care, prison administration, work tracking, point of sale
transactions, border control and banking activities.

Many factors, including recent world events have created increased demand for
new biometric applications to secure access, not only to physical areas, but
also sensitive data. Among the applications that are being developed are the use
of biometrics to validate the identities of individuals at security checkpoints
before boarding a plane, entering a building, crossing a border and accessing
computers.

PRODUCTS AND SYSTEMS

BIOCLOCK(R)

Our biometric systems are designed and built around our proprietary hardware
platform known as BioClock(R), a stand-alone platform, or as an integrated part
of the user's network, that replaces a traditional wall mounted or free-standing
swipe or punch card time clock. Identity verification is accomplished by
comparing an individual's scanned and digitized fingerprint to the fingerprint
profile stored in a computer database. The user's fingerprint is scanned by
means of a silicon-based reader with sensors that capture the fingerprint image.
The image is then converted into data that is stored in the system's computer
database, and saved as a reference for comparison to the fingerprint offered for
identification.

BioClock(R) replaces traditional identification devices such as: swipe cards;
punch cards; PIN numbers; or, passwords that can be stolen or voluntarily
provided by the owner to another person. Alternatively, BioClock(R) can be used
in conjunction with traditional identification devices for added security. We
have made our systems modular so the user can choose which parts of the
technology they wish to use. In addition, we have designed our systems to be
compatible with many existing technologies so that they can be integrated into
an existing system. As a result, we believe BioClock(R) reduces incidents of
fraud associated with traditional identification systems that do not effectively
preclude individuals from using another person's means of identification while
keeping integration hurdles and costs down.

We have also developed several integrated hardware and software applications
that incorporate BioClock(R) in turn-key total solution systems.

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CHECKPRINT(R) T/A

Our time and attendance systems, which are marketed under the name CheckPrint(R)
T/A:

o use fingerprint verification to authenticate the identity of employees when
they arrive at and leave work;

o gather data, including the time each employee attends work and what areas
where accessed by an employee;

o perform payroll functions and other record keeping calculations using the data
that is gathered;

o provide electronic export capability to over 150 third-party payroll services
to facilitate the use of automated payroll checks;

o generate logs and reports, including over 20 standard reports; and

o perform other functions including employee scheduling, job cost analysis, edit
time punches, electronic calculations and related record keeping.

Our standard CheckPrint(R) T/A system includes a 100 person user base. We have
developed database management capabilities for larger numbers of employees,
while maintaining system accuracy. These developments include the management of
finger print templates on a network of BioClock(R) devices, without adverse
effects on accuracy.

CHECKPRINT(R) A/C

Our access control systems, which are marketed under the name CheckPrint(R) A/C,
are security systems that permit access to locked buildings, offices or other
secured areas only to those whose identities can be verified, using our
proprietary fingerprint identification software. Our CheckPrint(R) A/C systems,
which can be used with or without smartcard technology, can be programmed for
different levels of security, permitting access only to recognized individuals
who have the requisite level of security clearance. Our current version of
CheckPrint(R) A/C system incorporates access control capability for single door
access. We are developing a software application infrastructure that will enable
a single CheckPrint(R) A/C system to control access to multiple locations.

CHECKPRINT(R) W/R

Our prisoner work release systems, which are marketed under the name
CheckPrint(R) W/R, are security systems that permit prison facilities to monitor
inmates that are released into the public on work release programs. Under these
programs, prisoners report back to the facilities for incarceration when they
are not working. The system allows the prison facility personnel to identify the
prisoner as a work release candidate and verify their status as to release times
and return times. The prisoners' identities can be verified, using our
fingerprint identification software. We developed the system in response to a
Request For Proposal issued by a Department of Corrections in Georgia and we are
attending a tradeshow at the end of April to present the solution to the
industry. We have plans to promote the project to other Departments of
Correction via direct mail, tradeshow attendance and industry specific
publications.

BDS (TM)

Our BDS software allows our hardware and software solutions to function on an
enterprise level. It can be modified to work in a variety of network
environments. We have recently installed a customized version of our BDS (TM)
for a customer having over 50,000 employees that will enable centralized time
and attendance data collection. The BDS (TM) software gives the user the ability
to administrate fingerprint templates and data collection using a network of
BioClocks(R). We intend to market this solution to customers that have large
amounts of enrollment and collection data.

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We have also developed and are marketing:

o CheckPrint(R) SDK, a software development kit for biometrics that enables
purchasers and licensees to create custom applications for our software and
hardware. The SDK was developed to work in conjunction with Sense Holdings,
Inc.'s hardware and aids developers in the creation of robust biometric
fingerprint applications. The SDK is separated into 3 categories - imaging,
algorithm, and database. Once an application is developed and successfully
deployed by a purchaser or licensee the end result will be increased sales of
Sense Holdings, Inc.'s hardware.

o CheckPrint(R) DTU, provides users with the ability to secure a computer
terminal, and files and folders via, fingerprint identification. The hardware is
a stand-alone peripheral that can be connected to a port on an existing computer
to permit fingerprint identification.

o CheckPrint(R) SDTU, provides users the ability to secure a computer terminal
with fingerprint biometrics and a smartcard. The hardware is a stand-alone
peripheral that can be connected to a port on an existing computer to permit
fingerprint identification. There are many applications that can be written
around the secure data storage capability of a smart card that is unlocked by a
fingerprint biometric signature. For example, in a university setting
information such as meal plan credits can be stored on the smartcard and
deducted as used by the biometrically identified user.

o CheckPrint(R) H/C, provides users the ability to identify and verify members
of an insurance plan. It also allows for the monitoring against fraudulent
claims. In addition, adding biometric identification to the process of using
insurance benefits will aid in the securing of the user's medical records. This
is particularly important because of new government guidelines requiring
security of medical records.

o CheckPrint(R) V/A, provides users the ability to secure an area that is
frequented by many outside vendors. A typical application would be the securing
of a cruise ship that must be accessed by many vendors, at different times,
during a voyage. All vendors would be pre-registered in order to gain access to
the vessel. This is particularly important given the fact that there may be an
attempt to stow away persons or items on a vessel during its voyage.

PRODUCT DEVELOPMENT, MANUFACTURING AND ASSEMBLY

BioClock(R) is configured as a standalone unit or networked unit which is
comprised of a TFT Flat Panel display, internal computer, keypad, smartcard
reader and silicon fingerprint reader. There are several variations of
BioClock(R) wherein features are added or taken away from the base model. For
example, we can add iris recognition to our devices if the customer requires
that specific biometric solution. Also, modifications can be made to the housing
as required by specific applications. All of our BioClocks(R) are assembled and
tested "in-house" from custom and off the shelf parts supplied by third party
vendors. We also manufacture a Desk Top Unit (DTU(TM)) that is a USB device with
a built in fingerprint reader and optional smartcard reader. The DTU(TM) can be
used as an enrollment device for our systems and is also sold as part of a
software developer's kit (SDK). The SDK allows other parties to develop
applications that would utilize our hardware solution. Finally, we have
designed, and have manufactured for us, printed computer boards that serve
several functions. The functions include integration of the fingerprint print
reader into our BioCLock(R) and DTU(TM), controlling doors for our access
control systems and providing increased functionality in our BioClock(R) over
that of standard printed computer boards.

We design, develop, create, and sell various software packages that work in
conjunction with our hardware. The systems are described in greater detail below
and include, CheckPrint(R) T/A, CheckPrint(R) A/C, CheckPrint(R) W/R,
CheckPrint(R) H/C, CheckPrint(R) V/A, BDS(TM), SDK and various other routines
that work in conjunction with our hardware.

The software components for our biometric identification systems have been
developed, in most part, by our employees. The source code for the software is
our proprietary property. This software enables our systems to gather, filter
and sort data, generate reports from the data and compute payroll information
for export to third party payroll services.

Most of the hardware components for our biometric systems are off-the shelf, and
we are not dependent on any one vendor for these components. However, certain
hardware components have been designed by our in-house engineering staff or
designed to our specifications as works for hire by independent contractors.

We have entered into an agreement with Test Systems Engineering, under which
Test Systems Engineering has designed, engineered and configured some of our
hardware components for CheckPrint(R) T/A and CheckPrint(R) A/C systems. They
are a valuable outsource for many engineering tasks and have a state of the art
design and manufacturing facility. All product testing and assembly is performed
by "in-house" personnel in order to maintain quality control. Our agreement with
Test Systems Engineering terminates on December 31, 2005, and may be
automatically renewed for consecutive one-year terms. For its services, Test
Systems Engineering receives a fee payable at the rate of $75 per hour. We are
not dependent on Test Systems Engineering for its services.

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Our biometric systems currently incorporate a silicon-based fingerprint scanner
to capture a user's fingerprint. Related software then compares the user's
fingerprint to the digitized reference sample stored in the system's database,
and verifies the user's identity. The silicon-based technology is used in
conjunction with our own software that interfaces between the silicon product
and our biometric systems. We currently purchase the silicon-based technology
from an independent supplier. We believe that this supplier is able to provide
us with our foreseeable requirements for these components. We are not dependent
on the supplier for our sensor needs.

We have entered into an agreement with Integrated Design, Inc. under which
Integrated Design developed a software program to enable the payroll data
produced by CheckPrint(R) T/A to be exported to over 150 third party payroll
services such as ADP and Paychex. We have licensed the software from Integrated
Design and are required to pay license fees on a per user basis. This fee is
incorporated into the cost of our overall product. Integrated Design was paid a
$10,000 software development fee to customize their software to our application.
The software development agreement is for a term of five years, with five year
renewal terms, but may be canceled by either party on 90 days written notice.
The agreement also provides us access to the software and allows us to continue
to use Integrated Design's software in the event of such company's dissolution,
bankruptcy or similar events. If our agreement with Integrated Design
terminates, we will incur time and expense to develop alternative software links
for data export. Delays in the successful development of alternative software
links could adversely affect us.

ACQUISITION OF MICRO SENSOR TECHNOLOGIES, INC.

On May 31, 2001, we acquired all of the outstanding shares of Micro Sensor
Technologies, Inc. , a Florida corporation. The shares were acquired from UTEK
Corporation a Delaware corporation and UT-Battelle LLC, a Tennessee corporation,
the shareholders of Micro Sensor, in a stock-for-stock exchange, for total
consideration of 2,000,000 shares of our common stock. Following the
acquisition, Micro Sensor became our wholly-owned subsidiary, and we indirectly
acquired the rights and obligations of Micro Sensor under various agreements to
which it is a party, including a Patent License Agreement with UT-Battelle LLC,
a Consulting Agreement with Dr. Thomas Thundat and a Work for Others Agreement
with UT-Battelle LLC.

Under the Patent License Agreement, Micro Sensor became the exclusive licensee
of UT-Battelle with respect to certain patented technology owned by UT-Battelle
relating to the use, sale or offer for sale of technology which assists in the
detection of unexploded ordnance including bombs, grenades, shells, rockets, and
other explosive devices either placed as mines or fallen as projectiles whether
buried or camouflaged. The exclusive license does not include explosive
detection for security applications, including airport security. However, Micro
Sensor has been granted a non-exclusive license to use the technology for
security-related applications. UT-Battelle acquired the licensed rights under a
contract with the United States Department of Energy, pursuant to which the
technology was developed at the Oak Ridge National Laboratory in Oak Ridge,
Tennessee.

Under the License Agreement, Micro Sensor is obligated to pay UT-Battelle an
amount equal to 2.5% of net sales of products incorporating the licensed
technology, subject to minimum annual royalties ranging from $5,000 during the
third year of the license term to $25,000 for the seventh year of the term and
thereafter. If the technology is sublicensed to third parties, a sublicense
royalty fee equal to 50% of the sublicenses received by Micro Sensor must be
paid to UT-Battelle. The term of the license agreement expires upon termination
of the last-to-expire of the proprietary rights granted under the agreement,
subject to earlier termination in the event of an uncured breach of the
agreement by either party. No products have yet been developed from the
technology, and we do not know if the acquired technology can be successfully
incorporated into commercially feasible products or whether any such products
can be successfully marketed.

Under a Consulting Agreement, Dr. Thomas G. Thundat has agreed to review,
evaluate and make recommendations to Micro Sensor regarding the application of
manufacturing and testing of the explosive detection technology, and will also
provide recommendations to Micro Sensor regarding the application and
integration of the new technology to products, and recommendations regarding the
need for future research and development. Dr. Thundat was integrally involved in
the development of the technology at the Oak Ridge National Laboratory. The one
consulting agreement commenced on June 1, 2001. The agreement requires Thundat
to provide 100 hours of consulting time to Micro Sensor at a rate of $200 an
hour totaling $20,000, which amount was paid by Micro Sensor at the time of our
acquisition.

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Oak Ridge National Laboratory continues to work toward a commercially viable
Micro Sensor to be incorporated into our product line of sensors. We are
engineering systems and hardware to incorporate the sensor, as envisioned, into
handheld explosive detection devices. We have filed a patent with the United
States Patent Office regarding our handheld explosive detection device. Although
the application is on file there is no guarantee that the application will
mature into a patent.

RESEARCH AND DEVELOPMENT

From the inception of our current activities in July 1998 through December 2002,
we have spent approximately $1,075,000 on research and development activities.

SALES AND MARKETING

Many of our goods and services are based on custom orders that require pricing
on a case by case basis. However, to the extent individual pricing is not
necessary, we market CheckPrint(R) T/A systems for base prices ranging from
$4,995 to $7,995, depending on the number of employees who will be tracked on
the system. We also offer software updates and on-site service contracts for
additional fees. We sell other goods and services, such as a desk top finger
sensor, a desk top finger sensor with a smart card reader built into the desk
top unit, software developer's kits and database management tools, at suggested
retail prices.

Initially, we intend to market CheckPrint(R) T/A to manufacturers and retailers
with at least 15 employees. We plan to sell CheckPrint(R) T/A and future
products through an in-house sales force as well as OEMs and independent sales
representatives. We will engage in direct marketing programs, trade show
participation, and local, regional and national advertising campaigns to
generate sales. Moreover, we have offered consulting and design services to
specialized biometric deployment projects. By offering our expertise in the
design and deployment of biometric systems we gain additional revenues and
create another marketing avenue.

Our latest generation of hardware and software works for single unit
installations or as an enterprise level solution networking many units when
coupled with our BDS(TM) software. BDS(TM) allows an enterprise to manage a
network of biometric devices and the data utilized and recorded by these
devices. We intend to market all of our solutions with direct marketing
programs, trade show participation and traditional advertising campaigns to
generate sales.

Our independent Sales Representatives currently serve markets throughout the
United States and South America. We intend to engage sales representatives to
cover additional territories over the next 12 months. Initially, we intend to
seek penetration of the retail merchandise, home and business security, food
processing facilities, textile manufacturing and trucking and transport
distribution markets through the services of these representatives. Sales
representatives are generally compensated by a commission based upon the sales
prices of systems sold by them.

We intend to license our time and attendance software to third-party OEMs,
integrators and software developers, for incorporation in their products.
License fees and royalty fees will be negotiated on a case by case basis, and
take into consideration various factors including competitive pricing, the
nature of the installation, the number of users to be tracked, and the extent of
enhancements, modifications and customization required by the customer. Basic,
extended and enhanced maintenance services will also be made available for an
annual fee.

We market other CheckPrint(R) solutions designed for specific industries. These
solutions include CheckPrint(R) W/R to the corrections industry; CheckPrint(R)
H/C to the healthcare industry; and, CheckPrint(R) V/A to the cruise ship
industry. We continue to develop industry specific applications and intend to
market these applications through direct marketing programs, trade show
participation and traditional advertising campaigns.

INTELLECTUAL PROPERTY

Patents. We currently have on file with the United States Patent and Trademark
Office, a utility patent that was converted from a provisional patent covering
the proprietary use of our technology and the proprietary hardware used in our
application. The goods and services are clearly marked as patent pending. In
addition, we have on file a patent of a hand held device that utilizes explosive
detection technology that we currently license. Several other products and
methods are being identified as potential patentable subject matter and once the
analysis is complete applications will be sought. All of the engineers and
programs are working diligently toward hardware and software solutions and it is
believed that many of the solutions may be patentable. Sense Holdings, Inc., has
retained patent counsel to review the projects and advise where patentable
subject matter exists and to prepare applications for the same. All of our
employees are under an obligation to assign inventive material to Sense
Holdings, Inc. There is no guarantee that our patent application will mature
into a registration for patent.

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Trademarks. We enjoy several common law rights to our trademarks. The common law
rights protect the use of marks used to identify our goods and services since
the time of their first use in commerce. In addition, we have filed applications
with the United States Patent and Trademark Office seeking registration of our
logo, meCard(TM) used to identify identification cards used in conjunction with
our biometric systems and Security Solutions at a Touch of A Finger(TM) used to
identify our professional services of creating custom biometric security
application. We have a registration for the flagship software product
Checkprint(R) and our flagship hardware product Bioclock(R). Several other marks
are being identified as strong product and service identifiers and trademark
search and applications are underway. There is no guarantee that our trademark
applications will mature into registration of trademarks.

Copyrights. We enjoy several common law rights to our proprietary copyrights.
The common law rights protect the actual programming code, the look and feel of
its display screens and material contained in our user manuals since the time of
the copyrightable works creation. In addition, we have an application on file
with the United States Copyright Office covering our proprietary source code,
the look and feel of our display screens and user manuals. There is no guarantee
that our application will mature into a registration for copyright.

Whether or not we obtain formal protection for our products and/or systems, we
intend to vigorously protect our ownership rights. However, protection of our
rights will not prevent others from developing similar technology on their own
or developing other products that may be used for purposes similar to ours. If
these events occur, others may become our competitors, which could have a
material adverse effect on our business, financial condition and results of
operations.

COMPETITION

We face competition from companies engaged in the time and attendance industry,
the security and access control industry and custom application software
developers. Competition may come from companies using biometric fingerprint
technology, as well as from companies using other biometric identification
methods. Competitors also include companies marketing traditional forms of
employee verification and attendance products, including time clocks, ID badges,
passwords and PIN numbers. Some of our competitors may have longer operating
histories and greater financial and other resources than we have. Our ability to
compete successfully will depend on many factors, including our ability to adapt
to changing technologies and meet the needs of the marketplace on a price
competitive and timely basis.

Competition in time and attendance services exists from various software
developers and product manufacturers, the largest of which is Kronos, a
publicly-traded company (NASDAQ National Market System: KRON) providing software
applications based on a swipe card identifier. Other competitors in time and
attendance application development include Simplex, Smartime Software, Time and
Tech.com and Unitime Systems. Principal competition in fingerprint biometrics
include Identix, Secugen and Veridicom. Other biometric technology providers
include Recognition Systems (hand geometry), Iridian(iris identification) and
Visionics (facial recognition). Many of our competitors have a substantially
longer operating history than we do and have substantially greater financial and
other resources than we do. While we believe that our ability to offer a total
package of time and attendance and access control software and innovative
hardware gives us a competitive marketing advantage, unless we are able to
penetrate the marketplace and gain name recognition for our products and
technology, we may be unable to compete effectively.

We believe that we can effectively compete in our industry because:

o biometric identification is more reliable than traditional employment
verification methods;

o fingerprint identification is less costly and more recognized than other
currently available forms of biometric identification;

o our systems provide a total solution, turnkey approach to our customers; and

o our systems can be deployed over a network and can be remotely accessed by a
system administrator to get valuable real time information regarding the
customer's work force and security at the workplace;

o our systems offer an enterprise solution in that the systems are complete
scalable for large numbers of employees and multiple access points and numerous
locations;

o our systems are modular and offer a variety of identification methods that can
be added to the basic system;

o our systems are software driven and the software is customizable to a
customer's particular needs; and,

o biometric identification does not use ID badges, passwords, PIN numbers or
other devices that have historically been misused by employees to the detriment
of employers.

                                       8
<PAGE>

We have not deployed technology in the explosive detection arena as the product
is still under development.

Our inability to compete successfully could have a material adverse effect on
our business, financial condition and results of operations.

EMPLOYEES

We currently employ eleven people, all of whom are full-time employees, in the
following capacities: three executive officers, one corporate counsel, four
programmers, one research and development engineer, and two warehouse and
assemble employees. Our employees are not represented by a collective bargaining
unit. We believe that relations with our employees are good.

CORPORATE HISTORY

We were organized in Idaho, under the name Century Silver Mines, Inc., on
February 5, 1968. Originally, we developed mining properties, but by 1998 we had
ceased those operations.

Sense Technologies, Inc. was organized under the laws of the State of Florida on
July 13, 1998. Sense Technologies was formed for the purpose of engaging in
developing and marketing biometric devices for use in employee identification
and security-related products.

In January 1999, we acquired all of the outstanding shares of Sense Technologies
for a purchase price consisting of 4,026,700 of our shares, issued to the former
shareholders of Sense Technologies. We operated Sense Technologies, Inc. as our
wholly-owned subsidiary. At the time of the acquisition, Century Silver Mines
had no operations and Sense Technologies was developing its proprietary
biometric security systems. Immediately following the acquisition, the former
shareholders of Sense Technologies owned approximately 93% of our outstanding
shares.

At the time of the acquisition, the principal owners of Sense Technologies were
Dore Scott Perler and Andrew Goldrich. Dore Perler was its president, Andrew
Goldrich was its secretary and treasurer, and Messrs. Perler and Goldrich were
the members of its board of directors. At the time of the acquisition, the
officers and directors of Century Silver Mines were John Branz, Kirk Scott and
Barbara Scott, the mother of Kirk Scott. There were 288,300 outstanding shares
of Century Silver Mines owned by approximately 750 holders, none of whom, to our
knowledge, owned in excess of 5% of the outstanding shares. However, we
understand that Kirk Scott, Barbara Scott and James Scott, her brother-in-law,
owned an aggregate of approximately 29% of the outstanding shares of Century
Silver Mines at the time of the acquisition.

In January 1999, we reduced the shares of our stock that were outstanding by
combining each 7.74 shares that were outstanding, into one share. All numbers of
shares in this report reflect the January 1999 share combination. In June 1999,
we changed our corporate domicile from Idaho to Florida and, in connection with
the domicile change, we changed our name to Sense Holdings, Inc. In May 2000, we
increased the number of shares of common stock we are authorized to issue to
20,000,000, and in Janaury 2002, we again increased our authorized common stock
to 40,000,000 shares.

In May of 2001 we acquired all of the issued and outstanding capital stock of
Micro Sensor Technology Incorporated, a Florida corporation specializing in
explosive detection technology. Micro Sensor Technology is now a wholly-owned
suhsidiary of Sense Holdings.

In January 2002, in an effort to unify our corporate identity we ceased
operating under the name Sense Technologies, Inc., and began operating only as
Sense Holdings, Inc.

                                       9
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTIES

In February 2002 we terminated our lease in Tamarac, Florida (with no further
financial obligation thereunder) and relocated our corporate offices to
approximately 7,000 square feet of office space in Sunrise, Florida. The lease
is with an unaffiliated party. Our monthly lease payment is $4,664 over the
lease term. The lease expires in March 2005 and provides that we may not assign
or sublet the premises without the landlord's prior written consent. These
facilities are suitable and adequate for our current needs and allow for
anticipated expansion during the term of the lease. We currently maintain
commercial general liability and property insurance coverage with policy limits
of $1,000,000 and $125,000, respectively. We may increase this coverage to the
extent business growth dictates.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any material legal proceeding, nor are any of our
officers, directors or affiliates a party adverse to us in any legal proceeding.

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

No matters were submitted to securityholders for the reporting period.

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Our shares of common stock are currently traded on the Over-the-Counter Bulletin
Board under the symbol SEHO (previously CTSMD). Prior to February 28, 2000, our
shares were listed on the National Quotation Bureau's Pink Sheets. There is
currently a limited trading market for our shares and we do not know whether an
active market will develop. The reported high and low bid prices for the common
stock are shown below for the period from January 1, 2001 through December 31,
2002. The quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.



Period                                    High                     Low
------                                    ----                     ---

First Quarter ended 3/31/01              $0.51                     $0.96
Second Quarter ended 6/30/01             $0.71                     $0.36
Third Quarter ended 9/30/01              $0.85                     $0.33
Fourth Quarter ended 12/31/01            $1.35                     $0.63

First Quarter ended 3/31/02              $1.15                     $0.68
Second Quarter ended 6/30/02             $0.90                     $0.45
Third Quarter ended 9/30/02              $0.74                     $0.33
Fourth Quarter ended 12/31/02            $0.60                     $0.31


                                       10
<PAGE>

As of December 31, 2002, there were 16,656,905 shares of our common stock
outstanding. Our common stock is owned of record by approximately 800 holders.
We have never paid cash dividends on our common stock. We intend to keep future
earnings, if any, to finance the expansion of our business, and we do not
anticipate that any cash dividends will be paid in the foreseeable future. Our
future payment of dividends will depend on our earnings, capital requirements,
expansion plans, financial condition and other relevant factors.

The Securities and Exchange Commission has adopted regulations which generally
define a penny stock to be any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions. Depending on market
fluctuations, our common stock could be considered to be a penny stock. A penny
stock is subject to rules that impose additional sales practice requirements on
broker/dealers who sell these securities to persons other than established
customers and accredited investors. For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
these securities. In addition he must receive the purchaser's written consent to
the transaction prior to the purchase. He must also provide certain written
disclosures to the purchaser. Consequently, the penny stock rules may restrict
the ability of broker/dealers to sell our securities, and may negatively affect
the ability of holders of shares of our common stock to resell them.

Recent Sales of Unregistered Securities

During 2002, the Company issued 305,435 of its common shares to consultants and
employees for services rendered. The shares were valued at prices ranging from
$.31 to $.97. For the year ended December 31, 2002, the Company recorded
professional fees expense of $196,593 and deferred compensation of $18,216. The
consultants and advisors (a) had a preexisting business relationship with the
Company, (b) had access to financial statements and other relevant information
concerning the Company, (c) had such knowledge in business and financial matters
that they were able to understand the risks and merits of an investment in the
Company, and were, therefore, sophisticated investors at the time of acquisition
and (d) the shares that were issued contained a legend restricting their
transferability absent registration under the Act or the availability of an
applicable exemption therefrom. Accordingly, these transactions were exempt from
the registration requirements of the Act by reason of Section 4(2) of the Act
and the rules and regulations thereunder.

On March 1, 2002, the Company raised $2,625,625 through a private placement of
70 units ($37,500 per unit), each unit consisting of 50,000 shares of the
Company's common stock and 50,000 common stock warrants exercisable at $1.00 per
share with an expiration date of five years from the date of closing. The
Company incurred costs in relation to this private placement of $315,075 and
netted proceeds of $2,310,550. Additionally, the Company issued to a consultant
that provided services in relation to securing the proceeds of this offering,
866,455 common stock warrants exercisable at $1.25 per share. All costs
associated with this offering are recorded net against the gross proceeds. The
units were issued to a total of seventy-one persons whom the Company had
reasonable grounds to believe were accredited investors. Each of the investors
(a) had access to business and financial information concerning the Company, (b)
represented that it was acquiring the securities for investment purposes only
and not with a view towards distribution or resale except in compliance with
applicable securities laws and (c) had such knowledge and experience in business
and financial matters that he or she was able to evaluate the risks and merits
of an investment in the Company. Therefore each investor was also sophisticated
within the meaning of Federal securities laws. In addition, the certificates
evidencing the shares and warrants that were issued contained a legend
restricting their transferability absent registration under the Act or the
availability of an applicable exemption therefrom. The issuance of these
securities was exempt from the registration requirements of the Act by reason of
Section 4(2) and/or the rules and regulations thereunder including Rule 506 of
Regulation D.

In September 2002, the Company's outstanding notes payable of $1,055,000 along
with accrued interest of $105,000 was retired with a cash payment of $1,068,200
and the issuance of 277,500 shares of its common stock. The Company recorded
additional interest expense of $51,800 in connection with the conversion of a
portion of the notes principal balance. Each of the investors (a) had access to
business and financial information concerning the Company, (b) represented that
it was acquiring the securities for investment purposes only and not with a view
towards distribution or resale except in compliance with applicable securities
laws and (c) had such knowledge and experience in business and financial matters
that he or she was able to evaluate the risks and merits of an investment in the
Company. Therefore each investor was also sophisticated within the meaning of
Federal securities laws. In addition, the certificates evidencing the shares and
warrants that were issued contained a legend restricting their transferability
absent registration under the Act or the availability of an applicable exemption
therefrom. The issuance of these securities was exempt from the registration
requirements of the Act by reason of Section 4(2) and/or the rules and
regulations thereunder including Rule 506 of Regulation D.

In October 2002, as part of a private placement the Company issued 610,000
shares to two accredited investors and aggregated proceeds of $250,000 through a
private placement of 2 units ($125,000 per unit), each unit consisting of
152,500 shares of the Company's common stock and 152,500 common stock warrants
exercisable at $.50 per share with an expiration date of five years from the
date of closing. The Company incurred costs in relation to this private
placement of $25,000 and netted proceeds of $225,000. The Company also issued to
a consultant that provided services in relation to securing the proceeds of this
offering, 48,800 common stock warrants exercisable at $0.50 per share. All costs
associated with this offering are recorded net against the gross proceeds. The
units were issued to a total of two persons whom the Company had reasonable
grounds to believe were accredited investors. Each of the investors (a) had
access to business and financial information concerning the Company, (b)
represented that it was acquiring the securities for investment purposes only
and not with a view towards distribution or resale except in compliance with
applicable securities laws and (c) had such knowledge and experience in business
and financial matters that he or she was able to evaluate the risks and merits
of an investment in the Company. Therefore each investor was also sophisticated
within the meaning of Federal securities laws. In addition, the certificates
evidencing the shares and warrants that were issued contained a legend
restricting their transferability absent registration under the Act or the
availability of an applicable exemption therefrom. The issuance of these
securities was exempt from the registration requirements of the Act by reason of
Section 4(2) and/or the rules and regulations thereunder including Rule 506 of
Regulation D.

Please refer to Item 11 Section - Compensation Under Existing Equity
Compensation Plans for options granted under existing employee stock
compensation plans.

                                       11
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CRITICAL ACCOUNTING POLICIES

Financial Reporting Release No. 60, which was recently released by the SEC,
requires all companies to include a discussion of critical accounting policies
or methods used in the preparation of financial statements. Note 1 to our
consolidated financial statements includes a summary of the significant
accounting policies and methods used in the preparation of our consolidated
financial statements. The following is a brief discussion of the more
significant accounting policies and methods used by us.

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

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. All material inter-company transactions have been
eliminated.

REVENUE RECOGNITION

The Company recognizes revenues as units of its product are shipped to its
customers.

MARKETABLE SECURITIES

Marketable securities are classified as trading securities and are held for
resale in anticipation of short-term market movements. At December 31, 2002,
marketable securities consisted of U.S. Treasury and Federal Agency securities
held for resale. Gains or losses are recognized in the statement of operations
when the bonds are sold. Unrealized gains or losses are recognized in the
statement of operations on a monthly basis based on changes in their estimated
fair value.

INVENTORY

Inventory is stated at the lower of average cost or market and consists of raw
materials and finished goods.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash, marketable
securities, receivables, inventory and accounts payable approximate their fair
market value based on the short-term maturity of these instruments.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred. These costs primarily
consist of fees paid for the development of the Company's software.

LICENSE AGREEMENT

License agreement is stated at cost, less accumulated amortization. Amortization
is computed using the straight-line method over an estimated life of five years
based upon management's expectations relating to the life of the technology and
current competitive market conditions. The estimated life is reevaluated each
year based upon changes in these factors.


The following discussion and analysis should be read in conjunction with the
financial statements of the Company and the notes thereto appearing elsewhere.

RESULTS OF OPERATIONS - YEAR ENDED DECEMBER 31, 2001 AS COMPARED TO DECEMBER 31,
2002

Sales increased by 109% from $69,569 in 2001 to $145,363 in 2002. This increase
is attributable to an increased demand for our products, increase in technology
acceptance, new generations of products offered and larger unit sales to
individual clients.

Cost of goods sold as a percentage of sales nominally increased from 31% in 2001
to 34% in 2002. This nominal increase is attributable to increased sale in hard
goods versus professional services.

Depreciation and amortization increased 73% from $65,262 in 2001 to $112,620 in
2002. This increase is attributable to the amortization of a technology license.

                                       12
<PAGE>

General and administrative cost nominally increased 2% from $1,148,707 in 2001
to $1,173,683 in 2002. This nominal increase is attributable to continued
operations.

Research and Development costs nominally increased 3% from $460,253 in 2001 to
$473,019 in 2002. This nominal increase is attributable to continued research
and development while management controlled any increase in research and
development costs.

We determined that, as of December 31, 2002, a write-down of the license
agreement associated with our subsidiary, Micro Sensor, was necessary as the
projections of future operations results indicated impairment. We recorded an
impairment of $216,246 and $150,000 remains as of December 31, 2002.

Interest Expense increased 79% from $387,235 in 2001 to $693,100 in 2002. This
increased is attributable to interest paid on the satisfaction of note that
became due during September of the reporting year.

LIQUIDITY, CAPITAL RESOURCES AND PLAN OF OPERATIONS

We have financed our growth and cash requirements through equity investments and
debt and equity financing. We do not currently have any credit facilities from
financial institutions or private lenders. We do not currently have any material
commitments for capital expenditures.

Cash used in operations for the year ended December 31, 2002 was $1,528,731
attributable primarily to the net loss of $2,572,815 offset by non-cash
compensation of $210,761, depreciation and amortization of $112,620, the
amortization of deferred financing cost of $568,844, the impairment of the
license agreement of $216,426, other non-cash items and change in asset and
liability accounts.

Cash used by investing activities was $250,154 and consisted of the purchase of
marketable securities, sale of marketable securities and the purchase of office
furniture and equipment used in the daily operations of the Company.

Cash provided by financing activities during the year was $1,580,550
attributable from proceeds of equity raises of $2,875,625 from the sale of
common stock offset by costs related to the sale of securities of $340,075, the
repayment of notes payable of $962,500 and the repayment of advances to
shareholders of $7,500.

As a result of the above, total cash decreased by $198,335 during the period.

Since our inception, we have been engaged in research development activities
relating to our first generation of biometric security products. We commenced
delivery of these products in the third quarter of 1999 and have been generating
revenues since the fourth quarter of 1999. We have completed development of our
second and third generation product, and have recognized revenue on their sales
since the year ended December 31, 2000. We have also recognized revenue for
consulting fees since the third quarter of 2000. We will continue to make
enhancements to our second generation product so that it will support a larger
database, and enable us to market CheckPrint T/A to larger companies, resulting
in a greater profit margin to us. We will continue to develop other products and
services relating to biometrics, security, data management, explosive detection,
and consulting services.

Based upon purchase orders we have received, anticipated future product sales
and cash on hand, we believe that we will have the need for additional capital
investment and are actively pursuing additional outside capital investments that
will be necessary to meet our cash flow needs over the next twelve months.
Additionally, in order to remain competitive in the marketplace, we must develop
new products and enhance our existing products. Should revenues not reach
projected levels or should unforseen events arise, we may be required to secure
additional funds to meet our operating needs sooner than anticipated. Subsequent
to December 31, 2002, we are currently engaged in the private placement of a
promissory note comprising of 15 units at $50,000 per unit. The terms of the
promissory note are a one year term at 10% interest. To date, we have not
accepted any funds under this promissory note.

                                       13
<PAGE>

Factors That Could Cause Our Results to Differ From Our Forward-Looking
Statements

This Report contains forward-looking statements. Forward-looking statements
express our expectations or predictions of future events or results. They are
not guarantees and are subject to many risks and uncertainties. There are a
number of factors - many beyond our control - they could cause actual events or
results to be significantly different from those described in the
forward-looking statement. Any or all of our forward-looking statements in this
report or in any other public statements we make may turn out to be wrong.

Forward-looking statements might include one or more of the following:

o projections of future revenue;
o anticipated purchase orders and/or product delivery dates;
o descriptions of plans or objectives of management for future operations,
products or services;
o forecasts of future economic performance; and
o descriptions or assumptions underlying or relating to any of the above items.

Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They use words such as "anticipate",
"estimate", "expect", "project", "intend", "plan", "believe" or words of similar
meaning. They may also use words such as "well", "would", "should", "could" or
"may".

Factors that may cause our actual results to differ materially from those
described in forward-looking statements include the risks such as:

o our early stage of development makes evaluating us difficult;
o we have experienced historical losses and an accumulated deficit and we may
not become profitable;
o we will require additional capital or alternative financing and funding may
not be available to us on acceptable terms;
o our competitors are financially stronger than we are and we may be unable to
compete effectively or become a competitive force in our industry;
o we are dependent upon third-party software, our access to which may be
cancelled on 90 days' notice;
o biometric security devices may not be accepted in the marketplace or may be
replaced by alternative technologies;
o we may be unable to develop applications for the technology we acquired from
Micro Sensor Technology Inc., and we are obligated to pay royalties to the
technology owner even if we do not develop commercial applications for the
technology;
o we may be unable to protect our proprietary rights;
o our stock is thinly traded and in the absence of an active trading market,
investors may have difficulty reselling their shares;
o as an emerging technology company, the market price for our common stock is
subject to wide fluctuations; and
o the other risks identified from time-to-time in our various filings with the
United States Securities and Exchange Commission, including our registration
statement on Form S-8 File No. 333-81306.

ITEM 7. FINANCIAL STATEMENTS

See Index to Financial Statements for the financial statements included in this
Form 10-KSB.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTS ON ACCOUNTING AND FINANCIAL
DISCLOURE STATEMENTS

None.

                                       14
<PAGE>
                                    PART III

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

DIRECTORS AND EXECUTIVE OFFICERS

The following table includes the names, positions held and ages of our executive
officers and directors.


 NAME                   AGE             POSITION
 ----                   ---             --------

Dore Scott Perler       42              Chief Executive Officer,
                                        President and Director

Andrew Goldrich         42              Vice President and Director

Shawn Tartaglia         33              Chief Technical Officer and Director

Julie Slater            43              Director


Dore Scott Perler has served as our Chief Executive Officer, President and a
member of our Board of Directors, since July 1998. From May 1993 to July 1998,
Mr. Perler was a founder, Director, and Vice President of Sales covering the
Southeast United States and Latin America, for Latinrep, Inc., a manufacturer's
representative organization. He assisted in the formation of Latin Channels, a
trade show for Latin American distributors.

Andrew Goldrich has served as our Vice President and a member of our Board of
Directors, since July 1998. From January 1984 to July 1998, Mr. Goldrich was
Vice President of Sales and Finance for Sassy Knitting Mills, Inc., a
privately-held garment manufacturer. He was a founder of Sassy Knitting Mills,
where he implemented a national sales force and was responsible for overall
financial and marketing activities.

Shawn Tartaglia has served as our Chief Technical Officer and a member of our
Board of Directors, since July 1998. From November 1997 to July 1998, Mr.
Tartaglia was Manager of Information Systems for CompScript, Inc., a
privately-held pharmaceutical provider. From February 1993 to November 1997, he
was employed by Solopak Pharmaceuticals, a privately-held pharmaceutical
supplier, as its Systems and Telecommunications Manager.

Julie Slater has served on our Board of Directors since January 1999. From 1984
and continuing until the present, Ms. Slater is Vice President of All Eyes
Optical, a privately-held optometry and retail eye wear provider.

                                       15
<PAGE>

We have also engaged several consultants who we believe are significant to our
business. They are:

Doug Kilarski is our Operations Director, Business Operations. Mr. Kilarski has
served as a consultant to us, through Test Systems Engineering, since July 1998.
Since 1994 he has been Vice President, Analyst for Aspen Business Development, a
privately-held business development organization.

Alex Schlinkmann is our Operations Director, Hardware Engineering and
Manufacturing. Mr. Schlinkmann has been a consultant to us, through Test Systems
Engineering, since July 1998. Since 1991 he has been President and Design
Engineer for Test Systems Engineering.

Jamie Schlinkmann is our Operations Director, Hardware Design. Mr. Schlinkmann
is the brother of Alex Schlinkmann, and has been a consultant to us since July
1998. Since 1991 he has been Vice President and Design Engineer for Test Systems
Engineering.

Board Committees: We do not as yet have an audit committee or a compensation
committee. However, as and when we elect independent directors, we expect to
organize these committees.

All directors serve for one year and until their successors are elected and
qualify. Directors do not receive compensation for serving as directors.
Officers are elected by the Board and their terms of office are, except as
otherwise stated in employment contracts, at the discretion of the Board.

Employment Agreements: In December 2002 the Company entered in to two year
employment contracts with its Chief Executive Officer at an annual salary of
$115,000, Chief Financial Officer at an annual salary of $115,000 and Chief
Technology Officer at an annual salary of $96,000.

In the event of involuntary termination without cause or disability each
executive would be entitled to the following compensation for the succeeding 24
months following the date of termination:

        i)      Two hundred (200%) percent of the executive's base compensation
                in effect on the date of the employment termination; plus

        ii)     Two hundred (200%) percent of the executive's annual incentive
                bonus earned on a quarterly basis as of the date of the
                termination, assuming the executive was employed on the last day
                of the quarter in which termination of employment occurred.

In the event the executive is terminated for "cause" the executive will be
entitled to any unpaid salary through the date of termination and deferred
compensation will be forfeited. In the event there is a "Change in Control" the
Company will be required to pay the executive a lump sum equal to 299% of the
executive's base compensation in effect on the date of employment plus 299% of
the executive's prior year incentive bonus. The executive may, at their
discretion, elect to terminate the contract the executive must give the Board 90
days written notice and the executive would not be entitled to severance
benefits.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

We are not subject to Section 16(a) of the Securities Exchange Act of 1934, and,
therefore, our directors and executive officers, and persons who own more than
ten percent of our common stock are not required to file with the Securities and
Exchange Commission reports disclosing their initial ownership and changes in
their ownership of our common stock.

                                       16
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information relating to all compensation awarded
to, earned by or paid by us for each of the three fiscal years ended December
31, 2002, to: (a) our President and Chief Executive Officer; and (b) each of our
executive officers who earned more than $100,000 during the fiscal year ended
December 31, 2002:

<TABLE>
<CAPTION>

                                    Fiscal                             Other Annual                     LTIP     All Other
Name and Principal Position          Year        Salary       Bonus    Compensation     Options/ (#)    Payouts  Compensation
---------------------------          ----        -------      -----    ------------     ------------    -------  ------------
<S>                                  <C>        <C>                                       <C>
Dore Scott Perler, CEO               2002       $101,250         -           -            150,000           -         -
                                     2001       $ 93,000         -           -            650,000           -         -
                                     2000       $ 57,000         -           -                  -           -         -

Andrew Goldrich, VP                  2002       $101,250         -           -            150,000           -         -

</TABLE>

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning our grant of options to
purchase shares of our common stock during the fiscal year ended December 31,
2002 to (a) our President and Chief Executive Officer; and (b) each of our
executive officers who earned more than $100,000 during the fiscal year ended
December 31, 2002.

<TABLE>
<CAPTION>
                               Percent of
                               Number of       Total Options/
                               Securities       SARs Granted
                               Underlying       To Employees        Exercise Or
                               Options/SARs      In Fiscal           Base Price
      Name                     Granted (#)          Year               ($/Sh)           Expiration Date

<S>                              <C>               <C>                 <C>                   <C>
Dore Scott Perler, CEO           150,000           27.7%               $ 0.86                2/22/07

Andrew Goldrich, VP              150,000           27.7%               $ 0.86                2/22/07

</TABLE>

INCENTIVE AND NON-QUALIFIED STOCK OPTION PLAN

1999 Plan: On July 19, 1999, the board of directors and shareholders adopted our
1999 stock option plan. We have reserved 1,500,000 shares of common stock for
issuance upon exercise of options granted from time to time under the 1999 stock
option plan. The 1999 stock option plan is intended to assist us in securing and
retaining key employees, directors and consultants by allowing them to
participate in our ownership and growth through the grant of incentive and
non-qualified options.

Under the stock option plan we may grant incentive stock options only to key
employees and employee directors, or we may grant non-qualified options to our
employees, officers, directors and consultants. The 1999 stock option plan is
currently administered by our board of directors.

Subject to the provisions of the stock option plan, the board will determine who
shall receive options, the number of shares of common stock that may be
purchased under the options, the time and manner of exercise of options and
exercise prices. The term of options granted under the stock option plan may not
exceed ten years or five years for an incentive stock option granted to an
optionee owning more than 10% of our voting stock. The exercise price for
incentive stock options will be equal to or greater than 100% of the fair market
value of the shares of the common stock at the time granted. However, the
incentive stock options granted to a 10% holder of our voting stock are
exercisable at a price equal to or greater than 110% of the fair market value of
the common stock on the date of the grant. The exercise price for non-qualified
options will be set by the board, in its discretion, but in no event shall the
exercise price be less than 75% of the fair market value of the shares of common
stock on the date of grant. The exercise price may be payable in cash or, with
the approval of the board, by delivery of shares or by a combination of cash and
shares. Shares of common stock received upon exercise of options will be subject
to restrictions on sale or transfer. As of December 31, 2002 we have granted
options to purchase 1,500,000 shares under the 1999 stock option plan. There are
no shares remaining under the 1999 stock option plan and none of the options
granted to date have been exercised.

                                       17
<PAGE>

2001 Plan: On November 28, 2001, the board of directors adopted our 2001 equity
compensation plan, and on November 28, the 2001 plan was ratified by holders of
a majority of our outstanding common stock. We have reserved 2,000,000 shares of
common stock for issuance as stock grants and upon exercise of options granted
from time to time under the 2001 equity compensation plan. The 2001 plan is
intended to assist us in securing and retaining key employees, directors and
consultants by allowing them to participate in our ownership and growth through
the grant of incentive and non-qualified options, as well as direct stock
grants.

Under the 2001 plan we may grant incentive stock options only to key employees
and employee directors. We may grant non-qualified options and issue direct
stock awards to our employees, officers, directors and consultants. The 2001
equity compensation plan is currently administered by our board of directors.

Subject to the provisions of the 2001 plan, the board will determine who shall
receive options or grants, the number of shares of common stock that may be
purchased under the options, the time and manner of exercise of options and
exercise prices. The term of options granted under the stock option plan may not
exceed ten years or five years for an incentive stock option granted to an
optionee owning more than 10% of our voting stock. The exercise price for
incentive stock options will be equal to or greater than 100% of the fair market
value of the shares of the common stock at the time granted. However, the
incentive stock options granted to a 10% holder of our voting stock are
exercisable at a price equal to or greater than 110% of the fair market value of
the common stock on the date of the grant. The exercise price for non-qualified
options will be set by the board, in its discretion, but in no event shall the
exercise price be less than the par value for our common stock The exercise
price may be payable in cash or, with the approval of the board, by delivery of
shares or by a combination of cash and shares. The board may also direct the
issuance of shares of our common stock as awards under the 2001 plan. Absent
registration under the Securities Act of 1933, as amended, or the availability
of an applicable exemption therefrom, shares of common stock received as stock
grants and upon exercise of options will be subject to restrictions on sale or
transfer. As of December 31, 2002, we have granted options to purchase 951,333
shares and awarded 113,282 shares under the 2001 plan. Subsequent to December
31, 2002, 30,250 shares have been issued under the 2001 plan and there are
905,132 shares remaining under the 2001 stock option plan and none of the
options granted to date have been exercised.

                                       18
<PAGE>

OPTION EXERCISES AND HOLDINGS

The following table contains information with respect to the exercise of options
to purchase shares of common stock during the fiscal year ended December 31,
2002 to (a) our President and Chief Executive Officer; and (b) each of our
executive officers who earned more than $100,000 during the fiscal year ended
December 31, 2002.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values

<TABLE>
<CAPTION>
                                                                            Number of
                                                                           Securities            Value of
                                                                           Underlying           Unexercised
                             Shares                                        Unexercised         In-The-Money
                            Acquired                                      Options/SARs         Options/SARs
                               On                         Value           At FY-End (#)        At FY-End ($)
                            Exercise                    Realized          Exercisable/         Exercisable/
      Name                     (#)                         ($)            Unexercisable        Unexercisable
      ----                -------------               -------------       -------------        -------------

<S>                            <C>                          <C>            <C>                 <C>
Dore Scott Perler, CEO         -                            -              800,000/-0-         -$169,000/-0-

Andrew Goldrich, VP            -                            -              800,000/-0-         -$169,000/-0-

</TABLE>

Long-Term Incentive Plans Awards in Last Fiscal Year

<TABLE>
<CAPTION>
                                     Number          Performance
                                    of Shares         or Other            Estimated Future Payouts Under
                                    Units or        Period Until             Non-Stock Price-Based Plans
                                                                          ---------------------------------
                                  Other Rights       Maturation             Threshold   Target   Maximum
      Name                            (#)             or Payout                ($or #)  ($or #)    ($ or #)
      ----                    --------------------    ---------           ---------------------------------
<S>                                     <C>               <C>                    <C>        <C>    <C>
Dore Scott Perler, CEO                  -                 -                      -          -      -

Andrew Goldrich, VP                     -                 -                      -          -      -

</TABLE>

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

As authorized by the Florida Business Corporation Law, our Articles of
Incorporation provide that none of our directors shall be personally liable to
us or our shareholders for monetary damages for breach of fiduciary duty as a
director, except liability for:

o any breach of the director's duty of loyalty to our company or its
shareholders;
o acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law; o unlawful payments of dividends or unlawful stock
redemptions or repurchases; and o any transaction from which the director
derived an improper personal benefit.

This provision limits our rights and the rights of our shareholders to recover
monetary damages against a director for breach of the fiduciary duty of care
except in the situations described above. This provision does not limit our
rights or the rights of any shareholder to seek injunctive relief or rescission
if a director breaches his duty of care. These provisions will not alter the
liability of directors under federal securities laws.

Our Articles of Incorporation further provide for the indemnification of any and
all persons who serve as our director, officer, employee or agent to the fullest
extent permitted under Florida law.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the SEC, this indemnification is against public policy as expressed in the
securities laws, and is, therefore unenforceable.

                                       19
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of April 4, 2003, information known to us
relating to the beneficial ownership of shares of common stock by: each person
who is the beneficial owner of more than five percent of the outstanding shares
of common stock; each director; each executive officer; and all executive
officers and directors as a group.

We believe that all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them.

Under securities laws, a person is considered to be the beneficial owner of
securities he owns and that can be acquired by him within 60 days from the date
of this prospectus upon the exercise of options, warrants, convertible
securities or other understandings. We determine a beneficial owner's percentage
ownership by assuming that options, warrants or convertible securities that are
held by him, but not those held by any other person and which are exercisable
within 60 days of the date of this prospectus, have been exercise or converted.

Except as other wise required by Securities and Exchange commission rules
relating to beneficial ownership, the table does not give effect to the issuance
of up to:

o 2,451,333 shares of common stock issuable upon exercise of options that have
been granted; and

o 5,952,590 shares of common stock issuable upon exercise of outstanding
purchase warrants.

Name and Address of             Amount and Nature of                  Percentage
   Beneficial Owner             Beneficial Ownership                   of Class

Dore S. Perler                     2,094,723 shares(1)                   12.5%
9400 S.W. 49th Place
Cooper City, FL 33328

Andrew Goldrich                    1,994,519 shares(1)                   11.9%
21653 Marigot Drive
Boca Raton, FL 33428

Shawn Tartaglia                      768,585 shares (2)                   4.6%
6888 Ashburn Road
Lake Worth, FL 33467

Julie Slater                          43,703 shares                         *
402 N.W. 118th Terrace
Coral Springs, FL 33071

Officers and Directors             4,901,530 shares (3)                  29.4%
as a group (4 persons)

* Less than 1%.

(1) Includes 800,000 shares issuable upon exercise of currently exercisable
options.
(2) Includes 575,000 shares issuable upon exercise of currently exercisable
options
(3) Includes 2,175,000 shares issuable upon exercise of currently exercisable
options.

The following table sets forth, as of April 4, 2003, information known to us
relating to shares, options, warrants and rights issued under existing equity
compensation plans.

<TABLE>
<CAPTION>
                                   (a)                          (b)                          (c)
                              Number of securities      Weighted-average        Number of Securities remaining
                              issued or to be           exercise price of       available for future
                              issued upon exercise      outstanding             issuance under equity
                              of outstanding options    options, warrants       compensation plans
                              warrants and rights       and rights              (excluding securities
  Plan Category                                                                 reflected in column (a))
  -------------               -------------------       ------------------      ------------------------------
<C>                              <C>                          <C>                        <C>
1999 Equity Compensation         1,500,000                    $.45                             0
Plan approved by security
Holders

2001 Equity Compensation         1,094,868                    $.75                       905,132
Plan approved by security
Holders

</TABLE>
                                       20
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Officers/Shareholders have received funds from the Company in the form
of demand notes bearing no interest. During the period ended December 31, 2002
the Company advanced the Officers/Shareholders $2,500 and Officers/Shareholders
made repayments to the Company of $10,000. As of December 31, 2002, the balance
on the amount owed to the Company by the Officers/Shareholders is Dore Perler
$42,000, Andrew Goldrich $24,500 and Shawn Tartaglia $2,222.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

A. EXHIBITS:

     Exhibit No.                Description of Document

        2.1     Agreement and Plan of Merger between Century Silver Mines, Inc.
                and Sense Holdings, Inc.(1)
        3.1(a)  Articles of Incorporation of Sense Holdings, Inc.(1)
        3.1(b)  Articles of Merger of Century Silver Mines, Inc. into Sense
                Holdings, Inc. (FL)(1)
        3.1(c)  Articles of Merger of Century Silver Mines, Inc. into Sense
                Holdings, Inc. (ID)(1)
        3.2     Bylaws (1)
        10.1    1999 Stock Option Plan (1)
        10.2    Employment Agreement between the Company and Dore Scott Perler
                (1)
        10.3    Employment Agreement between the Company and Andrew Goldrich (1)
        10.4    Employment Agreement between the Company and Shawn Tartaglia (1)
        10.5    Technology License Agreement, as amended, with SAC Technologies,
                Inc.(1)
        10.6    Lease for Tamarac Office (1)
        10.11   Manufacturing and Non-Compete Agreement with Test Systems
                Engineering (1)
        10.12   Sales Agreement with Integrated Design, Inc.(1)
        10.13   Agreement and Plan of Acquisition dated May 31, 2001 with Micro
                Sensor Technologies, Inc. (2)
        10.14   Patent License Agreement dated March 26, 2001, between Micro
                Sensor Technologies, Inc. and UT-Battelle, LLC (2)
        10.15   Consulting Agreement dated June 1, 2001, between Micro Sensor
                Technologies, Inc. and Dr. Thomas Thundat (2)
        10.16   Work for Others Agreement dated June 4, 2001, between
                UT-Battelle, LLC and Micro Sensor Technologies, Inc. (2)
        10.17   Form of Promissory Note, as amended (4)
        10.18   Lease for Sunrise Office. (4)
        10.19   2001 Equity Compensation Plan (3)
        10.20   Employment Agreement between the Company and Dore Scott Perler
                as of December 16, 2002(5)
        10.21   Employment Agreement between the Company and Andrew Goldrich as
                of December 16, 2002 (5)
        10.22   Employment Agreement between the Company and Shawn Tartaglia as
                of December 16, 2002(5)
        99.1    Certification of CEO dated April *, 2003 (5)
        99.2    Certification of CFO dated April *, 2003 (5)

        (1) Incorporated by reference to exhibits with the corresponding number
        filed with our registration statement on Form SB-2 (File No. 333-87293).

        (2) Incorporated by reference to exhibits with the corresponding number
        filed with our registration statement on Form SB-2 (File No.333-62874).

        (3) Incorporated by reference to exhibits with the corresponding number
        filed with our registration statement on Form S-8 (File No.333-81306).

        (4) Previously filed with Form 10-KSB

        (5) Filed herewith

B. REPORTS ON FORM 8-K:
The following reports on Form 8-K were filed during the last reporting year:
Form 8-K on August 28, 2002 disclosing a contract entered into with Federal
Express, Inc., pursuant to Item 5 thereof.
Form 8-K on September 20, 2002 disclosing a change in accounting firm pursuant
to Item 4 thereof.
Form 8-K on December 6, 2002 disclosing a contract entered into with American
Airlines, Inc., pursuant to Item 5 thereof.

                                       21
<PAGE>

ITEM 14. CONTROLS AND PROCEDURES

Our Chief Executive Officer and Chief Financial Officer (collectively, the
"Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures for us. Based upon such officers' evaluation
of these controls and procedures as of a date within 90 days of the filing of
this Annual Report, and subject to the limitations noted hereinafter, the
Certifying Officers have concluded that our disclosure controls and procedures
are effective to ensure that information required to be disclosed by us in this
Annual Report is accumulated and communicated to management, including our
principal executive officers as appropriate, to allow timely decisions regarding
required disclosure.

The Certifying Officers have also indicated that there were no significant
changes in our internal controls or other factors that could significantly
affect such controls subsequent to the date of their evaluation, and there were
no corrective actions with regard to significant deficiencies and material
weaknesses.

Our management, including each of the Certifying Officers, does not expect that
our disclosure controls or our internal controls will prevent all error and
fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. In addition, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within a company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people or by management
override of the control. The design of any systems of controls also is based in
part upon certain assumptions about the likelihood of future events, and their
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of these inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.

                                       22
<PAGE>

                                  SIGNATURES


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

                                       Sense Holdings, Inc.


                                       By: /s/ Dore Scott Perler
                                           ------------------------
                                           Dore Scott Perler, DIRECTOR,
                                           CHIEF EXECUTIVE OFFICER AND PRESIDENT


Date:   April 15, 2003


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

     Signature                          Capacity                       Date


 /s/ Dore Scott Perler     Director, Chief Executive Officer      April 15, 2003
 ---------------------     and President (Principal Executive
 Dore Scott Perler         Officer)


 /s/ Andrew Goldrich       Chief Financial Officer and Director   April 15, 2003
 ---------------------     (Principal Financial and Accounting
 Andrew Goldrich           Officer)


 /s/ Shawn Tartaglia       Chief Technical Officer and Director   April 15, 2003
 ---------------------
 Shawn Tartaglia


 /s/ Julie Slater          Director                               April 15, 2003
 ---------------------
 Julie Slater


                                       23
<PAGE>
           CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Sense Holdings, Inc. on Form 10-KSB for
the fiscal year ended December 31, 2002, as filed with the Securities and
Exchange Commission on the date hereof, I, Dore Scott Perler, the Chief
Executive Officer of the Company, certify, pursuant to and for purposes of 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, that:

1. I have reviewed this annual report on Form 10-KSB of Sense Holdings, Inc.;

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

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

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

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

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

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

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

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

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

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

Date:   April 15, 2003                      /s/ Dore Scott Perler
                                            -----------------------
                                   Name:    Dore Scott Perler
                                   Title:   Chief Executive Officer

                                       24
<PAGE>
           CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Sense Holdings, Inc. on Form 10-KSB for
the fiscal year ended December 31, 2002, as filed with the Securities and
Exchange Commission on the date hereof, I, Andrew Goldrich, the Chief Financial
Officer of the Company, certify, pursuant to and for purposes of 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002, that:

1. I have reviewed this annual report on Form 10-KSB of Sense Holdings, Inc.;

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

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

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

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

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

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

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

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

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

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

Date:   April 15, 2003                      /s/ Andrew Goldrich
                                            -----------------------
                                   Name:    Andrew Goldrich
                                   Title:   Chief Financial Officer

                                       25
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Independent Auditors' Report ........................................    F-2

Consolidated Balance Sheet ..........................................    F-3

Consolidated Statements of Operations ...............................    F-4

Consolidated Statements of Stockholders' Equity .....................    F-5

Consolidated Statements of Cash Flows ...............................    F-6

Notes to Consolidated Financial Statements ..........................F-7 to F-21


                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Sense Holdings, Inc. and Subsidiary
Sunrise, Florida

We have audited the accompanying consolidated balance sheet of Sense Holdings,
Inc. and Subsidiary as of December 31, 2002, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
ended December 31, 2002 and 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 audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Sense
Holdings, Inc. and Subsidiary as of December 31, 2002, and the results of their
operations and their cash flows for the years ended December 31, 2002 and 2001,
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered losses from
operations and an accumulated deficit that raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters 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/ Sherb & Co., LLP
                                        Certified Public Accountants
New York, New York
March 24, 2003

                                       F-2
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2002


                                     ASSETS

Current assets:
           Cash ...............................................     $   242,579
           Marketable securities ..............................         229,673
           Accounts receivable, net of allowance
                for doubtful accounts of $33,500 ..............          61,848
           Inventories ........................................         123,109
           Advances - shareholders ............................          68,722
           Prepaid expenses ...................................          13,888
           Other current assets ...............................          12,176
                                                                    -----------

           Total current assets ...............................         751,995

Property and equipment, net ...................................          20,599

License agreement, net ........................................         150,000
                                                                    -----------

           Total assets .......................................     $   922,594
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
           Accounts payable ...................................     $    83,985
           Accrued expenses ...................................           7,700
                                                                    -----------

           Total current liabilities ..........................          91,685
                                                                    -----------

Stockholders' equity:
           Common stock, $.10 par value,
             40,000,000 shares authorized;
             16,656,905 shares issued and outstanding .........       1,665,690
           Additional paid-in capital .........................       5,487,363
           Deferred compensation ..............................          (4,048)
           Accumulated deficit ................................      (6,318,096)
                                                                    -----------

           Total stockholders' equity .........................         830,909
                                                                    -----------

           Total liabilities and stockholders' equity .........     $   922,594
                                                                    ===========

                 See notes to consolidated financial statements

                                      F-3
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                      Years Ended December 31,
                                                    ---------------------------
                                                        2002           2001
                                                    ------------   ------------

Sales ............................................  $    145,363   $     69,569

Cost of goods sold ...............................        49,532         21,798
                                                    ------------   ------------

Gross profit .....................................        95,831         47,771
                                                    ------------   ------------

Operating expenses:
   Depreciation and amortization .................       112,620         65,262
   Research and development ......................       473,019        460,253
   Impairment of license agreement ...............       216,246              -
   General and administrative ....................     1,173,683      1,148,707
                                                    ------------   ------------
         Total operating expenses ................     1,975,568      1,674,222
                                                    ------------   ------------

Loss from operations .............................    (1,879,737)    (1,626,451)

Other income (expense):
   Gain on sale of securities ....................         4,538              -
   Interest expense, net .........................      (693,100)      (387,235)
   Unrealized loss on securities .................        (4,516)             -
                                                    ------------   ------------
        Total other income (expense) .............      (693,078)      (387,235)
                                                    ------------   ------------

Net loss .........................................  $ (2,572,815)  $ (2,013,686)
                                                    ============   ============


Net loss per common share - basic and diluted ....  $      (0.17)  $      (0.21)
                                                    ============   ============

Weighted average number of shares
   outstanding - basic and diluted ...............    14,885,668      9,786,559
                                                    ============   ============

                 See notes to consolidated financial statements

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                                             SENSE HOLDINGS, INC. AND SUBSIDIARY

                                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


                                                 Common Stock
                                           -------------------------   Additional                                   Total
                                            Number of                    Paid-in      Deferred     Accumulated  Stockholders'
                                             Shares        Amount        Capital     Compensation    Deficit       Equity
                                           -----------   -----------   -----------   -----------   -----------   -----------
<S>                                        <C>           <C>           <C>           <C>           <C>           <C>
Balance, December 31, 2000 ..............    6,510,636   $   651,063   $   925,110   $         -   $(1,731,595)  $  (155,422)

Issuance of common stock for services ...      886,500        88,650       331,191             -             -       419,841

Sale of common stock, net ...............    1,208,000       120,800       465,550             -             -       586,350

Issuance of common stock for services in
  connection with stock offering ........       56,000         5,600        (5,600)            -             -             -

Shares issued for acquisition ...........    2,000,000       200,000       560,000             -             -       760,000

Repurchase of common stock ..............       (3,000)         (300)       (1,288)            -             -        (1,588)

Issuance of common stock in connection
  with short term loan ..................      100,000        10,000       102,500             -             -       112,500

Issuance of common stock for services in
  connection with notes payable .........      105,000        10,500        49,035             -             -        59,535

Issuance of shares for notes payable ....    1,055,000       105,500       492,685             -             -       598,185

Options and warrants granted for services            -             -        47,998             -             -        47,998

Beneficial conversion of notes payable ..            -             -        70,000             -             -        70,000

Net loss ................................            -             -             -             -    (2,013,686)   (2,013,686)
                                           -----------   -----------   -----------   -----------   -----------   -----------

Balance, December 31, 2001 ..............   11,918,136     1,191,813     3,037,181             -    (3,745,281)      483,713

Sale of comon stock, net ................    4,110,834       411,083     2,124,467             -             -     2,535,550

Issuance of common stock for services ...      305,435        30,544       184,265       (18,216)            -       196,593

Amortization of deferred compensation ...            -             -             -        14,168             -        14,168

Issuance of common stock for settlement .       15,000         1,500         5,400             -             -         6,900

Issuance of common stock in connection
  with note payable .....................       30,000         3,000        19,500             -             -        22,500

Shares issued for conversion of
  notes payable .........................      277,500        27,750       116,550             -             -       144,300

Net loss ................................            -             -             -             -    (2,572,815)   (2,572,815)
                                           -----------   -----------   -----------   -----------   -----------   -----------

Balance, December 31, 2002 ..............   16,656,905   $ 1,665,690   $ 5,487,363   $    (4,048)  $(6,318,096)  $   830,909
                                           ===========   ===========   ===========   ===========   ===========   ===========

                                        See notes to consolidated financial statements

                                                             F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                       SENSE HOLDINGS, INC. AND SUBSIDIARY

                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                      Years Ended December 31,
                                                                                    ---------------------------
                                                                                       2002            2001
                                                                                    -----------     -----------
<S>                                                                                 <C>             <C>
Cash flows from operating activities:
         Net loss ..............................................................    $(2,572,815)    $(2,013,686)
         Adjustments to reconcile net loss to net cash used in operations:
              Depreciation and amortization ....................................        112,620          65,262
              Bad debt expense .................................................         13,500               -
              Impairment of license agreement ..................................        216,246               -
              Common stock issued for services .................................        210,761         419,841
              Common stock issued for in connection with note payable ..........         22,500               -
              Common stock issued for settlement ...............................          6,900               -
              Amortization of deferred financing costs .........................        568,844         284,421
              Common stock options and warrants granted ........................              -          47,998
              Common stock issued for interest .................................         51,800          70,312
              Gain on sale of investments ......................................         (4,538)              -
              Unrealized loss on investments ...................................          4,516               -

         Changes in assets and liabilities:
              Accounts receivable ..............................................        (26,480)         12,231
              Inventories ......................................................         (3,938)         (2,182)
              Prepaid expenses .................................................         87,783          55,828
              Other current assets .............................................        (11,876)         15,177
              Accounts payable and accrued expenses ............................       (169,387)         21,484
              Accrued Interest .................................................        (35,167)         35,167
                                                                                    -----------     -----------
                       Total adjustments .......................................      1,044,084       1,025,539
                                                                                    -----------     -----------
Net cash used in operating activities ..........................................     (1,528,731)       (988,147)
                                                                                    -----------     -----------
Cash flows from investing activities:
         Purchases of marketable securities ....................................     (4,941,464)              -
         Proceeds from sales of marketable securities ..........................      4,711,814               -
         Cash from acquisition .................................................              -         104,028
         Purchase of equipment .................................................        (20,504)              -
                                                                                    -----------     -----------
Net cash flows (used) provided by investing activities .........................       (250,154)        104,028
                                                                                    -----------     -----------
Cash flows from financing activities:
         Repayment of bank overdraft ...........................................              -          (4,162)
         Repayments of notes payable ...........................................       (962,500)       (150,000)
         Deferred financing costs paid .........................................              -        (125,545)
         Repayment of advances to shareholders .................................         10,000               -
         Advances to shareholders ..............................................         (2,500)        (35,022)
         Repurchase of common stock ............................................              -          (1,588)
         Proceeds from notes payable ...........................................              -       1,055,000
         Proceeds from the sale of common stock ................................      2,875,625         586,350
         Costs associated with sale of common stock ............................       (340,075)              -
                                                                                    -----------     -----------
Net cash flows from provided by financing activities ...........................      1,580,550       1,325,033
                                                                                    -----------     -----------

Net (decrease) increase in cash ................................................       (198,335)        440,914
Cash - beginning of year .......................................................        440,914               -
                                                                                    -----------     -----------
Cash - end of year .............................................................    $   242,579     $   440,914
                                                                                    ===========     ===========
Supplemental disclosure of cash flow information: Cash paid for:
         Interest ..............................................................    $   105,700     $         -
                                                                                    ===========     ===========
         Taxes .................................................................    $         -     $         -
                                                                                    ===========     ===========
     Non-cash investing and financing activities:
         Common stock issued in connection with acquisition, net of
           cash acquired .......................................................    $         -     $   655,972
                                                                                    ===========     ===========
         Common stock issued in connection with note payable ...................    $         -     $   770,220
                                                                                    ===========     ===========
         Deferred financing costs recorded for beneficial interest .............    $         -     $    70,000
                                                                                    ===========     ===========
         Common stock issued for conversion of notes payable ...................    $    92,500     $         -
                                                                                    ===========     ===========
                                 See notes to consolidated financial statements

                                                       F-6
</TABLE>
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

Sense Technologies, Inc. ("Sense") was formed on July 13, 1998, to design,
develop, manufacture and sell biometric security identification systems.

On January 19, 1999, Sense was acquired by Century Silver Mines, Inc. ("CSM"),
an Idaho corporation, for 4,026,700 shares of CSM stock (the "Exchange"). The
Exchange was completed pursuant to the Agreement and Plan of Reorganization
between Sense and CSM. The Exchange has been accounted for as a reverse
acquisition under the purchase method for business combinations. Accordingly,
the combination of the two companies is recorded as a recapitalization of Sense,
pursuant to which Sense is treated as the continuing entity. In August 1999,
pursuant to the approval of the Board of Directors of CSM, the name of the
company changed to Sense Holdings, Inc. (the "Company").

As discussed in Note 6 "Acquisition" on May 31, 2001 the Company acquired 100%
of the outstanding stock of Micro Sensor Technologies, Inc. ("Micro Sensor") in
exchange for 2,000,000 shares of the Company's common stock. The Company
accounted for the acquisition using the purchase method of accounting and,
accordingly, the operating results of Micro Sensor have been included in the
consolidated financial statements since the date of acquisition.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiary. All material inter-company transactions have been
eliminated.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

MARKETABLE SECURITIES

Marketable securities are classified as trading securities and are held for
resale in anticipation of short-term market movements. At December 31, 2002,
marketable securities consisted of U.S. Treasury and Federal Agency securities
held for resale. Gains or losses are recognized in the statement of operations
when the bonds are sold. Unrealized gains or losses are recognized in the
statement of operations on a monthly basis based on changes in the estimated
fair value. Net unrealized losses related to investments held for trading as of
December 31, 2002, $4,516.

As of December 31, 2002, marketable securities consisted of U.S. Treasury
Securities with a market value of $33,593 and Federal Agency Securities with a
market value of $196,080.

                                       F-7
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

INVENTORIES

Inventories are stated at the lower of average cost or market and consists of
raw materials and finished goods.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. Depreciation on property and equipment
is calculated using the straight-line method over the estimated useful lives of
the assets. Expenditures for major renewals and betterments that extend the
useful lives of property and equipment are capitalized. Expenditures for
maintenance and repairs are charged to expense as incurred.

INCOME TAXES

Under the asset and liability method of FASB Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities, and their respective tax bases and operating loss and tax
credit carryforwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Deferred
tax assets are reduced by a valuation allowance, when in the Company's opinion
it is likely that some portion or the entire deferred tax asset will not be
realized.

REVENUE RECOGNITION

The Company recognizes revenues as units of its product are shipped to its
customers.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash, marketable
securities, receivables, inventories, accounts payable and accrued expenses
approximate their fair market value based on the short-term maturity of these
instruments.

USE OF ESTIMATES

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

                                       F-8
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

IMPAIRMENT OF LONG-LIVED ASSETS

The Company evaluates the recoverability and carrying value of its long-lived
assets at each balance sheet date, based on guidance issued in SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." Among other
factors considered in such evaluation is the historical and projected operating
performance of business operations, the operating environment and business
strategy, competitive information and market trends.

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred. These costs primarily
consist of fees paid for the development of the Company's software. Research and
development costs for the years ended December 31, 2002 and 2001 were $473,019
and $460,253, respectively.

LICENSE AGREEMENT

License agreement is stated at cost, less accumulated amortization. Amortization
is computed using the straight-line method over an estimated life of five years
based upon management's expectations relating to the life of the technology and
current competitive market conditions. The estimated life is reevaluated each
year based upon changes in these factors. For the years ended December 31, 2002
and 2001, amortization of the license agreement amounted to $107,196 and
$62,530, respectively.

STOCK BASED COMPENSATION

The Company uses SFAS No. 123, "Accounting for Stock-Based Compensation," which
permits entities to recognize as expense over the vesting period the fair value
of all stock-based awards on the date of grant. Alternatively, SFAS No. 123 also
allows entities to continue to apply the provision of APB Opinion No. 25 and
provide pro forma net income and pro forma earnings per share disclosures for
employee stock option grants as if the fair-value-based method defined in SFAS
No. 123 has been applied. The Company has elected to continue to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions
of SFAS No. 123.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents,
marketable securities and accounts receivable. The Company's investment policy
is to invest in low risk, highly liquid investments. The Company does not
believe it is exposed to any significant credit risk in its cash investment.

The Company maintains its cash balances at quality financial institutions. These
balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. At December 31, 2002, the Company's cash balances did not exceed the
insured limits. The Company has not experienced

                                       F-9
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

CONCENTRATIONS OF CREDIT RISK, CONTINUED

any losses in such accounts and believes it is not exposed to any significant
credit risk on cash on deposit.

The Company performs on-going credit evaluations of its customer base including
those included in accounts receivable at December 31, 2002, and, generally, does
not require collateral. The Company maintains reserves for potential credit
losses and such losses have been within management's expectations.

LOSS PER COMMON SHARE

Basic loss per common share is based upon the weighted average number of common
shares outstanding during the year. Diluted earnings (loss) per common share
include the effects of potential dilution that would occur if securities (such
as warrants) or other contracts (such as options) to issue common stock were
exercised or converted into common stock. Such instruments that are convertible
into common stock are excluded from the computation in periods in which they
have an anti-dilutive effect. Potential common shares included in the
computation are not presented in the consolidated financial statements, as their
effect would be anti-dilutive.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
No.143 is not expected to have a material impact on the Company's consolidated
financial statements.

In July 2002, the FASB issued Statement No. 146 (SFAS 146), "Accounting for
Costs Associated with Exit or Disposal Activities." This Standard supercedes the
accounting guidance provided by Emerging Issues Task Force Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity" (including "Certain Costs Incurred in a Restructuring").
SFAS No. 146 requires companies to recognize costs associated with exit
activities when they are incurred rather than at the date of a commitment to an
exit or disposal plan. SFAS No. 146 is to be applied prospectively to exit or
disposal activities initiated after December 31, 2002. The Company is currently
evaluating this Standard.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based

                                      F-10
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

RECENT ACCOUNTING PRONOUNCEMENTS, CONTINUED

Compensation -- Transition and Disclosure -- an Amendment of FASB Statement No.
123." 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. The Company does not currently intend to adopt the fair value
based method of measuring compensation associated with stock awards and grants.
As a consequence of continuing to utilize the intrinsic value method of
measuring such compensation, the Company will be required to provide additional
disclosures in its quarterly financial statements which will reflect the impact
on net income and earnings per share on a pro forma basis as if the Company had
applied the fair value method to stock-based employee compensation.

NOTE 2 - BASIS OF PRESENTATION

The accompanying consolidated financial statements are prepared assuming the
Company will continue as a going concern. During the years ended December 31,
2002 and 2001, the Company incurred losses from operations of $1,879,737 and
$1,626,451, respectively. During the years ended December 31, 2002 and 2001, the
Company had negative cash flows from operations in the amount of $1,528,731 and
$988,147, respectively.

While the Company is attempting to increase sales, the growth has not been
significant enough to support the Company's daily operations. Management intends
to attempt to raise additional funds by way of a public or private offering.
While the Company believes in the viability of its strategy to improve sales
volume and in its ability to raise additional funds, there can be no assurances
to that effect.

NOTE 3 - INVENTORIES

At December 31, 2002 inventories consists of:

                            Raw materials   $ 18,453
                            Finished goods   104,656
                                            --------
                                            $123,109
                                            ========

NOTE 4 - RELATED PARTY TRANSACTIONS

Certain shareholders have received funds from the Company in the form of demand
notes bearing no interest. During the periods ended December 31, 2002 and 2001
the Company advanced shareholders $2,500 and $35,022, respectively. During the
same periods, the shareholders made repayments to the Company of $10,000 and $0,
respectively. At December 31, 2002 and 2001, the balance on the amount owed to
the Company was $68,722 and $76,222, respectively.

                                      F-11
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5 - PROPERTY AND EQUIPMENT

At December 31, 2002, property and equipment consisted of the following:

                                           Estimated life
                                           --------------

         Computer equipment                   5 years           $ 15,195
         Furniture and fixtures               7 years             19,104
         Less: Accumulated depreciation                          (13,700)
                                                                --------
                                                                $ 20,599
                                                                ========

For the years ended December 31, 2002 and 2001, depreciation expense amounted to
$5,424 and $2,732, respectively

NOTE 6 - ACQUISITION

On May 31, 2001, the Company acquired 100% of the outstanding stock of Micro
Sensor Technologies, Inc. ("Micro Sensor") in exchange for 2,000,000 shares of
the Company's common stock. The Company accounted for this acquisition using the
purchase method of accounting and, accordingly, the operating results of Micro
Sensor have been included in the Company's consolidated financial statements
since the date of acquisition. The Company valued the shares exchanged at $0.38
per share, the fair value at the acquisition date, or $760,000. The purchase
price exceeded the fair value of assets acquired by $535,972. The excess has
been recorded as a license agreement and is being amortized on a straight-line
basis over five years.

Management determined that, as of December 31, 2002, a write-down of the license
agreement related to the acquisition of Micro Sensor was necessary as the
Company's projections of future operating results indicated impairment. Based on
such projections and other analysis the Company took an impairment charge of
$216,246 related to the Micro Sensor license agreement. This amount is included
in the statement of operations under "Impairment of license agreement." The
license agreement remaining as of December 31, 2002, totaled $150,000. The
remaining $150,000 is estimated based on the fact that development of a
commercially viable version of the licensed product is on-going and that there
is a market for such ordnance detection devices.

NOTE 7 - NOTES PAYABLE

On August 31, 2001, the Company issued promissory notes in the amount of
$1,055,000 in connection with a private placement. The notes bear interest at
10% per annum. In November 2001, the note agreements were amended. The maturity
date of the notes was extended from an original maturity date of March 1, 2002
to September 1, 2002. Additionally, each note payable is convertible into common
stock at a conversion price of $.75 per share or an aggregate of 1,406,661
shares of common stock. For the year ended December 31, 2001, $35,167 has been
charged to interest expense. The beneficial conversion feature present in the
issuance of the promissory notes as determined on the date of issuance of the
Company's common stock totaled $70,000. This amount was recorded as deferred
financing costs and amortized over the life of the notes. For the years ended
December 31, 2002 and 2001, $46,667 and $23,333, respectively, was charged to
interest expense.

                                      F-12
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 - NOTES PAYABLE, CONTINUED

In September 2002, the Company's outstanding notes payable of $1,055,000 along
with accrued interest of $105,000 was retired with a cash payment of $1,068,200
and the issuance of 277,500 shares of its common stock at $.52 per share. The
Company recorded additional interest expense of $51,800 in connection with the
conversion of a portion of the notes principal balance.

NOTE 8 - COMMITMENTS

OPERATING LEASE

The Company leases office space under an operating lease commencing March 1,
2002. The lease terminates on February 28, 2005.

At December 31, 2002, minimum rental commitments are as follow:

                                 2003  $39,753
                                 2004   41,741
                                 2005    7,305
                                       -------

                                       $88,799
                                       =======

For the years ended December 31, 2002 and 2001 rent expense was $56,688 and
$15,369, respectively.

LICENSE AGREEMENT

On August 27, 2001, the Company entered into a license agreement with a software
development
company. Under the terms of the agreement, the Company, has been granted a
non-exclusive, non-transferable right to incorporate, use, copy, reproduce,
market, sell, and distribute the software company's technology in its
identification systems. The agreement expires on August 31, 2004 and may be
renewed for an additional year. The Company paid an initial transfer fee of
$25,000 and is required to pay an annual maintenance fee of $15,300. In
addition, the Company is required to pay royalty fees in the amount of between
$10.00 and $25.00 per system sold, depending on the quarterly volume. Under the
terms of the original agreement the Company was required to pay a minimum
quarterly royalty fee of $25,000 beginning in 2003. In December 2002, both
parties agreed to amend the agreement and reduced the required minimum quarterly
royalty fee to $5,000 beginning in 2003.

NOTE 9 - EMPLOYMENT AGREEMENTS

In December 2002 the Company entered into two year employment agreements with
its Chief Executive Officer, Chief Financial Officer and Chief Technology
Officer. In the event of involuntary termination without cause or disability
each executive would be entitled to the following compensation for the
succeeding 24 months following the date of termination:

                                      F-13
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 - EMPLOYMENT AGREEMENTS,CONTINUED

         i)       Two hundred (200%) percent of the executive's base
                  compensation in effect on the date of the employment
                  termination; plus

         ii)      Two hundred (200%) percent of the executive's annual incentive
                  bonus earned on a quarterly basis as of the date of the
                  termination, assuming the executive was employed on the last
                  day of the quarter in which termination of employment
                  occurred.

In the event the executive is terminated for "cause" the executive will be
entitled to any unpaid salary through the date of termination and deferred
compensation will be forfeited. In the event there is a "Change in Control" the
Company will be required to pay the executive a lump sum equal to 299% of the
executive's base compensation in effect on the date of employment plus 299% of
the executive's prior year incentive bonus. The executive may, at their
discretion, elect to terminate the contract by giving the Board 90 days written
notice and the executive would not be entitled to severance benefits.

NOTE 10 - INCOME TAXES

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). SFAS No. 109
requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and tax bases of
assets and liabilities, and for the expected future tax benefit to be derived
from tax loss and tax credit carryforwards. SFAS No. 109 additionally requires
the establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets.

The provision (benefit) for income taxes differs from the amounts computed by
applying the statutory federal income tax rate to income (loss) before provision
for income taxes, the reconciliation is as follows:

                                            Year Ended           Year Ended
                                         December 31, 2002    December 31, 2001
                                         -----------------    -----------------
Tax benefit computed at statutory rate       $(874,700)           $(740,600)
Permanent differences ................         204,000              258,000
Temporary differences ................           6,100                    -
State income taxes, net of benefit ...         (66,400)             (44,400)
Income tax benefit not utilized ......         731,000              527,000
                                             ---------            ---------
Net income tax benefit ...............       $       -            $       -
                                             =========            =========

The Company has a net operating loss carry forward for tax purposes totaling
approximately $4,300,000 at December 31, 2002, expiring through the year 2021.
Such amounts would be subject to the limitations under Section 382 of the
Internal Revenue Code relating to changes in ownership.

                                      F-14
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 - INCOME TAXES, CONTINUED

Listed below are the tax effects of the items related to the Company's net tax
asset:

                                                  December 31,      December 31,
                                                      2002              2001
                                                  ------------      ------------
Tax benefit of net operating loss carryforward    $ 1,483,000       $   938,000
Valuation Allowance ..........................     (1,483,000)         (938,000)
                                                  -----------       -----------
Net deferred tax asset recorded ..............    $         -       $         -
                                                  ===========       ===========

After consideration of all the evidence, both positive and negative, management
has recorded a valuation allowance at December 31, 2002 and 2001, due to the
uncertainty of realizing the deferred income tax assets.

NOTE 11 - STOCKHOLDERS' EQUITY

COMMON STOCK

During 2001, the Company issued 886,500 of its common shares to consultants and
employees for services rendered. The shares were valued at the fair value on the
date of the issuance which were at prices ranging from $.39 to $.75. For the
year ended December 31, 2001, the Company recorded compensation expense of
$300,420 and professional fees of $119,421.

On March 28, 2001, the Company raised $755,000 through a private placement of
604,000 units ($1.25 per unit), each unit consisting of two shares of the
Company's common stock and one common stock purchase warrant exercisable at
$1.50 per share. The Company incurred costs in relation to this private
placement of $168,650 and netted proceeds of $586,350. The Company also issued
56,000 shares of its common stock for legal services rendered in relation to
this offering. Additionally, the Company issued to a consultant that provided
services in relation to securing the proceeds of this offering, 627,500 common
stock warrants exercisable at $0.50 per share. All costs associated with this
offering are recorded net against the gross proceeds.

On May 31, 2001, the Company issued 2,000,000 shares of its common stock in
exchange for 100% of the outstanding stock of Micro Sensor Technologies, Inc.
("Micro Sensor"). The Company valued the shares exchanged at $0.38 per share or
$760,000.

In June 2001, the Company purchased 3,000 shares of its common stock at $0.53
per share or $1,588. Such shares were subsequently retired.

In connection with a loan payable dated August 15, 2000, the Company agreed to
issue 100,000 shares of the Company's restricted common stock to the holder of
the loan at the end of the loan, which was due on August 15, 2001. The common
shares to be issued were valued on the loan date at the fair market value of
$1.12 per share for an aggregate of $112,500. Accordingly, as of December 31,
2000, the Company accrued $42,188 in interest expense in connection with these

                                      F-15
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY, CONTINUED

COMMON STOCK (CONTINUED)

shares to be issued. In May 2001, the Company issued these shares and recorded
additional interest expense of $70,312 related to these shares.

On August 31, 2001, in connection with a promissory note, the Company issued
1,055,000 shares of common stock. The stock was issued having a fair market
value on the date that the funds were received of $598,185. The amount was
recorded as common stock and deferred financing costs, which are being amortized
over the life of the notes. For the years ended December 31, 2002, and 2001,
$398,790 and $199,395, respectively, was charged to interest expense.

Additionally, in connection with the offering, the Company issued to an
investment banker for services provided in relation to securing the proceeds of
this offering, 105,000 shares of its common stock and paid other fees of
$125,545. The shares were valued $.57 per share, the fair value on the date of
the issuance, or $59,535. The Company has recorded the total amount of $185,080
as deferred financing costs and is amortizing the costs over the life of the
notes. For the years ended December 31, 2002 and 2001, $123,387 and $61,693,
respectively, has been charged to interest expense.

On January 30, 2002, the shareholders of the Company approved an increase in the
number of authorized shares to 40,000,000.

During the year ended December 31, 2002, the Company issued 305,435 shares of
its common stock for services rendered. The shares were issued at the fair value
at the date of the issuance which were at prices ranging from $.31 to $.97. The
Company recorded an expense of $196,593 and deferred compensation of $18,216. At
December 31, 2002 the balance remaining of deferred compensation was $4,048.

On March 1, 2002, the Company raised $2,625,625 through a private placement of
70 units ($37,500 per unit), each unit consisting of 50,000 shares of the
Company's common stock and 50,000 common stock warrants exercisable at $1.25 per
share with an expiration date of five years from the date of closing. The
Company incurred costs of $315,075 associated with the sale of the units.

In October 2002, the Company raised $250,000 through a private placement of
610,000 shares to two accredited investors. In addition the Company issued
305,000 common stock purchase warrants exercisable at $.50 per share with an
expiration date of five years from the date of closing. The Company incurred
costs of $25,000 associated with the sale of the shares.

During the year ended December 31, 2002, the Company issued 30,000 shares at a
price of $.75 per share, the fair value at the date of issuance, in connection
with a note payable issued in November 2001. The Company recorded interest
expense in the amount of $22,500 in connection with this transaction.

                                      F-16
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY, CONTINUED

COMMON STOCK, CONTINUED

A former employee of the Company was issued 15,000 shares of common stock from
the company's 2001 Equity Compensation Plan as settlement of a contractual
dispute. An expense in the amount of $6,900 was recorded in connection with the
settlement.

COMMON STOCK OPTION AND WARRANTS

1999 STOCK OPTION PLAN

On July 19, 1999, the board of directors adopted the Company's 1999 Stock Option
Plan (the "1999 Plan"). The company has reserved 1,500,000 shares of common
stock for issuance upon exercise of options granted from time to time under the
1999 stock option plan. The 1999 stock option plan is intended to assist the
Company in securing and retaining key employees, directors and consultants by
allowing them to participate in the Company's ownership and growth through the
grant of incentive and non-qualified options. Under the stock option plan, the
Company may grant incentive stock options only to key employees and employee
directors, or the Company may grant non-qualified options to employees,
officers, directors and consultants. The 1999 stock option plan is currently
administered by the Company's board of directors. Subject to the provisions of
the 1999 stock option plan, the board will determine who shall receive options,
the number of shares of common stock that may be purchased under the options,
the time and manner of exercise of options and exercise prices. The term of the
options granted under the 1999 stock option plan may not exceed ten years (five
years for an incentive stock option granted to an optionee owning more than 10%
of our voting stock). The exercise price for incentive stock options will be
equal to or greater than 100% of the fair market value of the shares of the
common stock at the time granted. However, the incentive stock options granted
to a 10% holder of the Company's voting stock are exercisable at a price equal
to or greater than 110% of the fair market value of the common stock at the date
of the grant. The exercise price for non-qualified options will be set by the
board, in its discretion, but in no event shall the exercise price be less than
75% of the fair market value of the shares of common stock on the date of grant.
The exercise price may be payable in cash or, with the approval of the board, by
delivery of shares or a combination of cash and shares. Shares of common stock
received upon exercise of options will be subject to restrictions on sale or
transfer. As December 31, 2002, the Company has granted 1,500,000 options under
the 1999 stock option plan.

2001 EQUITY COMPENSATION PLAN

On November 26, 2001, the board of directors adopted the Company's 2001 Equity
Compensation Plan (the "2001 Plan"). The Company has reserved 2,000,000 shares
of the Company's common stock. The purpose of the 2001 Plan is to provide
designated employees, certain key advisors who perform services for the Company,
and non-employee board members with the opportunity to receive grants of
incentive stock options, nonqualified stock options and restricted stock. The
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefiting the Company's
shareholders.

                                      F-17
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY, CONTINUED

COMMON STOCK OPTION AND WARRANTS, CONTINUED

2001 EQUITY COMPENSATION PLAN, CONTINUED

The Plan will be administered by the Company's board of directors or a committee
appointed by the board.

Subject to the provisions of the stock option plan, the board of directors or
its appointed committee shall have the sole authority to determine the
individuals to whom grants shall be made, the type, size and terms of the grants
to be made to each individual. In addition, the board or its appointed committee
will determine the time when the grants will be made and the duration of grants
including exercise or restrictions and criteria for exercisability.

The term of the options granted under the 2001 Plan may not exceed ten years
(five years for an incentive stock option granted to an optionee owning more
than 10% of our voting stock). The exercise price for incentive stock options
may be equal to or greater than the fair market value of the shares of the
common stock at the time granted. However, the incentive stock options granted
to a 10% holder of the Company's voting stock are exercisable at a price equal
to or greater than 110% of the fair market value of the common stock at the date
of the grant. In the case of an option granted that qualifies as performance
based compensation, the exercise price may not be less than 100% of the fair
market value of the Company's stock on the date of grant. The exercise price for
non-qualified options granted to non-employee directors, shall equal 100% of the
fair market value of the Company's common stock at the date of grant. The
exercise price may be payable in cash or, with the approval of the board, by
delivery of shares or a combination of cash and shares. Shares of common stock
received upon exercise of options will be subject to restrictions on sale or
transfer. As of December 31, 2002, the Company has granted 951,333 options under
the 2001 stock option plan.

During 2001, the Company granted options to purchase 1,385,000 shares of common
stock to certain employees of the Company under the 1999 Plan and 537,500 shares
under the 2001 Plan. The options are exercisable at per share prices ranging
from $.39 to $.50 per share and $.63 to $.69 per share, respectively, which was
the fair market value of the common stock at the grant date. Accordingly, under
APB 25, no compensation expense was recognized.

During 2001, the Company granted options to purchase 100,000 shares of common
stock to consultants of the Company under the 1999 Plan and 13,000 shares under
the 2001 Plan. The options are exercisable at a price of $.39 per share and $.63
per share, respectively, which was the fair market value of the common stock at
the grant date. Consulting expense in the amount of $22,348 was recorded for the
year ended December 31, 2001 relating to these options.

During 2002, the Company granted options to purchase 50,000 shares of common
stock to certain employees of the Company under the 1999 Plan and 505,000 shares
under the 2001 Plan. The options expire in two or three years from the grant
date. The options are exercisable at per share prices ranging from $.45 to $.75
per share and $.45 to $.86 per share, respectively, which was the

                                      F-18
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY (CONTINUED)

COMMON STOCK OPTION AND WARRANTS, CONTINUED

fair value of the common stock at the grant date. Accordingly, under APB 25, no
compensation expense was recognized.

In September 2002, the Company canceled 139,167 options that were not exercised
prior to expiration or termination of employment from employees.

The per-share weighted average exercise price of stock options granted during
2002 and 2001 was $0.78 and $0.51, respectively, on the date of grant using the
Black-Scholes pricing model and the following assumptions:

                                                2002         2001
                                                ----         ----
     Expected dividend yield                      0%           0%
     Risk-free interest rate                    4.0%         5.0%
     Annualized volatility                      108%       54%-105%
     Expected life, in years                    2-5          2-5

Stock option activity for the years ended December 31, 2002 and 2001 is
summarized as follows:
                                         Number of    Weighted average
                                          shares       exercise price
                                        ----------     --------------
Outstanding at December 31, 2000                 -         $   -
    Granted ....................         2,035,500          0.51
    Exercised ..................                 -             -
    Canceled ...................                 -             -
                                        ----------         -----

Outstanding at December 31, 2001         2,035,500          0.51
    Granted ....................           555,000          0.78
    Exercised ..................                 -          0.00
    Canceled ...................          (139,167)          .51
                                        ----------         -----

Outstanding at December 31, 2002         2,451,333         $0.57
                                        ==========         =====

The following table summarizes the Company's stock options outstanding at
December 31, 2002:

                              Options outstanding and exercisable
                              ------------------------------------
                                            Weighted      Weighted
                                             average      average
         Range of                           remaining     exercise
      exercise price           Number         life         price
      ---------------         ---------     ---------     --------
      $     0.39-0.50         1,500,000       1.56        $ 0.45
      $     0.57-0.69           486,333       3.43          0.63
      $     0.75-0.86           465,000       4.11          0.83
                              ---------
                              2,451,333
                              =========

                                      F-19
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY (CONTINUED)

COMMON STOCK OPTION AND WARRANTS, CONTINUED

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"), encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees", and related Interpretations.
Accordingly, compensation cost for stock options is measured as the excess, if
any, of the estimated fair value of the Company's stock at the date of the grant
over the amount an employee must pay to acquire the stock. The Company has
adopted the "disclosure only" alternative described in SFAS 123 and SFAS 148,
which require pro forma disclosures of net income and earnings per share as if
the fair value method of accounting had been applied.

The following table presents pro forma net loss and per share amounts as if the
fair value method had been applied to employee stock options granted:

                                               Years Ended December 31,
                                                2002              2001
                                           -------------     -------------
Net (loss):
 As reported ..........................    $  (2,343,069)    $  (2,013,686)
 Pro forma ............................       (2,668,519)       (2,464,796)

Diluted income (loss) per common share:
 As reported ..........................    $       (0.16)    $       (0.21)
 Pro forma ............................            (0.18)            (0.25)

On March 28, 2001, the Company granted 654,000 common stock purchase warrants
through a private placement. The warrants are exercisable at prices ranging from
$.50 to $1.50 per share. In addition, the Company issued to a consultant that
provided services in relation to securing the proceeds of this offering, 627,500
common stock purchase warrants exercisable at $0.50 per share which was the fair
market value of the common stock at that date. Consulting expense in the amount
of $25,650 was recorded for the year ended December 31, 2001.

During the year ended December 31, 2002 the Company granted 4,721,090 common
stock purchase warrants through a private placement. The warrants are
exercisable at prices ranging from $.50 to $1.50 per share.

During the year ended December 31, 2002 the Company canceled 50,000 common stock
purchase warrants that were not exercised prior to expiration or termination of
employment.

Stock warrant activity for the years ended December 31, 2002 and 2001 is
summarized as follows:

                                      F-20
<PAGE>
                       SENSE HOLDINGS, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 - STOCKHOLDERS' EQUITY (CONTINUED)

COMMON STOCK OPTION AND WARRANTS, CONTINUED

                                         Number of    Weighted average
                                          shares       exercise price
                                        ----------     --------------
Outstanding at December 31, 2000                 -         $   -
    Granted ....................         1,281,500          0.98
    Exercised ..................                 -             -
    Canceled ...................                 -             -
                                        ----------         -----

Outstanding at December 31, 2001         1,281,500          0.98
    Granted ....................         4,721,090          1.19
    Exercised ..................                 -          0.00
    Canceled ...................           (50,000)         0.98
                                        ----------         -----

Outstanding at December 31, 2002         5,952,590         $0.99
                                        ==========         =====

The following table summarizes the Company's stock warrants outstanding at
December 31, 2002:

                              Options outstanding and exercisable
                              ------------------------------------
                                            Weighted      Weighted
                                             average      average
         Range of                           remaining     exercise
      exercise price           Number         life         price
      ---------------         ---------     ---------     --------
      $          0.50           981,300       3.87          0.50
      $     1.25-1.50         4,971,290       4.07          1.28
                              ---------
                              5,952,590
                              =========

NOTE 12 - SUBSEQUENT EVENTS

In January 2003 the Company granted 10,000 shares of the Company's common stock
to a consultant in consideration for services rendered during the month of
December 2002.

In February and March 2003 the Company granted 10,000 and 10,250 shares,
respectively, of the Company's common stock to a consultant in consideration for
services rendered during the months of January and February 2003.

Subsequent to the balance sheet date, the Company is attempting to raise
additional capital, from accredited investors, under a private placement
memorandum of 15 units at a price of $50,000 per unit in order to raise up to a
total of $750,000. Each unit consists of a Promissory Note of $50,000 and a
Common Stock Purchase Warrant to purchase 25,000 shares of the Company's common
stock exercisable at $.35 per share. The purchase warrants expire in five years
from the date of the warrant. The notes have a term of one year and provide for
interest accrual on the unpaid principal balance of 10% per year. Under the
terms of the note, interest is payable quarterly commencing on May 1, 2003. As
of the date of the report no units had been sold and no funds had been received
in connection with this offering.

                                      F-21