United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

For the Year Ended December 31, 2002          Commission File Number:  333-85011

                                   STRATABASE
                 (Name of small business issuer in its charter)

               Nevada                                  88-0414964
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

                34595 3rd Ave., Suite 101
                Abbotsford, BC, Canada                  V2S.8B7

        (Address of principal executive offices)      (Zip Code)

         Issuer's telephone number, including area code: (604) 504-5811

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

                                      None

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

                     Common Stock, par value $.001 per share
                                (Title of Class)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act 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-K
or any amendment to this Form 10-KSB. [ ]

     The issuer's revenues for its most recent fiscal year were $430,240.

     Based on the closing sales price of the Common Stock on March 28, 2003, the
aggregate market value of the voting stock of registrant held by  non-affiliates
was $4,034,300.

     The  registrant  has one  class  of  Common  Stock  with  8,033,372  shares
outstanding as of March 28, 2003.

                    Documents Incorporated By Reference: None

     Transitional  Small Business Issuer  Disclosure Format (check one): Yes [ ]
No [X].


<PAGE>





Item 1.    Description of Business.

Stratabase  is a provider of Knowledge  Worker  Automation  software.  Knowledge
Worker  Automation  (KWA)  software,  of which  Enterprise  and CRM software are
components,  is  designed to allow  enterprises  to improve  the  efficiency  of
knowledge  workers.  The KWA  software we have  produced  consists of  web-based
software  tools.  These  tools allow  enterprises  to manage  relationships  and
contacts,  administer and organize time  allocations,  collaborate  with others,
manage data,  automate  communications and productivity  reporting,  and conduct
data synchronization.

We have developed both  proprietary  and open source  software.  Although in the
past we have focused  predominantly on developing open source code software,  we
have altered our direction to focus on proprietary software development.

It was originally thought by management that the demand for open source software
would increase significantly over time, and that open source software developers
would realize significant revenue from associated service contracts.  While this
has indeed happened over the last four years in the software  industry,  we have
seen  much  of  the  anticipated  service  revenues  go to  established  service
contractors  such as the  likes  of IBM,  and not to  small  companies  like us.
Therefore it was  determined by  management  that we can extract more value from
our software by keeping it proprietary,  and offering it on a subscription basis
as a hosted solution.

We previously generated revenues by selling databases of sales leads and mailing
lists,  and  providing  technical  services  aimed to customize  and improve the
quality of the  databases we sold.  Such  technical  services and  customization
substantially occurred prior to sale of databases.  Our open source software was
designed  to allow  users to  interface  with and manage  these  databases,  and
customer relationships.  It was the expectation of management that by giving the
software away for free and making it open source, we would create demand for our
database and technical services.

Specifically,  in 2001 and 2002,  when we  employed  this open  source  business
model,  89% and 91%,  respectively,  of our revenues related to the provision of
databases  to our  customers  and  11%  and  9%,  respectively,  related  to the
provision of  technical  and hardware  services.  Revenue for the quarter  ended
March 31, 2003 was $5,000.  However,  the  magnitude  of these  revenues was not
sufficient to generate the level of shareholder  value that management  feels is
expected by its  shareholders.  Therefore the decision was made by management to
alter  Stratabase's  business  model to focus on  proprietary  software.  We are
therefore no longer supporting open source code software.  We have not yet begun
selling our proprietary software.  However we did release the first phase of our
proprietary  software (the  software is called  "Resync") in the last quarter of
2002,  but we are offering it as a free trial  version for now in order to judge
consumer  interest.  We do not  know  whether  we will be able to  generate  any
revenue  from Resync.  Currently,  we are  beta-testing  the second phase of our
proprietary software (the software is called "Relata").  Approximately 200 users
have already  signed up for a free trial use of Relata.  We have not derived any
revenue to date from our  proprietary  products.  Although we intend to generate
sales of Relata by using direct mail  advertising and the Internet,  there is no
assurance that we will be  successful.  With the closing of our second office we
lost the  services  of two of our  salespeople,  and  therefore  have not had an
active sales staff to sell our database services.  Although we expect to rebuild
our sales staff in this area, we have not yet found suitable personnel for these
positions.

Stratabase  was  incorporated  under the laws of the State of Nevada on November
18, 1998 and commenced operations in January 1999. For the period from inception
to December 31, 1999, we operated in the development  stage.  Substantially  all
activity  during this period  through  1999 was devoted to the raising of equity
capital and development of our long-term business model, up until the completion
of our initial public  offering in February 2000. Our office is located at 34595
3rd Avenue, Suite 101, Abbotsford,  BC, V2S.8B7, Canada. The telephone number is
(604) 504-5811.

OUR FOCUS

We engineer Knowledge Worker Automation (KWA) software,  of which Enterprise and
CRM  software are  components.  The KWA  software we have  produced  consists of
web-based software tools. These tools allow enterprises to manage  relationships
and contacts, administer and organize time allocations, collaborate with others,
manage data,  automate  communications and productivity  reporting,  and conduct
data synchronization.

The software we have developed is:

-    mostly  web-based,  meaning that it can be accessed  through a standard web
     browser;
-    designed to appeal to the needs of  enterprises  with hundreds of potential
     users:
-    adaptable,  meaning that users can modify the functionality by establishing
     preferences;
-    functionally  reliable,  as bug  reports  and  performance  statistics  are
     regularly monitored by our programming staff.

In addition to developing this KWA software, we have developed extensive written
documentation and user support  materials.  Our programming staff has prepared a
manual and other  documentation  that describes the features of our software and
advises the user on how best to utilize these features.  Our staff monitors on a
daily basis the technical  support  inquiries  and bug reports,  and to a lesser
extent the software performance  statistics,  in order to ensure the software is
functionally reliable.

Core Products and Services

We have not yet begun selling our proprietary  software.  However we did release
the first phase of our proprietary software (the software is called "Resync") in
Q4 2002,  but we are  offering  it as a free trial  version  for now in order to
judge consumer interest.  We do not know whether we will be able to generate any
revenue  from  Resync.  Currently  we are  beta-testing  the second phase of our
proprietary  software  (the  software is called  "Relata").  Although we plan to
offer it as a hosted solution, and charge users on a monthly basis for access to
it, we do not know  whether we will be able to generate  any  revenue  from this
product.  We also do not know if our direct  mail and  Internet  advertising  of
Relata will successfully  generate any sales. We have not derived any revenue to
date from our proprietary products.

In the past we have  utilized  a business  model  built  around the open  source
software we have developed.  Historically we have generated  revenues by selling
databases of sales leads and mailing  lists,  and providing  technical  services
aimed to customize  and improve the quality of the  databases we sold;  our open
source  software was designed to allow users to interface  with and manage these
databases, and customer relationships. The model hypothesized that by giving the
software  away for free and making it open  source,  demand would be created for
our database and technical  services.  Customers who purchase  databases from us
are not required to use our open source software, however it is easier to manage
and  interface  with  these  databases  by  using  our  open  source   software,
particularly  when the  databases  are very  large.  Although  we are no  longer
supporting our open source software,  we plan to continue  offering database and
technical services.  However,  with the closing of our second office we lost the
services of two of our  salespeople,  and therefore have not had an active sales
staff to sell our database and technical services. Although we expect to rebuild
our sales staff in this area, we have not yet found suitable personnel for these
positions.

Competition

In the broader market for Knowledge Worker Automation  software,  which includes
Enterprise  and CRM  software,  there  are a large  number  of  well-established
companies  that  have   significantly   greater  financial   resources,   larger
development  staffs and more extensive  marketing and distribution  capabilities
than we do. These competitors include thousands of established software vendors,
some of them very large,  including the likes of Microsoft  and Siebel  Systems,
and some of them much smaller, such as Pivotol,  Hummingbird and Documentum. The
market  for this  software  is broad  and  covers  many  aspects  of  enterprise
computing.  Many of these  competitors  are  well  positioned  vendors  who have
established  and stable  customer  bases and continue to attract new  customers.
Most of these companies are larger and more  experienced  organizations  than we
are. In addition,  we face potential competition from many companies with larger
customer bases,  greater financial  resources and stronger name recognition than
we have.

Software markets are seldom  characterized by traditional barriers to entry that
are found in many traditional markets. Accordingly, new competitors or alliances
among competitors can emerge and rapidly acquire significant market share.

We believe that the major factors  affecting the  competitive  landscape for our
software and related services include:

     -    name and reputation of software and service provider;
     -    product performance and functionality;
     -    strength of relationships in the software community;
     -    availability of user applications;
     -    ease of use;
     -    networking capability;
     -    breadth of hardware compatibility;
     -    quality of related services;
     -    distribution strength; and
     -    alliances with industry partners.

Although we believe that we will compete  favorably with many of our competitors
in a number of respects, including product performance and functionality and the
fact that our  product  will be offered as a hosted and  web-based  service,  we
believe  that many of our  competitors  enjoy  greater  name  recognition,  have
software  which  has  more  features  than  our  software  does,  have  superior
distribution  capabilities  and offer more  extensive  support  services than we
currently do. In addition,  there are significantly more applications  available
for competing software  solutions,  than there are for ours. An integral part of
our strategy in the future,  however, is to address these shortcomings by, among
other things, offering our software as a hosted and entirely web-based solution;
providing more services to our clients that have high associated  margins;  and,
enhancing the software's functionality.

Intellectual Property

The software we have developed falls into two  categories:  proprietary and open
source.

The  proprietary  software  we  have  developed  is the  exclusive  property  of
Stratabase,  and we retain all  copyright  and  ownership  of this  intellectual
property.

The open source software we have developed has been made available for licensing
under the GNU General Public License (GPL), pursuant to which anyone, generally,
may copy,  modify and distribute the software,  subject only to the  restriction
that any resulting or derivative  work is made available to the public under the
same terms. Therefore, although we retain the copyrights to the code, due to the
GPL and the open  source  nature  of our  software,  the  intellectual  property
contained within the software does not belong to us, nor to anyone else. That is
the nature of open source software.  However,  we do enter into  confidentiality
and nondisclosure agreements with our employees and consultants.

We are pursuing registration of the Stratabase and Relata trademarks in the U.S.
However we may be unable to detect the  unauthorized use of, or take appropriate
steps to enforce, our trademark rights.  Although we have begun the registration
process of our trademarks in the U.S., it is not yet complete.  Additionally, we
do not have any assurances that the trademark  applications  will be successful.
Failure to adequately  protect our  trademark  rights could harm or even destroy
the Stratabase brand and impair our ability to compete effectively. The value to
creating market  awareness of the Stratabase and Relata marks will be diminished
if we cannot protect the name. Furthermore, defending or enforcing our trademark
rights could result in the  expenditure of significant  financial and managerial
resources.

Although we do not believe  that our  business  infringes on the rights of third
parties,  there  can  be  no  assurance  that  third  parties  will  not  assert
infringement claims against us in the future or that any such assertion will not
result in costly  litigation  or require  us to obtain a license to third  party
intellectual  rights. In addition,  there can be no assurance that such licenses
will be available on reasonable terms or at all.

Employees

As of July 1, 2003, we had 4 employees,  including our two officers,  Mr. Trevor
Newton, Chairman of the Board, President,  Secretary, Treasurer and CEO, and Mr.
Fred Coombes, Vice President of Corporate Development and a Director. Mr. Newton
supervises the company's operations.  It is anticipated that we will need to add
additional managerial, technical and administrative staff in the future in order
to realize our business objectives.  We currently utilize 2 software programmers
and outsource to outside software contractors on an as-needed basis.

Our equipment and primary agreements

We lease a Bandwidth/Connectivity (fiber optic line) from BCTel/Telus. It is the
subject of a three-year agreement which commenced on February 1, 2001, and calls
for a monthly fee of $1,000.

Additionally,  we pay an annual premium of  approximately  $1,500 for a one year
term  comprehensive  general  liability  insurance  policy  with  the  following
coverages:  (i) general liability - $1,400,000;  (ii) database - $150,000; (iii)
hardware  -  $125,000;  and  (iv)  Flood/Earthquake  -  $185,000.  (Figures  are
converted from Canadian dollars).

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

You should read this  discussion  together  with our  financial  statements  and
related notes included elsewhere in this report.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

The matters discussed in this section and in certain other sections of this Form
10-KSB contain  forward-looking  statements within the meaning of Section 21D of
the  Securities  Exchange  Act of  1934,  as  amended,  and  Section  27A of the
Securities Act of 1933, as amended,  that involve risks and  uncertainties.  All
statements other than statements of historical information provided herein maybe
deemed to be  forward-looking  statements.  Without limiting the foregoing,  the
words  "may",  "will",  "could",  "should",  "intends",   "thinks",  "believes",
"anticipates",  "estimates",  "plans",  "expects", or the negative of such terms
and similar  expressions are intended to identify  assumptions and uncertainties
which could cause actual results to differ  materially  from those  expressed in
them.  Any  forward-looking  statements  are  qualified  in  their  entirety  by
reference  to the  factors  discussed  throughout  this  report.  The  following
cautionary  statements  identify  important  factors that could cause our actual
results  to  differ  materially  from  those  projected  in the  forward-looking
statements made in this report. Among the key factors that have a direct bearing
on our results of operations are:

-    General  economic  and  business  conditions;  the  existence or absence of
     adverse  publicity;  changes  in, or  failure  to comply  with,  government
     regulations;  changes in marketing  and  technology;  changes in political,
     social and economic conditions;

-    Increased competition in the Internet;  Internet capacity;  general risk of
     the Internet.

-    Success  of  operating   initiatives;   changes  in  business  strategy  or
     development plans; management of growth;

-    Availability, terms and deployment of capital;

-    Costs and other effects of legal and administrative proceedings;

-    Dependence  on  senior  management;  business  abilities  and  judgment  of
     personnel;  availability of qualified personnel; labor and employee benefit
     costs;

-    Development risks; risks relating to the availability of financing, and

-    Other factors referenced in this report.

Because  the risks  factors  referred to above  could  cause  actual  results or
outcome  to  differ  materially  from  those  expressed  in any  forward-looking
statements  made  by us,  you  should  not  place  undue  reliance  on any  such
forward-looking statements.  Other factors may be described from time to time in
our filings with the Securities and Exchange Commission, news releases and other
communications.  Further,  any  forward-looking  statement speaks only as of the
date  on  which  it is  made  and we  undertake  no  obligation  to  update  any
forward-looking statement or statements to reflect events or circumstances after
the date on  which  such  statement  is made or to  reflect  the  occurrence  of
unanticipated  events.  New  factors  emerge  from  time to time,  and it is not
possible for us to predict which will arise.  In addition,  we cannot assess the
impact of each  factor on our  business  or the extent to which any  factor,  or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.

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

OVERVIEW

We are a provider of Knowledge  Worker  Automation  software.  Knowledge  Worker
Automation (KWA) software,  of which Enterprise and CRM software are components,
is designed to allow enterprises to improve the efficiency of knowledge workers.
The KWA software we have produced  consists of web-based  software tools.  These
tools allow  enterprises to manage  relationships  and contacts,  administer and
organize  time  allocations,  collaborate  with others,  manage  data,  automate
communications and productivity reporting, and conduct data synchronization.

We have developed both  proprietary  and open source  software.  Although in the
past we have focused  predominantly on developing open source code software,  we
have altered our direction to focus on proprietary software development.

It was originally thought by management that the demand for open source software
would increase significantly over time, and that open source software developers
would realize significant revenue from associated service contracts.  While this
has indeed happened over the last four years in the software  industry,  we have
seen  much  of  the  anticipated  service  revenues  go to  established  service
contractors  such as the  likes  of IBM,  and not to  small  companies  like us.
Therefore it was  determined by  management  that we can extract more value from
our software by keeping it proprietary,  and offering it on a subscription basis
as a hosted solution.

We previously generated revenues by selling databases of sales leads and mailing
lists,  and  providing  technical  services  aimed to customize  and improve the
quality of the  databases we sold.  Such  technical  services and  customization
substantially occurred prior to sale of databases.  Our open source software was
designed  to allow  users to  interface  with and manage  these  databases,  and
customer relationships.  It was the expectation of management that by giving the
software away for free and making it open source, we would create demand for our
database and technical services.

Specifically,  in 2001 and 2002,  when we  employed  this open  source  business
model,  89% and 91%,  respectively,  of our revenues related to the provision of
databases  to our  customers  and  11%  and  9%,  respectively,  related  to the
provision of technical and hardware  services.  However,  the magnitude of these
revenues  was not  sufficient  to generate the level of  shareholder  value that
management  feels is expected by its  stakeholders.  Therefore  the decision was
made by management to alter Stratabase's  business model to focus on proprietary
software.  We are therefore no longer  supporting open source code software.  We
have not yet begun selling our proprietary software.  However we did release the
first phase of our proprietary software (the software is called "Resync") in the
last quarter of 2002,  but we are offering it as a free trial version for now in
order to judge  consumer  interest.  We do not know  whether  we will be able to
generate any revenue from Resync. Currently we are beta-testing our second phase
of our proprietary software (the software is called "Relata"). Approximately 200
users have already signed up for a free trial use of Relata. We have not derived
any  revenue  to date from our  proprietary  products.  With the  closing of our
second office we lost the services of two of our salespeople, and therefore have
not had an active sales staff to sell our database services.  Although we expect
to  rebuild  our  sales  staff  in this  area,  we have not yet  found  suitable
personnel for these positions.

We were incorporated under the laws of the State of Nevada on November 18, 1998,
and commenced  operations in January 1999.  Our offices are located at 34595 3rd
Avenue,  Suite 101,  Abbotsford,  BC, V2S.8B7,  Canada.  The telephone number is
(604) 504-5811.

CRITICAL ACCOUNTING POLICIES

In the ordinary  course of business,  the company has made a number of estimates
and assumptions relating to the reporting of results of operations and financial
condition in the  preparation  of its financial  statements  in conformity  with
accounting  principles  generally accepted in the United States.  Actual results
could differ significantly from those estimates under different  assumptions and
conditions. We believe that the following discussion addresses our most critical
accounting policies, which are those that are most important to the portrayal of
our  financial  condition and results.  We are  constantly  re-evaluating  those
significant factors and makes adjustments where facts and circumstances dictate.
Historically,   actual  results  have  not  significantly  deviated  from  those
determined  using  the  necessary  estimates  inherent  in  the  preparation  of
financial statements. Estimates and assumptions include, but are not limited to,
customer receivables,  inventories,  office equipment, databases and domain name
lives, deferred income tax benefits,  contingencies and litigation. We have also
chosen  certain  accounting  policies when options were  available.  Significant
accounting policies include:

*    The first-in, first-out (FIFO) method to value our inventories; and

*    The  intrinsic  value  method,  or APB  Opinion  No. 25, to account for our
     common stock incentive awards; and

*    We record an allowance  for credit  losses based on estimates of customers'
     ability  to  pay.  If the  financial  condition  of our  customers  were to
     deteriorate, additional allowances may be required.

*    We have not recorded an  allowance  for credit  losses  related to our note
     receivable.  Should the financial condition of the note issuer deteriorate,
     additional allowances may be required.

*    We are  amortizing  our databases and domain names over three years and two
     years, respectively, their estimated remaining useful lives.

*    Software development costs associated with new products and enhancements to
     existing  software  products are expensed as incurred  until  technological
     feasibility in the form of a working model has been  established.  To date,
     in  development  of open  source  software,  the time  period  between  the
     establishment  of  technological  feasibility  and  completion  of software
     development has been short, and no significant  development costs have been
     incurred during that period. Additionally,  the Company only recently began
     developing  proprietary  software  and  no  significant  development  costs
     meeting the  criteria for  capitalization  have been  incurred  during that
     period.   Accordingly,   the  Company  has  not  capitalized  any  software
     development costs to date.

Software  development  and  implementation  costs are expensed until the Company
determines that the software will result in probable  future  economic  benefits
and  management  has  committed to funding the project.  Thereafter,  all direct
external  implementation  costs and purchase  software costs are capitalized and
amortized using the straight-line  method over remaining estimated useful lives,
generally not exceeding five years. To date, such costs are not significant. The
Company  only  recently  began  developing  prepackaged  software  for  sale  to
potential customers.

These accounting policies are applied consistently for all years presented.  Our
operating results would be affected if other alternatives were used. Information
about the  impact  on our  operating  results  is  included  in the notes to our
financial statements.

RESULTS OF OPERATIONS

REVENUES

Revenues  for the year ended  December  31,  2002,  were  $430,240,  compared to
revenues of $2,360,452  for the year ended  December 31, 2001.  Revenues for the
three months ended  December 31,  2002,  were  $10,705,  compared to revenues of
$1,456,067 for the three months ended for the same period in 2001. Revenues have
remained down primarily  because of our focus on developing our new  proprietary
software products, which has taken longer than expected,  resulting in more time
being taken away from the sales and marketing of our  traditional  product line.
As of December 2002, we released to the public a new software product. This is a
proprietary  software  product and is available  on a trial basis to  interested
users.  However,  our  primary  proprietary  software  product  has not yet been
released,  and we anticipate its release in the early part of the second quarter
of 2003. It will be made available to users on a monthly subscription basis.

OPERATING EXPENSES

Operating expenses for the years ended December 31, 2002 and 2001, were $579,762
and $1,607,102,  respectively. The 2002 operating expenses consisted of $255,750
stock  compensation  expense  recognized as a result of options being granted at
less than fair market value to a key sales person in May 2002; $111,641 of sales
commissions;  $94,345 of wages and  subcontracting  costs;  $79,238 of marketing
expenses;  $26,235  was for  hardware  costs  incurred  on sales for our systems
integration  solutions;  and  $12,553 of such  expenses  consisted  of  Internet
connectivity  costs.  Hardware costs decreased  significantly as a result of the
previously mentioned discontinuation in this product line.


GENERAL AND ADMINISTRATIVE EXPENSES

General and Administrative  (G&A) expenses for the years ended December 31, 2002
and 2001,  were  $710,689 and $441,571,  respectively.  For the year ended 2002,
$281,326  consisted of  depreciation  and  amortization;  $181,514  consisted of
legal, accounting, and consulting fees, of which, a substantial portion of these
fees are incurred  because we are a public  company;  and $122,710 of management
fees for the services of our executive management.  For the year ended 2001, the
$441,571  of G&A  expenses  consisted  of  $96,000  of  management  fees  to our
President  and  to  our  Vice  President;  $83,183  of  legal,  accounting,  and
consulting fees; a substantial portion of these fees are incurred because we are
a public company. A significant  portion of the databases acquired at the end of
2001 were  placed  into  service and led to the  increase  in  depreciation  and
amortization  by  $91,459  of such  expense  for the  year  ended  2001.  Legal,
accounting and  consulting  fees increased from $98,331 as a result of increases
in the fees being charged by our auditors and legal  providers . Management fees
increased  from  $26,710 from the year ended 2001 as a result of the decision of
the board to increase these fees. .

LIQUIDITY AND CAPITAL RESOURCES

As of  December  31,  2002,  we had  $134,093  in cash and cash  equivalents,  a
decrease of $1,131,364  since December 31, 2001, and a decrease of 153,898 since
September 30, 2002.  The  significant  decrease in cash as compared to the prior
year end is primarily  attributable  to two factors:  losses from  operations in
2002  and a delay  in  cash  disbursements  for  three  significant  operational
expenses at the end of 2001.  Losses from  operations may continue in the future
as we shift our revenue model from our existing  product line to developing  and
selling new  proprietary  software.  If  revenues  and  spending  levels are not
adjusted  accordingly,  we may  not  generate  sufficient  revenues  to  achieve
sustained profitability. Even if sustained profitability is achieved, we may not
sustain or increase  such  profitability  on a quarterly  or annual basis in the
future.  Our policy is to pay all  operational  expenses when due,  provided the
vendor, in the normal course of business, has satisfied all necessary conditions
for  payment.  As  a  result,  we  had  outstanding  payable  balances  totaling
approximately $60,000 with 26 vendors at the end of 2002 that remained unpaid by
us. As of December 31, 2002, our accounts payable aging was as follows:

Current          $  22,112
31-60  days         25,240
61-90  days          8,541
91+  days            3,628
                 ---------
Total            $  59,521
                 =========



As of December 31, 2001 the Company had $841,944_in  accounts payable,  of which
93% consisted of one time purchases of data and single-time list rentals to five
vendors.  These purchases were single time events,  and were made at a time when
the Company was  actively  growing the size of its  internal  revenue-generating
database through data purchases and list rentals. By the end of 2002, we were in
the process of changing our business model to focus on proprietary  software and
were no longer  making data  purchases  or engaging  list  rental  vendors.  The
remainder of the accounts payable for year end 2001 ($57,049) was not materially
different from the total accounts  payable for year end 2002, which was $59,521,
consisting of $14,744 legal fees,  $11,919  accounting  fees. With the remainder
falling into several miscellaneous categories.

Our current  expenditures  average between thirty and fifty thousand dollars per
month.  We expect our monthly  expenditures to remain within this range over the
next twelve months. As a result of the $350,000 private  placement  concluded in
April 2003, we believe that our available cash, together with operating revenues
expected to commence by the third quarter of 2003,  should be sufficient to fund
our working capital requirements for at least the next six months of operations.
However,  we will  need to raise  additional  funds to  finance  our  operations
subsequent to December 31, 2003.  We expect to raise funds by selling  equity in
the company,  however no specific plans for doing so have been  established  nor
have potential  investors been approached,  and there can be no assurances as to
whether any equity financing will be available.

We have no long-term debt. We have reduced our expenses by downsizing  staff and
closing one of our offices.  We believe that our available  cash,  together with
operating  revenues,  will be sufficient to fund our immediate  working  capital
requirements.  We further believe that we can generate  sufficient  liquidity to
carry out our operational activities.  We have no long-term employment contracts
and can reduce our work-force,  as necessary,  if revenues are not sufficient to
support our existing operations or until additional funding can be obtained.

We will  require  additional  capital  to fund  operations,  take  advantage  of
acquisition   opportunities,   develop  or  enhance  services,   or  respond  to
competitive  pressures.  We  cannot  be  certain  that any  required  additional
financing  will be available on terms  favorable to us. If additional  funds are
raised by the  issuance of our equity  securities,  such as through the issuance
and exercise of warrants, then existing stockholders will experience dilution of
their ownership interest. If additional funds are raised by the issuance of debt
or other equity  instruments,  we may be subject to certain  limitations  in our
operations,  and issuance of such  securities may have rights senior to those of
the then existing  holders of common stock.  If adequate funds are not available
or not  available  on  acceptable  terms,  we may be unable  to fund  expansion,
develop or enhance services or respond to competitive pressures.

Going Concern Consideration

Our  activities  have been  supported  by  available  cash on hand and  revenues
generated  from the sales of our  products  and  services.  As  indicated in the
accompanying  balance sheet, at December 31, 2002 we had approximately  $134,093
in cash and after  approximately  $66,455 of liabilities had only  approximately
$67,638  in  working  capital.  For the  year  ended,  we have  had a loss  from
operations of approximately $914,645.  Further, losses are continuing subsequent
to December  31,  2002.  We are in need of  additional  financing or a strategic
arrangement in order to continue our planned activities for the remainder of the
current fiscal year. These factors,  among others,  indicate that Stratabase may
be unable to continue operations in the future as a going concern.  Our plans to
deal with this  uncertainty  include further  reducing  expenditures and raising
additional capital or entering into a strategic  arrangement with a third party.
There can be no assurance that management's plans to reduce expenditures,  raise
capital or enter into a strategic arrangement can be realized. No adjustment has
been  made  in  the  accompanying   financial  statements  to  the  amounts  and
classification of assets and liabilities which could result should Stratabase be
unable to continue as a going concern.

Item 7.   Financial Statements.


<PAGE>


                                   STRATABASE

                          INDEPENDENT AUDITOR'S REPORT

                                       AND

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 2002 AND 2001


<PAGE>


INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Shareholders
Stratabase

We have audited the  accompanying  balance sheets of Stratabase,  as of December
31, 2002 and 2001, and the related  statements of operations  and  comprehensive
income (loss),  changes in  shareholders'  equity,  and cash flows for the years
then ended.  These financial  statements are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Stratabase,  as of December 31,
2002 and 2001,  and the  changes  in its  operations  and its cash flows for the
years then ended, in conformity with accounting principles generally accepted in
the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the Company experienced a significant reduction in their
revenues  in 2002 and changed  their  revenue  focus to a new product  line with
untested revenue  potential.  These conditions raise substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
those  matters are also  described in Note 3. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Moss Adams LLP

Portland, Oregon
February 26, 2003

                                        1


<PAGE>


                                   STRATABASE
                                 BALANCE SHEETS

                             ASSETS
<TABLE>
<CAPTION>
                                                             December 31,
                                                       --------------------------
                                                          2002           2001
                                                       -----------    -----------
CURRENT ASSETS
<S>                                                    <C>            <C>
      Cash                                             $   134,093    $ 1,265,457
      Receivables:
          Trade accounts                                     3,274         21,315
          Employee and other                                20,165         12,208
          Allowance for doubtful accounts                   (3,500)        (8,500)
      Note receivable, including accrued interest          171,206           --
      Inventory                                             28,450         21,363
      Refundable income taxes                               62,844           --
      Prepaid expenses                                       2,603           --
                                                       -----------    -----------

               Total current assets                        419,135      1,311,843
                                                       -----------    -----------

OFFICE EQUIPMENT
      Computer hardware                                     76,499         75,597
      Computer software                                     12,924         12,427
      Office furniture and equipment                        12,137         12,137
                                                       -----------    -----------

               Total office equipment                      101,560        100,161
      Less accumulated depreciation and amortization       (56,571)       (40,571)
                                                       -----------    -----------

               Office equipment, net                        44,989         59,590
                                                       -----------    -----------
OTHER ASSETS

      Deferred income taxes, net                              --           45,548
      Databases and domain names, net                      518,914        629,479
                                                       -----------    -----------

               Total other assets                          518,914        675,027
                                                       -----------    -----------

TOTAL ASSETS                                           $   983,038    $ 2,046,460
                                                       ===========    ===========
</TABLE>



                                       F-1


<PAGE>





                                   STRATABASE
                                 BALANCE SHEETS
--------------------------------------------------------------------------------



                  LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                      December 31,
                                                              --------------------------
                                                                  2002           2001
                                                              -----------    -----------

CURRENT LIABILITIES
<S>                                                           <C>            <C>
      Accounts payable                                        $    59,521    $   841,944
      Accrued liabilities                                           6,934          8,916
      Income taxes payable                                           --           50,265
                                                              -----------    -----------

             Total current liabilities                             66,455        901,125
                                                              -----------    -----------



COMMITMENTS AND CONTINGENCIES (Note 8)




SHAREHOLDERS' EQUITY
      Preferred stock, $.001 par value, 1,000,000 shares
          authorized and unissued                                    --             --
      Common stock, $.001 par value, 25,000,000 shares
          authorized; 8,033,372 and 7,718,372 shares issued
          and outstanding at December 31, 2002 and 2001,
          respectively                                              8,034          7,719
      Additional paid-in capital                                2,103,371      1,515,615
      Accumulated (deficit) earnings                             (808,563)       106,082
      Related-party notes received in exchange for
          the exercise of common stock options                   (375,000)      (477,000)
      Accumulated comprehensive loss                              (11,259)        (7,081)
                                                              -----------    -----------

             Total shareholders' equity                           916,583      1,145,335
                                                              -----------    -----------

TOTAL LIABILITIES AND SHAREHOLDERS'
      EQUITY                                                  $   983,038    $ 2,046,460
                                                              ===========    ===========
</TABLE>

See accompanying notes.

                                       F-2


<PAGE>


                                   STRATABASE
            STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(LOSS)
<TABLE>
<CAPTION>
                                                      Years Ended December 31,
                                                     --------------------------
                                                        2002           2001
                                                     -----------    -----------
<S>                                                  <C>            <C>
REVENUE                                              $   430,240    $ 2,360,452
                                                     -----------    -----------

OPERATING EXPENSES
      Direct marketing                                    79,238      1,185,968
      Hardware cost of sales                              26,235        100,908
      Commissions                                        111,641         48,403
      Wages and subcontracting costs                      94,345        259,494
      Compensation expense - stock options               255,750           --
      Internet connectivity                               12,553         12,329
                                                     -----------    -----------

             Total operating expenses                    579,762      1,607,102
                                                     -----------    -----------

             Net (operating expenses) revenues          (149,522)       753,350
                                                     -----------    -----------

GENERAL AND ADMINISTRATIVE EXPENSES                      710,689        441,571

OTHER INCOME

      Interest income                                     31,195          4,809
      Gain on sale of marketable equity securities          --          154,000
                                                     -----------    -----------

             Total other income                           31,195        158,809
                                                     -----------    -----------

NET (LOSS) INCOME BEFORE INCOME TAXES                   (829,016)       470,588

PROVISION FOR INCOME TAXES                                85,629         49,342
                                                     -----------    -----------

NET INCOME (LOSS)                                       (914,645)       421,246

OTHER COMPREHENSIVE LOSS
      Foreign currency translation adjustments            (4,178)        (4,249)
                                                     -----------    -----------

COMPREHENSIVE INCOME (LOSS)                          $  (918,823)   $   416,997
                                                     ===========    ===========

BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK        $     (0.12)   $      0.06
                                                     ===========    ===========

DILUTED INCOME (LOSS) PER SHARE OF COMMON STOCK      $     (0.12)   $      0.05
                                                     ===========    ===========
</TABLE>
                                       F-3
<PAGE>

                                   STRATABASE
                  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                          Retained       Related-       Accumulated
                                   Common Stock             Additional    Earnings        Party           Other         Total
                               -------------------------     Paid-In    (Accumulated      Notes       Comprehensive  Shareholders'
                                  Shares        Amount       Capital       Deficit)     Receivable        Loss          Equity
                               -----------   -----------   -----------   -----------    -----------    -----------    -----------
<S>                            <C>           <C>           <C>           <C>            <C>            <C>            <C>
BALANCE,
      December 31, 2000          6,653,772   $     6,654   $   782,455   $  (315,164)   $      --      $    (2,832)   $   471,113

Exercise of Class A warrants
      (January 2001)                14,600            15        14,585          --             --             --           14,600

Exercise of common stock
      options (April 2001)       1,050,000         1,050       673,950          --             --             --          675,000

Related-party notes
received in
      exchange for common
      stock options
      exercised                       --            --            --            --         (675,000)          --         (675,000)

Payments on related-party
      notes receivable                --            --            --            --          198,000           --          198,000

U.S. income tax benefit from common stock options
      exercised                       --            --          44,625          --             --             --           44,625

Net income and
      comprehensive
      loss                            --            --            --         421,246           --           (4,249)       416,997
                               -----------   -----------   -----------   -----------    -----------    -----------    -----------

BALANCE,
      December 31, 2001          7,718,372         7,719     1,515,615       106,082       (477,000)        (7,081)     1,145,335

Exercise of common stock
      options (April - July
                        2002)      315,000           315       241,685           --             --            --          242,000

Related-party notes
received in exchange for

      common stock options
      exercised                       --            --            --            --          (14,500)          --          (14,500)

Payments on related-party
      notes receivable                --            --            --            --          116,500           --          116,500

Compensation expense related
      to common stock

      options granted                 --            --         255,750          --             --             --          255,750

U.S.  income tax benefit from common stock options

      exercised                       --            --          90,321          --             --             --           90,321

Net loss and comprehensive
      loss                            --            --            --        (914,645)          --           (4,178)      (918,823)
                               -----------   -----------   -----------   -----------    -----------    -----------    -----------

BALANCE,

      December 31, 2002          8,033,372   $     8,034     2,103,371   $  (808,563)   $  (375,000)   $   (11,259)   $   916,583
                               ===========   ===========   ===========   ===========    ===========    ===========    ===========
</TABLE>

See accompanying notes.

                                       F-4

<PAGE>

                                   STRATABASE
                            STATEMENTS OF CASH FLOWS

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                Years Ended December 31,
                                                              ---------------------------
                                                                 2002            2001
                                                              -----------     -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                           <C>             <C>
      Net income (loss)                                       $  (914,645)    $   421,246
      Adjustments to reconcile net income (loss) to net
             cash from operating activities:
         Depreciation and amortization                            281,326          91,459
         Deferred income tax expense (benefit)                     45,548         (45,548)
         U.S. income tax benefit from common stock options
             options exercised                                     90,321          44,625
         Stock option compensation expense                        255,750            --
         Write-off of investment in Maturus.com, Inc.                --             2,250
         Services rendered for acquisition of databases              --           (88,473)

      Change in assets and liabilities:
         Receivables                                              (16,122)        109,026
         Income taxes receivable                                  (62,844)           --
         Prepaid expenses                                          (2,603)          3,965
         Inventory                                                 (7,087)         (8,859)
         Accounts payable                                        (782,423)        751,000
         Accrued liabilities                                       (1,982)        (12,415)
         Income taxes payable                                     (50,265)         50,265
                                                              -----------     -----------

                Net cash from operating activities             (1,165,026)      1,318,541
                                                              -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
      Advance on note receivable                                 (150,000)           --
      Acquisition of domain databases and names                  (154,761)       (466,288)
      Acquisition of office and computer equipment                 (1,399)        (14,948)
                                                              -----------     -----------

                Net cash from investing activities               (306,160)       (481,236)
                                                              -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from exercise of Class A warrants                     --            14,600
      Proceeds from exercise of common stock options              242,000            --
      Payments on related-party notes received in
         exchange for common stock                                102,000         198,000
                                                              -----------     -----------

                Net cash from financing activities                344,000         212,600
</TABLE>
See accompanying notes.

                                       F-5


<PAGE>





                                   STRATABASE
                            STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

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

EFFECT OF EXCHANGE RATE CHANGES ON CASH         $    (4,178)    $    (4,249)
                                                -----------     -----------

NET INCREASE (DECREASE) IN CASH                  (1,131,364)      1,045,656

CASH AND CASH EQUIVALENTS, beginning of year      1,265,457         219,801
                                                -----------     -----------

CASH AND CASH EQUIVALENTS, end of year          $   134,093     $ 1,265,457
                                                ===========     ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
         INFORMATION Cash paid during the year for:

         Interest                               $      --       $      --
                                                ===========     ===========
         Income taxes                           $    63,261     $      --
                                                ===========     ===========

SUPPLEMENTAL DISCLOSURE OF NONCASH
         INVESTING TRANSACTIONS
      Exercise of common stock options for
         related-party notes receivable         $    14,500     $   675,000
                                                ===========     ===========



                                       F-6


<PAGE>

                                   STRATABASE
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - NATURE OF ORGANIZATION AND OPERATIONS

On March 11,  2001,  Stratabase.com  changed its legal name to  Stratabase  (the
Company).   Stratabase  is  a  Nevada   corporation   which  develops   Customer
Relationship Management (CRM) software for its own use, that of its clients, and
for general distribution.  The Company provides clients with CRM, database,  and
technical services.  Its software is designed to provide sales force automation,
marketing  automation,  data  synchronization,  and knowledge worker  efficiency
services.  During  2002,  the  Company  began  redefining  its  product  line by
developing its  proprietary  software to be offered as a hosted service over the
Internet. Management believes this new proprietary software product line will be
the primary focus of the Company in 2003. The Company plans to have the software
available for sale during the second  quarter of 2003. On a limited  scale,  the
Company provided  customized  computer  hardware for its customers.  The Company
operates from Abbotsford, British Columbia, Canada.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management's  estimates  and  assumptions  - The  preparation  of the  financial
statements,  in the conformity with generally  accepted  accounting  principles,
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  as of the date of the balance,  and revenues
and expenses for the period. Actual results could differ significantly for those
estimates.  Significant  estimations  made by management  primarily  involve the
amortization  of the  databases and domain names and the  collectibility  of the
$150,000 note receivable.

Revenue recognition - The Company has historically generated revenues by selling
customized  CRM  services  which are  comprised  primarily  of the  provision of
databases  of sales leads and mailing  lists,  and  includes  the  provision  of
technical  services  aimed to customize and improve the quality of the databases
sold. Included in the sale of databases was non-essential  open-source  software
to allow users to interface with and manage these  databases and  relationships.
Revenue on the sales of databases  and  technical  services is  recognized  when
persuasive evidence of an arrangement exists and delivery has occurred, provided
the fee is fixed or determinable and collectibility is probable. The majority of
databases sold require customer  payments in advance of delivery.  There were no
customer projects in progress and hence no deferred revenue at December 31, 2002
or 2001.  There are no  post-delivery  performance  obligations  in  respect  to
database sales and no rights of refund exist.

During 2002, the Company began  development of  proprietary  software,  which it
believes  will be the primary  source of revenue in future.  The Company did not
recognize any revenues from the proprietary software developed during 2002.

Technical  consulting service revenue,  invoiced seperately from database sales,
are recognized upon completion of the services provided.

Hardware  revenue is  recognized  at the time the goods are  shipped,  when both
title and risk of loss  transfer to the customer,  provided that no  significant
obligations  remain.  The Company's  shipping and handling costs are included in
cost of sales for all periods presented.

Cash and cash equivalents - The Company considers all highly liquid  investments
purchased with a maturity of three months or less to be cash equivalents.

                                       F-7


<PAGE>


                                   STRATABASE
                         NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

Receivables  - Accounts  receivable  are  recorded  when  invoices  are  issued.
Accounts   receivable   are  written  off  when  they  are   determined   to  be
uncollectible.  The  allowance for doubtful  accounts is estimated  based on the
Company's  historical  losses,  review of specific  problem  accounts,  existing
economic  conditions  in  the  industry,  and  the  financial  stability  of its
customers.  Generally,  the Company considers accounts receivable past due after
60 days. The Company does not charge interest on overdue account balances.

Concentrations of credit risk - Financial instruments, which potentially subject
the Company to credit risk,  consist of cash and accounts and notes  receivable.
At December 31, 2002 and 2001,  the maximum loss that would have  resulted  from
these credit risks totaled $106,546 and $1,175,397, respectively, for the excess
of bank  deposits  over the  amount  that would  have been  covered by U.S.  and
Canadian  deposit  insurance  and $191,145 and  $25,023,  respectively,  for the
balance of accounts  receivable in excess of the allowance for doubtful accounts
to customers  primarily  located in the United  States and western  Canada.  The
Company  has a note  receivable  from one  party in the  amount of  $150,000  at
December 31, 2002.

Inventory - Inventory is comprised  primarily of system hardware  components and
is stated at the lower of cost or market.  The Company determines cost using the
first-in, first-out (FIFO) method.

Office  equipment - Office  equipment is recorded at cost and depreciated  using
the  straight-line  method over its useful  life,  which ranges from two to five
years.  Depreciation expense charged to general and administrative  expenses was
$16,000 and $22,146 for 2002 and 2001, respectively.

Databases and domain names - Databases and domain names are being amortized over
three years and two years,  respectively.  Total  accumulated  amortization  was
$347,140 and $81,814 at December 31, 2002 and 2001,  respectively.  Amortization
expense  charged to  operations  was  $265,326  and  $69,313  for 2002 and 2001,
respectively.

Software  development  costs - Software  development  costs  associated with new
products and enhancements to existing software products are expensed as incurred
until  technological  feasibility  in the  form  of a  working  model  has  been
established.  To date, in development of open source  software,  the time period
between  the  establishment  of  technological  feasibility  and  completion  of
software  development has been short, and no significant  development costs have
been incurred during that period. Additionally,  the Company only recently began
developing proprietary software and no significant development costs meeting the
criteria for capitalization have been incurred during that period.  Accordingly,
the Company has not capitalized any software development costs to date.

                                       F-8


<PAGE>


                                   STRATABASE
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

Advertising - Advertising costs are expensed as incurred.

Income taxes - The Company follows the asset and liability  method of accounting
for income taxes whereby  deferred tax assets and liabilities are recognized for
the future tax  consequences  of  differences  between the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases.

Foreign exchange accounting - The Company's  functional currency is the Canadian
dollar.  Transactions  are  measured in Canadian  dollars and  translated  to US
dollars  for  presentation  purposes.  All  balance  sheet  accounts  have  been
translated to US dollars using the current rate of exchange at the balance sheet
date.  Results  of  operations  have been  translated  using the  average  rates
prevailing  throughout the year.  Translation gains or losses resulting from the
changes  in the  exchange  rates are  accumulated  in a  separate  component  of
shareholders'  equity.  All  amounts  included  in  the  accompanying  financial
statements and footnotes are denominated in U.S. dollars.

Stock option plans - The Company applies Accounting Principles Board Opinion No.
25 (APB No. 25) and related  interpretations  in accounting for its common stock
option plans.  Accordingly,  compensation costs are recognized as the difference
between the exercise  price of each option and the market price of the Company's
stock at the date of each grant.  Compensation expense charged to operations was
$255,750  for the year ended  December  31,  2002.  No  compensation  costs were
recognized for the year ended December 31, 2001.

STRATABASE

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

Had  compensation  expense been determined  based on the fair value at the grant
dates, as described in the Financial Accounting Standards Board (FASB) Statement
of  Financial  Accounting  Standards  (SFAS) No. 123, the  Company's  net income
(loss) and net income (loss) per share would have been as follows:

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

Net income (loss), as reported               $  (914,645)    $   421,246
Add stock-based compensation
   expense included in reported net
   income, net of related tax effects            163,680            --
Deduct total stock-based employee
   compensation expense determined
   under fair based methods for
   all awards, net of related tax effects       (219,376)       (266,187)
                                             -----------     -----------

Pro forma net income (loss)                  $  (970,341)    $   155,059
                                             ===========     ===========

Earnings (loss) per common share:

   Basic - as reported                       $     (0.12)    $      0.06
   Basic - pro forma                         $     (0.12)    $      0.02
   Diluted - as reported                     $     (0.12)    $      0.05
   Diluted - pro forma                       $     (0.12)    $      0.02


The fair value of each option  granted is  estimated  on the date of grant using
the  Black-Scholes  option-pricing  model  with the  following  assumptions  for
December 31, 2002 and 2001, respectively: (1) dividend yield of 0%, (2) expected
volatility of 148.78% and 120.82%,  (3) risk-free  rate of 3.16% and 3.74%,  and
(4) expected  life of 1.13 and 3.24 years.  The  weighted  average fair value of
options  granted  in 2002 and 2001 was $1.04 and  $0.69,  respectively.  Because
additional  stock  options are expected to be granted  each year,  the above pro
forma  disclosures  are not  representative  of pro forma  effects  on  reported
financial results for future years.


                                      F-9
<PAGE>

                                   STRATABASE
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

Earnings  (loss) per share of common stock - Basic earnings  (loss) per share of
common  stock is computed  by dividing  net income  (loss)  available  to common
shareholders by the weighted-average number of common shares outstanding for the
period.  Diluted  earnings  per  share of common  stock  reflect  the  potential
dilution that could occur if securities or other contracts to issue common stock
were  exercised  or  converted  into common stock or resulted in the issuance of
common stock that then shared in the earnings of the Company. The basic weighted
average  number of common shares  outstanding  for the years ended  December 31,
2002  and  2001,  were  7,928,372  and  7,368,372,   respectively.  The  diluted
weighted-average  number  of  common  shares  outstanding  for the  years  ended
December  31,  2002 and 2001 were  7,928,372  and  8,112,658,  respectively.  At
December  31,  2002 and 2001,  potential  common  shares of 715,000  and 180,000
related  to  common  stock  options,   respectively,   were  excluded  from  the
computation  of diluted  earnings  per share since their  effect would have been
anti-dilutive upon exercise.

Recently  issued  accounting  standards - In December 2002, the FASB issued SFAS
No. 148, "Accounting for Stock-Based  Compensation - Transition and Disclosure -
an Amendment of FASB  Statement No. 123." This  statement  amends FASB Statement
No. 123,  "Accounting  for  Stock-Based  Compensation,"  to provide  alternative
methods of transition for a voluntary change to the fair  value-based  method of
accounting for stock-based employee  compensation.  In addition,  this statement
amends the  disclosure  requirements  of Statement No. 123 to require  prominent
disclosures in both annual and interim financial  statements about the method of
accounting for stock-based  employee  compensation  and the effect of the method
used on reported results. The Company's management intends to continue using the
intrinsic value method for stock-based  employee  compensation  arrangements and
therefore does not expect that the application provisions of this statement will
have a material impact on the Company's financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal Activities." This statement addresses financial accounting
and  reporting  for  costs  associated  with  exit or  disposal  activities  and
nullifies  Emerging  Issues  Task  Force  (EITF)  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)."  This statement
is effective for exit or disposal  activities  that are initiated after December
31, 2002, with early application  encouraged.  The Company's management does not
expect that the  application  of the  provisions of this  statement  will have a
material impact on the Company's financial statements.

                                      F-10


<PAGE>


                                   STRATABASE
                         NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

In July 2001,  the FASB issued SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations."   SFAS  No.  143  addresses  the   accounting  and  reporting  for
obligations associated with the retirement of tangible long-lived assets and the
associated  asset  retirement  costs.  SFAS No.  143 will be  effective  for the
Company in the first quarter of 2003. The Company's  management  does not expect
that the  application  of the  provisions of this statement will have a material
impact on the Company's financial statements.

The  Company's  management  does not expect  other  recently  issued  accounting
standards,   including  SFAS  No.  147,   "Acquisistions  of  Certain  Financial
Institutions,"  SFAS No. 145,  "Recession of FASB  Statements No. 4, 44, and 64,
Amendment  of  FASB   Statement  No.  13,  and  Technical   Corrections,"   FASB
Interpretation No. 45, "Guarantor's  Accounting and Disclosure  Requirements for
Guarantees,  Including Indirect Guarantees of Indebtedness of Others," to have a
material impact on the Company's financial statements.

Reclassifications - Certain 2001 balances have been reclassified to conform with
the current year presentation.

NOTE 3 - ABILITY TO CONTINUE AS A GOING CONCERN

The  accompanying  financial  statements  have been  prepared on a going concern
basis,  which  contemplates  the  realization of assets and the  satisfaction of
liabilities in the normal course of business. However, the Company experienced a
significant  reduction in their  revenues in 2002.  The Company  began  actively
developing its  proprietary  software  product line during the second quarter of
2002, and revenues declined due to the reduced resources for sales and marketing
of the Company's  existing  product line. The Company expects to begin marketing
and sales of their new product line during the second quarter of 2003.

The Company  expects the sale of their new product line to fund their  long-term
operations and can be actively  marketing their product during 2003.  Management
believes  marketing  and operating  expenses will be financed in the  short-term
through the collection of related-party  notes due in April 2003.  Subsequent to
year-end,  the Company  reduced  their labor force and closed  their  Vancouver,
British Columbia,  office in an effort to reduce their operating and general and
administrative expenses.

The Company's  ability to operate as a going concern is dependent on its ability
to regain and sustain profitable operations and to generate sufficient cash flow
from  financing and operations to meet its  obligations as they become  payable.
Although there are no assurances that management's plans to reduce  expenditures
and raise  additional  capital will be realized,  management  believes  that the
Company  will be able to  continue  operations  in the future.  Accordingly,  no
adjustment  has  been  made  to  the   accompanying   financial   statements  in
anticipation of the Company not being able to continue as a going concern.

NOTE 4 - NOTE RECEIVABLE

The Company  loaned  $150,000  to  Advanced  Cell  Technology  (ACT),  a private
biotechnology company, in exchange for a convertible promissory note receivable.
The note bears  interest at 20% per annum,  matures  April 30, 2003,  and may be
converted into stock of ACT should ACT proceed with a preferred  stock financing
prior to the maturity  date.  The Company has accrued a receivable  for interest
income,  due under the terms of the promissory note, in the amount of $21,206 at
December 31, 2002.

NOTE 5 - RELATED-PARTY TRANSACTIONS

Investment in Maturus.com,  Inc. - In 2001, Maturus.com,  Inc., a privately-held
development stage corporation,  for which the president of the Company served as
an officer, ceased operations. The Company wrote off their

                                      F-11


<PAGE>


investment  of $2,250 in  Maturus.com,  Inc. as well as the  remaining  accounts
receivable  balance of $15,354  generated from 2000  revenues.  No revenues were
earned from  Maturus.com,  Inc. by the Company for the years ended  December 31,
2002 or 2001.

Related-party  notes received in exchange for exercise of common stock options -
The  Company  has   reclassified  all  notes  receivable  from  (and  loans  to)
related-parties if the related-party has signed a note receivable to the Company
in exchange for the exercise of common stock options.  All notes receivable from
executive officers  aggregating $375,000 are  noninterest-bearing  and are to be
paid from proceed from the sale of stock acquired  through the exercise of stock
options, but no later than April 1, 2003.

NOTE 6 - SHAREHOLDER TRANSACTIONS

Capital raising  activities - On February 7, 2000, the Company's public offering
for up to 800,000  investment  units  closed  with the  maximum  number of units
purchased.  Each unit had a public  offering price of $.50, and consisted of one
share of  common  stock  and one each of Class A, B, and C  redeemable  purchase
warrants. The warrants, Classes A, B, and C, could be exercised for one share of
common  stock at $1, $3, and $5,  respectively,  and at 6-month,  12-month,  and
18-month  periods,  respectively,  commencing  on the  date  of  the  prospectus
(November 10, 1999).  Total  proceeds from the public  offering of $400,000 were
released to the  Company by the escrow  agent  subsequent  to the closing of the
offering.

On August 31,  2000,  a letter was issued to holders of the  Company's  warrants
advising them that the expiration date of the Class A warrants would be extended
to January 7, 2001,  and Class B and C warrants would be extended to February 7,
2001.

Prior to expiration on January 7, 2001,  14,600 Class A warrants were  exercised
for  common  stock at $1 per  share.  The  remaining  Class A  warrants  expired
unexercised.

In April 2001,  pursuant to the Company's 2000 stock option plan, 750,000 common
stock options were  exercised by officers at $0.50 per share and 300,000  common
stock  options  were  exercised  by an employee at $1, all in exchange for notes
receivable.

On May 11, 2001, the Company  authorized the issuance of up to 1,000,000  shares
of  preferred  stock,  with timing and terms at the  discretion  of the Board of
Directors.

On July 4, 2001, a letter was issued to holders of Stratabase  warrants advising
them that the expiration date of the Class B and C warrants would be extended to
January 7, 2002. All the Class B and C warrants  expired  unexercised on January
7, 2002.

During April through July of 2002, pursuant to the Company's 2002 and 2000 stock
option plans, 230,000, 10,000, and 75,000 common stock options were exercised by
employees at $0.50, $1.45, and $1.50 per share, respectively, for total proceeds
to the Company of $242,000. The exercise of 10,000 shares at $1.45 was initially
accomplished  through the exchange of notes  receivable,  which was subsequently
paid by the employee in 2002.

                                      F-12


<PAGE>


                                   STRATABASE
                          NOTES TO FINANCIAL STATEMENTS

NOTE 7 - PROVISION FOR INCOME TAXES

The provision for income taxes consists of the following:

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

Current:

    U.S                                           $    --       $  63,261
    U.S. net operating loss carryback               (50,240)         --
    Canadian                                           --            --

                                                    (50,240)       63,261

Deferred:

    U.S                                            (216,237)       85,204
    Increase (decrease) in valuation allowance      352,105       (99,123)
                                                  ---------     ---------

                                                    135,868       (13,919)

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

            Provision for income taxes            $  85,629     $  49,342
                                                  =========     =========

Deferred  income tax  represents the tax effect of differences in timing between
financial  income  and  taxable  income.  The net  deferred  tax  assets  in the
accompanying balance sheets include the following components:

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

Deferred tax assets (liabilities):
   Net operating loss carryforwards              $ 264,833     $    --
   Accumulated depreciation                         (7,387)       (6,522)
   Accumulated amortization                         94,659        20,441
                                                 ---------     ---------

                                                   352,105        13,919

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

Additional deferred tax asset due to exercise
   of nonqualified stock options                      --          31,629
Valuation allowance                               (352,105)         --
                                                 ---------     ---------

Net deferred tax asset                           $    --       $  45,548
                                                 =========     =========

                                      F-13
<PAGE>

                                   STRATABASE
                         NOTES TO FINANCIAL STATEMENTS

NOTE 7 - PROVISION FOR INCOME TAXES - (continued)

The exercise of nonqualified  stock options in 2002 resulted in the recording of
additional  paid-in capital of $90,321 and recognition of an additional  $90,321
of deferred tax assets related to a net operating loss carryforward.

The exercise of nonqualified  stock options in 2001 resulted in the recording of
additional  paid-in  capital of $44,625,  a $12,996  reduction  in income  taxes
payable and recognition of an additional  $31,629 of deferred tax assets related
to a foreign tax credit carryforward.

As of December 31, 2002,  the Company had  available  to offset  future  taxable
income,  net  operating  loss  carryforwards  of  approximately   $779,000.  The
carryforwards will begin expiring in 2018 unless utilized in earlier years.

The Company evaluates its valuation  allowance  requirements  based on projected
future  operations.  When  circumstances  change  and this  causes  a change  in
management's  judgement  about the  recoverability  of deferred tax assets,  the
impact of the change on the valuation  allowance is reflected in current income.
As a result of this  assessment  in 2002, a valuation  allowance is provided for
the year ended December 31, 2002, since management considers it more likely than
not that the Company  will not be able to utilize  existing net  operating  loss
carryforwards and other deferred items in future periods.

The  provision  for income  taxes from  continuing  operations  differs from the
amount of income tax  determined  by  applying  the  applicable  U.S.  statutory
federal  income  tax  rate  to  pretax  income  as a  result  of  the  following
differences:

                                     2002      2001

Statutory federal income tax rate    (34)%     34%
Change in valuation allowance         43      (21)
Effect of graduated tax rates        --        (3)
Other                                  1      --
                                     ---      ---

                                      10%      10%

                                     ===      ===



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


                                      F-14


<PAGE>

                                   STRATABASE
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------



NOTE 8 - COMMITMENTS AND CONTINGENCIES

Lease  commitments  - The Company  leases  office  space in  Vancouver,  British
Columbia,  on a  month-to-month  basis with  monthly  payments of  approximately
$1,200.  The Company leases office space in Abbotsford,  British Columbia,  with
monthly  payments of  approximately  $1,350.  The  Abbotsford  lease  expires in
February 2003. Total rent expense under the above leases was $30,429 and $32,563
for the years ended December 31, 2002 and 2001, respectively.

The Company leases a fiber optic line for a monthly fee of approximately $1,000.
The lease expires December 31, 2003. The monthly cost of leasing the fiber optic
line has been charged to Internet connectivity expense for 2002 and 2001.

Management fees - During 2001, the Company agreed to pay management fees for the
services of its president and vice president at the rates of $5,000 and $3,000 a
month,  respectively.  In June 2002, the management fees for the services of the
president and vice president were increased to $7,500 and $5,000,  respectively.
Compensation  of $122,710 and $96,000 for the years ended  December 31, 2002 and
2001,  has  been  recorded  as  management  fees in the  accompanying  financial
statements.

Legal  contingencies  - The  Company may become  involved in certain  claims and
legal  actions  arising in the ordinary  course of  business.  In the opinion of
management,  after consultation with legal counsel, there are no current matters
expected to have a material  adverse  effect on the  financial  condition of the
Company.

NOTE 9 - STOCK OPTION PLANS

In February  2000,  the Board of  Directors  adopted the  Stratabase  2000 Stock
Option  Plan (the 2000  Plan)  reserving  1,750,000  common  shares for grant to
directors and employees.

Activity under the 2000 Plan is summarized as follows:

                                                                      Weighted

                                Available          Options         Average Price
                                for Grant        Outstanding          Per Share

                                ----------       ------------         --------
Initial shares reserved,

   February 2000                 1,750,000               --           $    --
Options granted                 (1,250,000)         1,250,000         $   0.50
Options cancelled                   55,000            (55,000)        $   0.50
                                ----------       ------------         --------

                                      F-15
<PAGE>

BALANCE,

   December 31, 2000               555,000          1,195,000         $   0.50

Options granted                   (705,000)           705,000         $   0.99
Options cancelled                  150,000           (150,000)        $   0.50
Options exercised                     --           (1,050,000)        $   0.64
                                ----------       ------------         --------

BALANCE,

   December 31, 2001                  --              700,000         $   0.78

Options granted                   (100,000)           100,000         $   1.30
Options cancelled                  100,000           (100,000)        $   1.45
Options exercised                     --             (230,000)        $   0.50
                                ----------       ------------         --------

BALANCE,

   December 31, 2002                  --              470,000             0.88
                                ==========       ============         ========



During 2001,  the Board of Directors  adopted the  Stratabase  2002 Stock Option
Plan (the Plan)  reserving an additional  1,750,000  common shares for employees
and directors.

Activity under the 2002 Plan is summarized as follows:

                                                                      Weighted

                                Available          Options         Average Price
                                for Grant        Outstanding          Per Share

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

Initial shares reserved,

   January 2002                  1,750,000               --           $--
Options granted                   (330,000)           330,000         $   0.80
Options exercised                     --              (85,000)        $   1.49
                                ----------       ------------         --------

BALANCE,

   December 31, 2002             1,420,000            245,000         $   0.57
                                ==========       ============         ========



The  following  table   summarizes   information   concerning   outstanding  and
exercisable  common stock  options under the 2000 and 2002 Plans at December 31,
2002:
<TABLE>
<CAPTION>
                                            Weighted-
                                             Average
                                            Remaining         Weighted-          Number           Weighted-
     Range of             Number of        Contractual         Average         of Options          Average
     Exercise              Options            Life            Exercise          Currently         Exercise
      Prices             Outstanding       (in Years)           Price          Exercisable          Price
--------------------    --------------    --------------    --------------    --------------    --------------
<S>                     <C>               <C>               <C>               <C>               <C>
   $0.50 - $0.60              515,000              8.65     $      0.54             503,000     $      0.54
   $1.30 - $1.45              200,000              9.29     $      1.36              57,000     $      1.40
</TABLE>

                                      F-16
<PAGE>

                                   STRATABASE
                         NOTES TO FINANCIAL STATEMENTS

NOTE 10 - SALES ACTIVITY

The Company's sales are distributed geographically as follows:

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

United States        $  392,730        $2,217,503
Canada                   37,510           142,949
                     ----------        ----------

                     $  430,240        $2,360,452
                     ==========        ==========



During 2002,  the Company had one sale for $225,000,  which was 52% of the total
revenues for 2002.

During 2001,  the Company made sales to three  separate  sales to three separate
customers  that each  accounted  for  greater  than 10% of the  Company's  total
revenues.  The revenues  generated from these three sales were $1,700,000  which
was 72% of total revenues for 2001.

NOTE 11 - SUBSEQUENT EVENT

In January 2003,  the Company filed a proposal to effect a  continuation  of the
corporation jurisdiction from the State of Nevada to Canada on Form S-4 with the
United  States   Securities  and  Exchange   Commission   (SEC).   The  proposed
continuation  would  be  accomplished  through  the  adoption  of  the  plan  of
conversion,  as  presented  in the  proposal.  If approved by  shareholders  and
completed,  the Company would change its name to  "Stratabase,  Inc.," and would
continue  to operate  under the Canada  Business  Corporations  Act and would no
longer be a Nevada  corporation.  The  Company  has never had any  employees  or
operations  in the U.S.,  and  management  believes the  continuation  to Canada
accurately  reflects  the nature of its  operations.  Management  of the Company
believes  that the  continuation  to Canada  would enable the Company to benefit
from  scientific  research  and  development  grants that are not  available  to
non-Canadian  corporations.  As of March 23, 2003, the Form S-4 was still in the
regulatory  process  and  therefore  the  proposal  has  not yet  been  formally
presented to shareholders for approval. Due to management's controlling interest
of the Company's outstanding shares, the proposed plan would be expected to pass
if presented to shareholders for a vote.

                                      F-17


<PAGE>


                                   SIGNATURES

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

                                                   STRATABASE

                                By         /s/ Trevor Newton
                                           -----------------
Dated: July 23,2003                        Chairman, President, Chief Executive
                                           Officer, Secretary and Treasurer


                                By         /s/ Fred Coombes
                                           -----------------
                                           Fred Coombes
                                           Vice President of Corporate
                                           Development


         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.


                           Chairman, President, Chief      Dated: July 23, 2003
                           Executive Officer, Secretary
     /s/ Trevor Newton     and Treasurer
     -----------------     (Principal  Executive Officer and
     Trevor Newton         Principal Financial Officer)


                           Vice President of Corporate
     /s/ Fred Coombes       Development                    Dated: July 23, 2003
     -----------------
         Fred Coombes


                           Director
     /s/ Scott Praill                                      Dated: July 23, 2003
     -----------------
         Scott Praill



<PAGE>


      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
          PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

     I,  Trevor  Newton,  Chief  Executive  Officer,  Treasurer  and  Secretary,
Stratabase, certify that:

1.   I have reviewed this annual report on Form 10-KSB/A of Stratabase;

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

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

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

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities, particularly during the period in which the periodic reports
          are 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  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent functions):

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

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

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

/s/ Trevor Newton                                         Dated:  July 23, 2003
--------------------------------------------------------------------------------
Trevor Newton, Executive  Officer, Treasurer and Secretary,
Chief  Executive  Officer and Chief  Financial  Officer
 (Principal Executive Officer)