~~Table of Contents~~2003

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ~~Washington, D.C. 20549~~

~~FORM~~Washington, ~~10-K~~D.C. 20549

~~(Mark~~FORM ~~One)~~10-K

[X]		Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the fiscal year ended March 31, 2002
[ ]		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to


(Mark One)
[X]		Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

~~Commission~~For ~~File~~the ~~Number~~fiscal ~~0-18583~~year ended March 31, 2003

~~POLYMER SOLUTIONS,~~OR ~~INC.~~ ~~(Exact name of registrant as specified in its charter)~~

Nevada, U.S.A.		88-0360526
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)


[ ]		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

~~312~~For ~~Otterson~~the ~~Dr. Suite H Chico,~~transition ~~California~~period ~~95928~~from to . ~~(Address of principal executive offices)~~

~~Registrant’s~~Commission ~~telephone~~File ~~number~~Number ~~including area code: Telephone: (530) 894~~0-~~3585~~18583

Securities registered pursuant to Section 12(b) of the Act:		None
Securities registered pursuant to Section 12(g) of the Act:		Common Shares, par value $0.001
		(Title of class)

POLYMER SOLUTIONS, INC.

~~Indicate by checkmark whether the registrant~~ (~~1) has~~Exact ~~filed~~name ~~all reports required to be filed by Section 13 or 15(d)~~ of ~~the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the~~ registrant ~~was~~ ~~required~~as tospecified ~~file~~in ~~such~~its ~~reports~~charter)~~, and (2) has been subject to such filing~~ ~~requirements for the past 90 days.~~

~~Yes~~Nevada, ~~[X]~~ U.S.A. (State or other jurisdiction of incorporation) 88-0360526 (I.R.S. Employer Identification No ~~[ ]~~ .)

~~Indicate~~312 byOtterson ~~check mark if disclosure of delinquent filers pursuant to Item~~Dr. ~~405 of Regulation~~Suite ~~S-K is not contained herein, and will not be contained, to the~~H ~~best of registrant’s knowledge~~Chico, inCalifornia ~~definitive proxy or information statements~~95928 ~~incorporated~~(Address ~~by reference in Part III~~ of ~~this~~principal ~~Form 10-K~~executive ~~or any amendment to~~offices) ~~this Form 10-K. [ X ]~~

~~The~~Registrant’s ~~aggregate~~telephone ~~market value of the voting stock Common Shares held by non-affiliates of the registrant on May 18~~number, ~~2002~~including ~~was~~area ~~Cdn$2,944,373~~code: and US$2,228,174, computed by reference to the closing sale price of the Common Shares on the Canadian Venture Exchange and Over the Counter Bulletin Board, respectively on such date. The aggregate number of Common Shares outstanding on May(530) ~~28, 2002 was 9,343,664.~~894-3585

DOCUMENTS INCORPORATED BY REFERENCE


Securities registered pursuant to Section 12(b) of the Act:		None
Securities registered pursuant to Section 12(g) of the Act:		Common Shares, par value $0.001 (Title of class)

~~Portions~~Indicate ofby ~~the~~check ~~Proxy~~mark ~~Statement~~whether ~~prepared~~the ~~for~~registrant: ~~our~~(1) has ~~Annual~~filed ~~Meeting~~all ~~of Shareholders~~reports required to be ~~held~~filed onby ~~August~~Section 13 or 15,(d) ~~2002~~of ~~are~~the ~~incorporated~~Securities byExchange ~~reference~~Act inof 1934 ~~Part~~during ~~III~~the ofpreceding ~~this~~12 months (or for such shorter period that the ~~Form~~registrant was required to file such reports), and (2) ~~10-K~~has been subject to such filing requirements for the past 90 days.

~~POLYMER~~Yes ~~SOLUTIONS, INC.~~[X] No [ ] ~~Annual Report on Form 10-K~~ ~~For the Fiscal Year Ended March 31, 2002~~

~~TABLE~~Indicate OFby ~~CONTENTS~~check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K. [ X ]

~~TABLE~~Indicate OFby ~~CONTENTS~~check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [ ] No [ X ]

PART I
	ITEM 1. DESCRIPTION OF BUSINESS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12 EQUITY COMPENSATION PLAN INFORMATION
	ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 14. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
SIGNATURES
EXHIBIT INDEX
EX-10.2
EX-10.3
EX-10.4

Based on the closing sales price on September 30, 2002, the last day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates of the registrant was Cdn $2,944,373 on the TSX Venture Exchange and US $2,228,174 on the OTC Bulletin Board.

~~Table~~The aggregate number of ~~Contents~~Common Shares outstanding as of May 30, 2003 was 9,252,192.

Item		Page
Number		Number
	PART I
1.	Description of Business	3
2.	Properties	10
3.	Legal Proceedings	10
4.	Submission of Matters to a Vote of Security Holders	11
	PART II
5.	Market for Registrant’s Common Equity and Related Stockholder Matters	11
6.	Selected Financial Data	12
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
7A.	Quantitative and Qualitative Disclosures About Market Risk	17
8.	Financial Statements and Supplementary Data	18
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	35
	PART III
10.	Directors and Executive Officers of the Registrant	35
11.	Executive Compensation	35
12.	Equity Compensation Plan Information	35
13.	Security Ownership of Certain Beneficial Owners and Management	35
14.	Certain Relationships and Related Transactions	35
	PART IV
15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	36
SIGNATURES		38
EXHIBIT INDEX		39

DOCUMENTS INCORPORATED BY REFERENCE

~~Unless~~The ~~otherwise~~information ~~indicated~~required by Part III of this Report, ~~all~~to ~~dollar~~the ~~amounts~~extent innot set forth herein, is incorporated by reference from the registrant’s definitive proxy statement relating to the annual meeting of stockholders scheduled to be held on August 14, 2003, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report ~~are U~~relates.~~S. dollars.~~

~~Page~~POLYMER 2SOLUTIONS, INC. Annual Report on Form 10-K For the Fiscal Year Ended March 31, 2003

~~Table~~TABLE ofOF ~~Contents~~CONTENTS

PART I


		Page
	PART I
ITEM 1.	Business	1
ITEM 2.	Properties	10
ITEM 3.	Legal Proceedings	11
ITEM 4.	Submission of Matters to a Vote of Security Holders	12
	PART II
ITEM 5.	Market For Registrant’s Common Equity and Related Stockholder Matters	12
ITEM 6.	Selected Financial Data	15
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	21
ITEM 8.	Financial Statements and Supplementary Data	21
ITEM 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	38
	PART III
ITEM 10.	Directors and Executive Officers of the Registrant	38
ITEM 11.	Executive Compensation	38
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	38
ITEM 13.	Certain Relationships and Related Transactions	38
ITEM 14.	Controls and Procedures	38
	PART IV
ITEM 15.	Financial Statements, Financial Statement Schedules, and Reports on Form 8-K	39
SIGNATURES		41
EXHIBIT INDEX		44

~~ITEM~~Unless ~~1. DESCRIPTION~~otherwise OFindicated, ~~BUSINESS~~all dollar amounts in this report are U.S. dollars.

~~General~~PART I

~~Polymer~~ITEM ~~Solutions, Inc~~1. ~~(or “PSI”) develops, manufactures and distributes paints, coatings and adhesives to various industries on a national basis~~ BUSINESS. We ~~lease a state-of-the-art, highly automated production facility in Chico,~~ ~~California. This facility and related processing equipment helps provide us~~ with the unique ability to make any type of water or solvent-based coating the market currently demands and, we believe, will likely demand in the foreseeable future. The facility has excess production capacity and, with the addition of a minor amount of capital equipment and some additional labor, we believe that our capacity can be increased to help allow us significant growth opportunities in the future.

~~We conduct all of our product development, manufacturing and marketing/sales at~~General ~~the corporate and manufacturing facility based in Chico, California.~~ Public-company management and regulatory reporting is the responsibility of the corporate headquarters located at 312 Otterson Drive, Suite H, Chico, California, 95928. The telephone number is (530) 894-3585. We also have two laboratory and distribution facilities located in the major customer base areas of Los Angeles and San Jose, California, and these satellite facilities are staffed with sales engineers and technical service personnel.

WePolymer ~~were~~Solutions, ~~incorporated~~Inc. in(“PSI”) ~~the~~develops, ~~State~~manufactures ofand ~~Nevada~~distributes inpaints, coatings ~~July 1996~~ and ~~conducted~~adhesives ~~a reorganization~~to invarious ~~February~~industries ~~1997,~~on ~~which (~~a~~) resulted~~ innational ~~AMT Environmental Products Inc~~basis. ~~(“AMT”)~~We ~~becoming~~lease a ~~wholly-owned subsidiary of ours and (b)~~ ~~another wholly~~state-~~owned subsidiary~~ of ~~ours~~-the-art, ~~PSI~~highly ~~Acquisitions~~automated ~~Corp.~~production ~~(“PAC”), which~~facility in ~~turn owns its wholly-owned operating subsidiary~~Chico, ~~Alternative Materials~~California. ~~Technology,~~This ~~Inc.~~facility ~~(“AMT~~and ~~USA”),~~related ~~through~~processing ~~which~~equipment wehelps ~~conduct~~provide ~~all~~us ofwith ~~our~~the ~~operations.~~unique ~~The~~ability ~~reorganization~~to ~~resulted~~make ina ~~our~~wide ~~company~~range ~~acquisition~~ of ~~all~~water- ~~11,752,907~~and ~~issued shares~~solvent-based ofcoatings. ~~the~~The facility ~~common~~currently ~~stock~~has ofexcess ~~AMT~~production incapacity ~~exchange~~which ~~for~~we ~~the issuance of 3~~believe,~~762,505~~ with ~~common~~additional ~~shares~~capital ofequipment ~~PSI~~ and ~~155~~labor,~~130~~ ~~preferred~~could ~~shares~~be ofincreased ~~PSI’s~~to ~~99.9%~~help ~~owned~~allow us ~~subsidiary,~~significant ~~PSI~~growth ~~Acquisitions~~opportunities ~~Corp.,~~in athe ~~British Columbia corporation~~future.

~~The~~We ~~purpose~~conduct all of ~~the~~our ~~reorganization~~product ~~was~~development, tomanufacturing ~~consolidate~~and marketing/sales at the ~~issued~~corporate ~~share~~and ~~capital on~~manufacturing afacility ~~1:3~~in ~~basis~~Chico, California. Administration and toregulatory ~~redomicile~~reporting ~~the~~takes ~~publicly~~place ~~listed~~at ~~parent~~our ~~company~~corporate ~~from British Columbia~~headquarters, ~~Canada~~which toare also ~~Nevada,~~located ~~United~~in ~~States~~Chico, California. ~~PSI~~We ~~and~~also ~~PAC~~have ~~were~~two ~~organized~~laboratory and bydistribution ~~AMT~~facilities ~~for~~located ~~purposes~~in of the ~~reorganization~~major ~~and~~customer ~~had~~base noareas ~~businesses~~of orLos ~~operations~~Angeles ofand ~~their~~San ~~own~~Jose, ~~prior~~California, ~~thereto.~~and ~~Shareholders~~these ~~approved~~satellite ~~the~~facilities ~~reorganization~~are atstaffed awith sales ~~Special~~engineers ~~Meeting~~and ~~held~~technical onservice ~~November 12, 1996~~personnel.

OnPSI ~~October 18,~~was ~~1999,~~incorporated ~~AMT~~in ~~USA~~the ~~purchased~~State ~~all~~of Nevada in July 1996 as part of a reorganization conducted to consolidate the ~~stock~~issued share capital of ~~U.S.~~AMT Environmental ~~Cellulose~~Products, CoInc., a British Columbia corporation (“~~USC~~AMT”), which was then a ~~California~~publicly ~~corporation.~~held ~~USC~~company, ~~was~~and ~~engaged~~to inredomicile the ~~business~~organization’s ofthen parent ~~development~~company from British Columbia, ~~production~~Canada ~~and~~to ~~sale~~Nevada, United States. As a result of the ~~paints~~reorganization, ~~and~~which ~~coatings~~took place in ~~markets~~February ~~parallel~~1997, toPSI is now the publicly ustraded parent company and has a wholly owned subsidiary, PSI Acquisitions Corp., ~~Effective~~a ~~November 24~~British Columbia corporation (“PAC”). PAC now wholly owns AMT, ~~1999~~which in ~~USC~~turn ~~merged~~wholly ~~into~~owns its operating subsidiary, Alternative Materials Technology, Inc., a Nevada corporation (“AMT USA”), through which we conduct all of our operations. PSI and PAC were organized for purposes of the reorganization and had no businesses or operations prior thereto.

~~The~~On ~~market~~October 18, ~~for~~1999, ~~paints~~AMT ~~and~~USA ~~coatings~~purchased inall the ~~United~~stock ~~States~~of ~~has~~U.S. ~~been~~Cellulose ~~estimated in~~Co., ~~excess of $17 billion~~(“USC”), ~~and~~a itCalifornia iscorporation ~~anticipated~~engaged ~~that~~in the ~~market~~business ~~will~~of ~~generally~~development, ~~grow~~production atand ~~the~~sale ~~same~~of ~~rate~~paints asand ~~the US GDP~~coatings. ~~Our~~Effective ~~primary~~November 24, ~~target~~1999, ~~market is the western~~USC ~~half~~merged ofinto ~~the~~AMT ~~United States~~USA.

WeThe ~~have~~market ~~developed~~for ~~and~~paints ~~produced a unique suite of high-performance, low volatile organic compound (VOC),~~ and ~~environmentally~~coatings ~~sound products that have performance characteristics that meet or exceed the traditional products used~~ in the ~~coatings~~United ~~industry.~~States ~~Management’s~~has ~~assessment~~been ofestimated ~~the environmental arena is~~in ~~that~~excess ~~the trend towards reduction or elimination~~ of ~~VOCs~~$17 billion, and ~~certain~~it ~~hazardous solvents~~is ~~will~~anticipated ~~possibly~~that ~~accelerate in~~ the ~~next few years due to government regulation and~~ market ~~demand.~~will ~~We believe we are in a position to benefit from~~generally ~~these~~grow ~~trends~~at ~~because of~~ the ~~technological~~same ~~lead~~rate ~~and~~as ~~reputation~~the ~~we have established in this market place~~U.S. ~~Our~~gross ~~products~~domestic ~~supplied to this customer base are low-VOC~~ product ~~formulations based on proprietary polymer chemistry~~. ~~We anticipate~~Our ~~that~~primary ~~the growth rate of this~~ target market ~~segment~~is ~~will be higher than~~ the ~~growth~~ ~~rate~~western ofhalf ~~traditional coating products because~~ of ~~increasing environmental concerns regarding~~ the ~~polluting~~United ~~effects of highly volatile organic compounds~~States.

~~Page~~We 3have developed and produced a unique suite of high-performance, low-volatile organic compound (“VOC”), and environmentally sound products that have performance characteristics that we believe meet or exceed the traditional products used in the coatings industry. We expect that the trend towards the reduction or elimination of the use of VOCs and certain other hazardous solvents in the coatings industry will continue due to government regulation and market demand. In fact, we anticipate that the growth rate of this market segment will be higher than the growth rate of traditional coating products because of increasing environmental concerns regarding the polluting effects of high VOCs. We believe we are in a position to benefit from this trend because of the technological lead and reputation we have established in this market place. Our products designed to address this market segment are low-VOC product formulations based on proprietary polymer chemistry.

~~Table~~Our ofprincipal ~~Contents~~executive offices are located at 312 Otterson Drive, Suite H, Chico, California, 95928 and our phone number is (530) 894-3585.

~~The~~Page ~~Company~~1

WeThe ~~develop and manufacture proprietary coatings and adhesives and market them~~Company ~~to a wide range of users. We utilize polymer chemistry and in-house developed~~ ~~techniques to provide competitively priced products that meet or exceed~~ ~~currently existing and proposed governmental clean-air regulations, while delivering performance and handling characteristics that we believe are superior to existing products.~~

~~Our~~We ~~focus~~develop isand ~~the~~manufacture ~~continued~~proprietary ~~product~~coatings ~~development,~~and ~~refinement~~adhesives and ~~marketing~~market ofthem ~~low-VOC~~to ~~coatings~~a inwide ~~the~~range ~~western half~~ of ~~the United States~~users. ~~Our~~We ~~product~~utilize ~~group consists~~polymer ofchemistry ~~over~~and ~~100~~in-house ~~specialized~~developed techniques ~~coatings~~to ~~systems~~provide ~~designed~~competitively topriced ~~uniquely~~products that meet ~~the~~or exceed ~~design~~currently ~~requirements~~existing ~~of industrial~~ and ~~retail~~proposed ~~customers.~~governmental ~~Wood~~clean-air ~~coatings~~regulations, ~~comprise~~while ~~approximately~~delivering ~~94%~~performance ofand ~~total~~handling ~~our~~characteristics ~~sales.~~that Wewe ~~also~~believe ~~produce a water-based adhesive,~~are ~~which~~superior ~~is sold~~ to ~~the~~existing ~~aerospace and general industrial-manufacturing firms~~products.

~~The~~Our ~~Industry~~focus is the continued product development, refinement and ~~The~~marketing ~~Market~~of low-VOC coatings in the western half of the United States. Our product group consists of over 100 specialized coatings systems designed to uniquely meet the design requirements of industrial and retail customers. Wood coating systems comprise approximately 94% of our total sales. We also produce a water-based adhesive, which is sold to the aerospace and general industrial-manufacturing firms.

~~Worldwide paint and coatings shipments are valued at approximately $50 billion, with sales in the United States in excess of $17 billion.~~ The ~~worldwide adhesive~~Industry and ~~sealant~~Our ~~markets are valued at approximately $18 billion, with the~~Products ~~United States generating a third of all sales, or about $6 billion.~~

~~The~~In ~~original~~2002, ~~equipment-manufacturing~~worldwide ~~(OEM) segment~~paint ofand ~~the~~coatings ~~industry,~~shipments ~~which involves~~were ~~the~~valued ~~incorporation~~at ofapproximately $50 billion, ~~coating~~with ~~products~~sales ~~into~~in athe ~~manufacturer’s~~United ~~end products,~~States ~~typically~~in ~~involves~~excess ~~high~~of ~~performance~~$17 billion, ~~value-added~~and ~~products. Products~~the ~~that~~worldwide ~~are~~adhesive ~~successful~~and insealant ~~these~~ markets ~~must~~were ~~possess~~valued aat ~~particular~~approximately ~~combination of~~$18 ~~properties~~billion, atwith anthe ~~acceptable~~United ~~cost~~States togenerating ~~the~~a ~~end~~third ~~user~~of ~~and~~all besales, ~~easily~~or ~~applied~~about ~~by the~~$6 ~~end user~~billion.

~~Our~~The ~~depth~~wood ofcoatings ~~knowledge~~market inis ~~polymer~~just ~~chemistry~~one ~~has~~segment ~~enabled~~of usthe topaint ~~develop~~and ~~products~~coatings ~~suitable~~industry. ~~for~~We abelieve ~~wide~~this ~~variety~~industry ofcan ~~OEM~~be ~~firms~~characterized inas ~~several~~changing ~~industrial~~rather than ~~segments~~growing. ~~These segments~~Government ~~include~~and ~~firms~~environmental ~~whose~~regulations ~~processes~~are ~~demand~~driving ~~the application of coatings to~~research ~~several~~and ~~substrate~~development ~~types~~efforts ~~including~~toward ~~wood,~~coating ~~metal,~~systems ~~glass~~that ~~and~~allow ~~aggregate.~~manufacturers ~~The~~to ~~uniqueness~~reduce ofthe ~~our~~amount ~~products~~of inpollution ~~this~~generated ~~market~~during ~~place~~their ismanufacturing ~~related~~process. Most toof ~~our~~this ~~ability~~research ~~to produce~~and ~~these~~development ~~high~~is ~~performance~~directed ~~coatings~~toward ~~with~~environmentally ~~greatly~~safe products ~~reduced~~that ~~VOC~~will ~~content.~~meet ~~AMT USA~~the ~~has~~needs ~~succeeded~~of inmanufacturers ~~developing~~requiring ~~these~~coating ~~leading~~for ~~edge~~wood, metal, ~~coatings~~plastic and ~~adhesives~~glass ~~ahead of~~for ~~the~~protection ~~industry’s~~or ~~largest,~~cosmetic ~~most-established firms~~value.

WeThe ~~believe~~original ~~that~~equipment ~~there~~manufacturing ~~has~~(OEM) segment ~~been~~of ~~resistance~~the toindustry, ~~change~~which involves ~~among~~the ~~long-time~~incorporation ~~users~~ of ~~high-VOC~~ ~~coatings,~~coating ~~who seem generally reluctant to try new~~ products ~~when~~into ~~their current products produce~~ a ~~satisfactory~~manufacturer’s ~~result. This holds true even though~~end ~~current~~products, ~~use~~typically ~~may~~involves ~~provoke~~high ~~environmental~~performance, ~~health~~value-added ~~or safety concerns~~products. ~~We believe~~These ~~that~~segments ~~the~~include ~~negative~~OEM ~~environmental~~firms ~~and~~whose ~~health~~processes ~~aspects~~demand ofthe ~~traditional~~application ~~solvent-based~~of coatings ~~products~~to ~~have~~several ~~not~~substrate ~~been~~types ~~sufficient~~including ~~incentive~~wood, tometal, ~~encourage~~glass ~~manufacturers~~ and aggregate. ~~users~~Products tothat ~~change~~are ~~technologies.~~successful ~~Moreover,~~in ~~some~~these ~~manufacturers~~markets ~~have~~must ~~introduced~~possess a particular ~~sub-standard~~combination ~~and~~of ~~relatively~~properties ~~poor~~at ~~performing~~an ~~low-VOC~~acceptable ~~products~~cost to the ~~market during~~end ~~the~~user ~~past~~and ~~decade,~~be ~~which~~easily applied ~~may~~by ~~have~~the ~~helped~~end ~~prevent adoption of low-VOC products generally~~user.

~~The~~We ~~wood~~believe ~~coatings~~our ~~market~~depth isof ~~just~~knowledge ~~one~~in ~~segment~~polymer ofchemistry ~~the~~has ~~multi-billion~~enabled ~~dollar~~us ~~paint~~to ~~and~~develop ~~coatings~~products ~~industry.~~suitable ~~This~~for ~~industry~~a ~~can~~wide bevariety ~~characterized~~of asOEM ~~changing~~firms ~~rather than~~in ~~growing~~several industrial segments. ~~Government~~The ~~and~~uniqueness ~~environmental~~of ~~regulations~~our ~~are~~products ~~driving~~in ~~research and~~this ~~development~~market ~~efforts~~place ~~toward~~is ~~coating~~related ~~systems that allow manufacturers~~ to ~~reduce~~our ~~the~~ability ~~amount~~to ofproduce ~~pollution~~these ~~generated~~high-performance ~~during~~coatings ~~their~~with ~~manufacturing~~greatly ~~process. Most~~reduced ~~of this research and development is directed toward environmentally safe~~VOC ~~products~~content. ~~that~~In ~~will~~fact, ~~meet~~we ~~the~~believe ~~needs~~AMT ofUSA ~~manufacturers~~has ~~requiring~~succeeded ~~coating~~in ~~for~~developing ~~wood,~~these leading ~~metal,~~edge ~~plastic~~coatings and ~~glass~~adhesives ~~for~~ahead ~~protection~~of ormost ~~cosmetic~~of ~~value.~~the Weindustry’s ~~believe our~~largest, ~~coatings~~most-established ~~fill the needs of these manufacturers~~firms.

~~The~~In ~~Products~~the past, high-VOC solvent-based coatings have been the accepted standard by which manufacturers have been applying coatings or surface protection to their products for decades. We believe that there has been resistance to change among long-time users of high-VOC coatings, who seem generally reluctant to try new products when their current products produce a satisfactory result. This holds true even though current use may provoke environmental, health or safety concerns. We believe that the negative environmental and health aspects of traditional solvent-based products have not been sufficient incentive to encourage manufacturers and users to change technologies. Moreover, some manufacturers have introduced sub-standard and relatively poor performing low-VOC products to the market during the past decade, which may have helped prevent adoption of low-VOC products generally. However, our water-based and low-VOC solvent-based coatings provide these manufacturers with environmentally sound alternatives to the regulated high-VOC content coatings. We believe that manufacturers who use our

InPage ~~the past, high-VOC solvent-based coatings have been the accepted standard by~~2 ~~which manufacturers have been applying coatings or surface protection to their~~ products for decades. However, our water-based and low-VOC solvent-based coatings provide these manufacturers with environmentally sound alternatives to the regulated high-VOC content coatings. We believe that manufacturers who use our products produce a superior end product while drastically reducing the amount of VOCs that are generated during their manufacturing process.

~~Page~~products 4produce a superior end product while drastically reducing the amount of VOCs that are generated during their manufacturing process.

~~Table~~Our ofresearch ~~Contents~~chemists have developed products that satisfy government-mandated environmental guidelines while maintaining important quality standards. We believe our low VOC products offer several additional advantages such as increased yield per gallon, more durability with better clarity and decreased health risks to employees.

~~Our~~Raw ~~research chemists have developed products that satisfy government-mandated~~Materials ~~environmental guidelines while maintaining important quality standards. Our low~~ ~~VOC products offer several additional advantages such as increased yield per~~ ~~gallon, more durability with better clarity and decreased health risks to employees.~~

~~Raw~~Most ~~Materials~~of our raw materials are commodity products and supplies that are available from numerous sources in sufficient quantities; thus, we anticipate no significant sourcing problems during the next year.

~~Most of our Raw materials are commodity products and supplies are available~~Seasonality ~~from numerous sources in sufficient quantities; thus, we anticipate no~~ ~~significant sourcing problems during the next year.~~

~~Seasonality~~There is no significant seasonality in sales for our products.

~~There~~Backlog isand noProductive ~~significant seasonality in sales for our products.~~Capacity

Backlog orders are not significant in our business since there is normally a short period of time between the placing of an order and ~~Productive~~shipment. ~~Capacity~~Sufficient production capacity currently exists to fulfill the demand for our coatings products for the foreseeable future.

~~Backlog orders are not significant in our business since there is normally a~~Competition ~~short period of time between the placing of an order and shipment. Sufficient~~ ~~production capacity currently exists to fulfill the needs for coatings products~~ ~~for the foreseeable future.~~

~~Competition~~We experience competition from many local, regional, national and international competitors of various sizes in the manufacture, distribution and sale of our coatings products. The competitive nature of the paint industry results in ongoing acquisitions and consolidations. The total number of U.S. companies within the industry has decreased steadily to an estimated number of less than 1,400 companies today. Almost two-thirds of the estimated 1,400 paint and coatings plants are located east of the Mississippi River. Manufacturers are typically close to population centers due to logistics. The top 15 companies account for more than 60% of the U.S. domestic coatings market by volume. The ten largest producers have over 50% of the U.S. market for coatings. There are several companies such as PPG Industries, The Sherwin-Williams Company, Valspar/Lilly Industries, and Akzo Nobel, with national distribution, but generally, the paint and coatings industry remains a highly regional business. Our major domestic competitors include Akzo Nobel, The Sherwin-Williams Company, Valspar/Lilly Industries, MacLac, Cardinal Paints, Rudd Coatings, Performance Coatings, and Triangle Paints.

WeAlthough ~~experience~~there ~~competition~~are ~~from~~ many ~~local,~~companies ~~regional,~~with ~~national~~revenues ~~and international competitors~~ of ~~various~~less ~~sizes~~than $15 million operating in the ~~manufacture~~marketplace, ~~distribution~~we believe competitive forces and ~~sale~~environmentally driven changes will continue to decrease the number of ~~our~~competitors in the coatings ~~products~~industry (particularly the mid-size companies). The ~~competitive~~paint ~~nature~~business traditionally ofhas ~~the~~had ~~paint~~very ~~industry~~few ~~results~~barriers ~~in continual~~to ~~acquisitions~~entry and ~~consolidations.~~it ~~The~~was ~~total~~relatively ~~number~~easy ofto start USa ~~companies~~regional, fully integrated paint company. However, current ~~within~~environmental legislation has made the ~~industry~~entry ~~has~~into ~~decreased~~the ~~steadily~~coatings tobusiness ana ~~estimated~~more strenuous ~~number~~and ofexpensive ~~less~~proposition ~~than~~due to the extensive capital investment ~~1,400~~needed ~~companies~~in ~~today.~~research ~~The~~and ~~ten~~development ~~largest~~and ~~producers~~modern ~~have~~plant ~~over~~equipment ~~50%~~capable of allowing a company to meet the ~~U.S. market~~environmental ~~for~~and ~~coatings~~market requirements. ~~There~~These regulations are ~~several~~being ~~companies~~applied ~~such~~to asexisting ~~PPG~~small ~~Industries,~~manufacturers who face the ~~Sherwin~~expense ~~Williams,~~of ~~Valspar,~~upgrading ~~and~~their ~~Akzo~~operations. ~~Nobel~~In many cases, ~~with~~the ~~national~~businesses ~~distribution,~~are ~~but~~too ~~generally,~~small ~~the~~or ~~paint~~have ~~and~~limited ~~coatings~~growth ~~industry~~opportunities ~~remains~~to aoffset ~~highly~~the ~~regional~~cost ~~business.~~of upgrading the ~~Our~~manufacturing ~~major~~facility ~~domestic~~to ~~competitors~~achieve ~~include~~regulatory ~~Akzo~~compliance. ~~Nobel,~~Even ~~The~~though ~~Sherwin-Williams~~we are ~~Company,~~still ~~Valspar/Lilly~~considered ~~Industries,~~a ~~MacLac~~small manufacturer, ~~Cardinal~~we ~~Paints,~~have ~~Rudd~~addressed ~~Coatings,~~these obstacles ~~Performance~~through ~~Coatings,~~the development and ~~Triangle~~refinement ~~Paints.~~of environmentally compliant products

WePage ~~believe competitive forces and environmentally driven changes will decrease~~3 ~~the number of competitors in the coatings industry (particularly the mid-size~~ ~~companies). The successors will be companies that can operate globally and focus their efforts directly on regional markets.~~

Weand ~~understand~~a ~~that almost two~~state-~~thirds~~ of -the-art ~~estimated~~manufacturing ~~1,400~~facility. ~~paint~~In ~~and~~addition, ~~coatings~~this strategic ~~plants~~advantage ~~are~~provides ~~located~~us ~~east~~with ofan ~~the~~opportunity ~~Mississippi River. Manufacturers are typically close~~ to ~~population~~purchase ~~centers~~existing ~~due~~businesses ~~to logistics. The top 15 companies account for~~whose ~~more~~owners ~~than~~have ~~60%~~limited ofexit ~~the US domestic coatings market by volume~~strategies.

~~There~~Growth ~~are many companies with revenues of less than $15 million operating in~~Strategy ~~the marketplace. The paint business traditionally has had very few barriers to~~ ~~entry and it was relatively easy to start a regional, fully integrated paint~~ company. However, current environmental legislation has made the entry into the coatings business a more strenuous and expensive proposition due to the extensive capital investment needed in research and development and modern plant equipment capable of allowing a company to meet the environmental and market requirements. These regulations are being applied to existing small manufacturers who face the expense of upgrading their operations. In many cases, the businesses are too small or have limited growth opportunities to offset the cost of upgrading the manufacturing facility to achieve regulatory compliance. Even though we are still considered a small manufacturer, we have addressed these obstacles through the development and refinement of environmentally compliant products and a state-of-the-art manufacturing facility. In addition, this strategic advantage provides us with an opportunity to purchase existing businesses whose owners have limited exit strategies.

~~Page~~We 5have historically limited our marketing and sales activities primarily to the California area, but we are now poised to implement a more aggressive growth strategy. We are continuing the expansion of our marketing and sales efforts to extend the market focus of our state-of-the-art coatings products into new markets. Our wood coating markets include manufacturers of solid and laminate wood furniture, rattan, cabinets, doors, windows, moldings, signs, sporting goods and sundry smaller articles such as picture frames.

~~Table~~The acquisition of ~~Contents~~USC was designed to provide us with a vehicle to introduce our advanced OEM coating formulations to the consumer. The USC business was comprised of approximately 50% OEM sales and 50% consumer sales. We are using the established consumer brand name of “U.S. Cellulose” to help expand the sales of our products to the consumer market place. In particular, our wood-coating products are well suited for these distribution channels. We believe they have wide market appeal because of their superior performance and reduced-VOC content, which generally makes them much more suitable for the consumer market than higher-VOC products presently being sold into this market place. In addition, we have had some success with large industrial OEM producers of redwood and cedar wood products. The product that we are selling to these customers has been tested against the commercially available retail products and we believe has proven to out-perform those products in long-term weatherabilty testing. We hope to increase our overall revenue by building upon these factors and delivering these products to the consumer market through our distribution channels.

~~Growth~~Government ~~Strategy~~Regulations

WeThe ~~have~~Environmental ~~historically~~Protection ~~limited~~Agency ~~our~~(“EPA”) ~~marketing~~administers ~~and~~fourteen ~~sales activities primarily to~~different ~~the California area~~statutes, ~~but~~each weof ~~are~~which ~~now~~mandates ~~poised~~some toform ~~implement a more aggressive growth strategy. We are continuing the expansion~~ of ~~our~~pollution ~~marketing~~control and ~~sales~~abatement. ~~efforts~~Two toof ~~extend~~ the ~~market~~key ~~focus~~statutes ofthat ~~our~~affect ~~state-of-~~the~~-art~~ coatings ~~products into~~and ~~new~~adhesive ~~markets.~~industries ~~Our wood coating markets include manufacturers of solid and~~are ~~laminate~~the ~~wood~~1990 ~~furniture,~~Clean ~~rattan,~~Air ~~cabinets,~~Act ~~doors, windows, moldings, signs, sporting goods~~ and ~~sundry~~the ~~smaller~~Toxic ~~articles~~Substance ~~such~~Control ~~as picture frames~~Act. ~~This market~~ ~~can be serviced by our Chico, San Jose and Los Angeles locations.~~

The ~~acquisition~~above-mentioned oflegislation ~~USC~~applies ~~was~~on ~~designed to provide us with~~ a vehicle to introduce our advanced OEM coating formulations to the consumer. The USC business was comprised of approximately 50% OEM and 50% consumer. We are using the established consumer brand name of “U.S. ~~Cellulose”~~national tolevel ~~expand~~resulting in the ~~sales~~establishment of ~~our products~~National toAmbient ~~this~~Air ~~market~~Quality ~~place.~~Standards ~~In particular~~(“NAAQS”), ~~our~~which ~~wood-coating products are~~in ~~extremely~~turn ~~well~~mandate ~~suited~~ceilings for ~~these distribution channels. They have wide market appeal because of their superior performance and reduced-~~VOC ~~content~~emissions. ~~We believe~~A ~~this~~region ~~makes~~not ~~them~~complying ~~much more suitable for the consumer market than the toxic products presently being sold into this market place. We have had great success~~ with ~~large industrial OEM producers of redwood and cedar wood products. The product that we are selling to these customers has been tested against~~ the ~~commercially available retail products and we believe has proven to~~NAAQS ~~out-perform~~is ~~those~~classified ~~products~~as ina ~~long~~Non-~~term~~Attainment ~~weatherabilty~~Area ~~testing.~~and Weis ~~hope~~required to ~~increase~~ ~~our~~develop ~~overall~~rules ~~revenue by building upon these factors and delivering~~that ~~these~~limit ~~products to the consumer market through our distribution channels~~emissions.

~~Government~~A ~~Regulations~~state which contains a Non-Attainment Area receives the Control Technology Guidelines issued by the EPA and must submit a State Implementation Plan (“SIP”) for approval by the EPA which outlines the state’s plan to meet NAAQS emission standards. The EPA has the authority to withhold federal transfer payments for state highway construction if the emission standards are not met.

~~The~~There ~~Environmental~~are ~~Protection~~51 ~~Agency~~regions ~~(“EPA”)~~in ~~administers~~the ~~fourteen~~United ~~different~~States that have been classified as ~~statutes~~Non-Attainment Areas, ~~each~~the most significant of which ~~mandates~~is ~~some~~the ~~form~~Los ofAngeles ~~pollution~~Basin ~~control~~in California. The Los Angeles Basin is a major manufacturing, industrial and population ~~abatement~~center which, in combination with its topographic and atmospheric characteristics, produces an inversion layer conducive to retaining pollutants (i.e. “smog”). The South Coast Air Quality Management District (“SCAQMD”) was ~~Two~~created ofby the ~~key~~California ~~statutes~~State ~~that~~Legislature ~~affect~~in ~~the~~1977 ~~coatings~~with ~~and~~a ~~adhesive~~mandate ~~industries~~to ~~are~~restrict the ~~1990~~emissions ~~Clean~~of ~~Air~~photochemically ~~Act~~reactive, smog-producing chemicals and solvents. ~~the~~These ~~Toxic~~chemicals ~~Substance~~and ~~Control~~solvents ~~Act~~contain VOCs.

~~The~~Rule 1136 ~~above-mentioned~~was ~~legislation~~adopted ~~applies~~in on1983 aby ~~U.S.~~the ~~national~~SCAQMD ~~level~~to ~~resulting~~regulate ~~in the~~users ~~establishment~~ of ~~National~~wood ~~Ambient Air Quality Standards (“NAAQS”), which in~~coatings ~~turn~~containing ~~produced~~VOCs. ~~ceilings~~The ~~for~~Rule ~~VOC~~describes ~~emissions.~~specific Agrams ~~region~~per ~~not~~liter ~~complying~~and ~~with~~pounds ~~the~~per ~~NAAQS~~gallon islimits ~~classified~~for aseach atype ~~Non-Attainment~~of ~~Area~~coating: ~~and is required to develop rules~~top ~~that limit emissions.~~

APage ~~state which contains a Non-Attainment Area receives the Control Technology~~4 ~~Guidelines issued by the EPA and must submit a State Implementation Plan~~ (“SIP”), for approval by the EPA, which outlines the state’s plan to meet NAAQS emission standards. The EPA has the authority to withhold federal transfer payments for state highway construction if the emission standards are not met.

~~There~~coats, ~~are~~stains 51(undercoats) and ~~regions~~sealers. inThese ~~the~~limits ~~United~~were ~~States~~to ~~that~~be ~~have~~decreased ~~been classified as~~over ~~Non~~a six-~~Attainment~~year ~~Areas~~period ending in 1996. However, the ~~most~~Board ~~significant~~ of ~~which~~the isSCAQMD extended the ~~Los Angeles~~timing ~~Basin~~of ~~in California.~~the ~~The~~implementation ~~Los Angeles~~of ~~Basin~~reductions isin aallowable ~~major~~levels ~~manufacturing,~~of ~~industrial~~VOCs ~~and~~to ~~population center which~~1997, in ~~combination~~favor ~~with~~of ~~its topographic and atmospheric characteristics, produces~~ an ~~inversion~~incentive ~~layer~~program ~~conducive~~ to ~~retaining~~reward ~~pollutants (i.e.~~furniture ~~“smog”).~~and ~~The~~cabinet manufacturers ~~South~~who ~~Coast~~made ~~Air~~the ~~Quality~~switch ~~Management~~to ~~District~~compliant ~~(“SCAQMD”)~~coatings ~~was created~~in byadvance of the ~~California~~new date. ~~State~~Similar ~~Legislature~~limitations ~~in 1977 with a mandate~~ to ~~restrict~~ the ~~emissions~~earlier ofproposed ~~photo~~limits ~~chemically~~pertaining ~~reactive,~~to coatings ~~smog-producing~~are ~~chemicals~~now ~~and solvents.~~scheduled ~~These~~to ~~chemicals~~become ~~and~~effective ~~solvents~~July 31, ~~contain VOCs~~2003.

Rule ~~1136~~1401 was adopted in ~~1983~~1990 by the SCAQMD toand ~~regulate~~lists ~~users~~six ofsolvents ~~wood coatings~~typically ~~containing~~used ~~VOCs.~~in ~~The~~wood ~~Rule~~finishes ~~describes~~as ~~specific~~carcinogenic ~~grams~~air ~~per~~contaminants. ~~liter~~As ~~and~~such, ~~pounds~~the ~~per gallon~~use ~~limits for each type~~ of ~~coating: top coats, stains (undercoats) and~~ ~~sealers.~~these ~~These~~six ~~limits~~substances ~~were~~is topermitted ~~have~~only ~~decreased~~on ~~over~~ a ~~six~~case-~~year~~by-case ~~period ending in 1996~~basis. ~~However,~~This restricts the ~~Board~~end ofuser’s ~~the~~ability ~~SCAQMD~~to ~~extended~~expand ~~the~~production ~~timing~~using oftraditional ~~the~~solvent-based ~~implementation~~coatings. ofWe ~~reductions~~believe inour ~~allowable~~products ~~levels~~are ofas ~~VOCs~~viable, ~~to 1997~~safer, inalternatives ~~favor of an incentive program~~ to ~~reward furniture and cabinet manufacturers who make~~ the ~~switch~~traditional tosolvent-based ~~compliant~~ coatings inthat ~~advance~~contain of the ~~new~~carcinogens ~~date.~~listed ~~Similar~~in ~~limitations~~Rule ~~to the earlier proposed limits pertaining to coatings will become effective July 31, 2003~~1401.

~~Page~~Research 6and Development

~~Table~~Our current research and development activities include new product development and refinement, analyzing and testing of ~~Contents~~new and competitive products, and identification of new applications. On average, over the past three years we have spent approximately 16% of corporate and administrative expenses on research and development. Research and development expenses were $578,806 for fiscal year ended March 31, 2003 as compared to $540,932 for fiscal 2002 and $550,943 in fiscal 2001.

~~Rule 1401~~Intellectual ~~was adopted during 1990 by the SCAQMD and lists six solvents~~Property ~~typically used in wood finishes as carcinogenic air contaminants. As such, the~~ ~~use of these six substances is permitted only on a case-by-case basis. This~~ ~~restricts the end user’s ability to expand production using traditional solvent-based coatings.~~

~~Research~~We develop and ~~Development~~manufacture products of a proprietary nature, and believe that our formulated coating and adhesive products represent significant intellectual property assets. We further believe that our future growth and profitability will be closely linked to our research and development capabilities. Therefore we strictly maintain policies and procedures including, but not limited to strict internal confidentiality, license and patent protection (where appropriate) and binding non-disclosure agreements. During the course of customer testing and where total non-disclosure is not practicable, secrecy agreements are used for further protection. AMT USA has been issued one patent, WaterMaster™, describing a unique chemical composition that provides a specific decorative water based finish.

~~Our current research and development activities include new product development~~Management ~~and refinement, analyzing and testing of new and competitive products, and~~ ~~identification of new applications. On average, over the past three years we~~ have spent approximately 17% of corporate and administrative expenses on Research and Development. Research and development expenses were $540,932 for fiscal year ended March 31, 2002 versus $550,943 for fiscal 2001 and $575,491 in fiscal 2000.

~~Intellectual~~The ~~Property~~Board of Directors has implemented an organization to provide an infrastructure of experienced management professionals dedicated to maximizing shareholder value. Their objectives include strengthening controls and increasing profitability with the present customer base, along with growing externally through joint ventures, acquisitions, product licenses, new product development, synergistic strategic alliances and other opportunities that could result in a meaningful increase in shareholder value.

~~We develop and manufacture products of a proprietary nature, and believe that~~ CEO ~~our formulated coating~~ and ~~adhesive~~President products represent significant intellectual property assets. We further believe that our future growth and profitability will be closely linked to our research and development capabilities. Therefore we strictly maintain policies and procedures including, but not limited to strict internal confidentiality, license and patent protection (where appropriate) and binding non-~~disclosure~~ ~~agreements~~E. ~~During~~Laughlin ~~the course of~~Flanagan ~~customer testing and where total non-disclosure is not practicable, secrecy~~ ~~agreements are used for further protection. We have one registered trademark,~~ ~~WaterMasterTM, related to our water-based wood coating products.~~

~~Management~~Mr. Flanagan has been our CEO and President since February 1998 and is 56 years old. Mr. Flanagan is a senior management executive with over 21 years of broad technology company experience, from start-up to a Fortune 500 subsidiary to a $250 million publicly traded company. His background includes CFO, COO and CEO positions at several leading-edge firms including National Micronetics, Inc. and ITT Corporation. His experience encompasses the acquisition of capital and financing, the expansion of firms through internal growth, strategic alliances and acquisitions.

~~The~~Page ~~Board of Directors has implemented an organization to provide an~~5 ~~infrastructure of experienced management professionals dedicated to maximizing~~ shareholder value. Their objectives include strengthening controls and increasing profitability with the present customer base, along with growing externally through joint ventures, acquisitions, product licenses, new product development, synergistic strategic alliances and other opportunities that could result in a meaningful increase in shareholder value.

CEO and President, —AMT E.USA ~~Laughlin~~- ~~Flanagan~~William A. Maligie

Mr. ~~Flanagan~~Maligie has been the CEO and President ~~since~~of ~~February~~AMT ~~1998.~~USA ~~Mr. Flanagan~~since 1989 and is a44 ~~senior~~years ~~management~~old. ~~executive~~Prior ~~with~~to ~~over~~joining ~~21 years~~us, ofhe ~~broad~~managed ~~technology~~product ~~company~~development for Texas ~~experience,~~Instruments ~~from~~and ~~start-up~~marketing toand asales ~~Fortune~~for ~~500~~the ~~subsidiary~~Dynachem toDivision aof ~~$250 million~~Morton ~~publicly~~Thiokol. ~~traded company~~Mr. Maligie ~~His~~has ~~background~~a ~~includes~~Bachelor ~~CFO~~of Science, ~~COO~~Polymer ~~and~~Technology ~~CEO positions at~~from ~~several~~California ~~leading-edge~~State ~~firms~~University, ~~including National Micronetics~~Chico, ~~Inc.~~California and ~~ITT Corporation.~~a ~~His~~Masters ~~experience~~in ~~encompasses the acquisition of capital and~~Business ~~financing,~~Administration from the ~~expansion~~University of ~~firms~~Dallas ~~through~~located ~~internal~~in ~~growth~~Irvine, ~~strategic alliances and acquisitions~~Texas.

~~CEO~~ Corporate Controller &– ~~President,~~Charlene ~~AMT USA — William A. Maligie~~Bellante

MrMs. ~~Maligie~~Bellante has abeen ~~Bachelor~~our ofCorporate ~~Science,~~Controller ~~Polymer~~since ~~Technology~~November ~~from~~1999 ~~California~~and ~~State~~is 45 ~~University,~~years ~~Chico,~~old. ~~California~~Ms. Bellante ~~and~~is a ~~Masters~~Certified inPublic ~~Business~~Accountant ~~Administration~~with ~~from~~20 years ~~the~~of ~~University~~financial reporting experience and nine years of ~~Dallas~~experience ~~located~~as incontroller ~~Irvine,~~of ~~Texas~~a multi-million dollar international manufacturing company. Prior to joining us ~~in 1989~~, he ~~managed~~Ms. Bellante ~~product~~was ~~development~~the ~~for~~controller ~~Texas~~of ~~Instruments~~Lares ~~and~~Research, ~~marketing~~a ~~and~~privately ~~sales for~~held ~~the~~manufacturer ~~Dynachem~~and ~~Division~~distributor of ~~Morton~~dental ~~Thiokol~~products from 1994 to 1999.

~~Corporate~~ General Manager ~~Controller~~- –Ryan ~~Charlene Bellante~~Oates

MsMr. ~~Bellante~~Oates, isone aof ~~Certified~~our ~~Public~~original ~~Accountant~~employees, ~~with~~has ~~19 years~~worked ofin ~~financial~~the research and ~~reporting~~development, ~~experience~~manufacturing, information systems and ~~eight~~marketing ~~years~~and sales departments of ~~experience~~AMT asUSA ~~controller~~since 1992 and was named General Manager of aAMT USA in ~~multi-million~~1998. ~~dollar~~Mr. Oates ~~international~~is ~~manufacturing~~36 years ~~company~~old.

~~Page~~ Vice President 7Marketing & Sales - Craig Pollock

~~Table~~Mr. Pollock has been our Vice President Marketing & Sales since May 1998. He has over 16 years of ~~Contents~~sales management experience including tenures at Duckback Products, Inc., Olympic Stain and PPG Industries. He was responsible for the establishment of national distributor programs, national account programs and independent dealer programs for these national manufacturers. Mr. Pollock is 43 years old.

~~General~~ Director of ~~Manager~~Research —& ~~Ryan~~Development ~~Oates~~- Wade Potter

Mr. ~~Oates~~Potter ishas ~~one~~been our Director of ~~our~~Research ~~original~~& ~~employees~~Development since 1989 and ~~has~~is ~~worked~~48 years inold. ~~the~~Prior ~~research~~to ~~and development,~~joining ~~manufacturing~~us, ~~information~~Mr. Potter ~~systems~~gained ~~and~~21 years ~~marketing~~experience in development and ~~sales departments~~market ~~within~~application ~~Alternative~~chemistry, ~~Materials~~including ~~during~~extended aperiods 10in the well-~~year~~established ~~tenure.~~laboratories ~~His knowledge~~of Morton Thiokol Inc. and ~~ability~~Ablestik inLaboratories. Mr. Potter ~~the~~has ~~development~~both a Bachelors and ~~adaptation~~a ofMasters ~~wood~~degree ~~coatings~~in ~~to specific~~Chemistry ~~situations~~and isPolymer Chemistry, ~~excellent~~respectively, ~~and~~from hethe ~~has~~State ~~greatly~~University ~~contributed~~of toNew ~~our~~York ~~growth and~~in ~~ongoing~~Syracuse, ~~success~~New York.

~~Vice President Marketing & Sales — Craig Pollock~~Personnel

~~Mr. Pollock~~As ~~has~~of ~~over 15~~May ~~years~~18, of2003, ~~sales~~we ~~management~~had ~~experience~~sixty-five ~~including~~full-time ~~tenures at~~employees ~~Duckback Products, Inc., Olympic Stain~~ and ~~PPG~~we ~~Industries.~~also ~~He was~~contract ~~responsible~~a ~~for~~small ~~the~~number ~~establishment~~ of ~~national~~temporary ~~distributor~~employees ~~programs, national account programs~~ and ~~independent~~contractors. ~~dealer~~Forty-two ~~programs for these national~~employees ~~manufacturers.~~operate ~~His~~out ~~understanding~~ of ~~the~~our ~~coating~~manufacturing ~~industry~~plant ~~and~~located ~~track~~in ~~record~~Chico, ~~for~~California. Our ~~significant~~remaining ~~growth~~twenty-three ~~while~~employees ~~with~~are ~~his~~located ~~past~~in ~~employers~~our ~~has~~San ~~been~~Jose anand ~~integral~~Los ~~part of~~Angeles ~~keeping~~distribution usand ontechnical ~~our~~service ~~steep growth curve~~centers.

~~Director~~Page ~~of Research & Development — Wade Potter~~6

~~Mr. Potter~~RISK ~~has both a Bachelors and a Masters degree in Chemistry and Polymer~~FACTORS ~~Chemistry respectively, from the State University of New York in Syracuse, New~~ ~~York. In addition, he has 20 years experience in development and market~~ application chemistry, including extended periods in the well-established laboratories of Morton Thiokol Inc. and Ablestik Laboratories. Mr. Potter is responsible for directing our research and development efforts.

We The ~~also~~following ~~have~~risk ~~additional~~factors ~~technical~~and ~~sales~~other ~~support,~~information ~~manufacturing,~~included ~~research~~in this Annual Report should be carefully considered. The risks and uncertainties described ~~development~~below are not the only ones we face. Additional risks and ~~logistical~~uncertainties ~~support~~not presently ~~staff~~known into us or that we currently deem immaterial also may impair our business operations. If any of the ~~offices~~following inrisks ~~Chico~~occur, our business, financial condition, operating results and cash flows could be materially adversely affected.

~~Personnel~~We are still building our market presence and are subject to substantial competition that could inhibit our ability to succeed as planned.

AsWe are one of ~~May 18,~~many ~~2002,~~small companies in the coating systems market with no measurable percentage of that market. We are still attempting to build our market presence as we ~~had~~compete ~~sixty-five~~with ~~full-time~~both ~~employees~~domestic and weforeign ~~also~~companies. ~~contract~~Our asuccess ~~small~~is ~~number~~largely predicated upon our ability to produce superior products to meet the needs of ~~temporary~~manufacturers, ~~employees~~satisfy government environmental guidelines, maintain quality standards and ~~contractors~~sell our products at competitive prices. ~~Forty-two~~Our markets ~~employees~~are subject to intense competition from both private and public ~~operate~~businesses, ~~out~~many of ~~the~~which ~~fully~~have ~~integrated~~greater financial resources and ~~automated~~considerably larger ~~manufacturing~~operations ~~plant~~than ~~located~~us and may benefit from greater name recognition than us. Such competition as well as any future competition may adversely affect our success in ~~Chico,~~the ~~California~~market place. ~~Our~~Any ~~remaining~~reputation ~~twenty-three~~that ~~employees~~we ~~are~~may ~~located~~successfully ingain with ~~San~~retailers for quality product does not necessarily translate into name ~~Jose~~recognition ~~and~~or ~~Los~~increased ~~Angeles~~market ~~distribution~~share ~~and~~with ~~technical~~the ~~service~~end ~~centers~~consumer. Our products may not be well received by OEM firms or end-user consumers, or other companies may surpass us in product innovations.

~~RISK~~We ~~FACTORS~~cannot be certain that our product innovations and marketing successes will continue.

~~The~~We ~~following~~believe ~~risk~~that, ~~factors~~to an extent, our past performance has been based upon, and our ~~other~~future ~~information~~success ~~included~~will partially depend upon, in ~~this~~part, ~~Annual~~our ~~Report~~ability to continue ~~should~~to beimprove ~~carefully~~our ~~considered.~~existing ~~The~~products ~~risks~~through ~~and~~product ~~uncertainties~~innovation ~~described~~and ~~below~~to develop, ~~are~~market ~~not~~and ~~the~~produce ~~only~~new ~~ones~~products. We cannot assure you that we ~~face.~~will ~~Additional~~be successful ~~risks~~in the introduction, marketing and ~~uncertainties~~production ~~not presently~~of ~~known~~any tonew usproducts or product ~~that~~innovations, weor ~~currently~~develop ~~deem~~and ~~immaterial~~introduce ~~also~~in ~~may~~a ~~impair~~timely ~~our~~manner innovations to ~~business~~our ~~operations.~~existing Ifproducts ~~any~~that ofsatisfy ~~the~~customer ~~following~~needs ~~risks~~or ~~occur,~~achieve ~~our~~market ~~business,~~acceptance. ~~financial~~Our ~~condition,~~failure ~~operating~~to ~~results~~develop new products and ~~cash~~introduce ~~flows~~them successfully and in a timely manner could beharm ~~materially~~our ability to grow our business and could have a ~~adversely~~material ~~affected~~adverse effect on our business, results of operations and financial condition.

WeThe ~~are~~inability ~~dependent~~to ~~solely~~successfully onobtain ~~the~~or ~~operations~~protect of our ~~wholly~~intellectual ~~owned~~property ~~subsidiary, AMT~~could ~~USA,~~harm ~~and~~our ~~its success in a highly~~ competitive ~~business, which has a number of inherent risks~~advantage. ~~These may be summarized as follows:~~

• Our success iswill ~~largely~~depend, ~~predicated~~in ~~upon~~part, on our ability to ~~produce~~maintain ~~superior~~protection ~~products~~for ~~to meet~~ the research ~~needs~~and development of ~~manufacturers,~~our ~~satisfy~~formulated ~~government~~coating ~~environmental guidelines, maintain quality standards~~ and ~~sell~~adhesive ~~our~~ products ~~at competitive prices~~. Our products ~~markets~~represent ~~are~~significant ~~subject~~intellectual toproperty ~~intense~~assets. ~~competition~~This ~~from~~proprietary position ~~both~~reflects ~~private~~a technology and ~~public~~expertise ~~businesses,~~that ~~many~~we ofbelieve ~~who~~enables ~~have~~us ~~greater~~to provide ~~financial~~products ~~resources~~that ~~and~~meet ~~considerably~~customer ~~larger~~and ~~operations~~regulatory ~~than~~expectations us and ~~may~~therefore we ~~benefit~~continually ~~from~~try ~~greater~~to ~~name~~offer ~~recognition~~our ~~than~~customers ~~us.~~several ~~Such~~additional ~~competition~~advantages asover our ~~well~~competitors asto ~~any~~obtain ~~future~~their ~~competition~~loyalty ~~may~~and ~~adversely~~help ~~affect~~sustain our ~~success in the market place~~sales. ~~There~~Even though ~~can~~we bestrictly nomaintain ~~assurance~~policies ~~that~~and weprocedures ~~will~~for ~~continue~~strict tointernal confidentiality, bepatent ~~able~~protection toand ~~successfully~~binding ~~compete~~non-disclosure ~~against~~agreements ~~our~~we cannot ~~competitors~~assure oryou that ~~the~~our ~~competitive~~intellectual ~~pressures~~assets ~~faced~~will bybe usprotected ~~will~~and not ~~affect~~made available to our ~~financial performance.~~competitors

~~Page~~The 8products that we manufacture could expose us to product liability claims.

~~Table~~Our business exposes us to potential product liability risks, which are inherent in the manufacture and distribution of ~~Contents~~certain of our products. Although we generally seek to insure against such risks, there can be no assurance that such coverage is adequate or that we will be able to maintain such insurance on

•Page Our business places heavy reliance on the research and development of our formulated coating and adhesive products. Our products represent significant intellectual property assets. This proprietary position reflects a technology and expertise that enables us to provide products that meet customer and regulatory expectations and therefore we continually offer our customers several additional advantages over our competitors to attain their confidences and sustain our sales. Even though we strictly maintain policies and procedures for strict internal confidentiality, patent protection and binding non-disclosure agreements it is not certain that our intellectual assets will be protected and not made available to our competitors. • We are required to comply with the Federal Environmental Protection Agency (“EPA”) and, in particular, the 1990 Clean Air Act and the Toxic Substance Control Act and the State of California’s South Coast Air Quality Management District (“SCAQMD”). Government and environmental regulations are driving research and development efforts towards reducing the amount of pollution generated during their manufacturing process. There can be no assurance that existing regulations and licensing will not be amended in a way that negatively impacts our business. There can be no assurance that we will be able to comply with all regulations, which may be in force from time to time and expenditures for necessary corrective actions would be economical. In either event, a material adverse effect on the results of our operations could be expected. • Our market is based upon a large number of small manufacturers in the California area. Poor market conditions and inflation or other unanticipated events may result in lower revenues than anticipated, making certain planned expenditures on advertising, promotion and research and development projects unachievable. • We intend to commence an aggressive sales growth strategy to markets in other states, which may not prove profitable due to acceptance of our products or increased costs in providing our products due to raw materials or delivery costs, which in turn could result in decreased margins. • Should we undertake strategic acquisitions requiring funds in excess of our internally generated cash flow, we might be required to incur additional debt or seek additional financing through private placements. In either case, we may not be able to obtain such funds in sufficient quantities on terms we consider acceptable and there is no assurance that we will operate profitably in the future. • We are dependent on a relatively small number of key employees, the loss of any of whom would have a significant adverse effect on the Company. We do not carry key-man insurance on any of our employees.7

~~FORWARD-LOOKING~~acceptable ~~STATEMENTS~~terms. A successful product liability claim in excess of our insurance coverage could have a material adverse effect on us and could prevent us from obtaining adequate product liability insurance in the future on commercially reasonable terms.

~~Some~~Our ~~statements~~business ~~and~~is information contained in this Annual Report are not historical facts, but are forward-looking statements. They can be identified by the use of forward-looking words such as “believes,” “expects,” “plans,” “may,” “will,” “would,” “could,” “should” or “anticipates” or other comparable words, or by discussions of strategy, plans or goals that involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. We warn you that these forward-looking statements are only predictions, subject to ~~risks~~many regulations and ~~uncertainties.~~noncompliance ~~Actual~~is ~~events or results can differ materially from those expressed or implied as a result of a variety of factors, including those set forth above under “Risk Factors~~costly.”

~~Page~~The 9manufacture, marketing and sale of our products are subject to the rules and regulations of various federal, state and local agencies, including, without limitation, the Federal Environmental Protection Agency (“EPA”) and, in particular, the 1990 Clean Air Act and the Toxic Substance Control Act, as well as the State of California’s South Coast Air Quality Management District (“SCAQMD”). If a regulatory authority finds that our manufacturing process results in the creation of pollution, or that a current or future product or production run is not in compliance with any of these regulations, we may be fined and/or forced to implement a costly remediation plan, production may be stopped or our product may be pulled from the shelves, any of which could adversely affect our financial conditions and operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we have no way of anticipating whether changes in these rules and regulations will impact our business adversely. Additional or revised regulatory requirements, whether environmental, tax or otherwise, could have a material adverse effect on our financial condition and results of operations.

~~Table~~If ofwe ~~Contents~~fail to generate sufficient revenues to cover our planned expenditures, our financial condition will be harmed.

~~ITEM~~Our 2market is based upon a large number of small manufacturers in the California area. ~~PROPERTIES~~ Poor market conditions and inflation or other unanticipated events may result in lower revenues than anticipated, making certain planned expenditures on advertising, promotion and research and development projects unachievable. The occurrence of any of these events would have a negative impact on our financial condition and operating results.

~~Chico,~~The CAunsuccessful —implementation ~~Manufacturing~~of our growth strategy and expansion plans ~~Administration~~could ~~Facility~~result in lower gross margins and harm our financial condition.

~~AMT~~We ~~USA~~intend ~~leases~~to acommence ~~state-of-the-art~~an ~~manufacturing~~aggressive ~~and~~sales ~~administrative~~growth ~~facility~~strategy ~~in Chico,~~to ~~California.~~markets ~~The~~in ~~facility as presently configured approximates 50,000~~other ~~square~~states, ~~feet.~~which Wemay ~~believe~~not ~~that~~prove ~~this~~profitable ~~facility~~due isto ~~capable~~a lack of ~~producing~~acceptance ~~and shipping approximately five million gallons~~ of ~~coatings per year; if fully~~our ~~operational,~~products weor ~~believe~~increased ~~this~~costs ~~could result~~ in ~~potential~~providing ~~revenue~~our ofproducts ~~approximately $50 million~~due ~~of revenue per year, with adequate room~~ to ~~expand~~raw ~~at this location. This facility houses operations,~~ materials ~~management, research, finance and~~or ~~administrative~~delivery ~~functions. The lease expires on December 31~~costs, ~~2007,~~which ~~and~~in ~~requires monthly~~turn ~~payments~~could ofresult ~~$17,145~~in todecreased ~~$20,307 during the ten-year term~~margins.

~~Los~~Any ~~Angeles~~future acquisitions could prove difficult to integrate, CAdisrupt —our business, ~~Sales~~dilute shareholder value and ~~Technical~~adversely ~~Service~~affect ~~Facility~~our operating results.

~~AMT~~We ~~USA~~may ~~leases~~acquire or make investments in complementary companies and products in the future. If we fail to properly evaluate, execute and integrate acquisitions and investments, our business and prospects may be seriously harmed. To successfully complete an ~~office~~acquisition, we must properly evaluate the products, accurately forecast the financial impact of the transaction, including accounting charges and ~~warehouse~~transaction ~~unit~~expenses, integrate and retain personnel, combine potentially different corporate cultures and effectively integrate products and research and development, sales, marketing and support operations. If we fail to do any of ~~approximately~~these, 5we may suffer losses and impair relationships with our employees,~~300~~ ~~square~~customers ~~feet~~and strategic partners, and our inmanagement ~~Los~~may ~~Angeles~~be ~~County~~distracted from our day-to-day operations. We also may be unable to maintain uniform standards, controls, procedures and policies, and significant demands may be placed on our management and our operations, information services and financial, legal and marketing resources. Finally, acquired businesses sometimes result in unexpected liabilities and contingencies that

~~This~~Page ~~facility serves as a warehouse, regional sales office and laboratory and~~8 ~~has greatly improved the ability to service Southern California customers. The~~ ~~lease expired August 31, 2001, and is now on a short-term lease, which expires December 31, 2002. AMT USA intends to not renew the lease and will instead relocate to Ontario, California.~~

~~Ontario~~could be significant. In addition, CAacquisitions –using ~~Sales~~debt ~~and~~or ~~Technical~~equity ~~Service~~securities dilute ~~Facility~~the ownership of existing shareholders, which could affect the market price of our stock.

~~AMT~~If ~~USA~~we ~~has~~need ~~signed~~to araise ~~lease~~additional capital for aour ~~new~~operating 23plan,~~000~~ ~~square~~our ~~foot state-of-the-art~~business ~~facility~~would ~~in Ontario, California. This facility will enable us to~~ be ~~even closer~~harmed toif ~~important~~we ~~customers~~were ~~and~~unable will reduce transportation and handling costs. This facility will also provide enough space for our continued growth in this important market. The lease expires in September 30, 2012 and requires monthly payments of $10,080 to ~~$12,936~~do ~~during~~so ~~the~~on ~~ten-year~~acceptable ~~term~~terms.

~~San~~We ~~Jose~~currently anticipate that our existing capital resources and cash flows from operations will enable us to maintain our currently planned operations for the foreseeable future. However, CAour –current ~~Sales~~operating plan may change as a result of many factors, ~~Warehouse~~including general economic conditions affecting the U.S. economy that are beyond our control. If we are unable to generate and ~~Manufacturing~~maintain positive ~~Facility~~operating cash flows and operating income in the future, we may need additional funding. We may also choose to raise additional capital due to market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans. If additional capital were needed, our inability to raise capital on favorable terms would harm our business and financial condition. To the extent that we raise additional capital through the sale of equity or debt securities convertible into equity, the issuance of these securities could result in dilution to our stockholders.

~~AMT~~Competition ~~USA leases an office and warehouse unit of approximately 10,000 square feet~~ in ~~San~~our ~~Jose,~~industries ~~California.~~may ~~USC~~hinder ~~previously~~our ~~operated~~ability ~~the~~to ~~facility.~~execute ~~This~~our ~~facility~~business ~~serves as a warehouse~~strategy, ~~regional~~achieve ~~sales office~~profitability, ~~manufacturing,~~or ~~and~~maintain arelationships ~~small laboratory. The lease has a term that expires September 30, 2002,~~ with noexisting ~~option to renew~~customers. ~~The lease requires monthly payments of approximately $6,000.~~

~~Chico~~We operate in highly competitive industries. We compete against numerous other companies, CAsome —of ~~Principal~~which ~~Executive~~are ~~Office~~more established in their industries and have substantially greater revenue or resources than we do. Our products compete against national and regional products and private label products produced by various suppliers. Our largest domestic competitors include Akzo Nobel, The Sherwin-Williams Company, Valspar/Lilly Industries, MacLac, Cardinal Paints, Rudd Coatings, Performance Coatings, and Triangle Paints. To compete effectively, among other things, we must:

We• ~~have~~maintain our ~~principal~~relationships ~~executive~~with ~~offices~~key ~~and~~retailers; ~~corporate~~• ~~headquarters~~continually indevelop ~~Chico, California.~~innovative ~~The~~new ~~terms~~products ofthat ~~the~~appeal ~~rental~~to ~~agreement~~consumers; ~~call~~• ~~for~~ensure ~~total~~compliance ~~monthly~~with ~~payments of~~current ~~$925~~environmental regulations; • maintain strict quality standards; and ~~the~~• ~~lease~~deliver isproducts ~~currently~~on ~~month-to-month~~a reliable basis at competitive prices.

~~Vancouver~~Competition could cause lower sales volumes, BCprice reductions, reduced profits or losses, or loss of market share. Our inability to compete effectively could have a material adverse effect on our business, results of operations and financial condition.

WeThe ~~also~~loss ~~share 1,640 square feet~~ of ~~office~~key ~~space~~senior ~~with~~management ~~related~~personnel ~~companies~~could innegatively ~~North Vancouver,~~affect ~~British Columbia, Canada. The terms of~~ our ~~rental agreement call~~ ~~for monthly payments of $1,000 towards the office space and include the use of office furniture and equipment~~business.

~~ITEM~~We 3depend on the continued services and performance of our senior management and other key personnel. ~~LEGAL~~ ~~PROCEEDINGS~~We do not have “key person” life insurance policies. The loss of any of our executive officers or other key employees could harm our business.

AtPage ~~the present time there are no material pending legal proceedings to which we~~9 ~~or any of our subsidiaries is a party, or to which any of our property is~~ ~~subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.~~

~~Page~~Any 10increase in the costs, or decreases in the supply, of the raw materials necessary for our business could have an adverse effect on our financial condition.

~~Table~~Our business places heavy reliance on raw materials being readily available. Although we believe that there are a number of ~~Contents~~companies that can provide us with the raw materials necessary to conduct our business, any significant decreases in supplies, or any increase in costs or a greater increase in delivery costs for these materials, could result in a further decrease in our margins, which would harm our financial condition.

~~ITEM~~The ~~4. SUBMISSION~~price OFfor ~~MATTERS~~our TOcommon Ashares ~~VOTE~~may OFcontinue ~~SECURITY~~to ~~HOLDERS~~be volatile.

~~During~~The ~~the~~market ~~fourth~~price ~~quarter~~of our securities, like that of ~~the~~many ~~fiscal~~other ~~year~~emerging ~~ended~~companies, has ~~March 31~~been highly volatile, ~~2002~~experiencing wide fluctuations not necessarily related to the operating performance of such companies. Factors such as our operating results, noannouncements ~~matters~~by us or our competitors concerning ~~were~~innovations ~~submitted~~and tonew products or systems may have a ~~vote~~significant impact on the market price of ~~security~~our ~~holders~~securities. In addition, we have experienced limited trading volume in our common shares.

~~PART~~FORWARD-LOOKING IISTATEMENTS

~~ITEM~~Some 5statements and information contained in this Annual Report are not historical facts, but are forward-looking statements. ~~MARKET~~ ~~FOR~~They ~~REGISTRANT’S~~can ~~COMMON~~be ~~EQUITY~~identified ~~AND~~by the ~~RELATED~~use ~~STOCKHOLDER~~of ~~MATTERS~~forward-looking words such as “believes,” “expects,” “plans,” “may,” “will,” “would,” “could,” “should” or “anticipates” or other comparable words, or by discussions of strategy, plans or goals that involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. We warn you that these forward-looking statements are only predictions, subject to risks and uncertainties. Actual events or results can differ materially from those expressed or implied as a result of a variety of factors, including those set forth above under “Risk Factors.”

~~Market~~ITEM ~~information~~2. PROPERTIES.

~~Our common stock is listed on the TSX Venture Exchange (“TSX Venture”)~~Chico, ~~formerly~~ ~~the~~CA ~~Canadian~~- ~~Venture~~Manufacturing ~~Exchange (“CDNX”), under the symbol “PYM”~~ and ~~the OTC~~Administration ~~Bulletin Board under the symbol “PYSU.”~~Facility

~~The~~AMT ~~Toronto~~USA ~~Stock~~leases ~~Exchange~~a ~~acquired~~state-of-the-art ~~CDNX,~~manufacturing and ~~through~~administrative anfacility ~~internal~~in ~~reorganization~~Chico, ~~was~~California. ~~renamed~~The ~~the~~facility ~~TSX~~as ~~group~~presently ofconfigured ~~companies,~~is ~~which~~approximately ~~collectively~~50,000 ~~manages~~square ~~all~~feet. ~~aspects~~We ofbelieve ~~Canada’s~~that ~~senior~~this ~~and~~facility ~~junior~~will ~~capital~~provide ~~markets.~~us ~~TSX~~with ~~are~~sufficient production and shipping capability for the foreseeable future. This facility ~~initials~~houses ~~attached~~operations, tomaterials ~~the~~management, ~~core~~research, ~~business~~finance ofand ~~the~~administrative functions. ~~TSX~~The ~~group~~lease ofexpires ~~companies:~~on ~~Toronto~~December 31, 2007, and requires monthly ~~Stock~~payments ~~Exchange~~of $17,145 ~~TSX~~to ~~Venture~~$20,307 ~~Exchange~~during ~~and~~the ~~TSX~~ten-year ~~Markets~~term.

~~TSX~~Los ~~Venture is the Company’s principal trading market~~Angeles, ~~where~~CA it- isSales ~~classified as~~and aTechnical ~~Tier~~Service ~~1 Issuer. Tier 1 is considered a more advanced tier, where higher~~Facility ~~financial requirements must be maintained.~~

~~Shown~~AMT ~~below~~USA ~~are~~leases ~~the~~an ~~high~~office and ~~low~~warehouse ~~sale~~unit ~~prices~~of ~~for~~approximately ~~our~~5,300 ~~Common~~square ~~Stock~~feet in ~~for~~Los ~~each~~Angeles ofCounty. This facility serves as a warehouse, regional sales ~~the~~office ~~fiscal~~and ~~years~~laboratory. ~~ended~~The ~~March~~original lease expired August 31, ~~2002,~~ 2001 and ~~2000~~is currently month-to-month. AMT USA intends to relocate to Ontario, California in July 2003, at which time the Los Angeles location will be closed.

~~Canadian~~Ontario, ~~Dollars:~~CA – Sales and Technical Service Facility

	FISCAL 2002				FISCAL 2001				FISCAL 2000
	HIGH		LOW		HIGH		LOW		HIGH		LOW
First quarter	$	0.88	$	0.46	$	1.20	$	0.75	$	0.85	$	0.65
Second quarter	$	0.78	$	0.35	$	1.18	$	0.80	$	0.95	$	0.73
Third quarter	$	0.58	$	0.35	$	1.25	$	0.95	$	1.15	$	0.95
Fourth quarter	$	0.58	$	0.40	$	1.19	$	0.66	$	1.35	$	1.05

AMT USA has signed a lease that will commence on July 1, 2003 for a new 23,000 square foot state-of-the-art facility in Ontario, California, which will serve as our warehouse, sales office and laboratory. This facility will enable us to be even closer to important customers and will reduce transportation and

~~Shareholders~~Page 10

Wehandling ~~had~~costs. ~~470~~This ~~registered~~facility ~~shareholders~~will asalso atprovide ~~May~~sufficient space for our continued growth in this important market. The lease expires in September 2830, 2012 ~~2002~~and requires monthly payments of $10,080 to $12,936 during the ten-year term.

~~Dividends~~San Jose, CA – Sales, Warehouse and Manufacturing Facility

WeAMT ~~have~~USA ~~not~~leases ~~paid~~an ~~any~~office ~~dividends~~and towarehouse ~~the~~unit ~~holders~~ of ~~our~~approximately ~~common~~10,000 ~~stock.~~square ~~The decision~~feet toin ~~pay~~San ~~dividends~~Jose, ~~and~~California. ~~the~~USC ~~amount~~previously ~~thereof~~operated ~~is at~~ the ~~discretion~~facility. ofThis ~~our Board of~~facility ~~Directors~~serves ~~and~~as ~~will~~a bewarehouse, ~~governed~~regional bysales ~~such~~office, ~~factors as earnings~~manufacturing, ~~capital requirements~~ and ~~our~~a ~~operating and financial condition~~small laboratory. WeThe ~~intend~~lease tohas ~~retain~~a ~~any earnings~~term toof ~~finance~~five ~~growth~~years ofthat ~~our~~expires ~~business and~~September 30, ~~thus~~ 2007, wewith dono ~~not~~option ~~intend~~ to ~~pay dividends~~renew. inThe ~~the~~lease ~~foreseeable~~requires ~~future~~monthly payments of approximately $7,000.

~~Recent~~Chico, ~~Sales~~CA of- ~~Unregistered~~Principal ~~Securities~~Executive Office

~~The~~We ~~following~~have isour aprincipal ~~description~~executive offices and corporate headquarters of approximately ~~all~~1300 ~~securities~~square ~~that~~feet wein ~~sold~~Chico, ~~within~~California. The terms of the ~~past~~rental ~~three~~agreement ~~years~~call ~~without~~for ~~registering~~total ~~the~~monthly ~~securities~~payments ~~under~~of $925 and the ~~Securities~~lease ~~Act:~~is currently month-to-month.

~~Page~~Vancouver, 11BC

~~Table~~We also share 1,640 square feet of ~~Contents~~office space with related companies in North Vancouver, British Columbia, Canada. Our rental agreement is month to month, and calls for monthly payments of $1,000 towards the office space and includes the use of office furniture and equipment.

~~Minority~~ITEM ~~Interest~~3. LEGAL PROCEEDINGS

~~Through~~We aare ~~completed~~currently ~~reorganization~~ in ~~February~~discussions ~~1997,~~with wethe ~~redomiciled~~San toFrancisco ~~Nevada, United~~Regional ~~States~~Water ~~from~~Quality Control ~~British~~Board ~~Columbia,~~regarding ~~Canada.~~our ~~Those~~potential ~~Canadian~~responsibility ~~shareholders~~for ~~who~~groundwater pollution ~~elected~~caused toby ~~retain~~USC’s ~~shares~~operations inat aits ~~Canadian~~facility ~~company~~in ~~had~~San ~~the opportunity~~Jose, upCalifornia. toWe have ~~September 1,~~retained ~~2001,~~environmental consultants to ~~convert~~assist ~~their~~us ~~non-transferable,~~in ~~non-voting~~preparing ~~PSI Acquisitions~~a ~~Corp~~soil remediation plan. ~~(PAC) preferred~~The ~~shares~~current onproposed aproject ~~one~~cost ~~for~~is ~~one~~approximately ~~(1:1)~~$53,000. ~~basis into~~Upon ~~Polymer~~approval ~~Solutions~~of ~~common~~the ~~stock.~~remediation ~~This~~plan ~~transaction~~by ~~was~~the ~~exempt~~San ~~from~~Francisco ~~registration~~Regional Water Quality ~~pursuant~~Control toBoard, ~~section~~we ~~3(a)(9)~~intend ofto implement the ~~Securities Act~~plan.

~~Our~~On ~~Board~~June 5, 2002, we filed a lawsuit in the State of ~~Directors~~California ~~resolved~~Superior onCourt for ~~November 29~~the County of Butte against Kushwood Manufacturing, ~~2001~~Inc. et al. The complaint seeks damages for Kushwood’s failure to ~~request~~make ~~all~~certain ~~remaining~~payments that we ~~Canadian~~allege ~~shareholders~~are owing to ~~redeem~~us. ~~their~~Kushwood ~~preferred~~filed ~~shares~~a ~~prior~~counterclaim toon ~~January~~December 3118, 2002, alleging breach of contract, defective merchandise, and related claims. The Ascounterclaim seeks compensatory damages. We have been informed that our insurance carrier will be providing a defense to the counterclaim, subject to certain conditions and limitations. We dispute the allegations of ~~March 31~~the counterclaim and intend to defend the action vigorously and pursue all appropriate remedies available to us. However, ~~2002~~due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the litigation or that our insurance carrier will fully reimburse us, if at all, ~~non-voting~~for ~~PAC~~any ~~preferred~~damages ~~shares~~and ~~had~~costs ~~been~~we ~~redeemed~~incur in connection with this litigation. Any unfavorable outcome of litigation could have an adverse impact on our business, financial condition and results of operations.

~~Normal~~On ~~Course~~November 21, ~~Issuer~~2002, ~~Bid~~a lawsuit was filed in the State of California Superior Court for the County of Santa Clara against us by Young Han/dba Faithful Kitchen & Bath alleging breach of contract, defective merchandise and related claims. The complaint seeks compensatory damages. We have been informed that our insurance carrier will be providing a defense to the complaint, subject to certain conditions and limitations. We dispute the allegations of the complaint and intend to defend the action vigorously and pursue all appropriate remedies available to us. However, due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of the litigation or that our insurance carrier will fully reimburse us, if at all, for any damages and costs we incur in connection with this litigation. Any

OnPage ~~December 17, 2001, we received confirmation from TSX Venture of our ability~~11 ~~to repurchase and cancel up to 200,000 shares of our common stock through the~~ facilities of the TSX Venture Exchange. The Company repurchased and cancelled 199,500 common shares at an average price of $0.42 between January 8 and April 25, 2002. Polymer requested an amendment to the Normal Course Issuer Bid on May 17, 2002, to repurchase a further 276,143 shares, being a total of 5% of the outstanding common shares at December 17, 2001.

~~ITEM~~unfavorable ~~6. SELECTED~~outcome ~~FINANCIAL~~of ~~DATA~~litigation could have an adverse impact on our business, financial condition and results of operations.

~~The~~We ~~following~~are ~~table~~subject ~~sets~~to ~~forth~~other ~~selected~~claims ~~financial~~and ~~data~~legal ~~regarding~~actions ~~our consolidated~~that ~~operating~~may ~~results~~arise ~~and~~in ~~financial~~the ~~position~~ordinary course of business. ~~This~~We ~~data~~do ~~has~~not ~~been derived~~believe ~~from~~that ~~the~~any ~~consolidated~~of ~~financial~~these ~~statements~~other ~~that~~pending ~~have~~claims or ~~been~~legal ~~prepared~~actions ~~in accordance~~will ~~with~~have ~~accounting~~a ~~principles~~material ~~generally~~adverse ~~accepted~~effect inon ~~the~~our ~~United~~business ~~States~~or results of ~~America~~operations.

~~Page~~ITEM 124. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

~~Table~~During the fourth quarter of ~~Contents~~the fiscal year ended March 31, 2003, no matters were submitted to a vote of security holders.

~~The~~PART ~~following selected financial data is qualified in its entirety by, and should be read in conjunction with, the consolidated financial statements and notes thereto (Part~~ II~~, Item 8 Financial Statements), and the Management’s~~ ~~Discussion and Analysis (Part II, Item 7) included elsewhere in this Annual~~ ~~Report on Form 10-K.~~

	Year ended March 31,
	2002			2001			2000(1)			1999			1998
Sales revenue	$	14,604,141		$	15,389,181		$	13,121,376		$	7,807,291		$	7,328,947
Cost of goods sold		(10,505,821	)		(10,653,988	)		(9,028,728	)		(5,750,127	)		(5,904,797	)
Gross Profit		4,098,320			4,735,193			4,092,648			2,057,164			1,424,150
Corp./Admin. Expenses		(3,251,855	)		(3,489,479	)		(3,204,516	)		(2,377,592	)		(2,102,042	)
Income (loss) from operations		846,465			1,245,714			888,132			(320,428	)		(677,892	)
Income (loss) per share from operations		.09			.14			.11			(.06	)		(0.16	)
Interest expense (net)		(72,063	)		(232,970	)		(287,695	)		(280,456	)		(189,382	)
Income tax benefit (expense)		201,532			720,000			470,000			—			—
Net income (loss) for the year		574,159			1,740,155			1,105,337			(526,290	)		(870,090	)
Net income (loss) per share		.06			.19			.14			(.09	)		(0.21	)
Dividends per share		—			—			—			—			—
Working capital		3,035,131			2,479,899			2,711,092			888,821			501,292
Total assets		6,841,334			6,933,241			6,649,093			3,206,480			3,271,130
Long term obligations		256,710			899,752			2,484,334			1,769,192			1,474,506
Shareholders’ equity (deficit)		4,982,967			4,398,443			2,101,967			(197,874	)		(206,837	)

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

~~(1)~~Market The Company finalized the acquisition of USC on October 18, 1999 and as a result of the merger, USC was fully integrated during the last half of fiscal 2000. The results for the fiscal year end 2000 reflect the amalgamation. See Item 8 — Note 6 to the Consolidated Financial Statements.information

~~ITEM~~Our common stock is listed on the TSX Venture Exchange (“TSX Venture”), 7formerly the Canadian Venture Exchange (“CDNX”), under the symbol “PYM” and the OTC Bulletin Board under the symbol “PYSU. ~~MANAGEMENT’S~~” ~~DISCUSSION~~TSX ~~AND~~Venture ~~ANALYSIS~~is OFour principal ~~FINANCIAL~~trading ~~CONDITION~~market, ~~AND~~where ~~RESULTS~~it ~~OF OPERATIONS~~is classified as a Tier 1 Issuer. Tier 1 is considered a more advanced tier, where higher financial requirements must be maintained.

~~Some~~Shown ~~statements~~below ~~and~~are ~~information~~the ~~contained~~high ~~in this “Management’s Discussion~~ and ~~Analysis~~ oflow ~~Financial~~sale ~~Condition~~prices ~~and~~on ~~Results~~the ofTSX ~~Operations”~~Venture ~~are~~Exchange ~~not historical~~for ~~facts~~our ~~but~~common ~~are~~stock ~~forward-looking~~for ~~statements.~~each ~~For a discussion~~ of ~~important factors that could cause results to differ materially from~~ the ~~forward-looking statements~~fiscal ~~contained~~years inended ~~this Annual Report~~March 31, ~~see~~2003 ~~“Risk Factors”~~ and ~~“Forward-Looking~~ ~~Statements~~2002.”

~~Please~~Canadian ~~read the following discussion together with the consolidated financial~~Dollars: ~~statements and the related notes included elsewhere in this Annual Report.~~

Overview


	FISCAL 2003				FISCAL 2002
	HIGH		LOW		HIGH		LOW

First quarter	$	0.50	$	0.33	$	0.88	$	0.46
Second quarter	$	0.45	$	0.35	$	0.78	$	0.35
Third quarter	$	0.51	$	0.36	$	0.58	$	0.35
Fourth quarter	$	0.50	$	0.40	$	0.58	$	0.40

WeShown ~~develop,~~below ~~manufacture~~are ~~and~~the ~~distribute~~high ~~paints, coatings~~ and ~~adhesives~~low ~~to various~~bid ~~industries~~prices inon the ~~western~~OTC ~~half~~Bulletin ofBoard ~~the~~for ~~United States. We lease a~~our ~~production~~common ~~facility~~stock infor ~~Chico,~~each ~~California that, we believe, allows us significant growth opportunities both internally and by way~~ of ~~acquisition. Presently,~~ the ~~facility~~fiscal ~~has~~years ~~excess~~ended ~~production capacity and~~March 31, ~~with~~2003 ~~the addition of a minor amount of capital equipment~~ and ~~some additional labor, it is anticipated that capacity can be increased significantly~~2002.

~~Page~~U.S. 13Dollars:


	FISCAL 2003				FISCAL 2002
	HIGH		LOW		HIGH		LOW

First quarter	$	0.34	$	0.24	$	0.56	$	0.32
Second quarter	$	0.31	$	0.24	$	0.54	$	0.30
Third quarter	$	0.35	$	0.24	$	0.38	$	0.25
Fourth quarter	$	0.35	$	0.26	$	0.39	$	0.25

OnPage ~~October 18, 1999, our wholly owned subsidiary, AMT USA, acquired USC for~~12 ~~$1,000,000 in cash and the assumption of certain liabilities. To finance the~~ cash portion of the transaction, certain warrants were repriced to encourage exercise and two private placements were conducted. We also assumed responsibility for an Employee Severance Plan, which obligates us to pay up to $384,400 in severance pay to former USC employees through the year 2004. USC had annual revenues of approximately $3.3 million.

~~Management~~The ~~continues~~above toOTC ~~actively~~Bulletin ~~seek~~Board ~~acquisition~~quotations, ~~candidates~~as ~~with~~provided ~~financial~~by Canada Stockwatch, represent prices between dealers and do not include retail markup, markdown or ~~geographic~~commission. ~~profiles~~In ~~consistent~~addition, ~~with~~these ~~our~~quotations ~~growth~~may ~~objectives~~not necessarily represent actual transactions.

~~Environmental Matters~~Shareholders

We ~~are~~had ~~committed~~414 toregistered ~~being~~shareholders anas ~~environmentally~~at ~~friendly company and to producing products that benefit the quality of the environment. State~~May 30, ~~federal, and local laws all have jurisdiction over production activities~~2003. ~~We believe that~~ ~~we are currently in full compliance with these laws and expect to remain so in~~ ~~the future.~~

~~Results from Operations~~Dividends

~~Sales~~We ~~revenues~~have ~~for~~not ~~the~~paid ~~fiscal~~any ~~year~~dividends ~~ended~~to ~~March 31,~~the ~~2002~~holders ~~were~~of ~~$14,604,141,~~our ~~a decrease~~common ofstock. 5%The ~~from~~decision to ~~the~~pay ~~fiscal~~dividends ~~2001~~and ~~total~~the ofamount ~~$15,389,181,~~thereof ~~which~~is ~~was~~at anthe ~~increase~~ discretion of ~~17%~~our ~~over~~Board ~~the~~of Directors ~~fiscal~~and ~~2000~~will ~~total~~be ofgoverned ~~$13,121,376.~~by ~~The~~such ~~decrease~~factors inas ~~fiscal~~earnings, ~~2002~~capital ~~was~~requirements ~~primarily~~and ~~due~~our tooperating ~~the~~and ~~slowdown~~financial incondition. ~~the~~Our ~~economy,~~credit ~~resulting~~facility contains incertain arestrictions ~~decrease~~on ~~in sales~~our ofability ~~water-based~~to ~~coatings~~pay dividends. ~~The~~We ~~increase~~intend into retain ~~fiscal~~any ~~2001~~earnings ~~was due~~ to ~~the addition~~finance growth of ~~new~~our ~~customers~~business and, athus, ~~full~~we ~~year~~do ofnot intend ~~sales~~ to ~~USC~~pay ~~customers~~dividends in the foreseeable future.

~~Gross~~Recent ~~profit~~Sales for the fiscal year ended March 31, 2002 decreased 13% to $4,098,320 from $4,735,193 for fiscal 2001. This decrease results from certain fixed costs remaining constant when revenues decrease slightly. The increase in gross profit for the fiscal year ended March 31, 2001 over $4,092,648 for fiscal 2000 was attributable to the aforementioned addition of ~~new~~Unregistered ~~customers~~Securities ~~and the result of greater efficiencies and economies of scale from growing~~ ~~sales volumes.~~

~~Marketing~~In ~~and~~December ~~sales~~2002 ~~expenses~~and inJanuary ~~fiscal~~2003, ~~2002~~PSI ~~represent~~issued a 9%total ~~decrease~~of ~~to $1~~9,~~069,636~~528 ~~from~~shares ~~the~~of ~~fiscal~~Common Stock ~~2001~~to ~~total~~independent directors of ~~$1,174,365~~PSI ~~due~~pursuant to athe ~~full~~exercise ~~year~~ of aoptions ~~lower~~issued ~~commission~~under ~~structure.~~our ~~Marketing~~stock ~~and~~option ~~sales~~plan. ~~expenses~~These intransactions ~~fiscal~~were ~~2001 represent~~exempt ~~a 2% decrease~~ from registration ~~the~~pursuant ~~fiscal~~to ~~2000~~Section 4(2) ~~total~~or ofRegulation S ~~$1,200,576~~under ~~due to~~ the ~~initial~~ ~~restructure~~Securities Act of ~~our commission plan~~1933.

~~General~~Description ~~and~~Of ~~administrative~~Nevada ~~expenses were $1,641,287 for the year ended March~~Law ~~31, 2002 versus $1,764,171 in fiscal 2001 and $1,428,449 in fiscal 2000. The~~ ~~7% decrease in fiscal 2002 was due primarily to a decrease in wages and~~ investor relation fees. The 23% increase in fiscal 2001 was associated mainly with an increase in bad debt expense, investor relation fees, goodwill amortization expense, and the write off of rent deposits.

~~Research~~Nevada’s “Combination with Interested Stockholders Statute,” Nevada Revised Statutes 78.411-78.444, applies to Nevada corporations having at least 200 stockholders of record and ~~development~~a ~~expenses~~class ~~were~~of ~~$540~~voting shares registered with the Securities and Exchange Commission under Section 12 of the Act (unless the corporation has otherwise effectively opted-out of the provisions of the statutes) and prohibits an “interested stockholder” from entering into a “combination” with the corporation,~~932~~ ~~for~~unless ~~fiscal~~certain ~~year~~conditions ~~ended~~are ~~March~~met. A “combination” includes (a) 31any merger with an “interested stockholder,” or any ~~2002~~other ~~versus~~corporation ~~$550~~which is or after the merger would be,~~943~~ ~~for~~an ~~fiscal~~affiliate ~~2001~~or associate ~~and~~of ~~$575~~the interested stockholder,~~491~~ (b) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets, in ~~fiscal~~one ~~2000.~~transaction or ~~The~~a 2series of transactions, to an “interested stockholder,” having (i) an aggregate market value equal to 5% or more of the aggregate market value of the ~~decrease~~corporation’s inassets; ~~fiscal~~(ii) an ~~2002~~aggregate ~~was~~market ~~due~~value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation; or (iii) representing 10% or more of the earning power or net income of the corporation, (c) any issuance or transfer of shares of the corporation or its subsidiaries, to the “interested stockholder,” having an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding shares of the corporation, (d) the adoption of any plan or proposal for the liquidation a dissolution ~~decrease~~of the corporation proposed by the “interested stockholder,” (e) certain transactions which would result in ~~wages~~increasing the proportionate share of shares of the corporation owned by the “interested stockholder,” or (f) the receipt of benefits, except proportionately as a stockholder, of any loans, advances or other financial benefits by an “interested stockholder.” ~~The~~An “interested ~~$24~~stockholder” is a person who,~~548~~ ~~decrease~~together with affiliates and inassociates, ~~fiscal~~beneficially ~~2001~~owns ~~was~~(or ~~also~~within ~~due~~the toprior ~~decreased~~three ~~wages~~years, did beneficially own) 10% or more of the corporation’s voting stock.

~~Interest~~A ~~expense~~corporation ~~totaled~~to ~~$72,063~~which ~~for~~ the ~~fiscal~~statute ~~year~~applies ~~ended~~may ~~March 31,~~not ~~2002 compared~~engage ~~to $232,970~~ in ~~fiscal~~a ~~2001 and $287,695 in fiscal 2000. The 69%~~“combination” ~~decrease~~with inan ~~fiscal~~“interested ~~2002~~stockholder” ~~was~~within ~~due~~three toyears ~~the~~after ~~payoff of~~ the ~~operating~~date ~~line~~on ofwhich ~~credit.~~the ~~The~~interested ~~19%~~stockholder ~~decrease~~acquired inits ~~fiscal~~shares, ~~2001~~unless ~~was~~the ~~due~~combination toor ~~lower~~the interested ~~borrowing~~stockholder’s ~~and~~acquisition aof ~~lower~~shares ~~interest rate~~was onapproved by the ~~operating~~board ~~line~~ of ~~credit.~~

Page 1413

~~Table~~directors before the interested stockholder acquired such shares. If this approval was not obtained, after the three-year period expires, the combination may be consummated if all the requirements in the Articles are met, if any, and either (a) (i) the board of ~~Contents~~directors of the corporation approves, prior to such person becoming an “interested stockholder”, the combination or the purchase of shares by the “interested stockholder” or (ii) the combination is approved by the affirmative vote of holders of a majority of voting power not beneficially owned by the “interested stockholder” at a meeting called no earlier than three years after the date the “interested stockholder” became such or (b) (x) the aggregate amount of cash and the market value of consideration other than cash to be received by holders of common shares and holders of any other class or series of shares meets the minimum requirements set forth in Section 78.441 through 78.443, inclusive, and (y) prior to the consummation of the combination, except in limited circumstances, the “interested stockholder” will not have become the beneficial owner of additional voting shares of the corporation. The Company believes that it currently has over 200 stockholders of record and a class of voting shares registered with the Securities and Exchange Commission under Section 12 of the Act. As a result, since the Company has not opted-out of the provisions of the statutes, the Company believes that it may be subject to the provisions of these statutes.

~~Income~~Nevada’s ~~Taxes~~“Control Share Acquisition Status,” Nevada Revised Statute 78.378-78.3793, prohibits an acquiror, under certain circumstances, from voting shares of a target corporation’s stock after crossing certain threshold ownership percentages, unless the acquiror obtains the approval of the target corporation’s stockholders. The Control Share Acquisition Statute only applies to Nevada corporations with at least 200 stockholders, including at least 100 record stockholders who are Nevada residents, and which do business directly or indirectly in Nevada. The Company does not intend to “do business” in Nevada within the meaning of the Control Share Acquisition Statute. Therefore, it is unlikely that the Control Share Acquisition Statute will apply to the Company. The statute specifies three thresholds: at least one-fifth but less than one-third, at least one-third but less and a majority, and a majority or more, of the outstanding voting power. Once an acquiror crosses one of the above thresholds, shares which it acquired in the transaction taking it over the threshold or within ninety days become “Control Shares” which are deprived of the right to vote until a majority of the disinterested stockholders restore that right. A special stockholders’ meeting may be called at the request of the acquiror to consider the voting rights of the acquiror’s shares no more than 50 days (unless the acquiror agrees to a later date) after the delivery by the acquiror to the corporation of an information statement which sets forth the range of voting power that the acquiror has acquired or proposes to acquire and certain other information concerning the acquiror and the proposed control share acquisition. If no such request for a stockholders’ meeting is made, consideration of the voting rights of the acquiror’s shares must be taken at the next special or annual stockholders’ meeting. If the stockholders fail to restore voting rights to the acquiror or if the acquiror fails to timely deliver an information statement to the corporation, then the corporation may, if so provided in its Articles of Incorporation or By-Laws, call certain of the acquiror’s shares for redemption. The Company’s Articles of Incorporation and By-Laws do not currently permit it to call an acquiror’s shares for redemption under these circumstances. The Control Share Acquisition Statute also provides that in the event the stockholders who do not vote in favor of restoring voting rights to the Control Shares may demand payment for the “fair value” of their shares (which is generally equal to the highest price paid in the transaction subjecting the stockholder to the statute).

~~For~~The ~~several~~provisions ~~years~~described ~~prior to fiscal 2000~~above, wetogether ~~incurred~~with ~~losses.~~the ~~Accordingly,~~ability ~~prior to fiscal 2000, we provided a 100% valuation allowance against all deferred tax assets, primarily comprised~~ of ~~net~~the ~~operating~~Board ~~loss (NOL) carry-forwards and research and development credits. However, in fiscal 2000, we generated a pre-tax income~~ of ~~approximately $635,000 and based on an analysis of the~~ ~~various~~Directors ~~factors that contributed~~ to ~~the~~issue ~~fiscal~~Preferred ~~2000~~Stock ~~profitability,~~may ~~management reduced~~have ~~its valuation allowance by $500,000 during~~ the ~~fourth~~effect ~~quarter~~ of ~~fiscal 2000.~~delaying ~~Such~~or ~~assessment was based on various factors including pre-tax income;~~deterring ~~increased~~a ~~sales~~change ~~driven~~in ~~by more intensive marketing; improved gross margins generated from~~ the ~~efficiencies~~control ofor ~~operating~~management ~~in a larger capacity; state~~ of the ~~art~~ ~~plant in operation for a full year; acquisition of a profitable company; and an augmented management team~~Company.

~~During~~Page ~~fiscal 2001, we continued to be profitable and generated a pre-tax~~14 ~~income of approximately $1 million. Based on the continued profitability and~~ projected results of future operations, we further reduced our valuation allowance during the fourth quarter of fiscal 2001 by approximately $1.5 million. During fiscal 2002, we utilized approximately $112,000 in net NOL’s and tax credits, resulting in a net deferred tax asset of approximately $1.1 million at March 31, 2002. In management’s opinion, it is more likely than not that the deferred tax assets will be utilized. The total amount of future taxable income necessary to utilize the deferred tax assets is approximately $2.7 million.

~~Liquidity~~ITEM ~~and~~6. SELECTED ~~Capital~~FINANCIAL ~~Resources~~DATA.

AtThe ~~March 31,~~following ~~2002,~~table wesets ~~had~~forth ~~$1,036,709~~selected infinancial ~~cash~~data ~~compared~~regarding ~~to $112,366 at the end of~~our ~~fiscal~~consolidated ~~2001. Cash flow provided by~~ operating ~~activities~~results ~~totaled $1,530,622 in fiscal 2002 versus $1,302,630 in fiscal 2001~~ and ~~cash~~financial ~~used in operations of $104,351 in fiscal 2000~~position. ~~The~~This ~~lower~~data ~~requirements~~has ~~in fiscal 2002 and~~been ~~2001~~derived ~~were due~~from ~~to our continued profitability and were used in part to pay off~~ the ~~operating~~ ~~line~~consolidated offinancial ~~credit,~~statements asthat ~~was~~have ~~the~~been ~~$411,423~~prepared ~~proceeds from exercise of~~in ~~warrants~~accordance ~~and~~with ~~options~~accounting inprinciples ~~fiscal~~generally ~~2001.~~accepted ~~The $1,159,883~~ in ~~proceeds from private placements in 2000 was offset by~~ the ~~acquisition~~United ~~of USC, while we increased~~States ~~borrowing from the line~~ of ~~credit by $466,194~~America.

WeThe ~~have~~following aselected ~~positive~~financial ~~working~~data ~~capital~~is ofqualified ~~$3,035,131~~in atits ~~March 31,~~entirety ~~2002~~by, ~~versus~~and ~~$2,479,899~~should atbe ~~the~~read ~~end~~in ofconjunction ~~fiscal~~with, ~~2001.~~the ~~The~~consolidated ~~current~~financial ~~ratio~~statements atand notes ~~March 31~~thereto, ~~2002 was 2.9:1~~ and ~~2.6:1~~the at“Management’s ~~March 31,~~Discussion ~~2001.~~and ~~The~~Analysis ~~primary~~of ~~reason for the increase in~~Financial ~~working~~Condition ~~capital~~and ~~was~~Results ~~the increase~~ of ~~cash~~Operation” ~~due~~included toelsewhere ~~the~~in ~~pay~~this ~~off~~Annual ofReport ~~the operating~~on ~~line of credit~~Form 10-K.

Capital additions during the year ended March 31, 2002 were $72,379, consisting primarily of production and office equipment, including $24,490 acquired under capital leases offset by proceeds from disposal of equipment of $5,842. Capital additions during the year ended March 31, 2001 consisted of $144,932, consisting primarily of production and office equipment, including $57,333 acquired under capital leases, offset by proceeds from disposal of equipment of $8,901.


	Year ended March 31,

	2003			2002			2001			2000⁽¹⁾			1999

Sales revenue	$	14,899,242		$	14,604,141		$	15,389,181		$	13,121,376		$	7,807,291
Cost of goods sold		(10,790,947	)		(10,505,821	)		(10,653,988	)		(9,028,728	)		(5,750,127	)

Gross Profit		4,108,295			4,098,320			4,735,193			4,092,648			2,057,164
Corp./Admin. Expenses		(3,570,944	)		(3,251,855	)		(3,489,479	)		(3,204,516	)		(2,377,592	)
Income (loss) from operations		537,351			846,465			1,245,714			888,132			(320,428	)
Income (loss) per share from operations	$	0.06		$	0.09		$	0.14		$	0.11		$	(.06	)
Interest expense (net)		(22,749	)		(72,063	)		(232,970	)		(287,695	)		(280,456	)
Income tax benefit (expense)		407,522			(201,532	)		720,000			470,000			—
Net income (loss) for the year		922,517			574,159			1,740,155			1,105,337			(526,290	)
Net income (loss) per share		.10			.06			.19			.14			(.09	)
Dividends per share		—			—			—			—			—
Working capital		3,265,806			3,035,131			2,479,899			2,711,092			888,821
Total assets		7,253,455			6,841,334			6,933,241			6,649,093			3,206,480
Long term obligations		78,071			256,710			899,752			2,484,334			1,769,192
Shareholders’ equity (deficit)		5,875,471			4,982,967			4,398,443			2,101,967			(197,874	)

(1) We ~~anticipate~~finalized ~~that~~the ~~cash~~acquisition onof ~~hand,~~USC ~~cash~~on ~~flow~~October ~~from~~18, ~~operations~~1999 and ~~borrowing capability~~as ~~under~~a ~~our~~result ~~committed~~of ~~credit~~the ~~facility~~merger, ~~are~~USC ~~adequate~~was tofully ~~fund~~integrated ~~our~~during ~~cash requirements~~the ~~for~~last ~~fiscal~~half ~~2003. Should we undertake strategic acquisitions requiring funds in excess~~ of ~~our~~fiscal ~~internally~~2000. ~~generated~~The ~~cash~~results ~~flow,~~for wethe ~~might~~fiscal ~~be required~~year toend ~~incur~~2000 ~~additional~~reflect ~~debt~~the ~~or seek additional financing through private placements~~amalgamation.

~~Acquisition~~ITEM of7. MANAGEMENT’S ~~USC~~DISCUSSION ~~and~~AND ~~Related~~ANALYSIS ~~Financing~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

InSome ~~October~~statements ~~1999~~and ~~AMT~~information ~~USA~~contained ~~acquired~~in ~~all~~this ~~the~~“Management’s ~~issued~~Discussion and Analysis ~~outstanding~~of ~~shares~~Financial Condition and Results of ~~USC, a~~Operations” ~~California-based~~are ~~paint~~not ~~coatings~~historical facts ~~company,~~but ~~for~~are aforward-looking ~~total~~statements. ~~purchase~~For ~~price~~a discussion of important ~~$1,000,000~~factors inthat ~~cash.~~could ~~This~~cause ~~purchase~~results ~~price~~to ~~has~~differ ~~been~~materially ~~allocated~~from tothe ~~assets and~~forward-looking ~~liabilities~~statements ~~based~~contained onin ~~their~~this ~~estimated~~Annual ~~fair~~Report, ~~market~~see ~~values~~“Risk Factors” and “Forward-Looking Statements.”

ToPlease ~~finance~~read the ~~transaction,~~following wediscussion ~~sold~~together ~~common~~with ~~shares~~the asconsolidated ~~detailed on Form 8-K/A~~financial ~~dated~~statements ~~October 18,~~and ~~1999,~~the ~~page~~related ~~F-9~~notes ~~and~~included elsewhere in ~~“Item 5~~this —Annual ~~Recent Sales of Unregistered Securities”~~Report.

Page 15

~~Table of Contents~~Overview

InWe ~~connection~~develop, ~~with~~manufacture ~~the~~and ~~purchase~~distribute paints, ~~AMT~~coatings ~~USA~~and ~~adopted~~adhesives ato various ~~USC~~industries ~~Employee~~in ~~Severance~~the ~~Plan that~~western ~~entitles~~half ~~former~~of ~~USC~~the ~~employees~~United toStates. ~~receive~~We uplease toa production ~~$384,400~~facility in ~~benefits~~Chico, ~~paid from~~California ~~1999~~that, towe ~~2004.~~believe, ~~The~~allows ~~acquisition~~us significant ~~was~~growth ~~accounted~~opportunities ~~for~~both ~~using~~internally ~~the~~and ~~purchase~~by ~~method~~ way of ~~accounting~~acquisition. Presently, ~~The~~the ~~excess~~facility ofhas ~~acquisition~~excess ~~cost~~production ~~over~~capacity ~~the~~that ~~fair~~we ~~value~~believe, ~~of net~~with ~~assets~~additional ~~acquired~~capital ~~(“goodwill”)~~equipment ~~was~~and ~~amortized~~labor, onit ais ~~straight-line~~anticipated ~~basis~~that ~~over fifteen~~capacity ~~years, until March 31, 2002~~could increase.

~~Inflation~~On October 18, 1999, our wholly owned subsidiary, AMT USA, acquired USC for $1,000,000 in cash and the assumption of certain liabilities. To finance the cash portion of the transaction, certain warrants were repriced to encourage exercise and two private placements were conducted. We also assumed responsibility for an Employee Severance Plan (“ESP”), which obligates us to pay up to $384,400 in severance pay to former USC employees through the year 2004. Obligations outstanding under the ESP at March 31, 2003 approximated $144,000. USC had annual revenues of approximately $3.3 million in 1998.

InManagement ~~the~~continues ~~past we have been able~~ to ~~increase~~actively ~~the~~seek ~~prices~~acquisition ofcandidates ~~our~~with ~~products~~financial ~~or reduce~~and ~~overhead~~geographic ~~costs~~profiles ~~sufficiently~~consistent towith ~~offset the effects of inflation on~~ our ~~wages, materials~~growth ~~and other expenses, and we anticipate that we will be able to do so in the future~~objectives.

~~Related~~Results ~~Party~~from ~~Transactions~~Operations

~~General~~Sales ~~and~~revenues ~~administrative expenses~~ for the fiscal year ended March 31, 2003 were $14,899,242, an increase of 2% from the fiscal 2002 ~~included~~total of $7114,~~703~~604,141, ~~for~~which was a decrease ~~office~~of ~~rent~~5% ~~and~~over ~~related~~the ~~services~~fiscal (2001 —total of $6415,~~735)~~389,181. ~~which~~The ~~were~~increase ~~incurred~~in onfiscal a2003 ~~cost~~was ~~reimbursement~~due ~~basis~~to ~~from~~higher asolvent-based ~~corporation~~product ~~owned~~sales. ~~and~~The ~~controlled~~decrease byin ~~one~~fiscal of2002 ~~our~~was ~~officers~~primarily ~~and~~due ~~directors.~~to Atthe ~~March 31~~slowdown in the economy, ~~2002~~resulting ~~and~~in ~~2001~~a nodecrease ~~amounts~~in ~~were~~sales of ~~due~~water-based coatings. We expect revenues to ~~this~~increase slightly for fiscal ~~related~~year ~~party~~ending March 31, 2004.

WeGross ~~pay~~profit for ~~management~~the ~~services~~fiscal toyear ~~Gordann~~ended ~~Consultants~~March 31, ~~for~~2003 ~~the~~increased ~~services~~slightly ofto ~~Gordon~~$4,108,295 L.from ~~Ellis~~$4,098,320 ~~Chairman of the Board of Directors and~~ for ~~employment contracts~~fiscal ~~with William A~~2002. ~~Maligie~~The ~~and~~13% decrease E.in ~~Laughlin~~gross ~~Flanagan.~~profit Infor the fiscal ~~years~~ year ended March 31, 2002 ~~and 2001~~from $4,735,193 wefor ~~made~~fiscal ~~payments~~2001 ofwas ~~$337,491~~attributable ~~and~~to ~~$364,120~~certain ~~for~~fixed costs remaining ~~these~~constant ~~services~~when revenues decreased slightly.

~~Contractual~~Marketing ~~Obligations~~and sales expenses were $1,165,650 for the year ended March 31, 2003 representing a 9% increase from the fiscal 2002 total of $1,069,636 due to an increase in wages and travel. Marketing and sales expenses in fiscal 2002 represented a 9% decrease from the fiscal 2001 total of $1,174,365 due to a full year with a lower commission structure. We expect marketing and sales expenses to remain fairly constant for the fiscal year ending March 31, 2004.

General and administrative expenses were $1,826,488 for the year ended March 31, 2003 as compared to $1,641,287 in fiscal 2002 and $1,764,171 in fiscal 2001. The ~~following~~11% ~~table~~increase ~~details~~in ~~our~~fiscal ~~contractual~~2003 ~~cash~~was ~~obligations~~associated ~~subsequent~~mainly with an increase in the use of temporary labor. The 7% decrease in fiscal 2002 was due primarily to a decrease in wages and investor relation fees. We expect general and administrative expenses to remain fairly constant for the fiscal year ending March 31, ~~2002:~~2004.

			Payments Due by Period
Contractual Obligations	Total		2003		2004		2005		2006		2007		After 2007
Capital lease obligations	$	248,756	$	174,621	$	47,821	$	14,495	$	11,819	$	—	$	—
Operating leases	$	2,772,717	$	336,108	$	347,172	$	358,476	$	365,058	$	376,740	$	989,163
Severance Plan Liability	$	300,836	$	118,261	$	100,797	$	53,658	$	28,120	$	—	$	—

Research and development expenses were $578,806 for fiscal year ended March 31, 2003 as compared to $540,932 for fiscal 2002 and $550,943 in fiscal 2001. The 7% increase in fiscal 2003 was due to an increase in wages and benefits. The 2% decrease in fiscal 2002 was due to a decrease in wages. We expect research and development expenses to remain fairly constant for the fiscal year ending March 31, 2004.

~~Critical~~Page ~~Accounting Policies~~16

~~Our~~Interest ~~financial~~expense ~~statements~~totaled ~~are~~$22,749 ~~prepared~~for inthe ~~accordance~~fiscal ~~with~~year ~~accounting~~ended ~~principles~~March 31, 2003 as ~~generally~~compared ~~accepted~~to $72,063 in ~~the~~fiscal ~~United~~2002 ~~States~~and of$232,970 ~~America~~in fiscal 2001. ~~Our~~The ~~significant~~68% ~~accounting~~and ~~policies~~69% ~~are~~decrease ~~described~~ in ~~Note~~fiscal 22003 and 2002, respectively, was due to the ~~financial~~payoff ~~statements~~of the ~~included~~operating inline ~~Item 7~~ of ~~this~~credit ~~Annual~~in ~~Report~~fiscal year 2001 and decrease in capital lease obligations.

~~Recently~~Income ~~Issued Accounting Standards~~Taxes

InDuring ~~July~~fiscal ~~2001~~2003, ~~the~~we ~~Financial~~recognized ~~Accounting~~an ~~Standards~~income ~~Board~~tax ~~issued~~benefit ~~SFAS~~of ~~No. 141~~$408,000 as opposed ~~Business~~to ~~Combinations,~~an ~~and~~income ~~SFAS~~tax ~~No. 142,~~expense ~~Goodwill~~of ~~and~~$202,000 ~~Other~~during ~~Intangible~~fiscal ~~Assets~~2002. The tax benefit ~~They~~during ~~also~~fiscal ~~issued~~2003 ~~SFAS~~is ~~No. 143,~~primarily ~~Accounting~~a ~~for~~result ~~Obligations~~of ~~Associated~~the ~~with~~reduction of the valuation ~~Retirement~~allowance ofagainst ~~Long-Lived~~deferred ~~Assets,~~tax ~~and~~assets ~~SFAS~~based ~~No. 144,~~on ~~Accounting~~our ~~for~~assessment ~~the~~of certain ~~Impairment~~contingencies orthat ~~Disposal~~existed prior to fiscal 2003 surrounding the utilization of net ~~Long-Lived~~operating ~~Assets,~~loss incarryforwards. ~~August~~As ~~and~~of ~~October~~March 31, ~~2001~~2003, such contingencies no ~~respectively~~longer exist.

~~Page~~In 16management’s opinion, it is more likely than not that the deferred tax assets of approximately $1.5 million at March 31, 2003 will be utilized. The total amount of future taxable income necessary to realize the net operating loss carryforwards is approximately $2.4 million.

~~Table~~Liquidity ofand ~~Contents~~Capital Resources

~~SFAS~~At ~~No.~~March ~~141~~31, ~~requires~~2003, ~~all~~we ~~business~~had ~~combinations~~$1,165,031 ~~initiated~~in ~~after~~cash ~~June 30~~compared to $1,036,709 ~~2001~~at the end beof ~~accounted~~fiscal ~~for~~2002. ~~under~~Cash ~~the~~flow ~~purchase~~provided ~~method.~~by ~~SFAS~~operating ~~No. 141~~activities ~~supersedes~~totaled ~~Accounting~~$612,938 in ~~Principles~~fiscal ~~Board~~2003 ~~(APB) Opinion~~as ~~No. 16~~compared to $1,530,622 ~~Business~~in ~~Combinations~~fiscal 2002 and $1,302,630 in fiscal 2001. The reduction of cash provided by operations in fiscal 2003 reflects our reduction in profitability due to higher cost of goods sold and ~~SFAS~~higher Nogeneral and administrative expenses. 38 It was also due to the reduction in accounts payable and payments related to the U.S. Cellulose severance plan liability. The lower cash balances in fiscal 2002 and 2001 were due to higher profitability and the $411,423 proceeds from exercise of warrants and options ~~Accounting~~in ~~for~~fiscal ~~Pre-acquisition~~2001 ~~Contingencies~~offset by payments toward the operating line of ~~Purchased~~credit ~~Enterprises~~and capital lease obligations.

~~SFAS~~Cash ~~No. 142~~used ~~addresses~~in ~~the~~investing ~~financial~~activities ~~accounting~~increased ~~and~~in ~~reporting~~2003 ~~for~~to ~~acquired goodwill and other intangible assets. Under the new rules~~$227,073 ~~amortization~~as ~~of goodwill~~compared ~~and other intangible assets with indefinite lives is no longer required but intangible assets will be subject~~ to ~~periodic testing for~~ ~~impairment. SFAS No. 142 supersedes APB Opinion No. 17~~$42,047 ~~Intangible~~in ~~Assets. We adopted the provisions of SFAS No. 142 effective April 1,~~ 2002, ~~which~~due ~~will~~to ~~have a~~the ~~positive~~purchase ~~impact on our consolidated results~~ of ~~operations~~fixed ~~and financial position, as we have stopped recording amortization expense in connection with the goodwill related to the USC acquisition~~assets.

~~SFAS~~We ~~No. 143~~had ~~establishes~~a ~~accounting~~positive ~~standards~~working ~~for~~capital ~~the recognition and measurement~~ of an$3,265,806 ~~asset~~at ~~retirement~~March 31, ~~obligation~~2003, ~~and~~as ~~its associated asset~~compared ~~retirement~~to ~~cost.~~$3,035,130 Itat ~~also~~the ~~provides~~end ~~accounting~~of ~~guidance~~fiscal ~~for~~2002. ~~legal~~The ~~obligations associated~~current ~~with~~ratio ~~the~~at ~~retirement~~March 31, of2003 was ~~tangible long-lived assets~~3.5:1 ~~SFAS~~and No2. ~~143~~9:1 ~~is effective~~at ~~in fiscal years beginning after June~~March 1531, 2002~~, with early adoption permitted~~. WeThe ~~expect~~primary ~~that~~reason for the ~~provisions~~increase ~~of SFAS No. 143 will not have a~~in ~~material~~working ~~impact~~capital onwas ~~our~~the ~~consolidated~~increase ~~results~~ of ~~operations~~cash, and ~~financial position~~reduction ~~upon~~of ~~adoption.~~capital Welease obligations ~~plan~~and toseverance ~~adopt SFAS No~~liability. ~~143 effective April 1, 2003.~~

~~SFAS~~Capital ~~No. 144~~additions ~~establishes~~during athe ~~single~~year ~~accounting~~ended ~~model~~March 31, ~~for~~2003 ~~the~~were ~~impairment~~$227,373 orand ~~disposal~~consisted primarily of ~~long-lived~~office ~~assets,~~equipment ~~including~~and ~~discontinued~~leasehold ~~operations~~improvements. ~~SFAS No. 144~~Capital ~~superseded~~additions ~~SFAS~~during ~~No.~~the year ended March ~~121~~31, ~~Accounting~~2002 ~~for~~were ~~the~~$47,889, ~~Impairment~~consisting primarily of ~~Long-Lived~~production ~~Assets~~ and ~~for~~ ~~Long-Lived~~office ~~Assets to Be Disposed Of~~equipment, ~~and~~including ~~APB Opinion No. 30~~$24,490 ~~Reporting~~acquired ~~the~~under ~~Results~~capital ofleases ~~Operations —~~offset ~~Reporting~~by ~~the~~proceeds ~~Effects~~from ofdisposal ~~Disposal~~ of aequipment ~~Segment~~ of ~~a Business~~$5,842. Capital ~~and~~additions ~~Extraordinary,~~during ~~Unusual~~the ~~and~~year ~~Infrequently~~ended ~~Occurring~~March 31, ~~Events~~2001 ~~and Transactions.~~of We$87,599, ~~adopted~~consisted primarily ~~the provisions~~ of ~~SFAS~~production ~~No. 144~~and ~~effective~~office ~~April 1~~equipment, ~~2002,~~ ~~which~~including ~~did~~$57,333 ~~not~~acquired ~~have~~under capital aleases, ~~material~~offset ~~impact~~by onproceeds ~~our~~from ~~consolidated~~disposal ~~results~~ of ~~operations~~ ~~and~~equipment ~~financial~~of ~~position~~$8,901.

~~ITEM~~We 7Aanticipate that cash on hand, cash flow from operations and borrowing capability under our committed credit facility are adequate to fund our cash requirements for fiscal 2004. ~~QUANTITATIVE~~ ~~AND~~Should ~~QUALITATIVE~~we ~~DISCLOSURES~~undertake ~~ABOUT~~strategic ~~MARKET~~acquisitions requiring ~~RISK~~funds in excess of our internally generated cash flow, we might be required to incur additional debt or seek additional financing through private placements.

WePage ~~are exposed to interest rate change market risks with respect to our credit~~17 ~~facility with our financial institution, which is priced based on the prime~~ rate of interest. At March 31, 2002, there were no borrowings under the credit facility. Changes in the prime interest rate during fiscal 2002 had a positive effect on our interest expense. Exposure would increase accordingly should we begin borrowing during 2003.

~~We have minimal operations in foreign countries. While we are exposed to~~Inflation ~~foreign currency fluctuations, we presently have no financial instruments in~~ ~~foreign currency and we do not maintain material funds in foreign currency~~ ~~beyond those necessary for operations.~~

~~Page~~In 17the past we have been able to increase the prices of our products or reduce overhead costs sufficiently to offset the effects of inflation on our wages, materials and other expenses, and we anticipate that we will be able to do so in the future.

~~Table~~Related ofParty ~~Contents~~Transactions

~~ITEM~~General 8and administrative expenses for fiscal years 2003 and 2002 included $74,857 and $71,703, respectively, for office rent and related services, which were incurred on a cost reimbursement basis from a corporation owned and controlled by one of our officers and directors. ~~FINANCIAL~~ ~~STATEMENTS~~At ~~AND~~March 31, ~~SUPPLEMENTARY~~2003 ~~DATA~~and 2002 no amounts were due to this related party.

~~INDEX~~We pay for management services to Gordann Consultants for the services of Gordon L. Ellis, Chairman of the Board of Directors. We have also entered into employment contracts with William A. Maligie and E. Laughlin Flanagan. In the fiscal years ended March 31, 2003 and 2002, we made payments of $335,435 and $337,491 for these services.

Consolidated Financial Statements:
	Report of Independent Accountants	Page 19
	Consolidated Balance Sheets	Page 20
	Consolidated Statements of Operations	Page 21
	Consolidated Statements of Shareholders’ Equity (Deficit)	Page 22
	Consolidated Statements of Cash Flows	Page 23
	Consolidated Statements of Cash Flows, continued	Page 24
	Notes to Consolidated Financial Statements	Page 25

Contractual Obligations

~~-18-~~The following table details our contractual cash obligations subsequent to March 31, 2003:


			Payments Due By Period

Contractual													After
Obligations	Total		2004		2005		2006		2007		2008		2008

Capital lease obligations	$	59,740	$	45,699	$	14,041	$	—	$	—	$	—	$	—
Operating leases	$	2,814,609	$	431,172	$	442,476	$	449,058	$	460,740	$	361,851	$	669,312
Severance Plan Liability	$	143,883	$	79,853	$	44,836	$	19,194	$	—	$	—	$	—

~~Report~~Critical ofAccounting ~~Independent Accountants~~Policies

ToOur significant accounting policies are also described in Note 2 to the financial ~~Board~~statements included in Item 8 of ~~Directors~~this ~~and~~Annual Report. Our financial ~~Shareholders~~statements are prepared in accordance with accounting principles generally accepted in the United States of ~~Polymer~~America. ~~Solutions~~The following policies, ~~Inc~~we believe, are our most critical accounting policies and are explained below.

InBasis ~~our opinion, the accompanying consolidated balance sheets and the related consolidated statements~~ of ~~operations, of shareholders’ equity (deficit) and of~~consolidation ~~cash flows present fairly, in all material respects, the financial position of~~ Polymer Solutions, Inc. and its subsidiaries at March 31, 2002 and 2001, and the results of their operations and their cash flows for the three years in the period ended March 31, 2002 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~/s/~~Our ~~PricewaterhouseCoopers~~consolidated ~~LLP~~financial statements include our wholly owned active subsidiary, AMT USA and our wholly owned inactive subsidiaries AMT and PAC. Intercompany transactions and accounts are eliminated in consolidation.

~~Sacramento,~~Financial ~~California May 30,~~statement ~~2002~~presentation

~~-19-~~The preparation of financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~Table~~Page ~~of Contents~~18

~~Polymer~~Concentration ~~Solutions,~~of ~~Inc.~~credit ~~and Subsidiaries~~risk ~~Consolidated Balance Sheets~~ ~~(U.S. dollars)~~

			March 31,
			2002			2001
Assets
Current assets:
	Cash		$	1,036,709		$	112,366
	Accounts receivable, current			1,653,506			1,994,070
	Inventories, net			1,358,223			1,649,295
	Prepaid expenses and other			166,750			65,496
	Deferred income taxes, current			421,600			248,200
		Total current assets		4,636,788			4,069,427
Fixed assets, net				498,938			695,752
Deferred income taxes				632,745			1,009,655
Goodwill, net				1,072,863			1,158,407
		Total assets	$	6,841,334		$	6,933,241
Liabilities and Shareholders’ Equity
Current liabilities:
	Accounts payable		$	1,069,142		$	1,078,549
	Payroll related and commissions payable			239,633			325,390
	Current portion of severance liability			118,261			—
	Current portion of capital lease obligations			174,621			185,589
		Total current liabilities		1,601,657			1,589,528
Bank loan facilities				—			340,991
Capital lease obligations, net of current portion				74,135			226,765
Severance plan liability, net of current portion				182,575			331,996
		Total liabilities		1,858,367			2,489,280
Minority interest				—			45,518
Shareholders’ equity:
Preferred stock, $0.001 par value;
	Authorized — 4,000,000 shares; issued and outstanding — nil			—			—
Common stock, $0.001 par value;
	Authorized — 20,000,000 shares; issued and outstanding,March 31, 2002 — 9,503,664 and March 31, 2001 — 9,596,663			9,617			9,596
Treasury stock, at cost; 113,300 shares				(35,153	)		—
Additional paid-in capital				12,102,497			12,057,000
Accumulated deficit				(7,093,994	)		(7,668,153	)
		Total shareholders’ equity		4,982,967			4,398,443
		Total liabilities and shareholders’ equity	$	6,841,334		$	6,933,241

Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of trade accounts receivable and cash. We perform credit evaluations of our customers’ financial condition and generally do not require collateral on accounts receivable. We maintain an allowance for doubtful accounts on our receivables based on expected collectibility. Allowance for doubtful accounts was $238,000 and $207,000 at March 31, 2003 and 2002, respectively. At March 31, 2003, we had cash deposited in two financial institutions that were federally insured up to $100,000 per financial institution.

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

Inventories are valued at the lower of cost, determined on the first-20in first-out basis, and net realizable value. We maintain a reserve for slow-moving or obsolete inventory as well as the related disposal costs.

~~Table~~Fixed ~~of Contents~~assets

~~Polymer~~Fixed ~~Solutions~~assets are recorded at cost and depreciated on a straight-line basis over their estimated life, ~~Inc~~which varies between five and ten years. Repair and maintenance ~~Subsidiaries~~costs are charged against income while improvements are capitalized ~~Consolidated~~as ~~Statements~~additions to the related assets. Retirements, sales and disposals of ~~Operations~~assets ~~(U.S.~~are ~~dollars)~~recorded by removing the applicable costs and accumulated depreciation from the accounts with any resulting gain or loss reflected in other income.

		Years ended March 31,
		2002			2001			2000
Sales revenue		$	14,604,141		$	15,389,181		$	13,121,376
Cost of goods sold			10,505,821			10,653,988			9,028,728
			4,098,320			4,735,193			4,092,648
Corporate and administrative expenses:
	Marketing and sales		1,069,636			1,174,365			1,200,576
	General and administrative		1,641,287			1,764,171			1,428,449
	Research and development		540,932			550,943			575,491
			3,251,855			3,489,479			3,204,516
Income from operations			846,465			1,245,714			888,132
Other income			1,289			7,411			34,900
Interest expense			(72,063	)		(232,970	)		(287,695	)
Income before provision for income taxes			775,691			1,020,155			635,337
Income tax benefit (expense)			(201,532	)		720,000			470,000
Net income		$	574,159		$	1,740,155		$	1,105,337
Basic and diluted earnings per share		$	.06		$	.19		$	.14
Weighted average basic number of shares outstanding			9,344,023			9,177,362			7,925,595
Weighted average diluted number of shares outstanding			9,345,109			9,294,615			8,151,562

Goodwill

~~The~~Goodwill ~~accompanying~~reflects ~~notes~~the ~~are~~excess anof ~~integral~~acquisition ~~part~~costs of ~~these~~U.S. ~~financial~~Cellulose ~~statements~~Co. over the estimated fair value of net assets acquired. Prior to April 1, 2002 goodwill was amortized on a straight-line basis over a 15-year life. Effective April 1, 2002 the Company adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, and accordingly, goodwill is no longer amortized, but is reviewed at least annually for impairment. Goodwill amortization expense amounted to $85,600 during the year ended March 31, 2002.

Long-~~21-~~lived assets

~~Table~~Long-lived assets are recorded at the lower of ~~Contents~~amortized cost or fair value. As part of an ongoing review of the valuation of long-lived assets, we assess the carrying value of such assets if facts and circumstances suggest it may be impaired. If this review indicates that the carrying value of these assets may not be recoverable, as determined by a nondiscounted cash flow analysis over the remaining useful life, the carrying value would be reduced to its estimated fair value. There have been no material impairments recognized in these financial statements.

~~Polymer~~Stock ~~Solutions, Inc.~~options ~~and Subsidiaries~~ ~~Consolidated Statements of Shareholders’ Equity (Deficit)~~ ~~(U.S. dollars)~~

		Common Stock								Additional					Total
							Treasury			Paid-in		Accumulated			Shareholders'
		Shares			Amount		Stock			Capital		Deficit			Equity
Balance at March 31, 1999			6,410,833		$	6,410	$	—		$	10,309,361	$	(10,513,645	)	$	(197,874	)
Shares issued, pursuance to — Private placement			2,043,915			2,044		—			959,602		—			961,646
	Exercise of warrants		385,750			386		—			197,851		—			198,237
	Minority interest shareholder exchange of shares		15,441			15		—			34,606		—			34,621
Net income			—			—		—			—		1,105,337			1,105,337
Balance at March 31, 2000			8,855,939			8,855		—			11,501,420		(9,408,308	)		2,101,967
Shares issued, pursuance to — Exercise of warrants			671,100			671		—			407,347		—			408,018
	Exercise of options		5,000			5		—			3,400		—			3,405
	Minority interest shareholder exchange of shares		64,624			65		—			144,833		—			144,898
Net income			—			—		—			—		1,740,155			1,740,155
Balance at March 31, 2001			9,596,663			9,596		—			12,057,000		(7,668,153	)		4,398,443
Shares issued, pursuance to — Minority interest shareholder exchange of shares			20,301			21		—			45,497		—			45,518
Treasury stock purchased			(113,300	)		—		(35,153	)		—		—			(35,153	)
Net income			—			—		—			—		574,159			574,159
Balance at March 31, 2002			9,503,664		$	9,617	$	(35,153	)	$	12,102,497	$	(7,093,994	)	$	4,982,967

We account for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees and its related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation. Under APB No. 25, compensation expense for fixed options is based on the difference, if any, on the date of the grant, between the fair value of our stock and the exercise price of the option. We account for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123.

~~The~~Page ~~accompanying notes are an integral part of these financial statements.~~19

~~-22-~~Income taxes

~~Table~~We use the liability method of ~~Contents~~accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

~~Polymer~~Recently ~~Solutions,~~Issued ~~Inc.~~Accounting ~~and Subsidiaries~~Standards ~~Consolidated Statements of Cash Flows~~ ~~(U.S. Dollars)~~

					Years ended March 31,
					2002			2001			2000
Cash flows from operating activities:
		Net income			$	574,159		$	1,740,155		$	1,105,337
		Adjustments to reconcile net income to net cash provided by (used in) operating activities:
			Depreciation and amortization			347,901			352,553			282,111
			Loss (gain) on disposals of fixed assets			994			(5,055	)		(945	)
			Deferred income tax expense (benefit)			203,510			(757,855	)		(500,000	)
			Changes in operating assets and liabilities:
				Accounts receivable		340,564			379,995			(875,372	)
				Inventories		291,072			(125,348	)		(302,979	)
				Prepaid expenses and other assets		(101,254	)		54,864			74,458
				Accounts payable		(9,407	)		(224,539	)		(5,747	)
				Payroll related and commissions payable		(85,757	)		(84,401	)		138,451
				Severance plan liability		(31,160	)		(27,739	)		(19,665	)
Net cash provided by (used in) operating activities						1,530,622			1,302,630			(104,351	)
Cash flows from investing activities:
	Goodwill acquired in business acquisition					—			—			(1,274,487	)
	Purchase of fixed assets					(47,889	)		(87,599	)		(96,588	)
	Proceeds from disposals of fixed assets					5,842			8,901			15,145
Net cash used in investing activities						(42,047	)		(78,698	)		(1,355,930	)
Cash flows from financing activities:
	Repurchase of stock					(35,153	)		—			—
	Proceeds from issuance of common stock					—			411,423			1,159,883
	(Payments) borrowings on operating line of credit, net					(340,991	)		(1,411,676	)		466,194
	Payments of capital lease obligations					(188,088	)		(176,410	)		(140,002	)
Net cash (used in) provided by financing activities						(564,232	)		(1,176,663	)		1,486,075
Increase in cash						924,343			47,269			25,794
Cash, beginning of year						112,366			65,097			39,303
Cash, end of period					$	1,036,709		$	112,366		$	65,097

In August and October 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 143, Accounting for Obligations Associated with the Retirement of Long-Lived Assets, and SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, respectively.

~~The~~SFAS ~~accompanying~~No. 143 ~~notes~~establishes ~~are~~accounting standards for the recognition and measurement of an ~~integral~~asset ~~part~~retirement obligation and its associated asset retirement cost. It also provides accounting guidance for legal obligations associated with the retirement of ~~these~~tangible ~~financial~~long-lived ~~statements~~assets. SFAS No. 143 is effective in fiscal years beginning after June 15, 2002, with early adoption permitted. The Company adopted the provisions of SFAS No. 143 effective April 1, 2003.

SFAS No. 144 establishes a single accounting model for the impairment or disposal of long-23lived assets, including discontinued operations. SFAS No. 144 superseded SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and APB Opinion No. 30, Reporting the Results of Operations— Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. The Company adopted the provisions of SFAS No. 144 effective April 1, 2002, which did not have a material impact on the consolidated results of operations, financial position and cash flows.

~~Table~~In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. The 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, Liabilities Recognition for Certain Employee Termination Benefits and Other Costs to Exit and Activity (including Certain Costs Incurred in a Restructuring). The impact of ~~Contents~~this pronouncement on the Company’s financial statements is not expected to be material.

~~Polymer~~In ~~Solutions~~November 2002, ~~Inc~~the FASB issued FASB Interpretation No. 45 (“FIN 45”), Guarantor’s Accounting and ~~Subsidiaries~~Disclosure Requirements for Guarantees, Including ~~Consolidated~~Indirect ~~Statements~~Guarantees of ~~Cash~~Indebtedness ~~Flows~~of Others, ~~Continued~~and Interpretation of SFAS 5, (U57, and 107 and Rescission of FIN 34.S The interpretation requires certain disclosures to be made by a guarantor about its obligations under certain guarantees that it has issued. ~~Dollars)~~It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

			Years ended March 31,
			2002		2001		2000
Supplemental disclosure of cash flow information:
	Cash paid for:
		Income taxes	$	89,200	$	27,300	$	800
		Interest	$	72,063	$	245,560	$	287,695
Supplemental schedule of non-cash investing and financing activities:
		Minority interest shareholder exchange of shares	$	45,518	$	144,898	$	34,621
		Acquisition of equipment under capital leases	$	24,490	$	57,333	$	61,800
Acquisition of U.S. Cellulose Co.
	Accounts receivable						$	354,774
	Inventories							211,214
	Prepaid expenses							89,910
	Fixed assets							20,896
	Accounts payable							(269,953	)
	Accrued payroll							(27,008	)
	Severance plan liability							(384,400	)
Net liabilities at date of acquisition							$	(4,567	)

Page 20

~~The~~ITEM ~~accompanying~~7A. QUANTITATIVE ~~notes~~AND ~~are~~QUALITATIVE anDISCLOSURES ~~integral~~ABOUT ~~part~~MARKET ~~of these financial statements~~RISK.

~~-24-~~We are exposed to market risk arising from changes in interest rates. Our primary interest rate risk results from changes in the prime rate, which is used to determine the interest rate applicable to the term loans under our credit facility. At March 31, 2003, there were no borrowings under the credit facility. Exposure would increase accordingly should we begin borrowing during fiscal year 2004.

~~Table~~We ofhave ~~Contents~~minimal operations in foreign countries. While we are exposed to foreign currency fluctuations, we presently have no financial instruments in foreign currency and we do not maintain material funds in foreign currency beyond those necessary for operations.

~~Polymer~~ITEM ~~Solutions, Inc~~8. FINANCIAL ~~and~~STATEMENTS ~~Subsidiaries Notes~~AND toSUPPLEMENTARY ~~Consolidated Financial Statements~~DATA.

1.		Nature of Operations
		Polymer Solutions, Inc. (“PSI” or “Company”) is engaged in the development and sale of advanced polymer-based coatings, sealants and adhesives to industrial and retail users in the western half of the United States.
2.		Significant Accounting Policies
		Generally accepted accounting principles
		The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Differences between reporting these consolidated financial statements under accounting principles generally accepted in the United States of America versus accounting principles generally accepted in Canada are not material.
		Basis of consolidation
		The Company’s consolidated financial statements include its wholly owned active subsidiary, Alternative Materials Technology, Inc. and its wholly owned inactive subsidiaries AMT Environmental Products Inc. and PSI Acquisitions Corp. Intercompany transactions and accounts are eliminated in consolidation.
		Financial statement presentation
		The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
		Concentration of credit risk
		Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of trade accounts receivable and cash. The Company performs credit evaluations of its customers’ financial condition and generally do not require collateral on accounts receivable. The Company maintains an allowance for doubtful accounts on its receivables based on expected collectibility. Allowance for doubtful accounts was $207,000 and $146,000 at March 31, 2002 and 2001, respectively. At March 31, 2002, the Company had cash deposited in two financial institutions that were federally insured up to $100,000 per financial institution.
		Inventories
		Inventories are valued at the lower of cost, determined on the first-in first-out basis, and net realizable value. The Company maintains a reserve for slow-moving or obsolete inventory as well as the related disposal costs.
		Fixed assets
		Fixed assets are recorded at cost and depreciated on a straight-line basis over their estimated life, which varies between five and ten years. Repair and maintenance costs are charged against income while improvements are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the applicable costs and accumulated depreciation from the accounts with any resulting gain or loss reflected in other income.

INDEX

-25-


Consolidated Financial Statements:
	Report of Independent Accountants	Page 22
	Consolidated Balance Sheets	Page 23
	Consolidated Statements of Operations	Page 24
	Consolidated Statements of Shareholders’ Equity	Page 25
	Consolidated Statements of Cash Flows	Page 26
	Consolidated Statements of Cash Flows, continued	Page 27
	Notes to Consolidated Financial Statements	Page 28

~~Table~~Page ~~of Contents~~21

~~Polymer~~Report ~~Solutions,~~of ~~Inc.~~Independent ~~and Subsidiaries~~Accountants ~~Notes to Consolidated Financial Statements~~

~~Goodwill~~To ~~Goodwill reflects~~ the ~~excess~~Board of ~~acquisition~~Directors costs of U.S. Cellulose Co. over the estimated fair value of net assets acquired. Goodwill was amortized on a straight-line basis over a 15-year life until March 31, 2002. Accumulated amortization amounted to $210,300 and Shareholders ~~$124,700 at March 31, 2002 and 2001, respectively. Goodwill amortization expense amounted to $85,600 during each~~ of ~~the~~Polymer ~~years ended March 31~~Solutions, ~~2002 and 2001~~Inc. Long-lived assets Long-lived assets are recorded at the lower of amortized cost or fair value. As part of an ongoing review of the valuation of long-lived assets, management assesses the carrying value of such assets if facts and circumstances suggest they may be impaired. If this review indicates that the carrying value of these assets may not be recoverable, as determined by a nondiscounted cash flow analysis over the remaining useful life, the carrying value would be reduced to its estimated fair value. There have been no material impairments recognized in these financial statements. Stock options The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees and its related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation. Under APB No. 25, compensation expense for fixed options is based on the difference, if any, on the date of the grant, between the fair value of the Company’s stock and the exercise price of the option. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123. Research and development costs Research and development costs are expensed as incurred. Revenue recognition Revenue from the sale of products is recognized upon shipment. Foreign currency translation The Company’s operations are primarily conducted in the United States and the United States dollar is the Company’s functional currency. The Company and its subsidiaries are considered integrated operations and the accounts are translated as follows:

~~Monetary~~In ~~assets~~our ~~and~~opinion, ~~liabilities~~the ataccompanying consolidated balance sheets and the ~~rates~~related consolidated statements of ~~exchange~~operations, of shareholders’ equity and of cash flows present fairly, in ~~effect~~all atmaterial respects, the ~~balance~~financial ~~sheet~~position ~~date;~~of Polymer ~~non-monetary~~Solutions, ~~assets~~Inc. and its subsidiaries at ~~historical~~March 31, ~~rates;~~2003 ~~revenue~~and 2002, and the ~~expense~~results ~~items~~of ~~(except~~their ~~depreciation~~operations and ~~amortization)~~their atcash flows for the ~~average~~three ~~rates~~years ~~for~~in the period; ~~depreciation~~ended ~~and~~March 31, ~~amortization~~2003 atin conformity with accounting principles generally accepted in the ~~same~~United ~~rates~~States asof ~~for~~America. These financial statements are the responsibility ~~assets~~of the Company’s management; our responsibility is to ~~which~~express ~~they~~an opinion ~~relate~~on these financial statements based on our audits. ~~The~~We ~~net~~conducted ~~effect~~our audits of these statements in accordance with auditing standards generally accepted in the ~~foreign~~United ~~currency~~States ~~translation~~of isAmerica ~~included~~which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in ~~current~~the ~~operations~~financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

~~Income~~/s/ ~~taxes~~PricewaterhouseCoopers The Company uses the liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. See Note 9.LLP

~~-26-~~Sacramento, California May 28, 2003

~~Table~~Page ~~of Contents~~22

Polymer Solutions, Inc. and Subsidiaries ~~Notes to~~ Consolidated ~~Financial~~Balance ~~Statements~~Sheets (U.S. Dollars)

		Recently Issued Accounting Standards
			March 31,
		In July 2001, the Financial Accounting Standards Board issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. They also issued SFAS No. 143, Accounting for Obligations Associated with the Retirement of Long-Lived Assets, and SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, in August and October 2001, respectively.
			2003			2002
		SFAS No. 141 requires all business combinations initiated after June 30, 2001 be accounted for under the purchase method. SFAS No. 141 supersedes Accounting Principles Board (APB) Opinion No. 16, Business Combinations, and SFAS No. 38, Accounting for Pre-acquisition Contingencies of Purchased Enterprises.
Assets
		SFAS No. 142 addresses the financial accounting and reporting for acquired goodwill and other intangible assets. Under the new rules, amortization of goodwill and other intangible assets with indefinite lives is no longer required but intangible assets will be subject to periodic testing for impairment. SFAS No. 142 supersedes APB Opinion No. 17, Intangible Assets. The Company adopted the provisions of SFAS No. 142 effective April 1, 2002, which will have a positive impact on its consolidated results of operations and financial position, as the Company stopped recording amortization expense in connection with the goodwill related to the USC acquisition.
Current assets:
		SFAS No. 143 establishes accounting standards for the recognition and measurement of an asset retirement obligation and its associated asset retirement cost. It also provides accounting guidance for legal obligations associated with the retirement of tangible long-lived assets. SFAS No. 143 is effective in fiscal years beginning after June 15, 2002, with early adoption permitted. The Company expects that the provisions of SFAS No. 143 will not have a material impact on its consolidated results of operations and financial position upon adoption. The Company plans to adopt SFAS No. 143 effective April 1, 2003.
	Cash		$	1,165,031		$	1,036,709
		SFAS No. 144 establishes a single accounting model for the impairment or disposal of long-lived assets, including discontinued operations. SFAS No. 144 superseded SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and APB Opinion No. 30, Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. The Company adopted the provisions of SFAS No. 144 effective April 1, 2002, which did not have a material impact on its consolidated results of operations and financial position.
	Accounts receivable, net			1,643,305			1,653,506
3.		Inventories
	Inventories, net			1,265,236			1,358,223
	Prepaid expenses and other assets			140,847			166,750
	Deferred income taxes, current			351,300			421,600
		Total current assets		4,565,719			4,636,788
Fixed assets, net				476,856			498,938
Deferred income taxes				1,138,017			632,745
Goodwill				1,072,863			1,072,863
		Total assets	$	7,253,455		$	6,841,334
Liabilities and Shareholders’ Equity
Current liabilities:
	Accounts payable		$	892,337		$	1,069,142
	Payroll related and commissions payable			282,024			239,633
	Current portion of severance liability			79,853			118,261
	Current portion of capital lease obligations			45,699			174,621
		Total current liabilities		1,299,913			1,601,657
Capital lease obligations, net of current portion				14,041			74,135
Severance plan liability, net of current portion				64,030			182,575
		Total liabilities		1,377,984			1,858,367
Commitments and contingencies (Note 9)
Shareholders’ equity:
Preferred stock, $0.001 par value;
	Authorized - 4,000,000 shares; issued and outstanding - nil			—			—
Common stock, $0.001 par value;
	Authorized - 100,000,000 shares in 2003 and 20,000,000 in 2002
	March 31, 2003: issued 9,626,492, and outstanding 9,252,192			9,627			9,617
	March 31, 2002: issued 9,616,964, and outstanding 9,503,664
Treasury stock, at cost; 374,300 and 113,300 shares in 2003 and 2002, respectively				(106,144	)		(35,153	)
Additional paid-in capital				12,143,465			12,102,497
Accumulated deficit				(6,171,477	)		(7,093,994	)
		Total shareholders’ equity		5,875,471			4,982,967
		Total liabilities and shareholders’ equity	$	7,253,455		$	6,841,334

~~Inventories~~The ataccompanying ~~March~~notes ~~31,~~are ~~consists~~an integral part of ~~the~~these ~~following:~~financial statements.

	2002			2001
Raw materials and supplies	$	882,163		$	1,021,842
Finished goods		724,811			910,667
Less allowance for slow-moving inventory		(248,751	)		(283,214	)
	$	1,358,223		$	1,649,295

Page 23

~~-27-~~Polymer Solutions, Inc. and Subsidiaries Consolidated Statements of Operations (U.S. Dollars)


		Years ended March 31,

		2003			2002			2001
Sales revenue		$	14,899,242		$	14,604,141		$	15,389,181
Cost of goods sold			10,790,947			10,505,821			10,653,988

			4,108,295			4,098,320			4,735,193

Corporate and administrative expenses:
	Marketing and sales		1,165,650			1,069,636			1,174,365
	General and administrative		1,826,488			1,641,287			1,764,171
	Research and development		578,806			540,932			550,943

			3,570,944			3,251,855			3,489,479

Income from operations			537,351			846,465			1,245,714
Other income			393			1,289			7,411
Interest expense			(22,749	)		(72,063	)		(232,970	)

Income before provision for income taxes			514,995			775,691			1,020,155
Income tax benefit (expense)			407,522			(201,532	)		720,000

Net income		$	922,517		$	574,159		$	1,740,155

Basic and diluted earnings per share		$	.10		$	.06		$	.19

Weighted average basic number of shares outstanding			9,110,410			9,344,023			9,177,362

Weighted average diluted number of shares outstanding			9,158,935			9,345,109			9,294,615

~~Polymer~~The ~~Solutions,~~accompanying ~~Inc.~~notes ~~and~~are ~~Subsidiaries Notes~~an tointegral ~~Consolidated~~part ~~Financial~~of ~~Statements~~these financial statements.

4.Page ~~Fixed Assets Fixed assets consists of the following:~~24

	March 31, 2002
			Accumulated
	Cost		Depreciation		Net
Laboratory equipment	$	139,986	$	120,345	$	19,641
Office equipment		225,906		126,243		99,663
Production equipment		1,231,896		972,532		259,364
Leasehold improvements		184,031		63,761		120,270
	$	1,781,819	$	1,282,881	$	498,938

Polymer Solutions, Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity
(U.S. Dollars)

		March 31, 2001
			Common Stock										Additional					Total
						Accumulated
										Treasury			Paid-in		Accumulated			Shareholders'
		Cost				Depreciation			Net
			Shares				Amount			Stock			Capital		Deficit			Equity
Laboratory equipment		$	139,986			$	106,989		$	32,997
Balance at March 31, 2000				8,855,939			$	8,855		$	—		$	11,501,420	$	(9,408,308	)	$	2,101,967
Office equipment			194,565				91,691			102,874
Shares issued, pursuant to:
Production equipment			1,211,553				787,469			424,084
	Exercise of warrants			671,100				671			—			407,347		—			408,018
Leasehold improvements			181,371				45,574			135,797
	Exercise of options			5,000				5			—			3,400		—			3,405
		$	1,727,475			$	1,031,723		$	695,752
	Minority interest shareholder exchange of shares			64,624				65			—			144,833		—			144,898
Net income				—				—			—			—		1,740,155			1,740,155
Balance at March 31, 2001				9,596,663				9,596			—			12,057,000		(7,668,153	)		4,398,443
Shares issued, pursuant to:
	minority interest shareholder exchange of shares			20,301				21			—			45,497		—			45,518
Treasury stock purchased				(113,300	)			—			(35,153	)		—		—			(35,153	)
Net income				—				—			—			—		574,159			574,159
Balance at March 31, 2002				9,503,664				9,617			(35,153	)		12,102,497		(7,093,994	)		4,982,967
Shares issued, pursuant to:
	exercise of options			9,528				10			—			2,454		—			2,464
Treasury stock purchased				(261,000	)			—			(70,991	)		—		—			(70,991	)
Variable option based compensation				—				—			—			38,514		—			38,514
Net income				—				—			—			—		922,517			922,517
Balance at March 31, 2003				9,252,192			$	9,627		$	(106,144	)	$	12,143,465	$	(6,171,477	)	$	5,875,471

		Fixed assets include capital leased assets, net of depreciation, of $173,933 and $315,203 at March 31, 2002 and 2001, respectively. Total depreciation expense for the years ended March 31, 2002, 2001 and 2000, was $262,357, $270,988 and $246,966, respectively.
5.		Earnings Per Share (“EPS”)
		The Company’s basic net income per share is computed by dividing net income by the weighted average number of outstanding common shares. The diluted EPS amounts are the same as the basic EPS for all periods presented due to rounding. At March 31, 2002 and 2001, there were warrants and options for 2,286,397 and 2,360,833 shares, respectively, that were not included in the diluted EPS because they were antidilutive for the period; however, these shares could potentially dilute basic EPS in the future.
6.		Acquisition
		In October 1999, the Company purchased the outstanding capital stock of U.S. Cellulose Co. (“USC”), a paint coatings company based in California, for $1,000,000 in cash. In connection with the purchase, the Company adopted the USC Employee Severance Plan, which entitles former USC employees to receive up to $384,400 in benefits, to be paid over a six-year period. The acquisition was accounted for using the purchase method of accounting. USC’s assets and liabilities were recorded at their fair value at the date of the acquisition. The excess of acquisition cost over the fair value of tangible net assets acquired was recorded as goodwill.

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

~~-28-~~Page 25

~~Table~~Polymer Solutions, Inc. and Subsidiaries Consolidated Statements of ~~Contents~~Cash Flows (U.S. Dollars)

Polymer Solutions, Inc. and Subsidiaries Notes to Consolidated Financial Statements


				Years ended March 31,

				2003			2002			2001
Cash flows from operating activities:
	Net income			$	922,517		$	574,159		$	1,740,155
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			249,455			347,901			352,553
		(Gain) loss on disposals of fixed assets			(300	)		994			(5,055	)
		Deferred income tax (benefit) expense			(434,972	)		203,510			(757,855	)
		Variable option based compensation			38,514			—			—
		Changes in operating assets and liabilities:
			Accounts receivable		10,201			340,564			379,995
			Inventories		92,987			291,072			(125,348	)
			Prepaid expenses and other assets		25,903			(101,254	)		54,864
			Accounts payable		(176,805	)		(9,407	)		(224,539	)
			Payroll related and commissions payable		42,391			(85,757	)		(84,401	)
			Severance plan liability		(156,953	)		(31,160	)		(27,739	)

Net cash provided by operating activities					612,938			1,530,622			1,302,630

Cash flows from investing activities:
	Purchase of fixed assets				(227,373	)		(47,889	)		(87,599	)
	Proceeds from disposals of fixed assets				300			5,842			8,901

Net cash used in investing activities					(227,073	)		(42,047	)		(78,698	)

Cash flows from financing activities:
	Repurchase of stock				(70,991	)		(35,153	)		—
	Proceeds from issuance of stock				2,464			—			411,423
	Payments on operating line of credit, net				—			(340,991	)		(1,411,676	)
	Payments of capital lease obligations				(189,016	)		(188,088	)		(176,410	)

Net cash used in financing activities					(257,543	)		(564,232	)		(1,176,663	)

Increase in cash					128,322			924,343			47,269
Cash, beginning of year					1,036,709			112,366			65,097

Cash, end of year				$	1,165,031		$	1,036,709		$	112,366

The ~~following~~accompanying ~~summarized~~notes ~~unaudited proforma financial information for the twelve months ended March 31, 2000, assumes the acquisition had occurred on April 1, 1999. The USC results of operations~~ are ~~through~~an ~~the~~integral ~~date~~part of ~~acquisition,~~these ~~October~~financial ~~18, 1999~~statements.

				(unaudited)
Revenues:
		Polymer Solutions, Inc.		$	13,121,376
		U.S. Cellulose Co.			1,949,629
			Combined	$	15,071,005
Net income (loss):
		Polymer Solutions, Inc.		$	1,105,337
		U.S. Cellulose Co.			(820,708	)
			Combined	$	284,629
Combined net income per share:
	Basic
		Net income available to common shareholders		$	284,629
		Weighted average number of common shares outstanding			7,925,595
	Basic and diluted earnings per share			$	0.04

Page 26

		The amounts do not reflect any benefits from economies that might be achieved from combined operations. The proforma amounts do reflect purchase accounting adjustments and amortization for the period presented.
7.		Bank Loan Facilities
		The Company’s revolving line of credit provides funds up to $3,000,000. Funds available to be advanced are limited to 80% of eligible accounts receivable and 25% of eligible inventories. At March 31, 2002, the maximum available borrowing under the line was approximately $1.7 million. Interest is payable on funds advanced at the rate of prime plus 0.25% (4.75% at March 31, 2002). The line of credit is collateralized by accounts receivable and inventories and expires on November 30, 2002. The line of credit provides for various financial and non-financial covenants including minimum cash flow ratio, minimum quick ratio, net worth, and capital expenditures.

Polymer Solutions, Inc. and Subsidiaries
Consolidated Statements of Cash Flows, Continued
(U.S. Dollars)

-29-


			Years ended March 31,

			2003		2002		2001
Supplemental disclosure of cash flow information:
	Cash paid for:
		Income taxes	$	54,000	$	89,200	$	27,300

		Interest	$	22,749	$	72,063	$	245,560

Supplemental schedule of non-cash investing and financing activities:
		Minority interest shareholder exchange of shares	$	—	$	45,518	$	144,898

		Acquisition of equipment under capital leases	$	—	$	24,490	$	57,333

~~Table~~The accompanying notes are an integral part of ~~Contents~~these financial statements.

~~Polymer~~Page ~~Solutions, Inc. and Subsidiaries~~27 ~~Notes to Consolidated Financial Statements~~

8.Polymer ~~Capital~~Solutions, ~~Lease~~Inc. ~~Obligations~~and ~~Capital~~Subsidiaries Notes ~~lease~~to ~~obligations~~Consolidated atFinancial ~~March 31, consist of the following:~~Statements

	2002		2001
1.	Nature of Operations
Capital lease obligations bearing interest ranging from 6.46% to 20.49%, payable in monthly principal and interest payments and collateralized by the related equipment	$	248,756	$	412,354
	Polymer Solutions, Inc. (“PSI” or the “Company”) is engaged in the development and sale of advanced polymer-based coatings, sealants and adhesives to industrial and retail users in the western half of the United States.
Less current portion		174,621		185,589
2.	Significant Accounting Policies
	$	74,135	$	226,765
	Generally accepted accounting principles The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Differences between reporting these consolidated financial statements under accounting principles generally accepted in the United States of America versus accounting principles generally accepted in Canada are not material.
	Basis of consolidation The Company’s consolidated financial statements include its wholly owned active subsidiary, Alternative Materials Technology, Inc. and its wholly owned inactive subsidiaries AMT Environmental Products Inc. and PSI Acquisitions Corp. Intercompany transactions and accounts are eliminated in consolidation.
	Financial statement presentation The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	Concentration of credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of trade accounts receivable and cash. The Company performs credit evaluations of its customers’ financial condition and generally does not require collateral on accounts receivable. The Company maintains an allowance for doubtful accounts on its receivables based on expected collectibility. Allowance for doubtful accounts was $238,000 and $207,000 at March 31, 2003 and 2002, respectively. At March 31, 2003, the Company had cash deposited in two financial institutions that were federally insured up to $100,000 per financial institution.
	Inventories Inventories are valued at the lower of cost, determined on the first-in first-out basis, and net realizable value. The Company maintains a reserve for slow-moving or obsolete inventory as well as the related disposal costs.
	Fixed assets Fixed assets are recorded at cost and depreciated on a straight-line basis over their estimated life, which varies between five and ten years. Repair and maintenance costs are charged against income

~~Future minimum principal payments under capital lease obligations for the year ending March 31 are as follows:~~Page 28

For the year ending March 31
	2003	$	174,621
	2004		47,821
	2005		14,495
	2006		11,819
		$	248,756

Polymer Solutions, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

9while improvements are capitalized as additions to the related assets. ~~Income~~Retirements, ~~Taxes~~sales ~~The~~and ~~benefit~~disposals of assets are recorded by removing the applicable costs and accumulated depreciation from the accounts with any resulting gain or loss reflected in other income. Goodwill Goodwill reflects the excess of acquisition costs of U.S. Cellulose Co. over the estimated fair value of net assets acquired. Prior to April 1, 2002 goodwill was amortized on a straight-line basis over a 15-year life. Effective April 1, 2002 the Company adopted the provisions of Statement of Financial Accounting Standards (~~expense~~“SFAS”) No. 142, Goodwill and Other Intangible Assets, and accordingly, goodwill is no longer amortized, but is reviewed at least annually for impairment. Goodwill amortization expense amounted to $85,600 during the year ended March 31, 2002. Net income ~~taxes~~and earnings per share exclusive of amortization related to goodwill, for the years ended March 31, ~~consists~~would ofhave ~~the~~been ~~following~~as follows:

				2002			2001			2000
		2003			2002			2001
Federal:
Net income		$	574,159		$	574,159		$	1,740,155
	Current			$	—		$	(18,597	)	$	(17,000	)
Add back: Goodwill amortization, net of tax			—			51,360			51,360
	Deferred				(271,561	)		754,082			434,000
Adjusted net income		$	574,159		$	625,519		$	1,791,515
					(271,561	)		735,485			417,000
Basic and diluted earnings per share:
State:
	Net income	$	0.10		$	0.06		$	0.19
	Current				1,978			(19,258	)		(13,000	)
	Add back: Goodwill amortization, net of tax		—			0.01			—
	Deferred				68,051			3,773			66,000
Adjusted basic and diluted earnings per share		$	0.10		$	0.07		$	0.19
					70,029			(15,485	)		53,000
	Income tax (expense) benefit			$	(201,532	)	$	720,000		$	470,000

Long-30lived assets Long- lived assets are recorded at the lower of amortized cost or fair value. As part of an ongoing review of the valuation of long-lived assets, management assesses the carrying value of such assets if facts and circumstances suggest they may be impaired. If this review indicates that the carrying value of these assets may not be recoverable, as determined by a nondiscounted cash flow analysis over the remaining useful life, the carrying value would be reduced to its estimated fair value. There have been no material impairments recognized in these financial statements. Stock options The Company accounts for stock-based employee compensation arrangements in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees and its related interpretations and complies with the disclosure provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation. Under APB No. 25, compensation expense for fixed options is based on the difference, if any, on the date of the grant, between the fair value of the Company’s stock and the exercise price of the option. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of SFAS No. 123.

~~Table of Contents~~Page 29

Polymer Solutions, Inc. and Subsidiaries Notes to Consolidated Financial Statements

~~The~~Research ~~tax~~and ~~effects~~development ofcosts ~~temporary~~Research ~~differences~~and ~~that~~development ~~give~~costs ~~rise~~are toexpensed ~~significant~~as ~~portions~~incurred. Revenue recognition Revenue from the sale of products is recognized upon shipment. Foreign currency translation The Company’s operations are primarily conducted in the ~~net~~United ~~deferred~~States ~~tax~~and ~~assets~~the atUnited ~~March~~States ~~31,~~dollar ~~consist~~is ofthe Company’s functional currency. The Company and its subsidiaries are considered integrated operations and the ~~following~~accounts are translated as follows:

		2002			2001
Net operating loss carryforwards		$	485,294		$	705,253
Tax credits			610,517			503,004
State taxes			(46,853	)		(23,716	)
Other			5,387			73,314
	Net deferred tax assets	$	1,054,345		$	1,257,855

Monetary assets and liabilities at the rates of exchange in effect at the balance sheet date; non-monetary assets at historical rates; revenue and expense items (except depreciation and amortization) at the average rates for the period; depreciation and amortization at the same rates as for the assets to which they relate. The net effect of the foreign currency translation is included in current operations.

AtIncome ~~March~~taxes ~~31,~~The ~~2002,~~Company ~~management~~uses ~~believes~~the ~~that~~liability itmethod isof ~~more~~accounting ~~likely~~for ~~than~~income ~~not~~taxes. ~~that~~Deferred tax assets and liabilities are recognized for the ~~deferred~~future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets ~~will~~and beliabilities ~~realized~~and their respective tax bases. ~~The~~Deferred ~~total~~tax ~~amount~~assets ofand ~~future~~liabilities are measured using enacted tax rates expected to apply to taxable income ~~necessary~~in the years in which those temporary differences are expected to ~~realize~~be ~~the~~recovered ~~benefit~~or issettled. ~~approximately~~See $2Note 8.7 ~~million~~Recently Issued Accounting Standards In August and October 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. ~~The~~143, ~~expiration~~Accounting ~~dates~~for Obligations Associated with the Retirement of Long-Lived Assets, and SFAS No. 144, Accounting for the ~~net~~Impairment ~~operating~~or ~~loss~~Disposal ~~carryforwards~~of Long-Lived Assets, respectively. SFAS No. 143 establishes accounting standards for ~~federal~~the ~~purposes~~recognition ~~are~~and ~~from~~measurement ~~2010~~of toan ~~2021~~asset retirement obligation and its associated asset retirement cost. It also provides accounting guidance for ~~state~~legal ~~purposes~~obligations ~~from~~associated ~~2003~~with tothe ~~2005~~retirement of tangible long-lived assets. SFAS No. 143 is effective in fiscal years beginning after June 15, 2002, with early adoption permitted. The ~~expiration~~Company ~~dates~~adopted the provisions of SFAS No. 143 effective April 1, 2003. SFAS No. 144 establishes a single accounting model for the ~~tax~~impairment ~~credits~~or disposal of long-lived assets, including discontinued operations. SFAS No. 144 superseded SFAS No. 121, Accounting for ~~federal~~the ~~purposes~~Impairment ~~are~~of ~~from~~Long-Lived ~~2005~~Assets and for Long-Lived Assets to ~~2017~~Be Disposed Of, and ~~for~~APB ~~state~~Opinion ~~purposes~~No. ~~credits~~30, ~~may~~Reporting bethe ~~carried~~Results ~~forward~~of ~~indefinitely~~Operations— Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. The ~~income~~Company ~~tax~~adopted ~~rate~~the onprovisions ~~earnings~~of ~~differed~~SFAS ~~from~~No. ~~the~~144 ~~Federal~~effective ~~statutory~~April ~~rate~~1, ~~for~~2002, which did not have a material impact on the ~~years~~consolidated ~~ended~~results ~~March~~of 31operations, asfinancial ~~follows:~~position and cash flows.

	2002			2001			2000
Federal statutory rate		34.0	%		34.0	%		34.0	%
State statutory rate, net of federal benefit		5.8			5.8			5.8
Change in valuation allowance		—			(145.7	)		(99.9	)
Research and development credits		(8.1	)		(9.7	)		(25.1	)
Permanent differences		—			28.5			6.5
Other		(5.7	)		16.5			4.7
Effective rate		26.0	%		(70.6	%)		(74.0	%)

Page 30

10.		Commitments and Contingencies
		Operating leases
		The Company leases certain facilities under arrangements that contain renewal options and provide for periodic cost of living adjustments. Rental expense was $350,057, $358,507 and $299,012 for the years ended March 31, 2002, 2001 and 2000, respectively.

Polymer Solutions, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

-31-

		In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. The 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, Liabilities Recognition for Certain Employee Termination Benefits and Other Costs to Exit and Activity (including Certain Costs Incurred in a Restructuring). The impact of this pronouncement on the Company’s financial statements is not expected to be material.

		In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, and Interpretation of SFAS 5, 57, and 107 and Recission of FIN 34. The interpretation requires certain disclosures to be made by a guarantor about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

3.		Inventories

		Inventories at March 31, consists of the following:


	2003			2002

Raw materials and supplies	$	887,160		$	882,163
Finished goods		620,337			724,811
Less allowance for slow-moving inventory		(242,261	)		(248,751	)

	$	1,265,236		$	1,358,223

~~Polymer Solutions, Inc. and Subsidiaries~~Page 31 ~~Notes to Consolidated Financial Statements~~

~~Future~~Polymer ~~minimum rental commitments as of March 31~~Solutions, ~~2002,~~Inc. ~~under~~and ~~noncancelable~~Subsidiaries Notes ~~operating~~to ~~leases~~Consolidated ~~are~~Financial ~~as follows:~~Statements

Year ending March 31:
	2003	$	336,108
	2004		347,172
	2005		358,476
	2006		365,058
	2007		376,740
	Thereafter		989,163
		$	2,772,717

4.		Fixed Assets

		Fixed assets at March 31, consists of the following:

	During the fourth quarter of fiscal 2002, the Company entered into a ten year lease for a new Sales and Technical Service facility in Southern California. The lease commences October 1, 2002 and will replace the lease on the current facility, which expires on December 31, 2002. The future minimum rental commitment on the new lease has been included in the above schedule.
	March 31, 2003
	Environmental Matters
			Accumulated
	The Company is subject to environmental related claims in the normal course of business. Management believes these liabilities, if any, will not materially affect the Company’s financial position or results of operations.
	Cost		Depreciation		Net
11.	Common Stock
Laboratory equipment	$	145,803	$	132,787	$	13,016
	Minority interest
Office equipment		309,670		171,984		137,686
	Through a reorganization of the Company in February 1997, Canadian shareholders are given the opportunity to convert their non-transferable, non-voting PSI Acquisitions Corp. (PAC) preferred shares on a 1:1 basis up to September 1, 2001, after which the Company may redeem the PAC preferred shares for common shares. During the years ended March 31, 2002, 2001 and 2000, 20,301, 64,624 and 15,441 preferred shares, respectively, were exchanged or redeemed into common shares. At March 31, 2002, all non-voting PAC preferred shares have been redeemed.
Production equipment		1,291,959		1,141,133		150,826
	Founders’ shares
Leasehold improvements		260,859		85,531		175,328
	The Company’s transfer agent holds an aggregate of 197,774 of “Founders’ shares” in escrow at March 31, 2002. These shares are releasable from escrow at various times based on requirements of the TSX Venture Exchange. The founders have all rights related to these shares except the right to transfer the shares without the permission of the TSX Venture Exchange.
	$	2,008,291	$	1,531,435	$	476,856

-32-


	March 31, 2002

			Accumulated
	Cost		Depreciation		Net

Laboratory equipment	$	139,986	$	120,345	$	19,641
Office equipment		225,906		126,243		99,663
Production equipment		1,231,896		972,532		259,364
Leasehold improvements		184,031		63,761		120,270

	$	1,781,819	$	1,282,881	$	498,938

		Fixed assets include capital leased assets, net of depreciation, of $33,529 and $173,933 at March 31, 2003 and 2002, respectively. Total depreciation expense for the years ended March 31, 2003, 2002, and 2001, was $249,255, $262,357 and $270,988, respectively.

5.		Earnings Per Share (“EPS”)

		The Company’s basic net income per share is computed by dividing net income by the weighted average number of outstanding common shares. The diluted EPS amounts are the same as the basic EPS for all periods presented due to rounding. At March 31, 2003 and 2002, there were warrants and options for 350,354 and 2,286,397 shares, respectively, that were not included in the diluted EPS because they were antidilutive for the period; however, these shares could potentially dilute basic EPS in the future.

6.		Bank Loan Facilities

		The Company’s revolving line of credit provides funds up to $3,000,000. Funds available to be advanced are limited to 80% of eligible accounts receivable and 25% of eligible inventories. At March 31, 2003, the maximum available borrowing under the line was approximately $1.7 million. Interest is payable on funds advanced at the rate of prime plus 0.25% (4.75% at March 31, 2003). The line of credit is collateralized by accounts receivable and inventories and expires on November

~~Polymer Solutions, Inc. and Subsidiaries~~Page 32 ~~Notes to Consolidated Financial Statements~~

~~12.~~Polymer ~~Stock~~Solutions, ~~Option~~Inc. ~~Plans~~ and ~~Warrants~~Subsidiaries Notes ~~The~~to ~~following~~Consolidated ~~table~~Financial ~~summarizes the stock option activity under the Company’s stock option plan:~~Statements

					Weighted-average
					Exercise price
		Underlying
		Shares			CDN		U.S.
Stock options outstanding, March 31, 1999			738,800		$	1.00	$	.72
	Granted		637,475			1.08		.74
	Forfeited		(251,200	)		1.00		.68
Stock options outstanding, March 31, 2000			1,125,075			1.05		.74
	Granted		876,771			1.12		.75
	Exercised		(5,000	)		1.00		.63
	Forfeited		(534,070	)		1.06		.67
Stock options outstanding, March 31, 2001			1,462,776			1.09		0.77
	Granted		543,692			.73		.46
	Forfeited		(180,071	)		.95		.61
Stock options outstanding, March 31, 2002			1,826,397			1.00		0.69
Stock options exercisable, March 31, 2002			1,473,484			1.07		.76

30, 2003. The line of credit provides for various financial and non-financial covenants including minimum cash flow ratio, minimum quick ratio, net worth, and capital expenditures.

~~Options outstanding at March 31, 2002 had a weighted average remaining contractual life of 3~~7.09 Capital ~~years~~Lease ~~and had exercise prices ranging from $.27 (Cdn$.43) to $1.25 (Cdn$2.00) per share. The warrants outstanding at March 31, 2002, are as follows:~~Obligations

					Weighted-average
					Exercise price
		Underlying
		Shares			CDN		U.S.
Warrants outstanding March 31, 1999			1,726,250			1.27		.91
	Issued		2,022,665			.89		.60
	Exercised		(385,750	)		.76		.51
	Expired		(297,500	)		.91		.63
Warrants outstanding March 31, 2000			3,065,665			1.12		.78
	Exercised		(671,100	)		.90		.57
	Expired		(573,400	)		1.06		0.67
Warrants outstanding March 31, 2001			1,821,165			1.15		0.72
	Expired		(1,221,165	)		1.18		0.74
Warrants outstanding March 31, 2002			600,000		$	1.10	$	.69

Capital lease obligations at March 31, consist of the following:

Warrants outstanding at March 31, 2002 were granted to Directors and Officers in 1998 and will expire December 2003.


	2003		2002
Capital lease obligations bearing interest ranging from 6.46% to 20.49%, payable in monthly principal and interest payments and collateralized by the related equipment	$	59,740	$	248,756
Less current portion		45,699		174,621

	$	14,041	$	74,135

~~-33-~~ Future minimum principal payments under capital lease obligations are as follows:


For the years ending March 31:
2004	$	45,699
2005		14,041

	$	59,740

~~Polymer Solutions, Inc~~8. Income ~~and Subsidiaries~~Taxes ~~Notes to Consolidated Financial Statements~~

		For purposes of the pro forma disclosures required by SFAS No. 123, the estimated fair value of options and warrants is recognized as expense upon issuance as the options and warrants are immediately vested. The fair value of each option and warrant grant is estimated at the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly sensitive assumptions, including the expected stock price volatility, which are subject to change from time to time. For this reason, the resulting pro forma compensation costs are not necessarily indicative of costs to be expected in future years.
		Pro forma unaudited net income and pro forma basic and diluted unaudited net income per share in fiscal year 2002 would not have been significantly different than reported if the Company had accounted for its stock options and warrants using the fair value based method of accounting established by SFAS 123. The following weighted average assumptions were used in the option pricing model to determine the fair value of the options: dividend yield of 0%, expected volatility ranging from 40% to 102%, risk-free interest rate ranging from 3.56% to 4.76% and expected lives of three to five years.
13.		401 (k) Retirement Plan
		On July 1, 2000, the Company implemented a 401 (k) retirement plan. Eligible employees may contribute up to 15% of compensation and the Company began matching 100% of contributions up to a maximum of 2% of the employees’ compensation on January 1, 2001. Employer matching contributions for the fiscal years ended March 31, 2002 and 2001 were $35,659 and $9,663, respectively.

The benefit (expense) for income taxes for the years ended March 31, consists of the following:

-34-


			2003			2002			2001

Federal:
	Current		$	11,822		$	—		$	(18,597	)
	Deferred			281,730			(271,561	)		754,082

				293,552			(271,561	)		735,485

State:
	Current			(39,272	)		1,978			(19,258	)
	Deferred			153,242			68,051			3,773

				113,970			70,029			(15,485	)

		Income tax benefit (expense)	$	407,522		$	(201,532	)	$	720,000

~~Table~~Page ~~of Contents~~33

~~ITEM~~Polymer 9Solutions, Inc. ~~CHANGES~~ INand ~~AND DISAGREEMENTS WITH ACCOUNTANTS~~Subsidiaries ONNotes ~~ACCOUNTING~~to ~~AND~~Consolidated ~~FINANCIAL~~Financial ~~DISCLOSURE~~Statements

~~Not~~The ~~applicable~~ tax effects of temporary differences that give rise to significant portions of the net deferred tax assets at March 31, consists of the following:

PART III


	2003			2002
Net operating loss carryforwards	$	811,810		$	1,095,401
Tax credits		683,791			610,517
State taxes		(90,529	)		(46,853	)
Other		84,245			5,387

		1,489,317			1,664,452
Less valuation allowance		—			(610,107	)

Net deferred tax assets	$	1,489,317		$	1,054,345

~~ITEM~~The 10Company eliminated its deferred tax benefit valuation allowance in 2003 based on an assessment of the Company’s ability to utilize deferred tax benefits in the future. ~~DIRECTORS~~ ~~AND~~This ~~EXECUTIVE~~assessment ~~OFFICERS~~was OFbased ~~THE~~on ~~REGISTRANT~~ management’s analysis of certain contingencies that existed prior to fiscal year 2003 surrounding the utilization of net operating loss carryforwards. As of March 31, 2003, such contingencies no longer exist. At March 31, 2003, management believes that it is more likely than not that the deferred tax assets will be realized. The total amount of future taxable income necessary to realize the net operating loss carryforward is approximately $2.4 million. The expiration dates of the net operating loss carryforwards for federal purposes are from 2010 to 2021 and for state purposes from 2003 to 2005. The expiration dates of the tax credits for federal purposes are from 2005 to 2018 and for state purposes credits may be carried forward indefinitely. The income tax rate on earnings differed from the Federal statutory rate for the years ended March 31, as follows:

The information concerning our directors and executive officers and regarding compliance with Section 16 of the Securities and Exchange Act of 1934, required by this Item, is incorporated by reference to our Proxy Statement prepared for the Annual and Special Meeting of Shareholders to be held August 15, 2002.


	2003			2002			2001
Federal statutory rate		34.0	%		34.0	%		34.0	%
State statutory rate, net of federal benefit		5.8			5.8			5.8
Change in valuation allowance		(113.0	)		—			(145.7	)
Research and development credits		(5.7	)		(8.1	)		(9.7	)
Permanent differences		0.3			—			28.5
Other		(0.5	)		(5.7	)		16.5

Effective rate		(79.1	%)		26.0	%		(70.6	%)

~~ITEM~~Page ~~11. EXECUTIVE COMPENSATION~~34

~~The~~Polymer ~~information~~Solutions, ~~required~~Inc. byand ~~this Item is incorporated by reference to our Proxy~~Subsidiaries ~~Statement~~Notes ~~prepared for the Annual and Special Meeting of Shareholders~~ to ~~be held~~Consolidated ~~August 15,~~Financial ~~2002.~~Statements

~~ITEM 12~~9. ~~EQUITY~~ Commitments ~~COMPENSATION~~and ~~PLAN INFORMATION~~Contingencies

~~Plans~~Operating ~~Approved~~leases byThe ~~Security Holders~~ Company leases certain facilities under arrangements that contain renewal options and provide for periodic cost of living adjustments. Rental expense was $359,610, $350,057 and $358,507 for the years ended March 31, 2003, 2002 and 2001, respectively. Future minimum rental commitments as of March 31, 2003 under noncancelable operating leases are as follows:

The information required concerning equity compensation plans is incorporated by reference to our Proxy Statement prepared for the Annual and Special Meeting of Shareholders to be held August 15, 2002.


For the years ending March 31:
2004	$	431,172
2005		442,476
2006		449,058
2007		460,740
2008		361,851
Thereafter		669,312

	$	2,814,609

ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

		The Company entered into a ten year lease for a new Sales and Technical Service facility in Southern California which will commence July 1, 2003 and will replace the lease on the Los Angeles facility, which is now month to month. The Company will close the Los Angeles facility in July 2003. The future minimum rental commitment on the new lease has been included in the above schedule.

		Litigation and Environmental Matters

		The Company is subject to various claims in the normal course of business. Management believes these liabilities, if any, will not materially affect the Company’s financial position or results of operations.

10.		Founders’ Shares

		The Company’s transfer agent holds an aggregate of 197,774 of “Founders’ shares” in escrow at March 31, 2003. These shares are releasable from escrow at various times based on requirements of the TSX Venture Exchange. The founders have all rights related to these shares except the right to transfer the shares without the permission of the TSX Venture Exchange.

~~The~~Page ~~information required by this Item is incorporated by reference to our Proxy~~35 ~~Statement prepared for the Annual and Special Meeting of Shareholders to be~~ ~~held on August 15, 2002.~~

~~ITEM~~Polymer 14Solutions, Inc. ~~CERTAIN~~ ~~RELATIONSHIPS~~and ~~AND~~Subsidiaries Notes ~~RELATED~~to ~~TRANSACTIONS~~Consolidated Financial Statements

~~The~~11. Stock ~~information~~Option ~~required~~Plans ~~by this Item is incorporated by reference to our Proxy Statement prepared for the Annual~~ and ~~Special Meeting of Shareholders to be~~Warrants ~~held August 15, 2002.~~

~~-35-~~ The following table summarizes the stock option activity under the Company’s stock option plan:


					Weighted-average
		Underlying			exercise price
		Shares			CDN		U.S.
Stock options outstanding, March 31, 2000			1,125,075		$	1.05		0.74
	Granted at market value		876,771			1.12		0.75
	Exercised		(5,000	)		1.00		0.63
	Forfeited		(534,070	)		1.06		0.67

Stock options outstanding, March 31, 2001			1,462,776			1.09		0.77
	Granted at market value		543,692			0.73		0.46
	Forfeited		(180,071	)		0.95		0.61

Stock options outstanding, March 31, 2002			1,826,397			1.00		0.69
	Granted at market value		896,719			0.40		0.26
	Granted above market value		203,454			0.68		0.44
	Exercised		(9,528	)		0.40		0.27
	Forfeited and expired		(1,546,108	)		1.03		0.69

Stock options outstanding, March 31, 2003			1,370,934			0.53		0.37

Stock options exercisable, March 31, 2003			1,290,934			0.63		0.48

~~PART~~Options IV outstanding at March 31, 2003 had a weighted average remaining contractual life ranging from 1.95 to 2.34 years and had exercise prices ranging from $.26 (Cdn$.40) to $.78 (Cdn$2.00) per share. The warrants outstanding at March 31, 2003 are as follows:

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


					Weighted-average
		Underlying			Exercise price
		Shares			CDN		U.S.
Warrants outstanding March 31, 2000			3,065,665		$	1.12	$	.78
	Exercised		(671,100	)		0.90		0.57
	Expired		(573,400	)		1.06		0.67

Warrants outstanding March 31, 2001			1,821,165			1.15		0.72
	Expired		(1,221,165	)		1.18		0.74

Warrants outstanding March 31, 2002			600,000			1.10		0.69
	Forfeited		(600,000	)		1.10		0.69

Warrants outstanding March 31, 2003			—			—		—

~~(A)~~Page ~~The following documents are filed as a part of this Report.~~36

(i)	Financial Statements
	The following documents are filed as a part of this report:
		Report of PricewaterhouseCoopers LLP, Certified Public Accountants on the Consolidated Financial Statements of the Company for the Fiscal Years Ended March 31, 2002 and 2001.
		Consolidated Financial Statements for the Fiscal Period Ended January 31, 2002:
			As at January 31, 2002 and 2001 —
			Consolidated Balance Sheets.
			For the Fiscal Years Ended January 31, 2002 and 2001 —
			Consolidated Statement of Operations.
			Consolidated Statement of Shareholders’ Equity (Deficit).
			Consolidated Statements of Cash Flows.
			Notes to Consolidated Financial Statements.
			Quarterly Reports For the Three, Six and Nine Months Periods Ended:
			June 30, 2001 on SEC Form 10-Q Filed August 7, 2001.
			September 30, 2001 on SEC Form 10-Q Filed November 14, 2001.
			December 31, 2001 on SEC Form 10-Q Filed February 1, 2002.
(ii)	Financial Statement Schedules
	Schedule III — Supplementary financial information required by Item 302 of Regulations S-K is located on page 35.
	Financial Statement Schedules may have been omitted because they are not applicable, are not required, or the information to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.
(iii)	Exhibits
	The exhibits listed on the Exhibit Index at page 37 are filed as part of this Annual Report on Form 10-K.

Polymer Solutions, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

On August 15, 2002, 2,137,499 outstanding stock options and warrants granted to employees, officers, consultants and directors, with exercise prices between $.78 and $.53 per share, were reissued and repriced into options to purchase 816,719 shares at an exercise price of $0.26 (BCdn$0.40) ~~Reports~~per onshare. ~~Form~~The 8repriced options are being accounted for as variable from August 15, 2002 to the date the options are exercised, forfeited, or expire unexercised. During the year ended March 31, 2003, compensation expense of $38,514 has been recorded in connection with these options. For purposes of the pro forma disclosures required by SFAS No. 123, the estimated fair value of options and warrants is recognized as expense upon issuance as the options and warrants are immediately vested. The fair value of each option and warrant grant is estimated at the date of grant using the Black-KScholes option-pricing model. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly sensitive assumptions, including the expected stock price volatility, which are subject to change from time to time. For this reason, the resulting pro forma compensation costs are not necessarily indicative of costs to be expected in future years. Pro forma unaudited net income and pro forma basic and diluted unaudited net income per share in fiscal year 2003 would not have been significantly different than reported if the Company had accounted for its stock options and warrants using the fair value based method of accounting established by SFAS 123. The following weighted average assumptions were used in the option pricing model to determine the fair value of the options: dividend yield of 0%, expected volatility of 20%, risk-free interest rate ranging from 2.11% to 2.22% and expected lives of 1.5 to 3 years.

12. ~~Not~~401 ~~applicable.~~(k) Retirement Plan

~~Page 36~~The Company has a 401 (k) retirement plan under which eligible employees may contribute up to 15% of compensation, and the Company matches 100% of contributions up to a maximum of 2% of the employees’ compensation. Employer matching contributions for the fiscal years ended March 31, 2003, 2002 and 2001 were $37,452, $35,659 and $9,663, respectively.

~~Table~~Page ~~of Contents~~37

~~SCHEDULE~~ITEM ~~III SUPPLEMENTARY~~9. ~~DATA~~ CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

~~Supplementary~~Not ~~financial information required by Item 302 of Regulations S-K~~applicable

~~Selected~~PART ~~quarterly financial data (unaudited)~~III

	Qtr Ending 30-Jun			Qtr Ending 30-Sep			Qtr Ending 31-Dec			Qtr Ending 31-Mar
2002
Net revenue		$	3,685,240		$	3,853,965		$	3,490,215		$	3,574,721
Gross Profit			1,148,989			1,105,740			952,160			891,431
Income from operations			328,016			238,454			126,687			153,308
Income before income taxes			299,531			220,570			112,008			143,582
Net income			190,377			127,591			64,313			191,878
Net income per share — basic & diluted			0.02			0.01			0.01			0.02
2001
Net revenue		$	3,914,812		$	3,989,313		$	3,768,986		$	1,448,265
Gross Profit			1,247,879			1,196,687			1,133,352			514,730
Income from operations			349,931			312,729			297,881			285,173
Income before income taxes			275,380			253,500			248,776			962,499
Net income			157,380			134,698			146,000			667,259
Net income per share — basic & diluted			0.02			0.01			0.02			0.14


ITEM 10.		DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

~~Page~~For 37information with respect to our directors, see our definitive Proxy Statement (the “Proxy Statement”) for our Annual Meeting of Stockholders to be held August 14, 2003 (the “Annual Meeting”), under the caption “Election of Directors,” which is incorporated herein by reference. The information required in this item regarding our executive officers is set forth in Part I of this Form 10-K Annual Report under the heading “Business-Management,” which is incorporated herein by reference.

~~Table~~The information regarding compliance with Section 16 of ~~Contents~~the Securities and Exchange Act of 1934 by our directors and executive officers and holders of ten percent of a registered class of our equity securities is incorporated by reference to our Proxy Statement under the caption “Section 16(a) Beneficial Ownership Reporting Compliance.”

~~SIGNATURES~~ ITEM 11. EXECUTIVE COMPENSATION.

~~Pursuant~~The toinformation ~~the~~required ~~requirements~~by ofthis ~~Section 13~~item orregarding ~~15(d)~~compensation of ~~the Securities Exchange~~executive ~~Act~~officers ofand ~~1934,~~directors ~~the~~is ~~Registrant~~incorporated ~~has~~by ~~duly~~reference ~~caused this Report~~ to beour ~~signed~~Proxy onStatement ~~behalf~~for by the ~~undersigned,~~Annual ~~thereunto duly authorized~~Meeting.

~~POLYMER~~ITEM ~~SOLUTIONS, INC~~12., ~~a Nevada~~SECURITY ~~corporation~~ OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

~~/s/~~For ~~Larry~~information ~~Flanagan~~with E.respect ~~Laughlin~~to ~~Flanagan~~the ~~President~~security ownership of directors and executive officers, ~~CEO~~see &the ~~Director~~Proxy ~~/s/~~Statement ~~Charlene~~for ~~Bellante~~our ~~Charlene~~Annual ~~Bellante~~Meeting, ~~Corporate~~under ~~Controller~~the caption, ~~Assistant~~“Security ~~Secretary/Treasurer~~Ownership of Certain Beneficial Owners and Management,” which is incorporated by reference herein.

~~Dated:~~The ~~June 04,~~information ~~2002~~ required by this item regarding equity compensation plan information is incorporated herein by reference from the Proxy Statement for our Annual Meeting under the caption “Equity Compensation Plan Information.”

~~POWER~~ITEM OF13. ~~ATTORNEY~~ CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

~~Each~~The ~~person~~information ~~whose~~required ~~individual~~by ~~signature~~this ~~appears~~item ~~below~~is ~~hereby~~incorporated ~~authorizes~~by ~~and appoints~~reference E.to ~~Laughlin~~our ~~Flanagan and Gordon Ellis, and each of them, with full~~Proxy ~~power~~Statement offor ~~substitution and resubstitution and full power to act without~~ the ~~other,~~ ~~as his true and lawful attorney-in fact and agent to act in his name, place below, and to file, any and all amendments to this Form 10-K~~ Annual ~~Report,~~ ~~including~~Meeting ~~any~~under ~~an all amendments thereto, and to file~~ the ~~same,~~caption ~~with~~“Certain ~~all exhibits~~Relationships ~~thereto,~~ and ~~other documents in connection therewith, with the~~ ~~Securities~~Related and Exchange Commission, granting unto said attorneys-in fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereofTransactions.”

~~Pursuant~~ITEM to14. ~~the~~CONTROLS ~~requirements~~AND ~~of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on this 5th day of June, 2002~~PROCEDURES.

~~/s/~~Within ~~Gordon~~the ~~Ellis~~90 days ~~Gordon~~prior L.to ~~Ellis~~the ~~Chairman~~date of filing this Annual Report on Form 10-K, we carried out an evaluation of the ~~Board~~effectiveness of ~~Directors,~~the ~~Director~~design ~~/s/~~and ~~Larry~~operation of ~~Flanagan~~our E.disclosure ~~Laughlin~~controls ~~Flanagan~~and ~~CEO~~procedures &pursuant ~~President,~~to ~~Director~~Exchange ~~/s/~~Act ~~Bill~~Rule 13a-14 under ~~Maligie~~the ~~William~~supervision A.and ~~Maligie~~with ~~CEO~~the &participation ~~President~~of ~~AMT~~our ~~USA~~management, ~~Director~~including our ~~/s/~~Chief ~~Darryl~~Executive ~~Jones~~Officer ~~Darryl~~and Fthe Corporate Controller. ~~Jones~~Based ~~Director~~upon that evaluation, ~~Treasurer~~our ~~/s/~~Chief ~~Stephen~~Executive ~~Silbernagel~~Officer ~~Stephen~~and H.Corporate ~~Silbernagel~~Controller ~~Director,~~concluded ~~Secretary~~that our ~~/s/~~disclosure ~~Gerald~~controls ~~Habib~~and ~~Gerald~~procedures A.are ~~Habib~~effective ~~Director~~in ~~/s/~~timely ~~John~~alerting ~~Sutherland~~them ~~John~~to material Jinformation relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings. ~~Sutherland~~Subsequent ~~Director~~to the date of

Page 38

~~Table~~that ofevaluation, ~~Contents~~there have been no significant changes in our internal controls or in other factors that could significantly affect internal controls, nor were any corrective actions required with regard to significant deficiencies and material weaknesses.

~~EXHIBIT~~PART ~~INDEX~~IV

Exhibit 2		Plan of acquisition, reorganization, arrangement, liquidation or succession
	2.1	[4]	Plan of Reorganization — Information Circular for the Extraordinary General Meeting of AMT Environmental Products, Held November 12, 1996
	2.2	[6]	Plan of merger
	2.3	[2]	Plan of acquisition
	2.4	[3]	Stock Purchase Agreement dated October 15, 1999, by and between Alternative Materials Technology, Inc., U.S. Cellulose Co., and Frederick Parkinson
	2.5	[3]	U.S. Cellulose Employee Severance Plan effective October 15, 1999
Exhibit 3		Current Articles of Incorporation
	3.1	[4]	Articles of Incorporation
	3.2	[4]	By-Laws
Exhibit 10		Material Contracts
	10.1	[3]	U.S. Cellulose Employee Severance Plan effective October 15, 1999
	10.2	[1]	Directors, Consultants and Employees 1998 Stock Option Plan
	10.3	[1]	Share Purchase Warrant of William Albert Maligie
	10.4	[1]	Share Purchase Warrant of Edward Laughlin Flanagan
Exhibit 11		Statement Regarding Computation of Per Share Earnings
	11.1	[1]	Basic earnings per share are computed by dividing earnings available to common shareholders, by the weighted average number of shares outstanding during the year. Diluted earnings per share are computed after giving effect to the exercise of all dilutive outstanding options and warrants. The basic and diluted earnings per share for 2002, 2001 and 2000 were the same, because of the insignificant incremental number of options and warrants whose exercise price was in excess of the weighted average market price during the year.
Exhibit 13		Annual Report to security holders, Form 10-Q or Quarterly reports to security holders
	13.1	[1]	2002 Annual Report to Shareholders
	13.2	[5]	Form 10-Q for the period ending June 30, 2001
	13.3	[5]	Form 10-Q for the period ending September 30, 2001
	13.4	[5]	Form 10-Q for the period ending December 31, 2001
Exhibit 21		Subsidiaries of the Registrant
	21.1	[6]	List of Subsidiaries of the Company
Exhibit 24		Power of attorney
	24.1	[1]	The power of attorney can be located on the signature page of this Form 10-K


ITEM 15.		FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

[1]		Filed herewith.
[2]		Incorporated by reference to the Form 10-K filed with the Company’s Annual Report for the year ended March 31, 1999.
[3]		Incorporated by reference to the exhibits accompanying the Company’s current report on Form 8-K filed on November 2, 1999.
[4]		Incorporated by reference to the exhibits accompanying the Company’s Form 10-K filed for the year ended March 31, 1997.
[5]		Incorporated by reference to the Form 10-Q filed with the Company’s Quarterly Report for the periods ended June 30, September 30, and December 31, 2001.
[6]		Incorporated by reference to the Form 10-K filed with the Company’s Annual Report for the year ended March 31, 2000.

(a) The following documents are filed as a part of this Report.

~~Page~~(i) 39 Financial Statements

			The index for the following documents is located on page 22:

			Report of PricewaterhouseCoopers LLP, Certified Public Accountants on the Consolidated Financial Statements of the Company for the Fiscal Years Ended March 31, 2003 and 2002.

			Consolidated Balance Sheets as of March 31, 2003 and 2002.

			Consolidated Statements of Operations for the Years Ended March 31, 2003, 2002 and 2001.

			Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended March 31, 2003, 2002 and 2001.

			Consolidated Statements of Cash Flows for the Years Ended March 31, 2003, 2002 and 2001.

			Notes to Consolidated Financial Statements.

(ii)

Financial Statement Schedules

			Schedule III - Supplementary financial information required by Item 302 of Regulations S-K is located on page 40.

			Financial Statement Schedules may have been omitted because they are not applicable, are not required, or the information to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.

(iii)

Exhibits

The exhibits listed on the Exhibit Index at page 44 are filed or incorporated by reference as part of this Annual Report on Form 10-K.

(b) Reports on Form 8-K.

Not applicable

Page 39

SCHEDULE III
SUPPLEMENTARY DATA

Supplementary financial information required by Item 302 of Regulations S-K

Selected quarterly financial data (unaudited)


	Qtr Ending		Qtr Ending		Qtr Ending		Qtr Ending
	30-Jun		30-Sep		31-Dec		31-Mar

2003
Net revenue	$	3,722,117	$	3,916,601	$	3,814,494	$	3,446,030
Gross Profit		1,104,231		1,156,805		1,038,700		808,559
Income from operations		264,979		278,576		100,022		(106,226	)
Income before income taxes		257,361		272,086		95,197		(109,649	)
Net income		167,231		168,807		64,313		522,166
Net income per share - basic & diluted		0.02		0.02		0.01		0.02
2002
Net revenue	$	3,685,240	$	3,853,965	$	3,490,215	$	3,574,721
Gross Profit		1,148,989		1,105,740		952,160		891,430
Income from operations		328,016		238,454		126,687		153,307
Income before income taxes		299,531		220,570		112,008		143,581
Net income		190,377		127,591		64,313		191,878
Net income per share - basic & diluted		0.02		0.01		0.01		0.02

Page 40

SIGNATURES

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

POLYMER SOLUTIONS, INC., a
Nevada. corporation


/s/ E. Laughlin Flanagan		/s/ Charlene Bellante

E. Laughlin Flanagan		Charlene Bellante
President, CEO & Director		Corporate Controller, Assistant Secretary/Treasurer
(Principal Executive Officer)		(Principal Financial and Accounting Officer)

Dated: June 04, 2003

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints E. Laughlin Flanagan and Gordon Ellis, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his true and lawful attorney-in fact and agent to act in his name, place below, and to file, any and all amendments to this Form 10-K Annual Report, including any an all amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on this 6th day of June, 2003.


Signature	Title	Signature	Title

/s/Gordon Ellis	Chairman of the Board of	/s/Larry Flanagan	CEO, President, Director
	Directors, Director
Gordon L. Ellis		E. Laughlin Flanagan

/s/Bill Maligie	CEO & President AMT USA,	/s/Darryl Jones	Director, Treasurer
	Director
William A. Maligie		Darryl F. Jones

/s/Stephen Silbernagel	Director, Secretary	/s/Gerald Habib	Director

Stephen H. Silbernagel		Gerald A. Habib

/s/John Sutherland John J. Sutherland	Director

Page 41

CERTIFICATION

I, E. Laughlin Flanagan, President and Chief Executive Officer of Polymer Solutions, Inc., certify that:

1.		I have reviewed this annual report on Form 10-K of Polymer Solutions, Inc.;

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

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

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

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

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

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

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

	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

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

Date: June 12, 2003

/s/ E. Laughlin Flanagan

E. Laughlin Flanagan
President, CEO & Director

Page 42

CERTIFICATION

I, Charlene Bellante, Corporate Controller, Assistant Secretary/Treasurer of Polymer Solutions, Inc., certify that:

1.		I have reviewed this annual report on Form 10-K of Polymer Solutions, Inc.;

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

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

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

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

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

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

	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

Date: June 12, 2003

/s/ Charlene Bellante

Charlene Bellante
Corporate Controller, Assistant Secretary/Treasurer

Page 43

EXHIBIT INDEX


3.1	[1]	Articles of Incorporation

3.2	[1]	By-Laws

10.1	[2]	U.S. Cellulose Employee Severance Plan effective October 15, 1999

10.2	[3]	Directors, Consultants and Employees 1998 Stock Option Plan

10.3	[1]	Employment Agreement of William Albert Maligie

10.4	[1]	Employment Agreement of E. Laughlin Flanagan

10.5	[1]	Lease of 311 Otterson Drive, Suite 60, Chico, CA 95928

11.1	[1]	Statement Regarding Computation of Per Share Earnings

21.1	[4]	List of Subsidiaries of the Company

24.1	[1]	Powers of attorney (located on the signature page of this Form 10-K)

99.1	[1]	Certification of Chief Executive Officer pursuant to 18. U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.2	[1]	Certification of Corporate Controller pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

[1]	Filed herewith.

[2]	Incorporated by reference to Exhibit 2.3 to the Company’s current report on Form 8-K filed on November 2, 1999.

[3]	Incorporated by reference to Exhibit 10.2 to the Form 10-K filed with the Company’s Annual Report for the year ended March 31, 2002.

[4]	Incorporated by reference to Exhibit 21.1 to the Form 10-K filed with the Company’s Annual Report for the year ended March 31, 2000.

Page 44

Filing Compare · POLYMER SOLUTIONS INC