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

FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended October 31, 2004 Commission File Number 0-28759
---------------- -------

PocketSpec Technologies Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

Colorado 84-1461919
------------------------------ -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

3225 E Second Avenue, Denver, Colorado 80206
-------------------------------------- -----
(Address of principal executive offices) (Zip code)

(303) 393-8060
----------------------------------------------------
(Registrant's telephone number, including area code)

Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common 36,827,055
Class Number of shares outstanding at December 20, 2004

This document is comprised of 20 pages.

FORM 10-QSB
3rd QUARTER
INDEX

PART I - FINANCIAL INFORMATION

Page
----

Item 1. Financial Statements*

Condensed, consolidated balance sheet - October 31, 2004 (Unaudited) 3

Condensed, consolidated statements of operations - Three months
and nine months ended October 31, 2004 and 2003 (Unaudited) 4

Condensed, consolidated statements of cash flows - Nine months ended
October 31, 2004 and 2003 (Unaudited) 5

Notes to condensed, consolidated financial statements (Unaudited) 6

Item 2. Management's Discussion and Analysis 13

Item 3. Controls and Procedures 16

PART II - OTHER INFORMATION

Item 1. Legal Proceeding 16

Item 2. Changes In Securities 16

Item 3. Defaults Upon Senior Securities 16

Item 4. Submission of Matters To A Vote of Security Holders 16

Item 5. Other Information 16

Item 6. Exhibits and Reports on Form 8-K 16

Signatures 17

Certifications 17

* The accompanying financial statements are not covered by an Independent
Certified Public Accountant's report.

POCKETSPEC TECHNOLOGIES INC.
Consolidated Balance Sheets

October 31,
2004
-----------

Assets
Current assets:
Cash and cash equivalents $ 288
Trade receivables 11,246
Other receibables - related party (Note 2) 123,226
Inventory at cost, net of reserve of $3,148 232,333
Prepaid, and other, net 3,720
-----------
Total current assets 370,813

Fixed assets:
Furniture and fixtures, net of accumulated
depreciation of $19,806 30,096
Office equipment, net of accumulated
depreciation of $19,755 17,849
Molds, net of accumulated
depreciation of $105,361 33,488
-----------
Total fixed assets 81,433
-----------
Total assets $ 452,246
===========

Liabilities and Shareholders' Equity (Deficit)
Liabilities:
Accounts payable $ 59,672
Accounts payable, related party (Note 2) 11,899
Accrued liabilities 5,329
Accrued liabilities, related party (Note 2) 27,500
Accrued interest 604
Accrued interest, related parties (Note 2) 12,121
Accrued wages net of advances of $19,126 25,472
Notes payable 90,582
Notes payable, related parties (Note 2) 1,818,045
-----------
Total current liabilities 2,051,224

Commitment and Contingencies --

Shareholders' equity (deficit):
Common stock, $0.001 par value, 50,000,000
shares authorized, 36,827,055 shares
issued and outstanding 36,827
Additional paid-in capital 4,211,262
Stock Options Outstanding 8,790
Accumulated deficit (5,855,857)
-----------
Total shareholders' equity (deficit) (1,598,978)
-----------
Total liabilities and shareholders' (deficit) $ 452,246
===========

See accompanying notes to financial statements
3

POCKETSPEC TECHNOLOGIES INC.
Consolidated Statements of Operations

For the Three Months Ended For the Nine Months Ended
October 31, October 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------

Revenues
Product sales $ 33,127 $ 31,849 $ 185,051 $ 111,763

Cost of sales:
Cost of sales 9,845 40,765 73,844 81,959
------------ ------------ ------------ ------------
Gross margin 23,282 (8,916) 111,207 29,804

Operating expenses:
General and administrative expenses:
General and administrative 44,635 140,041 322,117 609,162
Employment agreements 556,000 -- 556,000 --
Stock based compensation 16,500 29,802 26,527 212,822
Rent expense to related party (Note 2) 15,300 12,000 39,300 36,000
Research and development costs -- 33,361 -- 63,612
Depreciation 14,838 14,999 44,513 43,184
Amortization -- 27,766 -- 122,885
------------ ------------ ------------ ------------
Total general and administrative expenses 647,273 257,969 988,457 1,087,665

Operating (loss) (623,991) (266,885) (877,250) (1,057,861)

Other income (expense):
Other income 33 2,246 33 4,616
Interest income (expense) (Notes 2 and 3) (15,415) (16,223) (54,642) (56,697)
------------ ------------ ------------ ------------
Total other income (expense) (15,382) (13,977) (54,609) (52,081)

(Loss) before provision
for income taxes (639,373) (280,862) (931,859) (1,109,942)

Provision for income taxes - benefit -- -- -- --
============ ============ ============ ============
Net (loss) $ (639,373) $ (280,862) $ (931,859) $ (1,109,942)
============ ============ ============ ============

Net loss per share:

Net (loss) $ (0.017) $ (0.008) $ (0.026) $ (0.033)
============ ============ ============ ============
Basic and diluted shares used for computation 36,837,055 35,964,375 36,428,390 33,424,632
============ ============ ============ ============

See accompanying notes to financial statements
4

POCKETSPEC TECHNOLOGIES INC.
Consolidated Statements of Cash Flows

For The Nine Months Ended
October 31,
----------------------
2004 2003
--------- ---------

Cash flows from operating activities:
--------- ---------
Net cash used by operating activities (723,434) (512,305)
--------- ---------

Cash flows from investing activities:
Cash paid for property, other (Note 3) (3,500) (25,482)
Cash paid for intangibles -- (1,359)
--------- ---------
Net cash received (used) by investing activities (3,500) (26,841)
--------- ---------

Cash flows from financing activities:
Proceeds from short-term borrowings, related party (Note 2) 110,664 88,200
Proceeds from short-term borrowings, other (Note 3) 27,500 --
Repayment of short-term borrowings, related party (Note 2) (170,664) --
Repayment of short-term borrowings, other (Note 3) (89,300)
Repayment of principal, related party (Note 2) (129,424) (55,700)
Proceeds from loans, related party (Note 2) 915,584 479,550
Proceeds from loans, other 53,082 --
Sale of stock, related parties -- 10,398
Sale of stock, other -- 17,500
--------- ---------
Net cash provided by financing activities 717,442 539,948
--------- ---------

Net change in cash (9,492) 802
Cash and cash equivalents at beginning of period 9,780 6,451
--------- ---------
Cash and cash equivalents at end of period $ 288 $ 7,253
========= =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 15,676 $ 4,601
========= =========
Income taxes $ -- $ --
========= =========

Non-cash investing and financing activities:
Common stock issued for debt, related party $ -- $ 302,517
========= =========
Common stock issued for debt, other $ -- $ 385,145
========= =========
Common stock issued for payables, other (Note 4) $ 39,788 $ --
========= =========

See accompanying notes to financial statements
5

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

Note 1: Basis of presentation

(a) Organization and Basis of Presentation

The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its annual 10-KSB report dated
January 31, 2004 and should be read in conjunction with the notes thereto. The
statements presented herein have not been reviewed by the accountants.

In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.

(b) Inventory

Inventories are stated at the lower of cost or market. Cost includes materials,
labor, direct costs, and allocated overhead. Generally, inventories are written
down to market value during the period in which impairment of such inventories
is identified. Inventory at October 31, 2004 consisted of finished goods. All
electronic components are interchangeable between product lines. We do not
record an allowance that directly relates to the warranty of our products, which
would otherwise reduce our gross sales. We believe an allowance is not required
at this time, since historical data has indicated that returns of our products
for repair or replacement have been insignificant.

Property and equipment are recorded at cost. Expenditures that extend the useful
lives of assets are capitalized. Repairs, maintenance and renewals that do not
extend the useful lives of the assets are expensed as incurred. Depreciation is
provided on the straight-line method over the following estimated useful lives:
furniture, 7 years; office equipment, 5 years; molds, 3 years. Depreciation
expense was $14,838, and $14,999 for the three months period ended October 31,
2004 and 2003, respectively, and $44,513 and $43,184 for the nine months ended
October 31, 2004 and 2003, respectively.

(d) Revenue and Cost Recognition

Costs that clearly relate to sales of the Company's color comparison products
are charged to earnings when incurred. Revenues from sales of products are
recognized at the time of shipment of product. Customers have the right to
return products for 90 days after purchase. Defective products are repaired or
replaced at our discretion. Refunds are issued either by check or credit as
necessary. The Company has minimal returns and therefore does not maintain an
allowance for those returns.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
for interim financial information and pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by accounting principles generally

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

accepted in the United States for complete financial statements. In the opinion
of management, all adjustments considered necessary for a fair presentation have
been included. For further information, refer to the financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-KSB for the
year ended January 31, 2004.

The Company operates in two business segments which are identified as
distribution and manufacturing of color-comparison devices to service users,
value added resellers, businesses and consumers, primarily in the United States.

Operating results for the three months and nine months ended October 31, 2004
are not necessarily indicative of the results that may be expected for the year
ended January 31, 2005 or any future period.

Note 2: Related party transactions

B7 Brand, LLC (B7B), Cherry Creek Cottage, LLC (CCC), Color-Spec Technologies,
(CST), Cynthia Kettl (CK), Gregg Wagner (GW), Janet Brophy (JB), Jeff Krupka
(FJK), Krupka-Brophy Profit Sharing Plan (KBP), Moon Unit LLC, (MU), Wraith Moon
House, LLC (WMH), and Philip Robertson (PR) are affiliates of our Company by
either common ownership or by common management. Asset Realization, Inc. (ARI)
and Cape Aloe Corp., (CAC) became unaffiliated at January 31, 2004 when those
companies changed officers and directors.

(a) On August 17, 2004 the Company entered into a purchase and sale
agreement with Color-Spec Technologies, Inc., a wholly owned
subsidiary of PocketSpec Technologies Inc. The terms of the
agreement conveyed all assets of its color technology business,
including inventory, furniture, fixtures, equipment, supplies and
assignment of lessee's interest in leases for office space, and
copier, and all rights, title and interest in agreements as well
as patents, trademarks, websites, and all beneficial interest of
PocketSpec in its core operations and business. The purchase
price was $1,768,627. A gain was not recognized on the sale due
to affiliate status of CST.

(b) During the third quarter of our fiscal year ended October 31,
2004 the Company had an account receivable from FJK in the amount
of $123,226 due to a refund agreement between CST and FJK. The
refund agreement reduced notes accounts payable to FJK totaling
$416,826 by $140,000 in settlement of FJK's employment agreement.
The terms allow credit to the receivable for settlement of any
accounts payable by FJK or by payment by third party gifts that
do not have to be paid back in any form by FJK. Amounts credited
to the receivable for the period ended October 31, 2004 totaled
$16,774.

(c) The Company has accounts payable to employees totaling $11,899,
of which $6,010 is due CCC, $2,092 is due CK, and $3,797 is due
an employee. The Company also has paid CCC $11,800 for rent and
has accrued rent in the amount of $27,500 due to CCC. Total rent
expense for the period ended October 31, 2004 was $39,300. The
company has accrued wages totaling $44,598 which will be paid
when cash comes available to compensate the employees for their
work. Payroll
7

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

advances totaling $19,126 has been paid during the period ended
October 31, 2004.

(d) For the third period ended October 31, 2004, the Company did not
have any short term loans outstanding. Prior to the end of the
third periods, The Company had borrowed $14,000 from B7B, $2,200
from MU, $1,100 from WMH, transferred an account payable totaling
$8,864 to GW, borrowed $15,000 from GW, and CCC acquired a prior
note payable in the amount of $69,500 from CAC, which totaled
$110,664. All short term loans were rolled into notes payable. A
total amount of $170,664 had been repaid for the period ended
October 31, 2004. The repayments include $2,200 to MU, $1,100 to
WMH, $41,000 to B7B, $77,000 to CCC, $25,864 to GW, $6,000 to JB,
$16,500 to CK, and $1,000 to Frank Krupka, an employee.

1. Note payable to FJK in the amount of $136,825. The note
consists of $82,500 as settlement of accrued wages, and an
account payable in the amount of $54,326. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $1,434 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $912.

2. Note payable to FJK in the amount of $59,500. The note
consists of $59,500 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $623 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $397.

3. Note payable to FJK in the amount of $50,500. The note
consists of $50,500 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $630 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $337.

4. Note payable to FJK in the amount of $45,000. The note
consists of $45,000 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $471 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $300.

5. Note payable to FJK in the amount of $39,500. The note
consists of $39,500 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $414 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $263.
8

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

6. Note payable to FJK in the amount of $34,000. The note
consists of $34,000 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $356 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $227.

7. Note payable to FJK in the amount of $28,500. The note
consists of $28,500 as part settlement of future employment
considerations in the amount of $280,000. The note bears
interest at 8% starting October 1, 2004 with monthly payments
in the amount of $298 beginning November 1, 2004. The note
matures October 1, 2007. Accrued interest through October 31,
2004 totals $190.

8. Note payable to JB in the amount of $310,455. The note
consists of $5,415 of accrued interest, $54,535 from an account
payable, $116,505 from accrued wages, $6,000 from a short term
loan, $104,000 for settlement of future employment
considerations, and $24,000 from a prior note payable balance.
The note bears interest at 8% with monthly payments in the
amount of $3,254 starting November 1, 2004. The note matures
October 1, 2007. Accrued interest through October 31, 2004
totals $2,070.

9. Note payable to Frank Krupka in the amount of $115,180. The
note consists of $18,236 from an account payable, $43,944 from
accrued wages, $1,000 from a short term loan, $52,000 for
future employment considerations. The note bears interest at 8%
with monthly payments in the amount of $1,207 starting November
1, 2004. The note matures October 1, 2007. Accrued interest
through October 31, 2004 totals $768.

10. Note payable to Cynthia Kettl in the amount of $221,844.
The note consists of $141 of accrued interest, $176 from an
account payable, $81,000 from accrued wages, $12,650 from a
short term loan, $104,000 for settlement of future employment
considerations, and $23,877 from a prior note payable balance.
The note bears interest at 8% with monthly payments in the
amount of $2,325 starting November 1, 2004. The note matures
October 1, 2007. Accrued interest through October 31, 2004
totals $1,479.

11. Note payable to Gregg Wagner in the amount of $133,733. The
note consists of $944 of accrued interest, $629 from an account
payable, and $104,000 for settlement of future employment
considerations, and $28,160 from a prior note payable balance.
The note bears interest at 8% with monthly payments in the
amount of $1,402 starting November 1, 2004. The note matures
October 1, 2007. Accrued interest through October 31, 2004
totals $891.

12. Note payable to B7B in the amount of $411,730. The note
combined two notes payable in the original amounts of $300,000
and $127,600. Both notes payable had accrued interest in the
total
9

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

of $46,980. A short term loan from B7B in the amount of $37,150
was included in the combined note payable. $100,000 was
separated from the note payable and made into two notes in the
amount of %50,000 each, one payable to a current board member
and the other to an individual. The combined note payable bears
interest at 8% with monthly payments in the amount of $4,315
starting November 1, 2004 The note matures October 1, 2007.
Accrued interest through October 31, 2004 totals $2,745.

13. Note payable to Cherry Creek Cottage, LLC in the amount of
$77,000. The note consists of $69,500 from a note payable it
acquired from Cape Aloe Corp. and $7,500 from a short term
loan. The note bears interest at 8% starting October 1, 2004
with monthly payments in the amount of $807 beginning November
1, 2004. The note matures October 1, 2007. Accrued interest
through October 31, 2004 totals $513.

14. Note payable to Wraith Moon House, LLC in the amount of
$6,351. The note consists of $551 from accrued interest and
$5,800 from a prior note balance. The note bears interest at 8%
starting October 1, 2004 with monthly payments in the amount of
$67 beginning November 1, 2004. The note matures October 1,
2007. Accrued interest through October 31, 2004 totals $42.

15. Note payable to KBP in the amount of $45,927. The Company
borrowed $36,350 from KBP for use as operating capital. The
terms of the note required payment of $3,635 in interest points
which was deducted from the $39,985 principal balance, netting
the Company $36,350 cash. The note also combines accrued
interest in the amount of $5,942 and bears interest at 8% with
monthly payments in the amount of $480. The note matures
October 1, 2006. Accrued interest through October 31, 2004
totals $306.

16. Note payable to Philip Robertson in the amount of $50,000.
The note consists of $50,000 as part of the original B7B
$127,600 note that was combined with $300,000 note to B7B. The
note bears interest at 8% starting October 1, 2004 with monthly
payments in the amount of $523 beginning November 1, 2004. The
note matures October 1, 2007. Accrued interest through October
31, 2004 totals $333.

17. Note payable to Philip Robertson in the amount of $52,000.
The note consists of $52,000 as settlement of future employment
considerations. The note bears interest at 8% starting October
1, 2004 with monthly payments in the amount of $545 beginning
November 1, 2004. The note matures October 1, 2007. Accrued
interest through October 31, 2004 totals $347.

Repayment of principal in the amount of $129,424 includes
$127,600 to B7B from the combining of a note payable to B7B for
$300,000 and $127,600, $324 principal paid to Cynthia Kettl,
and $1,500 to ARI as a transfer from affiliate to non-affiliate
status.
10

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

New loan additions include $140,000 and $136,825 to Jeff
Krupka, $182,455 to Janet Brophy, $63,180 to Frank Krupka,
$93,968 to Cynthia Kettl, $1,573 to Gregg Wagner, $50,000 to
Philip Robertson, $111,730 to B7B, $77,000 to CCC, $551 to WMH,
$5,942 to KBP, and loans in the amount of $24,200 from Cynthia
Kettl and $28,160 from Gregg Wagner from the first quarter
ended April 30, 2004. New additions total $915,584.

(d) Shareholders' equity.

The Company issued 9,903 shares to a former employee for
services. The shares were valued at $.10 per share at the date of
issuance, or a total amount of $980.

(e) During the first nine months ended October 31, 2004 the Company
expensed interest from notes to affiliates totaling $43,828 and
interest points totaling $9,730.

(e) The Company has agreed to pay GW $50 from each sale of its
software device combined product known as ColorQA Pro Software
System, and $50 from each sale of its ColorQA Series 4 USB
devices sold to various vendors, commencing after receipt of
$5,150 from the pending sale of another 10 units. The payments
will be accumulated and the total amounts shall be credited to
the note payable to Gregg Wagner.

Note 3: Transactions with non-affiliates

(a) The Company reworked a mold used in the production of its product
line at a cost of $3,500.

(b) The Company has trade receivables totaling $11,246 and inventory
net of reserve totaling $232,333. The inventory consists of
finished products. The Company also has accounts payable in the
amount of $59,672 and accrued liabilities totaling $5,329 for
insurance and other expenses.

(c)The Company has notes payable to non-affiliates totaling $90,582.
The notes and respective terms are listed below.

1. Note payable to an individual in the amount of $23,000. The
note consists of $23,000 as part settlement of future
employment considerations for FJK in the amount of $280,000.
The note was acquired and assigned to an individual from FJK
during the third quarter ended October 31, 2004. The note
bears interest at 8% starting October 1, 2004 with monthly
payments in the amount of $241 beginning November 1, 2004.
The note matures October 1, 2007. Accrued interest through
October 31, 2004 totals $153.

2. Note payable to ARI in the amount of $1,633. The note
consists of accrued interest in the amount of $133 and a
prior note amount of

POCKETSPEC TECHNOLOGIES INC.
Notes to Consolidated Financial Statements

$1,500. The note bears interest at 8% starting October 1,
2004 with monthly payments in the amount of $17. The note
matures October 1, 2007. Accrued interest through October
31, 2004 totals $11.

3. Note payable to an individual in the amount of $15,949. The
note consists of accrued interest in the amount of $1,449
and a prior note amount of $14,500. The note bears interest
at 8% starting October 1, 2004 with monthly payments in the
amount of $168. The note matures October 1, 2007. Accrued
interest through October 31, 2004 totals $106.

4. Note payable to an individual in the amount of $50,000. The
note consists of $50,000 as part of the original B7B
$127,600 note that was combined with $300,000 note to B7B.
The note bears interest at 8% starting October 1, 2004 with
monthly payments in the amount of $523 beginning November 1,
2004. The note matures October 1, 2007. Accrued interest
through October 31, 2004 totals $333.

(d) For the third period ended October 31, 2004, the Company did not
have any short-term loans outstanding. Prior to the end of the
third period, the Company had borrowed $27,500 from a
non-affiliate, CAC. The Company repaid $19,300 to CAC and the
balance of $69,500 was acquired directly by CCC, for a total
repayment of $89,300.

(e) The Company had new borrowings totaling $53,082 during the period
ended October 31, 2004. $133 was from accrued interest along with
a prior outstanding note due in the amount of $1,500 due to ARI,
$1,449 was from accrued interest due to an individual, and
$50,000 was from part of the original B7B $127,600 note that was
split between an individual and a director of the Company.

Note 4: Shareholders' equity

(a) The Company issued 275,000 shares of its common stock to
individuals for services. The stock was valued at $.06 per share
as of date of issuance, for a total expense in the amount of
$16,500. The Company also issued 186,713 shares of its common
stock in exchange for extinguishment of accounts payable in the
amount of $11,202. The stock was valued at $.06 per share at date
of issuance.

(b) An individual exercised 61,683 stock options from a total option
available from PocketSpec Technologies Inc. of 500,000 shares of
its common stock as part of an agreement with a software writer
in Italy. The options exercised had a total value of $1,237 for
commissions on sales of software provided to the Company in
accordance with an agreement. Total valued of all stock issuances
to non-affiliates was $28,939. The stock was issued during the
third quarter ended October 31, 2004.

(c) During the period ended October 31, 2004 the Company cancelled
30,000 shares of its treasury common stock. The stock was
returned to the status of authorized and unissued.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.

Forward-Looking Statements

The following discussion contains forward-looking statements regarding our
Company, its business, prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude clients from using our products
for certain applications; delays our introduction of new products or services,
and our failure to keep pace with emerging technologies.

When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.

Results of Operations

Our main operational focus is the color-measuring business. Our efforts during
this period have been spent on marketing, production, and software product
upgrades.

We realized total revenues of $185,051 and $111,763 for the nine months period
ended October 31, 2004 and 2003, respectively, and $33,127 and $31,848 for the
three months period ended October 31, 2004 and 2003, respectively. Total
operating expenses, which consisted of general and administrative expenses, were
$988,457 and $1,087,665 for the nine months period ended October 31, 2004 and
2003, respectively. Operating expenses for the three months period ended October
31, 2004 and 2003 were $647,273 and $257,969, respectively. The major components
of general and administrative expenses were wages, accounting, rent and other
expenses for the nine months and three months period ended October 31, 2004 and
2003, respectively. The Company experienced a one time charge to the financial
statements in the amount of $566,000 for termination and settlement of all
employment agreements.

Our net loss for the nine months period ended October 31, 2004 and 2003 was
$931,859 and $1,109,942, respectively, and $639,373 and $280,862 for the three
months period ended October 31, 2004 and 2003, respectively. We had a loss on a
fully diluted basis, of $.026 per share and $.033 per share for the nine months
period ended October 31, 2004 and 2003, respectively, and $.017 and $.008 per
share for the three months period ended October 31, 2004 and 2003, respectively.

Our products are being produced and we have been actively selling the ColorQA

and BronzCheck product line. We are continuing an aggressive marketing campaign
in both the paint and tanning industries. The BronzCheck(TM) product and its
associated TanTone(TM) Measurement System generates a TanTone(TM) number (zero
to 1,000 - mostly 650 to 900). This number is the key to knowing if a person is
getting tanner. When these numbers are shown on a graph, the chart would show
that the tanning process is working, as well as verifying the quality of lotions
used by the clients to enhance the tanning speed. The Salon System Tan Tone
integrates data into existing Point of Sale software system used by the salons.

We have been marketing our new product software line including software that
will interface our device with certain Windows based operating systems for the
ColorQA devices. The software provides industries a database for use of the
color-measurement. We have released our software using the ColorQA USB device
which provides a database comprised of different mathematical measurements
pertaining to red, green and blue, or RGB color codes.

We have been selling our ColorQA(TM) product line with software for the paint
and plastics industries. We have upgraded our product line with software and USB
ports in order to create color charts from color comparisons. The software
provides a database for future reference to the user.

In analyzing our sales to date, we estimate that approximately 75% of our
product sales have been the ColorQA(TM) through October 31, 2004. We anticipate
that sales of our ColorQA(TM) devices will increase significantly by our fiscal
year end. With our continued aggressive marketing campaign and alliances created
within the paint, plastics, and tanning industries, we believe that overall
total sales will increase significantly. We have sold our color measuring
products in other countries such as Australia, China, Denmark, England, Spain,
Israel, Poland, and Mexico, to name a few. At the present time, we believe that
no product exists with the accuracy, dependability, and price range that
competes directly with our product.

In connection with our color measuring devices, we have also been selling the
replacement battery and calibration caps. We view the replacement parts as an
additional revenue stream for us. We have no backlog problem in meeting our
orders. We are keeping sufficient inventory in place. Most of our sales are
on-line or by telephone as credit card transactions, including American Express
and Discover cards. Our web site is. We have added a tanning specific website,
www.bronzcheck.com.

To date, however, through the marketing of our products, we have not yet
achieved profitable operations, which is our goal. We cannot predict when, if at
all, we will be profitable in our business. Nevertheless, we continue our
business plan and are focusing our efforts on newly formed alliances with in the
United States, Italy, and Japan.

At the present time, we plan to focus completely upon the development of our own
product applications, rather than pursuing other technology acquisitions.

Liquidity and Capital Resources

Our net cash was $288 as of October 31, 2004, compared to $7,253 as of October
31, 2003.

Net cash used by investing activities totaled $3,500 for the nine months period

ended October 31, 2004 compared to $26,841 for the period ended October 31,
2003. Net cash used by investing activities was a result of the purchase of a
depreciable asset. Net cash received from financing activities for the period
ended October 31, 2004 and 2003 was $717,442 and $539,948, respectively. We
received $1,026,248 from financing from related parties for the nine month
period ended October 31, 2004 compared to $567,750 for the nine months period
ended October 31, 2003, respectively. Cash provided from non-affiliates totaled
$80,582 for the period ended October 31, 2004 compared to $-0- for the nine
month period ended October 31, 2003. Cash provided from financing activities
came from loans from related parties and other sources. Cash repaid totaled
$389,388 and $55,700 for the nine months period ended October 31, 2004 and 2003,
respectively. The Company received $-0- and $27,898 from the sale of stock for
the nine months period ended October 31, 2004 and 2003, respectively.

We have accounts receivable for the nine months period ended October 31, 2004
totaling $11,246 and prepaid expenses of $3,720 for the same period. Prepaid
expenses consist of mainly of points paid on loans. We have deferred payroll
totaling $44,598, which is anticipated to be partially paid during the fourth
fiscal quarter this year.

Our products, the Color QA and BronzeCheck are being marketed through brochure
mailings, telephone, and internet. We have built what we consider to be a
sufficient inventory base to deliver products when ordered.

We are also considering ways in which to grow our shareholder equity.

Financing for operating deficits has largely been through affiliates. In any
case, we will need additional financing to achieve our business plan.

On August 20, 2004 the Company filed Form 8-K announcing it had entered into a
Purchase and Sale Agreement. The purpose of the Agreement was to restructure the
financial obligations, including settlement of long-term employment obligations,
and to transfer its color technology business, together with associated assets
and obligations, to its wholly owned subsidiary, Color-Spec Technologies, Inc.
PocketSpec Technologies Inc. and Color-Spec Technologies, Inc. have agreed to
terms for an Operating and Marketing Agreement, which governs required combined
operations of the business affairs for a limited term expiring December 31,
2004. The operations from August 1, 2004 have been recorded on Color-Spec
Technologies, Inc.'s financials, and combined with PocketSpec Technologies
Inc.'s operations through the period ended October 31, 2004.

During the period ended October 31, 2004, the Company was granted U.S. Patent
No. 6,798,517 for its color-measuring device. The Company paid $665 for fees on
the utility patent application and a publication fee of $300, $30 for copies of
the patent, maintenance fees of $200, and legal costs totaling $430. Total costs
for all patent and legal fees were $1,625.

The employees of the Company have provided funding on individual basis to assist
the Company's outstanding and current obligations. The employees continue to
work towards accomplishing positive cash flow and have deferred monthly salaries
in order to help the Company be successful towards achieving its goals. The
Company is appreciative of their individual efforts and accomplishments, along
with their dedication to assist with financing.

SUBSEQUENT EVENT

On December 13, 2004, the Registrant entered into a non-exclusive Investment
Banking Agreement to retain Sloan Securities Corp. The purpose of this Agreement
is to provide PocketSpec Technologies Inc. (the "Company") with advisory
services and potential acquisition transactions. Under the agreement Sloan
Securities will seek to identify a target corporation to consummate an
acquisition with the Company. Sloan Securities will assist the with any merger,
share exchange, consolidation, reorganization, or acquisition by the Company of
all or a portion of assets or common equity by way of negotiated purchase. The
Company agrees to pay Sloan Securities a fee equal to 20% of Consideration paid
or payable in the acquisition transaction. In addition, the Company will pay to
David Lowenstein's company, Strategic Initiatives, a fee of 5% for services
performed, upon completion of acquisition.

ITEM 3. CONTROLS AND PROCEDURES.

(a) Janet Brophy, who serves as the Company's president and chief
executive officer, and Cynthia Kettl, who serves as chief
financial officer, after evaluating the effectiveness of the
Company's disclosure controls and procedures as of the filing date
of this quarterly report (the "Evaluation Date") concluded that as
of the Evaluation Date, the Company's disclosure controls and
procedures were adequate and effective to ensure that information
required to be disclosed by the Company in reports that it files
or submits under the Exchange Act is recorded, processed,
summarized and reported as specified in the SEC's rules and forms.

(b) Changes in internal control over financial reporting.
There were no changes in the Company's internal control over
financial reporting during the three and nine months period ended
October 31, 2004 that have materially affected, or are reasonably
likely to materially affect, internal control over financial
reporting.

PART II - OTHER INFORMATION

Items 1 Through 5 - No response required.

Item 6 - Exhibits and reports on Form 8-K

31.1 Certification of CEO pursuant to Sec. 302
31.2 Certification of CFO pursuant to Sec. 302
32.1 Certification of CEO pursuant to Sec. 906
32.2 Certification of CFO pursuant to Sec. 906

REPORTS ON FORM 8-K.

Form 8-K Filed August 20, 2004 Purchase and Sale Agreement.

The following financial information is filed as part of this report:

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

PocketSpec Technologies Inc.

CHIEF EXECUTIVE OFFICER

Dated: DECEMBER 20, 2004 By: /s/ JANET BROPHY
----------------- ----------------------
Janet Brophy
President

CHIEF FINANCIAL OFFICER

Dated: DECEMBER 20, 2004 By: /s/ CYNTHIA KETTL
-------------- ----------------------
CYNTHIA KETTL
Chief Financial Officer