Commission File No. 0-26005
___________

777 Bay Street, Suite 1910,
Toronto, Ontario M5G 2E4, Canada
Tel: (416) 364-6513
Fax: (416) 360-4034
(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:   

None

Securities registered or to be registered pursuant to Section 12(g) of the Act:   

                                                                                                                        Common Shares

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:   

                                                                                                                        None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report   

                                                                                                                        48,732,187 Common Shares

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:       

                                                                                                                        Yes X         No    

Indicate by check mark which financial statement item the Registrant has elected to follow:   

                                                                                                                        Item 17X         Item 18    

        Reference throughout this document to Micromem Technologies Inc. ("Micromem") and/or its affiliates may be made through abbreviated forms of their respective names. See "Item 4. Information on the Company - C. Organizational Structure" for a summary of these abbreviated names.

        This Form 20-F contains certain forward-looking statements. These forward-looking statements are based on current expectations, estimates and projections about the business of the Company and the industry in which the Company operates, management's beliefs, and assumptions made by management. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks" and "estimates," variations on such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. The Company's actual results could differ materially from those expressed or forecasted in these forward-looking statements as a result of certain factors, including those set forth under "Description of Business" and elsewhere in this Form 20-F.

            Not Applicable

            Not Applicable

            The following table sets forth selected consolidated financial data of the Company in Unites States dollars as of and for each of the five fiscal years ended October 31, 2003. The selected consolidated financial data has been derived from the audited consolidated financial statements of the Company. All information contained in the following table should be read in conjunction with the audited consolidated financial statements of the Company and the notes thereto and "Item 5 - Operating and Financial Review and Prospects", included elsewhere in this Form.

1

Selected statement of operations and deficit information

            The Company's consolidated financial statements have been prepared in accordance with Canadian GAAP which, in the case of the Company, conform in all material respects with U.S. GAAP, except for those items disclosed in note 16 to the notes to the Consolidated Financial Statements.

            The financial statements of the Company are all expressed in United States dollars. All other financial data appearing in this Form 20-F are expressed in United States dollars ("US $"), with the exception of certain limited cases when reference is made to instruments denominated in Canadian dollars ("CDN $").

            Transactions that were conducted in Canadian dollars or other foreign currencies have been converted into United States dollars at the rate of exchange prevailing at the date of such transactions, and assets and liabilities denominated in Canadian dollars or other foreign currencies but expressed in this Form 20-F in United States dollars have been converted into United States dollars at the rate of exchange prevailing on the date of the applicable financial statement.

            The following table sets forth, for the periods indicated, the high, low, end of period and average for period noon buying rates as published by the Bank of Canada (the "Noon Buying Rate"), as expressed in the amount of U.S. Dollars equal to one Canadian dollar.

            The following table sets forth, for each period indicated, the high and low exchange rates for United States dollars expressed in Canadian dollars on the last day of each month during such period, based on the Noon Buying Rate.

2

            On March 19, 2004, the noon buying rate for one Canadian dollar as quoted by the Federal Reserve Bank of New York (US $1.00 = CDN $1.3310).

            Not Applicable.

            Not Applicable.

            The Company and the Company's investors face a number of significant risks, which are described below.

            Going Concern

            There is substantial doubt about the Company's ability to continue as a going concern because of the substantial losses incurred in the development stage. In addition the Company is still in the development stage and it will be necessary to raise additional funds for the continuing development, testing and commercial exploitation of its technologies. The sources of these funds have not yet been identified and there can be no certainty that sources will be available in the future. As such, the realization of the Company's assets and discharge of its liabilities is subject to significant uncertainty.

            The Company's ability to continue as a going concern is dependent upon completing the development of its technology for a particular application, achieving profitable operations, obtaining additional financing and successfully bringing its technologies to the market. The outcome of these matters cannot be predicted at this time. The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classifications of the assets and liabilities that might be necessary should the Company be unable to continue in business.

            The Company has no revenues and it does not expect to generate revenues in the near future. If the Company fails to enter into any license agreements it will have no revenues and even if it enters into such agreements the amount of the revenues it receives will depend on the terms it is able to get from each licensee and the ability of each licensee to compete in its particular market.

            The Company's technology is currently under development and is therefore not yet proven to be commercially viable. In order that the Company may be able to procure revenue generating licensing arrangements, significant development work remains to be completed.

            The Company's success depends on whether its technology can be manufactured in large quantities at competitive prices. Failure to be able to manufacture large quantities at competitive prices will seriously hurt the Company's ability to generate revenues.

            Most of the major producers of memory components and devices are reported to be conducting research directed towards the development of other non-volatile random access memory technologies. While information concerning such research is difficult to obtain, reports indicate that very large sums of money are being spent and that major companies such as IBM, Motorola and Honeywell, that have enormous resources at their disposal, are involved.

3

            The Company may be materially affected by aggressive competition as the memory and data storage industry is highly competitive, and customers make their decisions based on a number of competitive factors, including the following:

            • Functionality

            • Technology

            • Performance

            • Reliability

            • System scalability

            • Price

            • Quality

            • Product availability

            • Customer service

            • Brand recognition

            The Company must address each of these factors effectively in order to successfully compete. If the Company is unable to adapt its products and services to changes in these competitive factors, it may never gain market share.

            Since the Company expects no revenues in the near future, the Company will need additional financing to continue the research and development and to successfully market the technology to potential licensees. While the Company has had sufficient funds thus far to meet its requirements, there is no assurance it will be able to continue to do so, and failure to raise sufficient funds in the future will affect its ability to develop and market the technology.

            The Company's success will depend on its ability to protect its intellectual property. The Company relies primarily on patent, copyright, trademark and trade secret laws, as well as nondisclosure agreements and other methods to protect its proprietary technologies and processes. Despite its efforts to protect its proprietary technologies and processes, unauthorized parties may attempt to copy or otherwise obtain and use its products or technology without authorization, develop similar technology independently or design around its patents. Policing unauthorized use of the Company's products is expensive and difficult, and the Company cannot be certain that the steps it has taken will prevent misappropriation or infringement of its intellectual property.

            The Company's future success and competitive position depend in part on its ability to retain exclusive rights to its technology, including any improvements that may be made on that technology from time to time by the Company or on its behalf. While the technology is patented or subject to pending patent applications in the U.S.A. and the Company knows of no challenge that has been made either against the technology or against the Company's rights to it, and has no reason to believe that any such challenge might be made or that the grounds for any such challenge exist, if any intellectual property litigation were to be commenced against the Company, no matter how groundless, the result would be significant expense, adversely affecting further development, licensing and sales, and diverting the efforts of its technical and management personnel and, in the event of an adverse outcome, substantial damages and possible restrictions on the further development licensing and use of the technology.

            There is no assurance that any of the pending applications will be issued as patents or that any issued patent will not be determined to be invalid at a later date.

4

            No Foreseeable Dividends

            Micromem has never paid a dividend on its securities. Micromem does not anticipate paying dividends in the foreseeable future.

            The board of directors of Micromem has the authority to issue additional Common Shares or other securities of the Company without the prior consent or vote of the Company's shareholders. The issuance of additional Common Shares may have the effect of diluting the proportionate equity interest and voting power of holders of Shares.

            The senior managers and employees of the Company are Salvatore Fuda, who serves as the Chairman and Joseph Fuda, who serves as the Chief Executive Officer. Dr. Harry Ruda, and a number of researchers forming the team that he oversees, are key technical personnel, engaged pursuant to research collaboration agreements between the Company and the University of Toronto. The Company's success will depend on its ability to retain certain of its senior management and key technical personnel. It will also depend, to a large extent, on its ability to attract and retain additional highly skilled personnel in the future.

            The Company's ability to generate revenue may be adversely affected by the prevailing uncertainty of the global economy. The Company does not currently anticipate any significant improvement in new technology spending during 2004. During 2002 and 2003, the Company implemented various cost-saving measures to help mitigate the adverse effects of the slowdown in the global economy. The Company cannot provide any assurance that a prolonged economic downturn, particularly as it affects the technology sector, will not have additional adverse effects on the Company's financial condition, results of operations, or our ability to generate revenue. Furthermore, the Company cannot provide any assurance that our cost-saving measures will be successful or sufficient to allow the Company to commence generating revenues in future periods because revenues will be dependent, among other things, upon on completion of the development of the Company's technologies and procuring of revenue generating contracts.

            The Company's financial condition and results of operations could also be materially affected by unstable global political conditions. Terrorist attacks or acts of war could significantly disrupt the Company's operations and the operations of the Company's future customers, suppliers, distributors, or resellers. The Company cannot predict the potential impact on its financial condition or results of operations should such events occur.

            Short product life cycles are inherent in high-technology industries due to rapid technological change and evolving industry standards. The Company's future financial condition and results of operations depend on its ability to respond effectively to these changes. The Company cannot provide any assurance that it will be able to successfully develop, manufacture, and market innovative new products or adapt its current products to new technologies or new industry standards. In addition, customers may be reluctant to adopt new technologies and standards, or they may prefer competing technologies and standards. Because the technology market changes so rapidly it is difficult to predict the rate adoption of its ferromagnetic memory technology.

5

            The Company may be materially affected by risks associated with new product development

            New product research and development is complex and requires the investigation and evaluation of multiple alternatives, as well as planning the design and manufacture of those alternatives selected for further development. Research and development efforts could be adversely affected by any of the following:

            • Hardware and software design flaws

            • Product development delays

            • Changes in data storage technology

            • Changes in operating systems

            • Changes in industry standards

            Manufacturing new products involves integrating complex designs and processes, coordinating with suppliers for parts and components, and managing manufacturing capacities to accommodate forecasted demand. Failure to obtain sufficient quantities of parts and components, as well as other manufacturing delays or constraints, could adversely affect the timing of new product introductions. The Company has experienced product development delays in the past that adversely affected its financial position.

            The Company depends on its ability to develop new intellectual property that does not infringe on the rights of others. The Company cannot provide any assurance that it will be able to continue to develop such new intellectual property.

            The Company relies on a combination of U.S. patent, copyright, trademark, and trade secret laws to protect its intellectual property rights. The Company enters into confidentiality agreements relating to its intellectual property with its employees and consultants.

            Due to financial constraints, the Company has determined not to file patent and trademark registration applications with foreign governments; this may expose us and our technologies to infringement in foreign jurisdictions.

            Despite all of the Company's efforts to protect its intellectual property rights, unauthorized parties may attempt to copy or otherwise obtain or use its intellectual property. Monitoring the unauthorized use of the Company's intellectual property is difficult, particularly in foreign countries. The Company cannot provide any assurance that it will be able to adequately protect its intellectual property.

            The Company's future success depends in large part on its ability to attract, retain, and motivate its key employees. The Company faces significant competition for individuals who possess the skills required to design, develop, manufacture, and market the Company's technologies. An inability to successfully attract, retain, and motivate these employees in the future could have an adverse effect on the Company's future financial condition and results of operations.

            Volatility of Common Share Price and Volume

            Shareholders of Micromem may be unable to sell significant numbers of common shares of Micromem on the NASD OTC-BB (where the common shares are currently traded) without a significant reduction in the price of the shares, if at all.

            Furthermore, there can be no assurance that the Company will be able to meet the listing requirements of, or achieve listing on, any other stock exchange. The market price of the common shares of the Company may be affected significantly by factors such as fluctuations in the Company's operating results, announcements of technological innovations or new products by the Company or its competitors, action by governmental agencies against the Company or the industry in general, developments with respect to patents or proprietary rights, public concern as to the safety of products developed by the Company or others, the interest of investors, traders and others in public companies such as the Company and general market conditions. In recent years, the securities markets in the United States and Canada have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly small capitalization companies, have experienced fluctuations which have not necessarily been related to the operating performances, underlying asset values or prospects of such companies.

6

            Foreign Exchange Risks

            Because we have historically raised funding in U.S. dollars, and our costs are denominated in Canadian dollars we may be subject to foreign exchange risks. A decrease in the value of either of the U.S. dollar relative to the Canadian dollar could affect our burn rates and potential profitability. We do not currently hold forward exchange contracts or other hedging instruments to exchange foreign currencies for U.S. dollars to offset currency rate fluctuations.

            Broker-dealer practices in connection with transactions in "penny stocks" are regulated by penny stock rules adopted by the Securities and Exchange Commission. Penny stocks, like shares of our common stock, generally are equity securities with a price of less than $5.00 (other than securities registered on some national securities exchanges or quoted on Nasdaq). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer's presumed control over the market, and monthly account statements showing the market value of each penny stock held in the customer's account. In addition, broker-dealers who sell these securities to persons other than established customers and "accredited investors" must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. Consequently, these requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security subject to the penny stock rules, and investors in our common stock may find it difficult to sell their shares.

            Micromem is a corporation formed under the laws of the Province of Ontario, Canada, with principal executive offices at 777 Bay Street, Suite 1910, Toronto, Ontario M5G 2E4. Formerly known as AvantiCorp International Inc., Micromem changed its name to Micromem Technologies Inc. on January 14, 1999. Micromem was incorporated under the laws of the Province of Ontario, Canada, on October 21, 1985 as Mine Lake Minerals Inc. It subsequently changed its name to Avanti Capital Corp. on June 23, 1988 and to AvantiCorp International Inc. on April 30, 1992 before becoming Micromem Technologies Inc. on January 14, 1999 in connection with its acquisition of Pageant International.

            On January 11, 1999, Micromem completed the acquisition of 100% of the capital stock of Pageant International, in exchange for 32,000,000 Common Shares and warrants for the purchase of an additional 1,000,000 Common Shares (the "Warrants"), representing 88.94% of the outstanding Common Shares of Micromem (89.24% assuming exercise of all the Warrants). The acquisition was completed pursuant to an agreement, dated December 7, 1998, among Micromem, as the purchaser, and Ataraxia Corp., as the vendor, and Pageant International. The Warrants were exercisable at CDN $2.00 per share through January 11, 2000 and thereafter at CDN $2.30 per share through January 12, 2001 on which date the Warrants remaining unexercised expired. The total purchase price for the Pageant International Common Stock was $30,000,000. The value of the Common Shares used to pay the purchase price was determined through arm's length negotiations using as a point of reference the price per Common Share of $1.16 on September 23, 1998 less an agreed upon discount.

7

            The Company will face intense competition when its technologies are developed to a point at which they may be sold and/or licensed. The Company will be required to introduce its technologies into a well developed market and compete with major corporations who manufacture, sell and license existing memory products such as DRAM, SRAM, EPROM, EEPROM and Flash memory. The market for memory technologies is dominated by major corporations who have established market segments for their memory technologies and products, and have significantly greater financial and other resources which are required to design, develop, manufacture, market, sell and license their products and technologies. Many of these major corporations have worldwide wafer manufacturing and integrated circuit production facilities.

13

            The success of the Company's Technology will be determined by the following factors for which it has not yet been tested or measured: (i) the ability to build fully functional sub-micron scale devices for specific applications; (ii) the ability of manufacturers to incorporate the technology into existing manufacturing capabilities without significant retooling and material costs; (iii) price competitiveness; and (iv) availability and costs of raw materials.

            After completion of the development of the company's Technology, the ability of the Company to compete successfully will depend on elements outside of its control, including the rate at which customers incorporate the Company's Technology into their products, the success of such customers in selling those products, the Company's protection of its intellectual property, the number, nature and success of competitors and their product introductions, and general market and economic conditions. In addition, the Company's success will depend on its ability to develop, introduce, and license or sell in a timely manner its technology or products incorporating its technology and to compete effectively on the basis of factors such as speed, density, die size and packaging.

            In December 2003, the Company completed Unit private placements to two Canadian private investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placements, the Company received $33,000 as subscription proceeds for the sale and issue of 300,000 Units. Each Unit consists of one Common Share and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one Common Share and one Series B Warrant for $0.11 until expiry 12 months from the date of issue. Each Series B Warrant entitles the holder to purchase one additional Common Share for $0.11 until expiry 12 months from the date of issue.

            In December 2003, the Company also completed a Unit private placement to one Canadian private investor pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placement, the Company received $40,000 as subscription proceeds for the sale and issue of 500,000 Units. Each Unit consists of one Common Share and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one Common Share and one Series B Warrant for $0.08 until expiry 12 months from the date of issue. Each Series B Warrant entitles the holder to purchase one additional Common Share for $0.08 until expiry 12 months from the date of issue.

            On November 12, 2003, the Company entered into a second 2-year research collaboration agreement ("Second U of T Research Agreement") with Materials and Manufacturing Ontario ("MMO") and the University of Toronto. Through the collaboration, the Company has continued its involvement in the research and development of magnetic memory technology, carried out by a highly skilled research team headed and assembled by Dr. Harry Ruda. Under the agreement, which has a term of two years commencing on the date of the agreement, the Company has committed to providing $56,130 (CDN $81,000) per year in cash and $30,770 (CDN $44,400) per year of in kind contributions and MMO has committed to providing $58,900 (CDN $85,000) in cash. The combined cash contributions of the Company and MMO, $230,060 (CDN $332,000), will be used to cover the operating expenses of the research collaboration over a term of two years. MMO's funding of $117,800 (CDN $170,000) (or $58,900 (CDN $85,000) per year) will be paid directly to the University of Toronto and therefore is not reflected in the Company's financial statements. Under the agreement, the Company maintains its ownership of its portfolio of patents and intellectual property that was developed prior to or outside the scope of the agreement.

            In August 2003, the Company completed Unit private placements to two Canadian private investors pursuant to prospectus and registration exemptions set forth in applicable securities laws. Under the private placements, the Company received $162,500 as subscription proceeds for the sale and issue of 2,031,250 Units. Each Unit consists of one Common Share and one Series A Warrant. Each Series A Warrant entitles the holder to purchase one Common Share and one Series B Warrant for $0.08 until expiry 12 months from the date of issue. Each Series B Warrant entitles the holder to purchase one additional Common Share for $0.08 until expiry 12 months from the date of issue.

14

            On March 1, 2003, the Company entered into an Equipment Transfer Agreement with the University of Toronto. Under the terms of this agreement, the Company conveyed equipment having an estimated value of $200,000 (CDN $297,600) to the University for incorporation into the University's magnetic memory facility for the research and development and fabrication of magnetic memory.

            On December 10, 2002, the Company entered into a Collaborative Research Agreement with Communications and Information Technology Ontario ("CITO"), the University of Toronto and Dr. Harry Ruda, Professor of Physics at the University of Toronto. Under the terms of the agreement, over a period of two years the Company is required to contribute $63,750 (CDN $92,000) and $67,632 (CDN $97,600) of in-kind contribution and, CITO is required to contribute $215,430 (CDN $308,000) for research into "High Density Magnetic Memory Device Development". In consideration of such contribution, CITO shall receive a royalty based on revenues received from the sale of products incorporating intellectual property developed under this collaboration agreement for the remaining life of patents issued in connection with such intellectual property.

            On November 1, 2002 ("effective date"), Micromem entered into an Infrastructure Agreement with the University of Toronto, to fund the assembly of a facility for research and development and fabrication of Magnetic Memory ("MMF"). Under the terms of the agreement, Micromem has committed to contribute $249,463 (CDN $360,000) in cash to fund the direct costs of MMF. The sum is payable to University of Toronto as follows:

i.         $83,154 (CDN $120,000) on execution of agreement, which was paid;
ii.        $83,154 (CDN $120,000) at end of the two months following the effective date, which was paid; and
iii.       $83,155 (CDN $120,000) at end of the four months following the effective date, which was paid.

            The Company believes that protection of its intellectual property is important to its ability to generate revenues from its technologies in the future. The Company has both issued patents and pending patent applications and also enters into confidentiality and other agreements with third parties and its employees for protection of its intellectual property and trade secrets. The Company intends to continue to actively pursue the protection of its intellectual property. Management will determine from time to time the jurisdictions where protection will be sought which determination will be based on a number of factors including: state of development of the Company's Technology; importance of a particular market for the Company's Technology; costs of pursuing patent protection in a jurisdiction; and financial position of the Company.

            Micromem maintains its corporate headquarters in Toronto, Ontario, Canada. The space occupied by Micromem consists of 3,987 square feet of commercial office space and is occupied by Micromem pursuant to a lease that expires December 29, 2005.

            The research and development team headed by Dr. Harry Ruda conduct their research and development at facilities at the University of Toronto, which comprise both (i) equipment and tools and (ii) a new clean room and laboratory space.

            All facilities and equipment are owned by the University of Toronto and are being made available to the research and development team under Micromem's research collaboration agreements with the University of Toronto and an infrastrucuture agreement between the University of Toronto and Micromem.

            This discussion and analysis of financial condition and results of operations for the years ended October 31, 2003, 2002, 2001 2000 and 1999 and should be read in conjunction with the consolidated financial statements and related notes in this report, which are prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP). These principles differ in certain material respects from United States generally accepted accounting principles (U.S. GAAP). The differences as they affect the consolidated financial statements of the Company are described in Note 16 to the Company's 2003 consolidated financial statements.

16

            The following table sets forth certain selected financial information of the Company:

            The Company had no operating revenue, its only activities being the development of its memory technologies. Its only income during 2003 was $20,121 (2002: $165,892) being principally interest income.

            Costs and expenses decreased 50% from $2,934,444 (excluding the $10 million write down of royalty rights) in 2002 to $1,470,086 in 2003.

            During the year, the Company expended $490,914 (2002: $1,601,624) related to its efforts on research and development of its memory technologies, representing 33.4% (2002: 54.6%) of total expenditures (excluding the royalty rights write down). The research and development expenses primarily consists of payments made under research agreements with the University of Toronto, Dr. Ruda and the funding agencies (CITO and MMO), as further detailed below.

            The Company paid $87,432 (CDN $136,175) against its commitment under the two year research collaboration agreement that it entered into in October 2002.

            Additionally, during 2003, the Company secured funding in connection with the magnetic memory research program from Communications and Information Technology Ontario (CITO). Under a Collaborative Research Agreement among Micromem, CITO, the University of Toronto and Dr. Harry Ruda, in the first year, CITO provided funding of $106,715 (CDN $154,000) and Micromem has contributed $31,875 (CDN $46,000).

            On March 1, 2003, Micromem entered into an agreement with the University of Toronto whereby, Micromem contributed equipment and supplies with an estimated value of $200,000. The equipment was previously used by Pageant Technologies (USA) Inc., at Pageant's former Kansas City Missouri lab facility, and had a book value of $58,302.

17

            The Company has also continued its efforts to reduce administrative expenses in all areas of operation. The Company continues to control costs performed by outside service providers by performing the work in-house. As a result of these efforts, general administration expenses decreased by 47.2% to $176,361 in 2003 from $333,964 in 2002; travel and entertainment decreased by 76.1% from $73,385 in 2002 to $17,508 in 2003.

            Professional fees increased by 15.3% to $303,222 in 2003 from $262,927 in 2002; which is reflected in Wages and salaries decrease of 80.0% to $112,437 in 2003 from $562,532 in 2002 as a result of reduced employee levels.

            Amortization of patents and trademarks commenced in 2002 amounting to an expense of $36,258 (2002: $31,338). During 2003, the Company wrote off $130,839 relating to discontinued Patents and Trademark applications. The Company also assessed the remaining patent and trademark applications registered in the United States and Canada and has expense the residual net book value of $168,981 to reflect the uncertain nature of future events. The Company continues to actively pursue and protect its patents registered in the United States.

            Micromem had a net loss of $1,449,965 for 2003 or $0.03 loss per share compared to a net loss of $12,733,015 or $0.27 per share for 2002. The effect on loss per share of the royalty write down in 2002 was $0.22 per share.

            The Company had no operating revenue, its only activities being the development of its memory technologies. Its only income during 2002 was $165,892 (2001: $196,520) being principally the interest it earned on excess funds deployed in short-term deposits and revenue generated through an engineering services contract.

            Costs and expenses have increased from $4,725,931 in 2001 to $12,934,444 in 2002. The increase includes a $10,000,000 write down of royalty rights, which, when excluded from costs and expenses would result in a decrease of 42.2% of costs and expenses when compared to similar costs and expenses in 2001.

            In March 2001, Micromem's wholly-owned subsidiary, Pageant International, purchased a 40% gross profits royalty ("Estancia Royalty") related to patents and patent applications for VEMRAM^TM technology ("VEMRAM Patents") and the remaining 50% interest in the VEMRAM^TM Patents and all rights, entitlements and interests held by Estancia Limited and Richard Lienau under the Joint Ownership and Licensing Agreement dated as of September 17, 1997 pursuant to an asset purchase agreement (the "Asset Purchase Agreement") among Micromem, Pageant International and Estancia Limited and Richard Lienau for a purchase price of $10 million (which was paid at closing) and a further maximum of $40 million to be paid upon certain stipulated milestones being met. During the year, the Company decided to restructure its operations by closing its research and development facility and adopted a plan to continue its research and development program through a research collaboration with the University of Toronto. Micromem determined that there was significant uncertainty that any amounts would have become payable in respect of the Estancia Royalty. Accordingly, it was determined that a write down of the Estancia Royalty rights in the amount of $10,000,000 was appropriate under current generally accepted accounting principles. Notwithstanding the write down, Micromem is committed to continue its research and development of magnetic memory technology through its research collaboration with the University of Toronto.

            During the year, the Company expended $1,601,624 (2001: $2,212,679) related to its efforts on research and development of its memory technologies, representing 57.9% (2001: 46.8%) of total expenditures (excluding the royalty rights write down). During the fourth quarter of 2002, Micromem entered into a two year research collaboration agreement whereby researchers at the University of Toronto will undertake the research and development of magnetic memory technology in collaboration with Micromem. Furthermore, Micromem was successful in obtaining matching funds from Materials and Manufacturing Ontario (MMO - a non profit organization) pursuant to a research collaboration agreement among Micromem, the University of Toronto, Dr. Harry Ruda and MMO. Over the two-year period, Micromem will provide $174,864 (CDN $272,250) with matching contributions from the MMO towards the research and development to be undertaken under the research collaboration. In the fourth quarter of 2002, Micromem paid $87,432 (CDN $136,175) against its commitment. Micromem will have the first right to an exclusive and perpetual worldwide sub-license for all uses of the technology developed under the collaboration. MMO will be entitled to receive a royalty on Micromem's manufacturing revenues from the sale of products incorporating the technology developed under the collaboration.

18

            The Company has also continued its efforts to reduce administrative expenses in all areas of operation. The Company's facilities in Lee's Summit have been closed and all employees at the facility were terminated. The Company has also undertaken to control costs performed by outside service providers by performing the work in-house. Furthermore, Micromem has downsized its head office which will continue to reduce costs into the future. As a result of these efforts, administration expenses decreased by 18.4% from $409,312 in 2001 to $333,964 in 2002; professional fees decreased by 44.5% from $473,653 in 2001 to $262,927 in 2002; travel and entertainment decreased by 64.3% from $205,757 in 2001 to $73,385 in 2002.

            Wages and salaries decreased 59.0% from $1,372,375 in 2001 to $562,532 in 2002 as a result of decreasing employee levels (as discussed above) and as a result of changes to the Chairman and CEO's 2001 employment agreement, with effect from November 1, 2001. Effective February 13, 2002, Mr. Fuda resigned as President and Chief Executive Officer of Micromem but continued as Chairman and a director of Micromem and as a director of certain subsidiaries of Micromem. Mr. Fuda's compensation was reduced, with effect from November 1, 2001, to $1.00 per year.

            Amortization of patents and trademarks commenced in 2002 amounting to an expense of $31,338. Patents and trademarks will be amortized over 10 years.

            Amortization of capital assets decreased from $65,298 in 2001 to $40,635 in 2002 as a result of dispositions of assets due to downsizing.

            Micromem had a net loss of $12,733,015 for 2002 or $0.27 loss per share compared to a net loss of $4,559,625 in 2001 or $0.10 per share. The effect on loss per share of the royalty write down in 2002 was $0.22 per share.

Notes:

    1.     The increase in the loss for the quarter ended October 31, 2002 is due to a $10,000,000 write down
            of royalty rights, the effect of which is $0.22 per share.

            The Company currently has no cash flow from operations and will have none until it is in a position to either license or directly produce and sell products utilizing its memory technologies.

            Micromem currently has no lines of credit in place and must obtain equity financing from investors and from persons who hold outstanding options in order to meet its cash flow needs until it can generate revenues.

19

            Micromem has granted to its directors, officers and other employees a number of options to purchase shares at prices that are at or above market price on the date of grant. None of the optionees has any obligation to exercise his options and there can be no assurance that Micromem will realize any funds.

            During 2003, the Company raised $162,500 through private placement of 2,031,250 shares to arms length third parties. Since year-end the company raised a further $270,000 through equity private placements and exercise of options, to fund its working capital requirements.

            Micromem had no material commitments for capital expenditures as of October 31, 2003 or 2002. In March 2001, Micromem and its wholly owned subsidiary, Pageant International, completed the Asset Purchase Agreement described above. The total consideration payable in respect of the purchased assets under the Asset Purchase Agreement is $50 million in the form of cash and shares. Of this amount, $10 million was paid at closing through a cash payment of $2.0 million and the issuance by Micromem of 2,007,831 common shares valued at $3.98 per share. The balance of $40 million is payable in two equal amounts of $20 million each upon achievement of certain stipulated milestones provided that a minimum of 50% of each $20 million payment shall be in the form of shares of Micromem. None of the stipulated milestones have been met and therefore no amounts have been paid toward the balance of the $40 million purchase price.

            As no further payments toward the purchase price were made to Estancia under the Asset Purchase Agreement, Pageant is deemed to have conveyed back a percentage of the VEMRAM^TM Patents and to have granted a gross profits royalty to Estancia Limited such that Pageant would remain holding a 60% interest in the VEMRAM^TM Patents and it would be required to pay a 32% gross profits royalty to Estancia Limited in respect of the VEMRAM^TM technology, as of March 9, 2004.

            The Corporation's financial statements are prepared in conformity with Canadian generally accepted accounting principles, which require management to make estimates and assumptions which can affect the reported balances. In determining estimates of net recoverable amounts and net realizable values, or whether there has been a permanent impairment in value, for, pre-paid and deposits, pre-development costs and capital assets, patent rights and other assets, the Corporation relies on assumptions regarding applicable industry performance and prospects, as well as general business and economic conditions that prevail and are expected to prevail. Assumptions underlying asset valuations are limited by the availability of reliable comparable data and the uncertainty of predictions concerning future events.

            By nature, asset valuations are subjective and do not necessarily result in precise determinations. Should the underlying assumptions change, the estimated net recoverable amounts and net realizable values may change by a material amount. The Corporation's significant accounting policies are set forth in Note 3 to its consolidated financial statements, which should be read in conjunction with management's discussion of the Corporation's critical accounting policies and estimates set forth below.

            The Corporation's activities are subject to various governmental laws and regulations relating to corporations, copyrights, trademarks and patents. These regulations are continually changing. The Corporation believes its activities comply in all material respects with all applicable laws and regulations.

            Accounts recorded in foreign currency have been converted to United States dollars as follows:

            •        Current assets and current liabilities at exchange rates at the end of the year;

            •        Other assets at historical rates; and

            •        Revenue and expenses are translated at rates of exchange prevailing at the transaction dates.

            •        Gains and losses resulting from the fluctuation of foreign exchange rates are included in the determination of income.

20

Pre-development costs

            The Corporation is in the development stage. Research costs are expensed in the period incurred. Development expenses are expensed as incurred unless they meet the criteria for deferral and amortization under Canadian GAAP.

            The Company's research and development activities have been related primarily to research and development of a magnetic random access memory device, and have been funded  through research collaboration agreements between Micromem and MMO and between Micromem and Communications and Information Technology Ontario. Research and development expenses for the year ended October 31, 2003 were $490,914 for the year ended October 31, 2002, were $1,601,624 and for the year ended October 31, 2001 were $2,212,679.

            The digital memory industry and, more broadly, the semiconductor industry has historically been characterized by wide fluctuations in demand for, and supply of, semiconductors and memory technologies. In some cases, industry downturns have lasted more than a year.

            Prior experience has shown that restructuring of operations, resulting in significant restructuring charges, may become necessary if an industry downturn persists.

            Due to improved prospects for the economy of the United States and of other parts of the world, many industries may be considering increasing technology purchases and investments. However, the impact of this potential improvement in the economy on us is difficult to predict, as any prospects for revenues is dependent upon the successful completion of the Company's technology development and the incorporation of any technology that may be developed by us or pursuant to our research collaborations with the University of Toronto in the future into new products and their introduction into the market place.

            We are not party to any material off-balance sheet arrangements. In addition, we have no unconsolidated special purpose financing or partnership entities that are likely to create material contingent obligations.

            The Directors, Executive Officers and other key personal of Micromem as at March 1, 2003 are set forth below:

21

            Salvatore Fuda is and has served as Chairman of the Board of Micromem since January 11, 1999 and a Director of Micromem since 1992. He served as President and Chief Executive Officer from June 2000 through to February 13, 2002. From 1992 to January 11, 1999 he also served as Secretary of Micromem. He served as President and Chief Executive Officer of Ontex Resources Limited (TSE) from 1986 to December 1998 and as Chairman of the Board of Ontex Resources Limited since that date. He is and has served as Chairman and director of Pifher Resources Inc. (TSX Venture Exchange) since June, 2002. He is the father of Joseph Fuda.

            Joseph Fuda is and has been President, Chief Executive Officer and Director since February 13, 2002. Prior thereto he served as Manager, Strategic Alliances for Micromem since February 2001. Prior thereto, he served as a consultant to Micromem since November 2000. Prior thereto he served as a Vice-President and a Director of IPO Capital Corp since April 1999. Mr. J. Fuda has served as a director of Micromem since February 13, 2002. He is the son of Salvatore Fuda.

            Manoj Pundit is and has served as Micromem's Executive Vice President and General Counsel since July 2000 and joined the Board of Directors in March 2001. He has also been a partner, since December 1996, at Chitiz Pathak LLP, a Toronto law firm serving clients in the securities and investment industries, including issuers and dealers on a full range of securities transactions. Mr. Pundit holds a LL.M. in Taxation from Osgoode Hall Law school and a LL.B. and B.Sc. (Math) from the University of Alberta. Mr. Pundit has served as a director of Micromem since March 2001.

            Andrew Brandt is and has been Chairman and Chief Executive Officer of the Liquor Control Board of Ontario ("LCBO") since February 1991. The LCBO is the largest single purchaser of alcohol beverage products in the world with annual sales exceeding two billion dollars Canadian. Prior to his appointment to the LCBO, Mr. Brandt served as Leader of the Ontario Progressive Conservative Party from 1987 to 1990. He has previously served as the Minister of Industry and Trade, Minister of Environment and Mayor of Sarnia, Ontario. Mr. Brandt has served as a director of Micromem since June 2000

            Stephen B. Fleming is and has served as Managing Director of Kismet Limited since June 2001; prior thereto he served as Managing Director of Barefoot Enterprises since April 1999; prior thereto, he served as President of Pageant Technologies (USA) Inc. from July 1997 to April 1999; prior thereto, Mr. Fleming was Executive Vice-President of International Ion from August 1994 to April 1997. Previously, Mr. Fleming was responsible for planning MCI's wireless data products, intelligent network and frame relay international initiatives, and served as director of engineering for international business development for Telecom U.S.A. Mr. Fleming has worked with numerous emerging technology companies in consulting and management capacities. Mr. Fleming has served as a director of Micromem since January 1999.

            Charles Harnick is a founder and a director (since January 2004) of Suasion Public Affairs Management Inc., a public affairs management firm; he is also President and Chief Executive Officer of Ontex Resources Limited (TSE) and has served in such capacities since March, 2000. Mr. Harnick has been a practicing lawyer with Sutts, Strosberg LLP since December 2001. He was the Attorney-General of Ontario from June 1995 to June 1999. Mr. Harnick has served as a director of Micromem since June 2000.

            George A. Kennedy is and has served as managing partner of Source International (an international consulting firm in the Metropolitan Washington D.C. area) since March 1997. In 2001, he was Director for Planning and International Development for iGate Inc., a broadband technology company in Louisville, KY. From 1993 until 1996, Mr. Kennedy served as U.S. Consul General in Toronto, Canada, and prior thereto he held senior positions with the US Departments of State and Commerce in Washington D.C. Currently, he is an Executive Editor of the Black Business Journal of Houston, TX. Mr. Kennedy has served as a director of Micromem since June 2000.

            David Sharpless is Chairman, Maverick Inc., a family investment corporation. From 2000 to September 2001, he was President, International of CIT's Vendor Technology Finance unit. In this capacity, he was responsible for CIT's international vendor finance business, covering CIT's operations in Canada, Europe, Latin America, Asia Pacific, Australasia. Prior thereto, Mr. Sharpless was Newcourt Credit Group Inc.'s Deputy Chairman and was responsible for international operations for Newcourt Financial. David is a graduate of Osgoode Hall Law School and is a member of the bar of Ontario. Mr. Sharpless has served as a director of Micromem since March 2001.

22

            Steven Van Fleet is and has been Program Director for the Silent Commerce/Smart Packaging Initiative at International Paper Company since November 1999. From January 1999 to November 1999, he was Program Director for Process and Product Uniformity and from March 1996 to December 1998 he was the Director for Control Systems Development at International Paper in Cincinnati, Ohio. He is also presently on the Board of Overseers for the Massachusetts Institute of Technology Auto ID Center.

            Antonio Lopes is currently the Chief Financial Officer of several companies. Since November 1, 2002, he has been Chief Financial Officer of Micromem; since 1993, he has been Chief Financial Officer of Federal White Cement; since 1997, he has been Chief Financial Officer of Ontex Resources Limited; and since 1997, he has been Chief Financial Officer of Pifher Resources Inc. From 1994 to 1998, he was Chief Financial Officer of Fortune Minerals Limited. From 1989 to 1993, he was a staff accountant at Ernst &Young LLP. Mr. Lopes is a Chartered Accountant and holds an MBA from the University of Toronto.

            There are no arrangements or understandings between any director and any other person pursuant to which the director was selected as a director or executive officer. Each director holds office until the next annual meeting of shareholders or until his or her successor is elected or appointed, unless his or her office is earlier vacated according to the provisions of the by-laws of the Micromem or the Business Corporations Act (Ontario).

            Other than a father/son relationship between Salvatore Fuda (father) and Joseph Fuda (son), there is no family relationship between any director or executive officer and any other director or executive officer.

Notes:

24

            The aggregate direct compensation paid or accrued on behalf of all other directors as a group during 2003 was $1,940. This amount includes directors' fees and expenses for non-employee directors. None of the non-employee directors have agreements with Micromem that provide for benefits upon termination of service.

            Micromem has adopted a stock option plan. Options are offered to directors, executive officers and employees to purchase Common Shares at an exercise price equal to or above the market price for the Common shares at the date that the options are granted. 5,300,000 options were granted during 2003. As at the Company's fiscal year ended, October 31, 2003, 5,300,000 options were outstanding, of which 5,300,000 had vested and were exercisable, with exercise price of $0.10 per share.

            The board of directors has appointed an Audit Committee consisting of three independent directors. The members of the Audit Committee are Andrew Brandt, Charles Harnick and David Sharpless. The Audit Committee is responsible for the integrity of the Micromem's internal accounting and control systems. The committee receives and reviews the financial statements of Micromem and makes recommendations thereon to the Board prior to its approval by the full Board. The Audit Committee communicates directly with Micromem's external auditors in order to discuss audit and related matters whenever appropriate.

            Micromem does not have a Compensation Committee. Micromem's executive compensation program is administered by the board of directors and meets on compensation matters as and when required.

            The company has seven officers and employees of which four are in a management capacity, none are in a R&D capacity and three are in an administrative capacity. This includes a Chairman, a Chief Executive Officer and President, an Executive Vice-President and General Counsel and a Chief Financial Officer, and three support staff, all of whom work from Micromem's executive offices in Toronto, Canada. All research and development is carried out by Dr. Harry Ruda and a research team employed by the University of Toronto under the research collaboration agreements between Micromem and the University of Toronto.

25

            Micromem considers its relations with its employees to be good.

1.     These shares are held by a corporation wholly owned by a trust established for the benefit of members
        of Salvatore Fuda's family.

There are no shareholders who hold a number of common shares of Micromem that is greater than 5% of the common shares outstanding.

During fiscal year ended October 31, 2003, the Company paid $14,012.95 to a law firm in which Manoj Pundit, a director and officer of the Company or its subsidiaries is a partner.

26

Manoj Pundit, a partner of Chitiz Pathak LLP, who serves as legal counsel to the Company, holds 2,478 common shares of Micromem and 850,000 options of Micromem, each option entitling him to purchase one common share of Micromem at $0.10.

            See "Item 17 - Financial Statements."

            Micromem has never paid a dividend on its securities. Micromem does not anticipate paying dividends in the foreseeable future.

            Except as otherwise disclosed in this report, there has been no significant change in Micromem's financial position since October 31, 2003.

            The Company's subsidiary, Pageant Technologies (USA) Inc. ("Pageant USA"), has been named as a defendant in legal actions relating to tenant improvements on a leased property, including an action claiming dues of approximately $880,000 alleging breach of contract under a construction contract entered into by Clear Blue Laboratories, Inc. ("Clear Blue"). The landlord of the property is also claiming damages from Pageant USA. Pageant USA assigned its rights under the lease to Clear Blue, however, Pageant USA is allegedly obligated to pay the lease payments should the assignee default under the contract. The landlord is claiming damages of approximately $887,000.

            The table below sets forth the high and low sales prices for Common Shares in U.S. Dollars as reported since 2000. Micromem's fiscal year ends October 31. The Common Shares are not traded in Canada.

            Micromem's common shares are traded in the United States and are quoted on the NASD's OTC Bulletin Board. The common shares are quoted under the symbol MMTIF.OB.

            The following table sets forth information regarding the high and low prices of the common shares for the periods specified in U.S. dollars.

27

            On March 12, 2004, the last reported sale price for the common shares on the NASD OTC Bulletin Board was $0.23.

            Not Applicable

            Micromem was incorporated under the laws of the Province of Ontario, Canada, on October 21, 1985 as Mine Lake Minerals Inc. It subsequently changed its name to Avanti Capital Corp. by filing Articles of Amendment on June 23, 1988 and to AvantiCorp International Inc. on April 30, 1992 before becoming Micromem Technologies Inc. on January 14, 1999. The Articles of Incorporation of Micromem provide that there are no restrictions on the nature of the business to be carried on by Micromem.

            The rights, duties, powers and authorities of the Board of Directors of Micromem are set out in the Articles of Incorporation (the "Articles") and by-laws (the "By-Laws") of Micromem and the statutory provisions of the Business Corporations Act (Ontario) ("OBCA"). The following is a selected summary of the Articles, By-Laws and applicable provisions of the OBCA as they relate to selected rights, duties, powers and authorities of the Board of Directors of Micromem.

            The Articles of Micromem provide for a minimum of three and a maximum of 12 directors. The OBCA prescribes that an offering corporation must have a minimum of three directors, a majority of whom are Canadian residents and at least one third of whom are not officers or employees of Micromem or its affiliates. The Board of Directors may, between annual shareholders meetings, appoint one or more additional directors to serve until the next annual shareholders meeting provided that the number of directors so added may not exceed by one-third (1/3) the number of directors required to have been elected at the last annual meeting of shareholders.

28

            The Chairman of the Board of Directors or any one director may call a meeting upon the provision of forty-eight hours notice to each director in the manner prescribed in the By-Laws. Any such notice shall include the items of business to be considered at the meeting. A majority of the directors constitute a quorum provided that half of those directors present are Canadian residents. Business cannot be transacted without a quorum. A quorum of directors may vote on any matter of business properly brought before the meeting provided that where a director is a party to a material contract or proposed material contract or has a material interest in the matter to be considered, such director must disclose his or her interest at the earliest possible date, request the conflict be noted in the minutes of the meeting, and with a few limited exceptions enumerated in the By-Laws, refrain from voting on the matter in which the director has a material interest. There is no limitation on the Board of Directors to vote on matters of their remuneration provided such remuneration is disclosed in the financial statements and annual shareholder proxy materials.

            The Board of Directors has broad borrowing powers and may, without authorization from the shareholders, (a) borrow money on the credit of Micromem; (b) issue, re-issue, sell or pledge debt obligations of Micromem; (c) subject to restrictions respecting financial assistance prescribed in the OBCA, give a guarantee on behalf of Micromem to secure the performance of an obligation of any person; and (d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of Micromem, owned or subsequently acquired, to secure any obligation of Micromem.

            A person is qualified to be or stand for election as a director provided such person is at least 18 years of age, is not a bankrupt and is not found to be of unsound mind by a court in Canada or elsewhere. There is no requirement for a director to hold shares of Micromem.

            The authorized capital of Micromem consists of an unlimited number of common shares "Common Shares"), of which 48,732,187 shares were issued and outstanding as of October 31, 2003, and 2,000,000 special, redeemable, voting preference shares ("Special Shares"), none of which were outstanding, as of October 31, 2003.

            Holders of Common Shares will be entitled to receive notice of, attend and vote at all meetings of the shareholders of Micromem. Each Common Share carries one vote at such meetings. In the event of the voluntary or involuntary liquidation, dissolution or winding-up of Micromem, after payment of all outstanding debts, the remaining assets of Micromem available for distribution will be distributed to the holders of Common Shares. Dividends may be declared and paid on the Common Shares in such amounts and at such times as the directors shall determine in their discretion in accordance with the OBCA. There are no pre-emptive rights, conversion rights, redemption provisions or sinking fund provisions attaching to the Common Shares. Common Shares are not liable to further calls or to assessment by Micromem; provided, however, that pursuant to the provisions of the OBCA, Micromem has a lien on any Common Share registered in the name of a shareholder or the shareholder's legal representative for a debt owed by the shareholder to Micromem.

            Holders of Special Shares are entitled to receive notice of, attend and vote at all meetings of the shareholders of Micromem. Each Special Share carries one vote at such meetings. In the event of the voluntary or involuntary liquidation, dissolution or winding-up of Micromem, after payment of all outstanding debts, the holders of the Special Shares shall be entitled to receive, before any distribution of any part of the assets of Micromem among the holders of any other shares, the amount paid up on the Special Shares. The Special Shares are redeemable at the option of Micromem for the amount paid up on the shares. Dividends may not be declared or paid on the Special Shares and transfer of the Special Shares is restricted without the approval of the Directors of Micromem and the prior written consent of the Ontario Securities Commission. The number of Special Shares that may be issued and outstanding at any time is limited to 500,000. There are no pre-emptive rights, conversion rights or sinking fund provisions attaching to the Special Shares. Special Shares are not liable to further calls or to assessment by Micromem; provided, however, that pursuant to the provisions of the OBCA, Micromem has a lien on any Special Share registered in the name of a shareholder or the shareholder's legal representative for a debt owed by the shareholder to Micromem.

29

Rights and Privileges of Shareholders

            Only the registered holders of common shares and special preference shares on the record date are entitled to receive notice of and vote at annual and special meetings of shareholders. Where the items of business affect the rights of shareholders other than common shareholders, a special majority of two-thirds of the votes cast by the affected shareholders at the meeting called for such purpose is required to approve the item of business. Beneficial holders of common shares and special preference shares are also entitled to receive proxy materials in respect of meetings of shareholders in accordance with Canadian Securities Administrators National Instrument 54-101, provided that such proxies are limited in scope to instructing the registered shareholder (usually a brokerage house) on how to vote on behalf of the beneficial shareholder. There are no restrictions on the number of shares that may be held by non-residents other than restrictions set out in the Investment Canada Act (Canada). See "Additional Information - D. Exchange Controls".

            There are no provisions in the By-laws regarding public disclosure of individual shareholdings. Notwithstanding this, applicable Canadian securities legislation requires certain public disclosure of persons owning or acquiring common shares in excess of 10% of a corporation's issued and outstanding share capital.

            Not Applicable

35

ITEM 11.         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            Not Applicable

            Not Applicable

            Not Applicable

            Not Applicable

            (b)     Internal controls. Since the date of the evaluation described above, there have not been any significant changes in the Company's internal controls or in other factors that could significantly affect those controls.

            Not applicable

Item 16A. Audit Committee Financial Expert

            Our Board of Directors has determined that a member of our Board of Directors, David Sharpless, is an audit committee financial expert.

Item 16B. Code of Ethics

            We have adopted a code of ethics to impose certain policies relating to ethical conduct on all of our directors and employees, including our chief executive officer, chief financial officer, principal accounting officer and persons performing similar functions.

36

Item 16C. Principal Accountant Fees and Services

            The following table presents fees for professional audit services rendered by our auditors for the audit of our consolidated annual financial statements for the years ended October 31, 2003 and 2002, and fees billed for other services rendered by our auditors including our offerings of securities and tax services:

            The financial statements required by Item 17 appear commencing on the next page.

37

Toronto, Canada,
December 5, 2003 [except as to note 4,                                                     "Ernst & Young LLP"
which is as of March 9, 2004].                                                                   Chartered Accountants