Z<PAGE>


                        SECURITIES & EXCHANGE COMMISSION
                                Washington, D.C.

                                   FORM 10-QSB

    [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the quarterly period ended December 31, 1999

       [ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (No Fee Required)

                          Commission File No. 000-24551
                                           ---------

                            COMPOSITE SOLUTIONS, INC.
                 (Name of Small Business Issuer in its Charter)

                    Florida                         65-0790758
         -----------------------------          ------------------
        State or other jurisdiction of            I.R.S. Employer
        incorporation or organization            Identification No.

         3655 Nobel Drive, Suite 440, San Diego, CA          92122
       -----------------------------------------------    -------
           Address of principal executive office           Zip Code

                    Issuer's telephone number: (858) 459-4843
                                               --------------




              -----------------------------------------------------
              Former name and address, if changed since last report

  Check whether the issuer has (1) filed all reports required by Section 13 or
  15(d) of the Exchange Act during the past 12 months, and (2) been subject to
        such filing requirements for the past ninety (90) days. Yes X   No
                                                                 ------   -----

  As of February 7, 2000, 10,520,000 shares of Common Stock were outstanding.

                                        1


<PAGE>

                         PART I - FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

        The following unaudited financial statements contain information
regarding the results of operation and balance sheet of Composite Solutions,
Inc., a Florida corporation formerly known as JS Business Works, Inc., for
the period ending and as of December 31, 1999.

        Company's revenues for period ending December 31, 1999 were $0.00







                          INDEX TO FINANCIAL STATEMENTS



<TABLE>

<S>                                                                                              <C>
Consolidated Balance Sheets......................................................................F-2

Consolidated Statements of Operations............................................................F-3

Consolidated Statements of Stockholders' Equity..................................................F-4

Consolidated Statements of Cash Flows............................................................F-5

Notes to Consolidated  Financial Statements......................................................F-6

</TABLE>

                                        2


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                     December 31,      September 30,
                                                                         1999               1999
                                                                     (Unaudited)
                                                                  ----------------- ------------------
<S>                                                               <C>               <C>
                              ASSETS
CURRENT ASSETS
  Cash                                                            $         133,570 $            8,811
  Prepaid expense                                                             1,690              4,226
  Other receivables - related party                                           3,889                  0
  Deposits                                                                    7,373                  0
                                                                  ----------------- ------------------

          Total current assets                                              146,522             13,037
                                                                  ----------------- ------------------

PROPERTY AND EQUIPMENT

     Computer equipment                                                      14,798             14,798
     Less: Accumulated depreciation                                          (2,888)            (1,655)
                                                                  ----------------- ------------------

          Net property and equipment                                         11,910             13,143
                                                                  ----------------- ------------------

INTANGIBLE ASSETS
     Technical licenses                                                      95,678             93,682
     Fire test data - related party                                          13,979             13,979
     Software - related party                                               420,000            420,000
                                                                  ----------------- ------------------

          Total intangible assets                                           529,657            527,661
                                                                  ----------------- ------------------

Total Assets                                                      $         688,089 $          553,841
                                                                  ================= ==================

               LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts payable - trade                                       $          74,425 $           90,630
   Accrued payroll and related liabilities                                   22,576             17,999
                                                                  ----------------- ------------------
          Total current liabilities                                          97,001            108,629
                                                                  ----------------- ------------------

NON-CURRENT LIABILITIES
   Long-term obligation                                                      13,773             13,773
                                                                  ----------------- ------------------
          Total non-current liabilities                                      13,773             13,773
                                                                  ----------------- ------------------

Total Liabilities                                                           110,774            122,402
                                                                  ----------------- ------------------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.001 par value, authorized 10,000,000
   shares, 0 issued and  outstanding                                              0                  0
  Common stock, $0.0001 par value, authorized 50,000,000
   shares; issued and outstanding 10,520,000 in December
  1999, and 14,500,000 in September 1999                                      1,052              1,450
  Additional paid-in capital                                              1,325,237          1,004,839
  Deficit accumulated during the development stage                         (748,974)          (574,850)
                                                                  ----------------- ------------------

          Total stockholders' equity                                        577,315            431,439
                                                                  ----------------- ------------------

Total Liabilities and  Stockholders' Equity                       $         688,089 $          553,841
                                                                  ================= ==================

</TABLE>

                                      F-2


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                          For the Three       For the Three        Cumulative
                                                              Months             Months         October 20, 1997
                                                              Ended               Ended           (Inception)
                                                           December31,         December 31,         through
                                                               1999               1998            December 31,
                                                                                                      1999
                                                        ------------------ ------------------- ------------------
<S>                                                     <C>                <C>                 <C>
REVENUES                                                $                0 $                 0 $                0
                                                        ------------------ ------------------- ------------------

OPERATING EXPENSES
     Consulting fees                                                     0                   0             81,100
     Depreciation                                                    1,233                   0              2,888
     General and administrative expenses                            91,714                  15            236,091
     Organizational expenses                                             0                   0                514
     Professional fees - related party                              10,153                   0             36,037
     Professional fees - other                                       2,500                                 15,141
     Salaries - employees                                           68,035                   0            388,696
     Miscellaneous expense                                           1,742                   0              1,742
                                                        ------------------ ------------------- ------------------

          Total expenses                                           175,377                  15            762,209
                                                        ------------------ ------------------- ------------------

 Loss from operations                                             (175,377)                (15)          (762,209)
                                                        ------------------ ------------------- ------------------

OTHER INCOME (EXPENSE)
     Interest income                                                 1,253                 230              7,202
     Interest expense                                                    0                   0            (17,825)
     Gain on forgiveness of debt                                         0                   0              4,861
     Interest income - forgiveness of note                               0                   0             17,825
     Loss on forgiveness of debt                                         0                   0            (11,021)
                                                        ------------------ ------------------- ------------------
          Total other income (expense)                               1,253                 230              1,042
                                                        ------------------ ------------------- ------------------

Net loss                                                $         (174,124) $              215  $        (761,167)
                                                        ================== =================== ==================

Basic net loss per weighted average share               $            (0.01) $            (0.00) $           (0.04)
                                                        ================== =================== ==================

Weighted average number of shares                               13,807,826           2,039,224         17,195,291
                                                        ================== =================== ==================

</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-3


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY




<TABLE>
<CAPTION>

                                                                                                       DEFICIT
                                                                                                     ACCUMULATED
                                                                                       ADDITIONAL     DURING THE         TOTAL
                                                        NUMBER OF        COMMON          PAID-IN      DEVELOPMENT     STOCKHOLDERS'
                                                         SHARES           STOCK          CAPITAL         STAGE           EQUITY
                                                       -----------     -----------     -----------     -----------     -----------
<S>                                                    <C>             <C>            <C>           <C>              <C>
BEGINNING BALANCE, September 30, 1998                   21,196,410           2,120          16,215         (12,193)          6,142

   6/25 - shares contributed                            (7,896,410)           (790)            790               0               0
   Pre-acquisition income                                        0               0               0              47              47
   6/30 - shares issued for acquisition                  1,000,000             100         (12,146)         12,146             100
   6/30 - shares issued for payment of note payable        200,000              20         999,980               0       1,000,000


Net loss                                                         0               0               0        (574,850)       (574,850)
                                                       -----------     -----------     -----------     -----------     -----------

BALANCE, September 30, 1999                             14,500,000     $     1,450     $ 1,004,839     $  (574,850)    $   431,439
                                                       -----------     -----------     -----------     -----------     -----------

   12/99 - Shares issued for cash ($0.0001)                320,000              32         319,968               0         320,000
   12/99 - Shares surrendered                           (4,300,000)           (430)            430               0               0


Net loss                                                         0     $         0     $         0     $  (174,124)    $  (174,124)
                                                       -----------     -----------     -----------     -----------     -----------

BALANCE, December 31, 1999 (Unaudited)                  10,520,000     $     1,052     $ 1,325,237     $  (748,974)    $   577,315
                                                       ===========     ===========     ===========     ===========     ===========

</TABLE>

     The accompanying notes are an integral part of the financial statements

                                       F-4


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                              For the Three    For the Three  Cumulative October 20,
                                                                                  Months           Months        1997 (Inception)
                                                                                  Ended            Ended             through
                                                                               December 31,      December 31,       December 31,
                                                                                   1999             1998               1999
                                                                               --------------    -------------    -------------
<S>                                                                               <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                        $  (174,124)     $       215      $   (761,167)
  Adjustments to reconcile net loss to net cash used by operating activities:
          Depreciation                                                                  1,233                0            2,888
          Stock issued for services                                                         0                0            2,635
          Stock issued in lieu of cash                                                      0                0              100
          Pre-acquisition income                                                            0                0               47
  Changes in operating assets and liabilities:
          (Increase) decrease in accrued interest - shareholder                             0             (230)               0
          (Increase) decrease other receivables- related party                         (3,889)               0           (3,889)
          (Increase) decrease in prepaid expense                                        2,536                0           (1,690)
          (Increase) decrease deposits                                                 (7,373)               0           (7,373)
          Increase (decrease) accounts payable - trade                                (16,205)               0           74,425
          Increase (decrease) accrued payroll and related liabilities                   4,577                0           22,576
          Increase (decrease) long-term accounts payable obligation                         0                0           13,773
                                                                                  -----------      -----------      -----------
Net cash used by operating activities                                                (193,245)             (15)        (657,675)
                                                                                  -----------      -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                                        0                0          (14,798)
  Acquisition of intangible assets                                                     (1,996)               0         (529,657)
  (Issuance) repayment of note receivable - related party                                   0                0                0
                                                                                  -----------      -----------      -----------
Net cash used by investing activities                                                  (1,996)               0           (1,996)
                                                                                  -----------      -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock, net                                         320,000                0          320,000
  Proceeds from note payable                                                                                 0        1,000,000
                                                                                  -----------      -----------      -----------
Net cash provided by financing activities                                             320,000                0          320,000
                                                                                  -----------      -----------      -----------
Net increase in cash                                                                  124,759              (15)        (339,671)

CASH, beginning of period                                                               8,811              379                0
                                                                                  -----------      -----------      -----------

CASH, end of period                                                               $   133,570      $       364      $   133,570
                                                                                  ===========      ===========      ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Non-cash financing and investing activities:
      Note payable paid by issuance of common stock                               $ 1,000,000      $         0     $ 1,000,000
                                                                                  ===========      ===========     ===========
      Investment in subsidiary                                                    $   (12,046)     $         0     $   (12,046)
                                                                                  ===========      ===========     ===========
      Interest on note payable                                                    $    17,825      $         0     $    17,825
                                                                                  ===========      ===========     ===========
      Forgiveness of interest on note payable                                     $   (17,825)     $         0     $   (17,825)
                                                                                  ===========      ===========     ===========

</TABLE>

The accompanying notes are an integral part of the financial statements

                                      F-5
<PAGE>


                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (a) THE COMPANY Composite Solutions, Inc, f/k/a JS Business Works,
         Inc., is a Florida chartered development stage corporation which
         conducts business from its headquarters in San Diego, California. The
         Company was incorporated on October 20, 1997.

         The Company has not yet engaged in its expected operations. The
         Company's future operations include plans to market unique, innovative
         and affordable high technology products and processes for utilization
         in key areas of existing and new construction. Current activities
         include raising additional capital and negotiating with potential key
         personnel and facilities. There is no assurance that any benefit will
         result from such activities. The Company will not receive any operating
         revenues until the commencement of operations, but will nevertheless
         continue to incur expenses until then.

         The following summarize the more significant accounting and reporting
         policies and practices of the Company:

         (b) BASIS OF PRESENTATION On June 17, 1999, the Company entered into a
         Share Exchange Agreement with Composite Solutions, Inc., a Nevada
         corporation, headquartered in San Diego, California. The business
         combination was closed on June 30, 1999 and is a reverse merger that is
         accounted for as a reorganization of Composite Solutions, Inc., a
         Nevada corporation. The consolidated financial statements include the
         accounts of CSI, a Nevada company, its wholly owned subsidiary.
         Inter-company accounts and transactions have been eliminated in
         consolidation.

         (c) USE OF ESTIMATES The financial statements for the three months
         ended December 31, 1999 and 1998 include all adjustments which in the
         opinion of management are necessary for fair presentation, and such
         adjustments are of a normal and recurring nature. In preparing the
         consolidated financial statements, management is required to make
         estimates and assumptions that affect the reported amounts of assets
         and liabilities as of the date of the statements of financial condition
         and revenues and expenses for the year then ended. Actual results may
         differ significantly from those estimates.

         (d) START-UP COSTS Costs of start-up activities, including organization
         costs, are expensed as incurred, in accordance with Statement of
         Position (SOP) 98-5.

         (e) NET INCOME (LOSS) PER SHARE Basic loss per share is computed by
         dividing the net income (loss) by the weighted average number of common
         shares outstanding during the period.

         (f) COMPENSATION FOR SERVICES RENDERED WITH STOCK The Company issues
         shares of common stock, in exchange for services rendered. The cost of
         the services are valued according to generally accepted accounting
         principles based upon estimated fair value of such stock or service and
         have been charged to operations.

         (g) PROPERTY AND EQUIPMENT All property and equipment are recorded at
         cost and depreciated over their estimated useful lives, using the
         straight-line method. Upon sale or retirement, the cost and related
         accumulated depreciation are eliminated from their respective accounts,
         and the resulting gain or loss is included in the results of
         operations. Repairs and maintenance charges, which do not increase the
         useful lives of the assets, are charged to operations as incurred.

                                       F-6


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         (h) INTANGIBLE ASSETS Intangible assets are recorded at historical cost
         and amortized, beginning on the date the asset is placed in service,
         over the estimated useful life. The cost of software intended to be
         sold or licensed to others has been capitalized in accordance with
         Statement of Financial Accounting Standards (SFAS) 86, and will be
         amortized at the greater of the ratio to estimated future gross revenue
         or the straight-line method .


(2) INTANGIBLE ASSETS In April 1999, the Company entered into a license
         agreement with the Regents of the University of California-San Diego,
         (UCSD), for a license under patent rights to make, use, sell, offer for
         sale, import licensed products, practice licensed methods, and use
         technology. A license fee of $40,000 was paid upon execution of the
         agreement. Under the terms of the agreement, the Company must pay to
         the licensor a royalty of 1.5% on net sales of the licensed products.
         The Company must also pay for one half of all past and future patent
         costs, which totaled $7,811 as of December 31, 1999. Also, the Company
         is obligated to pay certain fees and royalties for any executed
         sub-license arrangements. As of December 31, 1999, there were no such
         arrangements.

         In August 1999, the Company entered into a second license agreement
         with UCSD under patent rights to make, use, sell, offer for sale, and
         import licensed products and to practice licensed methods and to use
         technology. A license fee in the amount of $5,000 was paid upon
         execution of the agreement. Under the terms of the agreement, the
         Company must pay to the licensor a royalty of 1.5% on net sales and
         certain fees and royalties for any executed sub-license agreements. In
         addition, the Company is obligated to pay for one-half of all past and
         future patent costs. As of December 31, 1999, past patent costs payable
         have been recorded as follows:

<TABLE>

<S>                                                                   <C>
                         Due Period Ending December 31,
                 2000 (included in Accounts payable - trade)          $         27,547
                 2001 (Long-term obligation)                                    13,773
                                                                      ----------------
                                                                      $         41,320
                                                                      ================

</TABLE>

         In January 1999, the Company acquired certain intangible assets from
         Trans-Science Corporation (TSC), a company under common control. Fire
         test data, concerning the overlay systems in the form of technical
         reports from an independent laboratory in New York performed prior to
         the Company's inception, was purchased from TSC, at their cost, for
         $13,979 in cash.

         Also, in January 1999, TSC sold, assigned and transferred all of its
         rights, title and interest to the Earthquake Retrofit Design Software
         to the Company for $330,000 in cash. This purchase price is an amount
         significantly less than the cost incurred by TSC. In addition, the
         Company paid TSC $90,000 for upgrade services on this software.

         There was no amortization expense incurred during the period ended
         December 31, 1999, as these intangible assets have not yet been placed
         in service.

                                       F-7


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(3) STOCKHOLDERS' EQUITY The Company has authorized 50,000,000 shares of
         $0.0001 par value common stock and 10,000,000 shares of $0.0001 par
         value preferred stock. Rights and privileges of the preferred stock are
         to be determined by the Board of Directors prior to issuance. The
         Company had 14,500,000 and 0 shares of common and preferred stock
         issued and outstanding, respectively, at September 30, 1999. On October
         21, 1997, the Company issued 1,601,000 shares to its President for the
         value of services rendered in connection with the organization of the
         Company. In April 1998, the Company issued 646,000 shares of common
         stock under Regulation D offerings in exchange for $20,200 in cash. The
         Company paid $4,500 of legal expenses in connection with these
         offerings. Also in April 1998, the Company issued 49,500 shares, to its
         Executive Vice President for value of services rendered of $2,475.

         On June 25, 1999, the Company completed a 9.229876 shares for 1 share
         forward split. Retroactive effect to this split has been given in the
         accompanying financial statements. On June 25, 1999, the Company
         received 7,896,410 shares contributed back to the Company. On June 30,
         1999, the Company issued 1,000,000 shares to acquire 100% of the issued
         and outstanding common stock of Composite Solutions, Inc., (a Nevada
         corporation). On June 30, 1999, the Company issued 200,000 shares in
         settlement of its subsidiary note payable with a principal balance of
         $1,000,000 and accrued interest of $17,825. In December 1999, a trustee
         shareholder surrendered 4,300,000 shares which have been cancelled. In
         December 1999, the Company issued 320,000 shares of common stock under
         a private placement in exchange for $320,000 in cash.

(4) OPERATING LEASE In November 1999, the Company and TSC, a company under
         common control, entered into an operating lease for its offices. The
         lease term ends November 2002. Future minimum payments under the lease
         are as follows:

<TABLE>

<S>                                   <C>
                                 2000   $         83,290
                                 2001             86,059
                                 2002             81,101
                                        ----------------
                                        $        250,450
                                        ================

</TABLE>

         In addition, the Company will be obligated to share operating expenses,
         with calendar year 2000 being a base year.

(5) INCOME TAXES Deferred income taxes (benefits) are provided for certain
         income and expenses which are recognized in different periods for tax
         and financial reporting purposes. The Company had net operating loss
         carry-forwards for income tax purposes of approximately $174,000,
         $575,000 and $12,000 expiring at September 30, 2020, 2019 and 2018,
         respectively.

         The amount recorded as deferred tax asset as of December 30, 1999 is
         approximately $195,000, which represents the amount of tax benefit of
         the loss carry-forward. The Company has established a 100% valuation
         allowance against this deferred tax asset, as the Company has no
         history of profitable operations.

                                       F-8


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(6) RELATED PARTIES See Note (2) for disclosure of related party intangible
         assets. See Note (3) for issuance of stock for services rendered by
         related parties. These amounts, totaling $2,635, were charged to
         Professional fees - related party.

         From January 1999 through November 1999, the Company shared office
         space and certain related expenses with TSC, a company under common
         control ("TSC"). Rent was paid directly to an independent lessor and
         TSC was reimbursed for the Company's share of office expenses. During
         the period October 1999 to November 1999, rent expense totaled $2,536
         and TSC was reimbursed $730 for utilities.

         Beginning November 1999, the Company shares office space and certain
         expenses with TSC, whereby the Company pays the rent under a new lease
         (see Note 4 ) and the office expenses, and TSC reimburses the company.
         As of the period ended December 31, 1999, TSC owes the company $3,883
         for its share of rent and office expenses. This amount is presented in
         Accounts receivable - related party.



(7) GOING CONCERN The accompanying consolidated financial statements have
         been prepared assuming that the Company will continue as a going
         concern. The Company's financial position and operating results raise
         substantial doubt about the Company's ability to continue as a going
         concern, as reflected by the net loss of $748,974 accumulated from
         October 20, 1997 (Inception) through December 31, 1999. The ability of
         the Company to continue as a going concern is dependent upon commencing
         operations, developing sales and obtaining additional capital and
         financing. The consolidated financial statements do not include any
         adjustments that might be necessary if the Company is unable to
         continue as a going concern. The Company is currently seeking
         additional capital to allow it to begin its planned operations.

         In October 1999, the Company began efforts to raise $2,000,000 through
         a private placement limited offering of 2,000,000 shares of common
         stock priced at $1.00 per share. See Note 3.

                                       F-9


<PAGE>

                            COMPOSITE SOLUTIONS, INC.
                        (A Development Stage Enterprise)


                        CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

              For the Three Months Ended December 31, 1999 and 1998


<PAGE>

ITEM 2. PLAN OF OPERATION

For the period from inception (October 20, 1997) through December 31, 1999,
the Company had no revenues from operations and had no significant business
operations other than organizational and capital raising activities.

On June 30, 1999, the Company consummated a reverse acquisition pursuant to
which the Company acquired CSI Nevada, a developer of construction
technology. Since the date of such acquisition, the Company's business
activities have consisted of research and development and marketing
activities relating to the development of the Company's construction
technology and services.

Utilizing the technology of the CSI - Nevada Company, the Company intends to
complete CSI -Nevada's development of an affordable high-technology method
for the retrofit/repair of buildings and other structures. This technology is
based upon the application of a composite material that is layered over
existing surfaces. This "composite overlay" is designed to be applied to key
areas of buildings and other structures to repair damage or to add structural
integrity. The Company believes that the simplicity of the overlay
applications, and the reduced cost and time to apply, has the potential to
revolutionize the way retrofit/repairs are done and will provide a solution
to many structures that would have otherwise been torn down or rebuilt
completely. This overlay, which is created by impregnating a carbon or glass
fabric with a chemical resin, and then "wallpapering" this combination to a
structural surface, is appropriate for concrete, masonry, and wood, and can
be used to accomplish a variety of structural objectives including:
earthquake retrofit and damage repair, defect repair, loan capacity increase,
and structural hardening to protect against bomb blasts.

The Company intends to market a method for new construction, called the
Carbon Shell System ("CSS"). CSS combines conventional civil construction
techniques and advanced carbon fiber reinforced polymer matrix composites to
provide a pre-manufactured advanced composite tube which is filled with
concrete depending on the strength, stiffness and stability requirements for
the structural component. In the CSS, the carbon shells are joined and filled
with concrete on site. The lightweight tubes will allow for rapid field
construction without the need for heavy lifting equipment. This, as well as
the lack of cumbersome rebar cages, offers the potential for reduced
construction costs and time. The Company believes CSS is applicable for a
variety of common structural components, including columns, girders, and
beams.

In fiscal 2000, the Company is continuing the development of its technology
and has begun active marketing to the construction industry. In order to
facilitate such marketing efforts, the Company expects to seek additional
capital through the sale of debt or equity securities or a combination
thereof. The Company may also seek to add more sales and marketing personnel
in order to accelerate the marketing of its products and services.

The Company's financial position and operating results raise substantial
doubt about its ability to continue as a going concern, as reflected by the
net losses accumulated from inception through December 31, 1999. The Company
currently does not have sufficient capital resources to effectively pursue
its plan of operation or continue its operations over the next twelve months.
The ability of the Company to continue as a going concern will be dependent
upon obtaining additional capital and financing in order to support its
marketing and sales activities. The Company is currently seeking additional
capital to allow it to implement its business plan. However, no assurances
can be given that the Company will be successful in raising such additional
capital or other financing or that the Company will be successful in
implementing its business plan even if adequate financing is obtained.

To the extent that the Company is successful in its financing activities, the
Company intends to devote substantially all of its financial resources
towards the marketing of its technology and services to the construction
industry. Capital will also be used for corporate and administrative expenses
and general working capital.

                  FORWARD-LOOKING STATEMENTS

When included in this Quarterly Report on Form 10-QSB, the words "expects,"
"intends," "anticipates," "plans," "projects" and "estimates," and analogous
or similar expressions are intended to identify forward-looking statements.
Such statements, which include statements contained in Item 2 hereof, are
inherently subject to a variety of risks and uncertainties that could cause
actual results to differ materially from those reflected in such
forward-looking statements. For a discussion of certain of such risks, see
the subsection of Item 1 entitled "Risk Factors" in the Annual Report 10KSB
for September 30, 1999.

These forward-looking statements speak only as of the date of this Quarterly
Report on Form 10-QSB. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statement contained herein to reflect any change in the
Company's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.

                                       13


<PAGE>

                                     PART II

ITEM 1. LEGAL PROCEEDINGS.

The Company knows of no legal proceedings to which it is a party or to which
any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B,
as described in the following index of exhibits, are incorporated herein by
reference, as follows

27.1 *   Financial Data Schedule

-------------------
* Filed herewith

(b) not applicable
                                       14

<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                             Date: February 11, 2000

                            Composite Solutions, Inc.



                        By:/s/ Don Nicholson
                           -------------------------------------
                           Don Nicholson, CFO, (Principal Accounting Officer)

                                       15