SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549


                           FORM 10-KSB



[X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the fiscal year ended December 31, 1996

                                OR

[  ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

Commission file number 33-3385LA

            ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
      (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

        Nevada                                            87-0430816
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                            Identification No.)

215 South State Street, #1100, Salt Lake City, Utah       84111
(Address of principal executive offices)                  (Zip code)

Issuer's telephone number, including area code:  (801) 323-2394

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act:  None.

Check whether the issuer (1) 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      

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [N/A]

State issuer's revenue for it most recent fiscal year:  None.

The aggregate market value of the voting stock held by non-affiliates of the
registrant is not currently determinable inasmuch as there is no bona fide
trading market for the registrant's common stock.

Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of the latest practicable date: 30,370,000 shares of Common
Stock outstanding on March 31, 1997.

Documents incorporated by reference:  None.
Transitional Small Business Disclosure Format (check one): Yes          No   X 

                              PART I

Item 1.        Description of Business.

                (a)        Business Development.

                Environmental Plasma Arc Technology, Inc. (the "Company") was
incorporated under the laws of the State of Nevada in 1986 under the name
Mainstay Investments, Inc.  The Company's name was changed in 1987 to
Bio-Helix, Inc., in 1990 to Concept Gold, Inc. and in 1992 to its current
name.  From December 31, 1991 through June 1992, the Company had no ongoing
business operations and investigated various acquisition possibilities.

                In June 1992, the Company entered into an agreement with Nu
Arc Scientific, Inc. ("Nu Arc Scientific") and its principal stockholders,
Edward and Carole Taylor (the "Taylors") whereby the Company acquired world-
wide commercial exploitation rights with respect to a  technology used for the
treatment of industrial emissions and other sources of air pollution.  The
technology, known as "environmental plasma arc technology" (the "EPAT
Technology"), principally relates to a method and devices used to remove and
reduce air pollutants from a variety of discharge facilities.  From this
acquisition to the present, the Company has operated as a research and
development company, seeking to identify applications for the EPAT Technology.
The Company did not have any revenues from operations in 1994.

                In connection with the June 1992 agreement, the Company's
stockholders approved a 1-for-5 reverse stock split of the outstanding shares
of common stock of the Company and ratified the agreement.  Thereafter, the
Company issued shares of common stock to the Taylors, Nu Arc Scientific and an
investor group, resulting in the Taylors' holding approximately 70 % of the
outstanding shares of the Company's common stock. In November 1993, the shares
of the Company's common stock owned by the Taylors were sold at a sheriff's
sale to a group of investors and current stockholders of the Company, which
changed the control of the Company to that group. The Company has also worked
to resolve third party claims with respect to the EPAT Technology that had
arisen from certain actions taken by the Taylors prior to the August 1992
agreement and during their relationship with the Company.  The Company
believes that resolution and settlement of all material claims have been
reached with the claimants, except for those that have not been deemed
meritorious and continue to be defended by the company. See "Legal
Proceedings."

                The officers of the Company as of March 31, 1997 were:
Mitchell T. Godfrey, President and Director; John Peters, Secretary/Treasurer
and Director; and David M. Rees, Director.

                In June 1994, pursuant to a court order, Mitchell Godfrey,
acting as trustee on behalf of a group of shareholders, acquired through a
garnishment proceeding the patent application relating to the EPAT Technology. 
In July 1994, Mr. Godfrey assigned all rights to the patent application to the
Company, and the Company became the owner of the patent application relating
to the EPAT Technology.  In November 1994, the Company was issued a patent
from the United States Patent and Trademark Office with respect to the EPAT
Technology.

                (b)        Business of the Company.

                Development of the EPAT Technology and Products
                As of December 31, 1996, the Company operated primarily as a
research and development company working to identify applications and develop
products for the EPAT Technology.  The EPAT Technology is an electro-
mechanical system that the Company believes is capable of reducing air
pollutants from commercial and industrial facility discharge systems by means
of an electrical field.  The process uses "non-thermal plasmas" generated by
electric arcs and coronas that energize air stream molecules and remove
pollutants by causing them to undergo molecular changes.  The Company believes
that the applications of this process have the potential to be used by oil
refineries, steel production plants, public utility power plants, co-
generation facilities, chemical producers, commercial printers, waste disposal
facilities, incinerators and other discharge facilities.

                The Company is currently in the process of developing and
testing a prototype configuration of the EPAT Technology. Tests of the EPAT
Technology occurred in June 1993 on a biomedical incinerator and in August
1993 on a commercial printing facility. These tests were conducted by
independent testing agencies that measured removal rates of pollutants
produced by discharge systems at those facilities.  Management believes that
the achievement of removal rates measured in such tests by the Company's first
generation prototype offers considerable promise for the development of the
EPAT Technology for a number of applications, although there can be no
assurance that such development will be successful.

                During 1993, the Company began the development of a fourth
prototype EPAT system. This unit will be used in an on-site test of the EPAT
Technology and is an integral part of the development plan of the EPAT
Technology.  In addition to the manufacture of this prototype, the Company
successfully tested the EPAT Technology in a biomedical incinerator
application and in a commercial printing application.  Although neither test
was conclusive, each served to further establish the viability of the EPAT
Technology as potentially effective in reducing air pollutants.

                Marketing Strategy
                ------------------

                The Company's short-term marketing strategy is to install a
test/demonstration unit at a host facility, which would agree to purchase a
system from the Company at such time as the unit demonstrates its
effectiveness.  It is intended that a complete set of third party tests will
be conducted at this site to evaluate the capabilities and effectiveness of
the EPAT Technology.  Other opportunities will be sought to install units for
other applications that are compatible with the current stage of development
of the EPAT Technology in an attempt to attain technical credibility for the
systems.  Assuming the EPAT Technology is demonstrated to be successful in
effectively removing and reducing air pollutants, of which there can be no
assurance, it is anticipated that the devices using the EPAT Technology will
be manufactured in various sizes, and would be capable of removing and
reducing emissions of a wide range of pollutants and compounds and of
providing either primary or secondary air stream treatment.

                Competition
                -----------

                If the Company is able to develop a product using the EPAT
Technology that is demonstrated to be effective in removing or reducing air
pollutants, the Company believes that the EPAT Technology can compete
effectively with other technologies that are currently used to control
emissions of air pollutants, including, for example, scrubbers, electrostatic
precipitators, catalytic converters, carbon absorption systems, filtration
devices, thermal incinerators and other methods of controlling such emissions. 
If a system using the EPAT Technology is successfully developed, of which
there can be no assurance, the Company believes that such system will compete
favorably in a number of areas.  The Company's system is intended to reduce
multiple pollutants in a single process, while most currently existing systems
are effective in reducing only one pollutant in the air stream and require by-
product removal and clean-up.  The Company believes that its system will most
likely compete favorably in the area of initial cost, the costs of continued
maintenance and effectiveness.  The Company faces substantial competition,
however, from conventional environmental control methods and may compete with
companies that have more extensive research, marketing and manufacturing
capabilities and significantly greater financial, technical and personnel
resources than the Company.

                Patent and Patent Applications
                ------------------------------

                The Company has been issued a patent relating to the EPAT
Technology from the United States Patent and Trademark Office and has filed
patent applications in several foreign jurisdictions.  The Company may seek
additional patents with respect to the EPAT Technology in the United States
and internationally.
                
                Research and Development
                ------------------------

                As described above, virtually all of the Company's operations
have consisted primarily of research and development activities with respect
to the EPAT Technology.

                Employees
                ---------

                As of December 31, 1996, the Company did not employ any full
time employees.

                Potential Acquisition
                ---------------------

                On April 15, 1997, the Company executed a letter of intent to
acquire at least 85% of the issued and outstanding stock of Environmental
Water Systems, Inc., a Nevada corporation ("EWS").  EWS is headquartered in
Northglenn, Colorado, and is in the water treatment and purification business. 
According to the letter of intent, this acquisition shall occur on or before
June 15, 1997.  At this time, the Company cannot be sure that this acquisition
will actually occur, or that if it does occur, the financial impact it will
have upon the Company.

Item 2.        Properties.

                As of December 31, 1996, the Company did not own any real
property. 

Item 3.        Legal Proceedings.

                The Company was a co-defendant, along with the Taylors and Nu-
Arc Scientific in litigation regarding marketing and manufacturing rights with
respect to the EPAT Technology, in an action entitled Bio-Arc Inc., a Delaware
Corporation v. Edward O. Taylor and Carole A. Taylor, Civil No. 920903383,
Third Judicial District of Salt Lake County, Utah.  An out of court settlement
was negotiated in this case to be paid in cash and stock.  An order dismissing
the action was signed on June 29, 1994.

                On September 29, 1993 Mitchell Godfrey took an assignment on a
judgment in favor of Brown & Brown, plaintiff in the case of Brown & Brown,
P.C. v. Nu Arc Scientific Incorporated, Carole Taylor and Edward Taylor, Third
District Court of Salt Lake County, Utah, in the amount of $50,000. Mr.
Godfrey then succeeded in a garnishment proceeding in attaching U.S. patent
application serial no. 07/786,261, held by the defendants in satisfaction of
the judgment.  Mr. Godfrey subsequently assigned this patent to EPAT.  

                The Company was named a defendant in an action entitled Bank
One, Utah, National Association v. Environmental Plasma Arc Technology, Civil
No. 930905654CN, Third Judicial District of Salt Lake County, Utah, seeking to
recover from the Company certain sums relating to an overdraft in the
Company's account with Bank One.  The Company entered into a settlement
agreement (the "Settlement Agreement") with Bank One in March 1994, pursuant
to which the Company agreed to pay the principal sum of the overdraft of
$101,606.27 plus interest and certain expenses.  Bank One agreed to assign to
the Company Bank One's claim against Nu Arc Scientific relating to an
overdraft in a Nu Arc Scientific account with Bank One.  The Company was
unable to meet the terms of the Settlement Agreement and on September 19, 1994
the co-defendants repaid the overdraft sums and some additional monies and
took an assignment of the Bank's claim against the Company.  All of the
parties to the Settlement Agreement expressly reserved all claims against
Edward and Carole Taylor and NuArc Scientific.  Additionally, the Company
pledged all of its assets (including patent rights as) collateral for the
payments of the overdraft amount.  The lawsuit has been dismissed with respect
to the Company with prejudice.

                During 1994, the Company negotiated stock settlement
agreements with several vendors and creditors of the Company.  The board of
directors also approved the settlement of several obligations of Nu-Arc
Scientific, Inc. and Edward and Carole Taylor, with stock of the Company owned
by shareholders of the Company.  This was done to alleviate the risk of any
future claims being brought against the Company's right to market the
technology purchased from Nu-Arc Scientific and Edward and Carole Taylor.
Approximately $271,553 of accounts payable and accrued expenses recorded on
the books of the Company at December 31, 1993 were satisfied through these
settlement agreements.

Item 4.        Submission of Matters to a Vote of Security Holders.

                No matter was submitted to a vote of the Company's
stockholders during the fourth quarter of the year ended December 31, 1996.

                             Part II

Item 5.        Market for Common Equity and Related Stockholder Matters.

                During the period covered by this Form 10-KSB report, there
has been no public market for the Company's Common Stock.  The Company's
Common Stock, par value $.001 per share, is the only class of securities of
the Company that is authorized, issued and outstanding.  As of March 31, 1997
there were 30,370,000 shares issued and outstanding, held by approximately 635
stockholders of record.

                The Company has never paid any dividends on its outstanding
shares of Common Stock, and no dividends are contemplated to be paid in the
foreseeable future.

Item 6.        Plan of Operation.

                The Company had no revenues from operations for the fiscal
year ended December 31, 1996.

                The Company owns an exclusive license in the EPAT Technology.
Since 1992, it has been the intent of the Company to develop a plan to exploit
the EPAT Technology as an exclusive licensee.  As of the date hereof, the
Company's inventory of systems utilizing the EPAT Technology ("EPAT Systems")
is limited to two demonstration/test models, one production model to be
utilized for beta testing purposes and one commercially viable model which the
Company feels is ready for market with a commercial value of approximately
$250,000.

                The Company is pursuing and will continue to pursue
opportunities to market the EPAT Technology to potential customers as well as
to pursue strategic combinations with potential business partners in an
attempt to maximize the value of the EPAT Technology and the EPAT Systems.

                Although the Company has several potential sources of capital
resources, its liquidity position is not sufficient to allow for substantial
growth activity.  The Company currently has no employees and is in need of
significant capital to enable it to pursue its objective of demonstrating the
EPAT Technology to potential customers and to obtain orders for the EPAT
Systems and to produce EPAT Systems in a timely manner.

                The Company does not intend or expect to purchase or sell any
significant equipment or assets, undertake any research and development, or to
hire any employees until such time as sufficient capital has been raised to
allow the Company to pursue operations.

Item 7.        Financial Statements.

                The consolidated audited financial statements of the Company
for the fiscal year ended December 31, 1996 are attached hereto and
incorporated herein by reference.

                During 1996, the Company issued an aggregate of 9,839,080
shares of its common stock to certain officers, directors, affiliated parties
and other creditors as repayment and settlement of certain debts and related
party loans.

Item 8.        Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

                None.

                             Part III

Item 9.        Directors, Executive officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.

                (a)        Directors and Executive Officers.

                The following table sets forth as of March 31, 1997 certain
information regarding the executive officers and directors of the Company.




Name                       Age                Position
----                       ---                --------
        
Mitchell T. Godfrey        50                 President, Director
                
John W. Peters             45                 Secretary/Treasurer, Director

David M. Rees              30                 Director

                MITCHELL T. GODFREY has served as a director of the Company
since September 1992.  Since 1987, Mr. Godfrey has held the following
positions: from 1987 through 1988 Mr. Godfrey was President of Rocky Mountain
Collection; from June 1988 through the present he has been the Vice-President
of Tax Planning Inc.; from November 1991 until present date he has served as
President of Tirex Inc.; and, for the past ten years through the present date
he has served as co-owner of M & M Development, Inc.  In the foregoing
positions, Mr. Godfrey's areas of responsibilities have been in an
administrative capacity and in such areas as employee relations, sales and
marketing.

                JOHN W. PETERS was appointed Secretary/Treasurer and a
director of the Company since January,  1997.  Mr. Peters was operations
manager of the Company from 1993 through 1995.  From 1991 to 1992, Mr. Peters
was president of Certified Environmental Laboratories, Inc.  From 1987 to
1991, Mr. Peters was vice president of sales and marketing for Comco
Communications Corp. in California.  Mr. Peters studied Business
Administration at Long Beach Community College and California Polytechnic
State University in San Luis Obispo, California.

                DAVID M. REES has served as the Secretary/Treasurer of the
Company for several months during 1996 and has been a director of the Company
since October, 1996.  From 1993 through 1995 Mr. Rees was an associate in the
Mergers and Acquisitions and Corporate Finance departments at the law firm of
Skadden, Arps, Slate, Meagher & Flom in New York City.  Mr. Rees has worked as
an attorney in Salt Lake City, Utah since 1996, including as counsel to the
Company.  Mr. Rees received his Bachelor of Arts degree in history from Weber
State University in 1990 and his Juris Doctorate from New York University in
1993.

                (b)        Compliance with Section 16(a) of the Exchange Act.

                The Company does not have a class of securities registered
under the Securities Exchange Act of 1934, and, therefore, its officers,
directors and holders of more than 10% of the outstanding shares of the
Company are not subject to the provisions of Section 16(a).

Item 10.        Executive Compensation.

                (a)        Executive Compensation.

                The directors and executive officers of the Company received
2,336,200 shares of the Company's common stock during 1996 for services
rendered.  No other compensation whatsoever was given to any of the directors
or executive officers of the Company during the fiscal year ended December 31,
1996.  However, an additional 8,919,000 shares of the Company's common stock
were issued to certain officers, directors and affiliated parties as payment
for the settlement of certain related party loans.

                (b)        Employment Agreements.

                None.

Item 11.        Security Ownership of Certain Beneficial owners and
Management.

                The following table sets forth, as of March 31, 1997 the name
and address of each person who is known by the Company's Board of Directors to
be the beneficial owner of more than 5% of the Company's outstanding Common
Stock and the beneficial ownership of the Company's Common Stock by the
Company's directors and executive officers.

                Under the rules of the Securities and Exchange Commission, a
person is deemed to be the beneficial owner of securities if he has or shares
"voting power" (which includes the power to vote, or to direct the voting of,
such securities) or "investment power" (which includes the power to dispose,
or to direct the disposition, of such securities).  A person is also deemed to
be the beneficial owner of any securities that he has the power to acquire
beneficial ownership of within 60 days.  Under these rules, more than one
person may be deemed the beneficial owner of the same securities.

Name and                        No. of Shares          Percent of Outstanding
Address                         Beneficially Owned     Common Stock
--------                        ------------------     ----------------------

Mitchell T. Godfrey             3,008,950              9.9%
c/o Mt. Baldy Associates        
3626 Highway 284
Townsend, Montana  59644

John W. Peters                  400,000                1.3%
215 South State Street
Suite 1100
Salt Lake City, Utah 84111

David M. Rees                   136,200                0.4%
215 South State Street
Suite 1100
Salt Lake City, Utah 84111

Six Way, Inc.                   3,543,000              11.7%
1246 East North Bonneville Dr.
Salt Lake City, Utah 84103

John Clayton                    3,321,300              10.9%
P.O. Box 2033
Sandy, Utah 84094

Mutual Ventures Corp.           2,900,000              9.5%
1993 Dewer Street
Suite 1-254                                
Rock Springs, Wyoming 82901

Item 12.        Certain Relationships and Related Transactions.

                John Clayton received shares for his services as promoter of
the Company's securities in various offerings and placements of the Company's
securities.

Item 13.        Exhibits and Reports on Form 8-K.

                (a)        Exhibits.

Exhibit No.        Description

3.1                Articles of Incorporation of the Company, as amended.

3.2                By-laws of the Company. 

23                 Consent of Jones, Jensen & Company.*

27                 Financial Data Schedule.*
                
                (b)        Reports on Form 8-K.



                None.
_______________
* filed herewith



                            SIGNATURES

                In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant cause this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                  ENVIRONMENTAL PLASMA
                                  ARC TECHNOLOGY, INC.



Date: April 24, 1997.                                

By:/s/ Mitchell T. Godfrey
   -----------------------
   Mitchell T. Godfrey
   President<PAGE>
                 ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                       (A Development Stage Company)

                     Consolidated Financial Statements

                        December 31, 1996 and 1995


                                CONTENTS

Independent Auditors' Report.................................. 3

Consolidated Balance Sheets................................... 4

Consolidated Statements of Operations......................... 5

Consolidated Statements of Stockholders' Equity (Deficit)..... 6

Consolidated Statements of Cash Flows......................... 10

Notes to the Consolidated Financial Statements ............... 12


<PAGE>
<Letterhead of Jones, Jensen & Company, Certified Public Accountant, appears
here>

                       INDEPENDENT AUDITORS' REPORT
                       ----------------------------

Board of Directors
Environmental Plasma Arc Technology, Inc.
(A Development Stage Company)
Salt Lake City, Utah

We have audited the accompanying consolidated balance sheets of Environmental
Plasma Arch Technology, Inc. (A Development Stage Company), as of December 31,
1996 and 1995, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for the years ended December
31, 1996, 1995 and 1994 and from inception on February 10, 1986 to December
31, 1996.  These consolidated financial statements are the responsibility of
the Company's management.  Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. 

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Environmental Plasma Arc Technology, Inc. (a development stage company), as
of December 31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for the years ended December 31, 1996, 1995
and 1994 and from inception on February 10, 1986 to December 31, 1996 in
conformity with generally accepted accounting principles. 

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company has suffered
recurring losses from operations which raises substantial doubt about its
ability to continue as a going concern.  Management's plans in regard to these
matters are described in Note 6.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

/S/ Jones, Jensen & Company
Jones, Jensen & Company
April 17, 1996








    50 So. Main Street, Suite 1450, Salt Lake City, Utah 84144
       Telephone (801) 328-4408,  Facsimile (801) 328-4461
<PAGE>
                  ENVIRONMENTAL PLASMA ARCH TECHNOLOGY, INC.
                         (A Development Stage Company)
                          Consolidated Balance Sheets
     
                                   ASSETS
                                             December 31, 
                                       ---------------------------
                                          1996              1995
                                       -----------       -----------
CURRENT ASSETS
  Cash                                 $    6,714        $     -
                                       -----------       ----------
    Total Current Assets                    6,714              -
                                       -----------       ----------
PROPERTY AND EQUIPMENT (Note 4)            16,065           22,169
                                       -----------       ----------
OTHER ASSETS
  Work in process inventory (Note 1)      366,143          341,128
                                       -----------       ----------
    Total Other Assets                    366,143          341,128
                                       -----------       ----------
    TOTAL ASSETS                       $  388,922        $ 363,297
                                       ===========       ==========
             
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------
                                               December 31, 
                                       -------------------------------
                                           1996              1995
                                      -------------    ---------------
CURRENT LIABILITIES
 Accounts payable                      $     98,501     $      304,949
 Accrued expenses                            16,325             49,744
 Payroll taxes payable                       32,670             60,139
 Notes payable - shareholders (Note 3)        2,336            241,128
 Note payable - (Note 7)                         -               2,485
                                       -------------    ---------------
    Total Current Liabilities               149,832            658,445
                                       -------------    --------------
COMMITMENTS AND CONTINGENCIES (NOTE 2)         -               -     
                                       -------------    ---------------
STOCKHOLDERS' EQUITY (DEFICIT)
 Common stock - $0.001 par value; 
   50,000,000 shares authorized,
   30,370,200 and 18,195,000 
   shares issued and outstanding, 
   respectively                              30,370             18,195
 Additional paid-in capital               2,410,736          1,679,579
 Stock subscription receivable              (15,000)              -
 Deficit accumulated during the 
 development stage                       (2,187,016)        (1,992,922)
                                      -------------    ----------------
   Total Stockholders' Equity (Deficit)     239,090           (295,148)
                                      -------------    ----------------
   TOTAL LIABILITIES AND 
   STOCKHOLDERS' EQUITY (DEFICIT)     $     388,922    $       363,297
                                       =============   ================
       The accompanying notes are an integral part of these
                consolidated financial statements.

                 ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                      (A Development Stage Company)
                  Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                             
                                                                            From Inception
                                                                                 On February 10,           
                                     For the Years Ended December 31,            1986 to
                                -------------------------------------------      December 31,    
                                1996               1995           1994           1996
                                --------------    ------------   ------------    ------------
<S>                             <C>                <C>            <C>            <C>
REVENUE                         $ -                $ -            $ -            $     50,000
                                --------------    ------------   ------------    ------------
EXPENSES
 Selling expense                  -                    -                              109,489
 Depreciation and amortization         6,104            6,322         1,203            23,402
 Research and development            111,281           -                -             153,773
 General and administrative          138,069           22,338       325,939         1,746,161
                                --------------    ------------   ------------     -------------
   Total Expenses                    255,454           28,660       327,142         2,032,825
                                --------------    ------------   ------------     ------------
OPERATING LOSS                      (255,454)         (28,660)     (327,142)       (1,982,825)
                                --------------    ------------   ------------     ------------
OTHER INCOME (EXPENSE)
 Gain on disposition of debt
    (Note 2)                          87,584            -               -              87,584
 Interest                            (26,224)        (28,237)       (19,150)          (79,536)
 Loss on disposal of assets       -                                 (36,492)         (211,831)
 Income Taxes                     -                     -              (208)             (408)
                                --------------    ------------   ------------     ------------
   Total Other Income
    (Expense)                         61,360         (28,237)       (56,650)         (204,191)
                                --------------    ------------   ------------     ------------
NET LOSS                        $   (194,094)     $  (56,897)    $ (383,792)     $ (2,187,016)
                                ==============    ============   ============    =============
WEIGHTED AVERAGE LOSS PER
 SHARE                          $      (0.01)     $    (0.00)    $    (0.02)
                                ==============    ============   ============

</TABLE>






















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

                  ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                       (A Development Stage Company)
          Consolidated Statements of Stockholders' Equity (Deficit)

<TABLE>
<CAPTION>

                                                               Deficit
                                                               Accumulated               Total
                           Common Stock           Additional   During the                Stockholders'
                          --------------          Paid-in      Development   Treasury    Equity
                          Shares       Amount      Capital      Stage        Stock       (Deficit)
                         ----------- ----------- ------------  ------------  ----------- ----------
<S>                      <C>         <C>         <C>           <C>           <C>         <C>
Balance, 
 February 10, 1986         -          $  -        $ -          $ -            $ -        $     -        

Shares  issued to  
officers and directors 
at $.025 per share          200,000         200        4,800      -              -            5,000

Net loss for the 
period ended December 
31, 1986                    -           -            -              (160)       -              (160)
                         ----------- -----------  -----------  ------------  -----------  ----------
Balance,
December 31, 1986           200,000         200        4,800        (160)       -             4,840
             
Shares issued through
public offering at $.25
per share                   400,000         400       99,600      -              -          100,000   

Public offering costs        -          -            (20,315)     -              -          (20,315) 

Shares issued in 
acquisition of wholly-
owned subsidiary            720,000         720       29,280      -              -           30,000

Shares issued through
private placement at 
$2.50 per share              10,000          10       24,990      -              -           25,000

Net loss for the year 
ended December 31, 1987      -           -            -          (36,112)        -          (36,112)
                         -----------  -----------  ----------- ------------  ---------- ------------
Balance 
December 31, 1987         1,330,000       1,330      138,355     (36,272)        -          103,413

Shares issued trough
private placement at
$2.50 per share              30,000          30       74,970      -              -           75,000

Net loss for the year 
ended December 31, 1988      -           -            -          (48,075)        -          (48,075)
                         -----------  ----------  -----------  ------------ ----------- ------------
Balance
December 31, 1988         1,360,000       1,360      213,325     (84,347)        -          130,338

Net loss for the year 
ended December 31, 1989      -           -            -         (175,094)        -         (175,094)
                         -----------  ----------  ----------   -----------  ----------- ------------
Balance
December 31, 1989         1,360,000   $   1,360   $  213,325   $(259,441)   $    -      $   (44,756)
                   ---------- --------  --------  ---------- --------  ---------
</TABLE>


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



                   ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                       (A Development Stage Company)
   Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>


                                                               Deficit
                                                               Accumulated               Total
                              Common Stock        Additional   During the                Stockholders'
                         ----------------------   Paid-in      Development    Treasury   Equity
                         Shares       Amount      Capital      Stage          Stock      (Deficit)
                         ----------- ----------  ------------  -------------  ----------  ------------
<S>                      <C>          <C>        <C>           <C>            <C>         <C>
Balance, 
December 31, 1989         1,360,000  $   1,360   $   213,325   $   (259,441)  $    -      $ (44,756)    
               
Expenses paid on behalf
of the Company by      
Stockholders                -           -             53,481          -            -         53,481

Shares issued for 
services provided by 
stockholders at 
$.001 per share             170,000        170          (170)         -            -             -      
 

Net loss for the year 
December 1990               -           -            -               (8,685)       -         (8,685)
                         -----------  ----------  ------------ -------------  -----------  ----------
Balance,
December 31, 1990         1,530,000      1,530        266,636      (268,126)       -             40
            
Net loss for the year 
ended December 31, 1991     -           -            -              (41,701)       -        (41,701)
                         -----------  ----------  ------------  ------------  ----------- -----------
Balance 
December 31, 1991         1,530,000      1,530        266,636      (309,827)       -        (41,661)

Shares issued for   
cash and relief of  
debt at $0.17 per share     470,000        470         80,370          -           -         80,840

Shares issued for 
marketing and 
manufacturing rights
at $0.00 per share       14,000,000     14,000        (14,000)         -            -           -

Shares issued for 
services performed
at $0.00 per share        2,000,000      2,000         (2,000)         -            -            -

Shares issued through
private placement at
$.25 per share            2,000,000      2,000        453,692          -          (192)     455,500

Net loss for the year 
ended December 31, 1992      -            -          -             (387,200)        -      (387,200)
                         ----------- ----------  ------------- -------------  ---------- -----------
Balance
December 31, 1992        20,000,000  $  20,000   $    784,698  $   (697,027)  $   (192)  $  107,479
                         ----------- ----------  ------------- -------------  ---------- -----------
</TABLE>

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

                       




                  ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                       (A Development Stage Company)
   Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
                                                               Deficit
                                                               Accumulated               Total
                            Common Shares         Additional   During the                Stockholders'
                         ----------------------   Paid-in      Development    Treasury   Equity
                           Shares       Amount    Capital      Stage          Stock      (Deficit)
                        ------------ ----------- ------------  ------------ -----------  -------------
<S>                     <C>          <C>         <C>           <C>          <C>          <C>
Balance, 
December 31, 1992        20,000,000  $   20,000  $   784,698   $  (697,027) $     (192)  $    107,479

Shares issued through
private placement at   
$.25 per share               -           -            47,808          -            192         48,000

Cancellation of shares
issued for private 
placement                (2,000,000)     (2,000)       2,000          -             -            -

Shares through
private placement 
at $.50 per share           332,000         332      165,860          -             -         166,192

Capital contributed 
by shareholder               -           -            80,826          -             -          80,826

Net loss for the year   
December 1993                -           -            -           (855,206)         -        (855,206)
                        ------------  ----------- ----------- ------------- ----------- -------------- 
Balance,
December 31, 1993        18,332,000      18,332    1,081,192    (1,552,223)         -        (452,709)

Cancellation of
shares                      (57,000)       (57)           57          -             -             -

Capital contributed
by shareholders              -           -           598,565          -             -         598,565

Net loss for the year 
ended December 31, 1994      -           -            -           (383,792)         -        (383,792)
                        ------------  ----------- ------------ ------------ ------------  ------------
Balance 
December 31, 1994        18,275,000      18,275    1,679,814    (1,936,025)         -        (237,936)

Cancellation of 
shares (Note 5)             (80,000)        (80)     (40,900)         -             -         (40,980)

Capital Contributed               
by shareholders              -           -            40,665          -             -          40,665

Net loss for the year 
ended December 31, 1995      -           -            -            (56,897)         -         (56,897)
                        ------------ ----------- ------------  ------------ ------------- -------------
Balance
December 31, 1995        18,195,000  $   18,195  $ 1,679,579   $(1,992,922)  $      -     $  (295,148)
                        ============ =========== ============ ============= ==========   ============

</TABLE>

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







            ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                  (A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
                                                               Deficit
                                                               Accumulated               Total
                            Common Shares         Additional   During the                Stockholders'
                         ----------------------   Paid-in      Development    Treasury   Equity
                           Shares       Amount    Capital      Stage          Stock      (Deficit)
                        ------------ ----------- ------------  ------------ -----------  -------------
<S>                     <C>          <C>         <C>           <C>          <C>          <C>
Balance
December 31, 1995        18,195,000  $   18,195  $ 1,679,579   $(1,992,922) $      -      $  (295,148)

Shares issued to officers
 and directors at $0.05 
 per share for services
 rendered                 2,336,200       2,336      114,474         -             -          116,810

Shares issued to officers
 and directors at an 
 average price of
 approximately $0.05 per
 share in settlement of
 related party loans      8,919,000       8,919      388,002         -             -          381,921

Shares issued to creditors
 at an average price of
 approximately $0.25 per 
 share in settlement of
 accounts payable           920,000         920      228,681         -             -          229,601

Net loss for the year 
 ended December 31, 1996       -             -            --      (194,094)        -         (194,094)
                         ---------- ------------ ------------  ------------  ------------  -----------
Balance,
 December 31, 1996       30,370,200  $   30,370  $ 2,410,736   $(2,187,016)   $    -       $  239,090
                         ========== =========== ============   ============ ============= ============

</TABLE>




























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


            ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                  (A Development Stage Company)
              Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                                From Inception
                                                                                  On February 10,
                                                                                  1986 to
                                     For the Years Ended December 31,             December 31,
                                   1996              1995         1994            1996
                                --------------- --------------- --------------    ----------------
<S>                             <C>              <C>            <C>               <C>
CASH FLOWS FROM OPERATING
ACTIVITIES

Net Loss From Operations        $    (194,094)   $     (56,897)  $   (363,792)    $    (2,187,016) 

Adjustments to Reconcile
 Net Cash Provided by
 Operating Activities:
  Depreciation and amortization         6,104            6,322          1,203              23,402
  Loss on disposal of assets            -                              36,492              36,831
  Gain on disposition of debt         (87,584)             -              -               (87,584)
  Common stock issued for
    services rendered                 116,810              -              -               116,810
Changes operating assets
 and liabilities:
  (Increase)decrease in
   employee and shareholder
   advances                             -                  -            9,176               9,176
 Increase (decrease) in accounts
   payable, accrued expenses 
   and payroll taxes                  144,993          (10,905)      (260,697)            515,314
                                --------------  ---------------  -------------     ---------------

Net Cash Used by Operating
Activities                           (13,771)          (61,480)      (597,618)         (1,573,067)
                                --------------  ---------------  -------------    ----------------
CASH FLOWS FROM INVESTING
ACTIVITIES

 Investment in inventory             (25,015)              -          (36,589)           (366,143)
 Purchase of fixed assets              -                   -             -                (85,818)
 Payment of organization costs         -                   -             -                   (110)
 Cash from sale of assets              -                   -              970               1,970
 Cash placed in trust                  -                   -           20,000                -
                                --------------  ----------------  ------------    ----------------

 Net Cash Used by Investing 
  Activities                    $    (25,015)   $          -      $   (15,619)    $      (450,101)
                                -------------   ----------------  ------------    ----------------
             

</TABLE>

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

<TABLE>
<CAPTION>









                 ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                   (A Development Stage Company
         Consolidated Statements of Cash Flows(Continued)

                                                                                From Inception
                                                                                  On February 10,
                                                                                  1986 to
                                     For the Years Ended December 31,             December 31,
                                    1996                1995         1994         1996
                                -----------------  -------------- --------------  ----------------
<S>                             <C>                <C>            <C>             <C>
CASH FLOWS FROM FINANCING
ACTIVITIES

 Contribution by stockholders   $           -      $     40,665   $     758,403   $       996,375
 Payment to stockholder                     -               -              -              (13,202)
 Sale of common stock                       -               -              -              876,185
 Cash received from debt 
   financing                             45,500          14,040                           409,884
 Cash paid on debt financing                -               -          (138,391)         (239,360)
                                ----------------   -------------  --------------  ----------------
 Net Cash Provided from
  Financing Activities                   45,500          54,705         620,012         2,029,882
                                ----------------   -------------  --------------  ----------------
NET INCREASE (DECREASE)IN CASH            6,714         (6,775)           6,755             6,714

CASH AT BEGINNING OF PERIOD                 -            6,775             -                -
                                ----------------   -------------  --------------   ---------------
CASH AT ENDING OF PERIOD        $         6,714    $        -     $       6,775    $        6,714
                                ================   ============= ===============   ===============
SUPPLEMENTAL CASH FLOWS
INFORMATION:

 CASH PAID FOR:
  Interest                      $           -      $         -    $          -     $        -
  Income taxes                  $           -      $         -    $          -     $        -

 NON CASH FINANCING ACTIVITIES:  
  Issuance of stock in 
   settlement of debt           $       611,522    $         -    $          -     $      652,358
  Capital contributed by
   shareholders                 $           -      $    40,665    $     598,565    $      639,230
   

</TABLE>

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

                        ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                              (A Development Stage Company)
                     Notes to the Consolidated Financial Statements
                               December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.  Organization
----------------

The financial statements presented are those of Environmental Plasma Arc
Technology, Inc. (The Company).  The Company was incorporated under the laws
of the State of Nevada on February 10, 1986 as Mainstay Investments, Inc.  The
Company was organized for the purpose of searching out and acquiring or
participating in a business or business opportunity.  The Company changed its
name in 1987 to Bio-Helix, Inc.   On July 13, 1992, the Company's name was
changed to Concept Gold, Inc., and on September 30, 1992, the shareholders of
the Company voted to change the name to Environmental Plasma Arc Technology,
Inc.  At such time, the Company resolved to issue stock for an agreement
between Nu-Arc Scientific, Inc., Edward Taylor and Carole Taylor, which gave
the Company exclusive marketing and manufacturing rights of certain 
patented air purification systems for internal combustion engines and other
applications.  The Company is currently in the beginning stages of marketing
and manufacturing these purification systems, and no significant revenues have
been realized from the sale of these purification system units. Accordingly,
the Company is classified as a development stage company as defined in SFAS
No. 7.

b  Consolidation
-----------------

The consolidated financial statements include those of Environmental Plasma
Arc Technology, Inc. and its wholly owned subsidiary EPAT Marketing
Corporation.  All intercompany accounts have been eliminated in the
consolidation.

c.  Work in Process Inventory
-----------------------------

Work in process inventories are stated at the lower of cost or market and
consist of the following:

                                     1996          1995
                                    ----------   ----------
     Materials                       $ 277,915   $  277,915
     Labor                              88,228       63,213
                                    ----------   ----------
                                     $ 366,143   $  341,128
                                    ==========   ==========


These costs have been incurred in manufacturing air purification systems for
resale. At December 31, 1996 and 1995, the estimated market value was
determined to be greater than the cost of the inventory.


                        ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                              (A Development Stage Company)
               Notes to the Consolidated Financial Statements (Continued)
                               December 31, 1996 and 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d.  Organization Costs
---------------------

The Company amortized its organization costs, which reflect amounts expended
to organize the Company, over sixty months using the straight-line method.

e.  Cash
--------

The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents.

f.  Income Taxes
----------------

No federal taxes have been accrued due to net operating losses in each year
presented.  The Company has net operating loss carryforwards of approximately
$2,184,000 which, begin to expire in 2007 through 2011.  No tax benefit has
been reported in the consolidated financial statements for the net operating
loss carryforward because of the uncertainty that sufficient future income
will be generated to offset the losses.  The valuation allowance of the loss
carryforwards offsets any potential tax benefit.

g.  Reclassifications
---------------------

Certain 1995 and 1994 items have been reclassified to conform to the 1996
presentation.

h.  Estimates
----------------

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


NOTE 2 - COMMITMENTS AND CONTINGENCIES

The Company was included in a lawsuit as a co-defendant with, Nu-Arc
Scientific, Inc., Edward Taylor and Carole Taylor.  The litigation concerned
the marketing and manufacturing rights of the plasma arc technology, which
rights were purchased by the Company.  An out of court settlement of cash and
stock totaling $23,750 was negotiated on the case.  An order dismissing the
action was subsequently signed on June 29, 1994.

The Company is involved as a co-defendant in a law suit with Bank One.  Bank
One instituted a suit against the Company and certain affiliates of the
Company seeking to recover certain sums relating to overdrafts in the
Company's bank account.  On March 18, 1994, the Company and its affiliates
entered into a settlement agreement with Bank One. The Company was unable to
meet the terms of the settlement agreement and on September 19, 1994 the co-
defendants took assignments of the bank's claim.  The claims were paid by co-
defendants and were contributed to additional paid-in capital.

                        ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                              (A Development Stage Company)
               Notes to the Consolidated Financial Statements (Continued)
                               December 31, 1996 and 1995

NOTE 2 - COMMITMENTS AND CONTINGENCIES (Continued)
 
During 1996, the Company wrote off accounts payable at $81,012.  The statute
of limitations has run for the amounts written off, and there have no recent
collection actions by the former creditors.  The Company believes that the
probability that it will be required to pay any of these amounts to be remote.

NOTE 3 - RELATED PARTY TRANSACTIONS AND NOTES PAYABLE - SHAREHOLDERS

All of the original shares issued were "restricted" shares and not to be
resold except in compliance with the provisions of Rule 144 promulgated by the
Securities and Exchange Commission.


Various shareholders advanced funds to the Company on a short-term basis as
needed.  The balances owed to the shareholders at December 31, 1996 and 1995
were $2,336 and $241,128, respectively.  The notes accrue interest at 12.0%,
are due on demand and are unsecured.  

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31:

                                           1996          1995
                                           ----          ----

Automobiles                                $  2,500     $ 2,500
Equipment                                     1,920       1,920
Furniture and fixtures                          497         497
Promotional video                            25,597      25,597
                                             ------      ------
     Total                                   30,514      30,514

Less accumulated depreciation               (14,449)     (8,345)
                                             -------     -------

                                           $ 16,065     $ 22,169 
                                            -------      -------
                                          
Property and equipment are recorded at cost.  Depreciation is provided using
the straight-line method over the estimated useful lives of the related
assets.  Depreciation expense for the years ended December 31, 1996 and 1995
was $6,104 and $6,322, respectively.

NOTE 5 - STOCKHOLDER TRANSACTIONS

On September 25, 1992, stockholders ratified an agreement dated August 10,
1992 to purchase the manufacturing and marketing rights of air purification
systems held by Nu-Arc Scientific, Inc., Edward Taylor and Carole Taylor.  The
agreement provided that 70% of the total issued and outstanding stock would be
owned by Nu-Arc Scientific, Inc. and the Taylors, 10% would go to an investor
group for services, 10% would issued for a private placement and 10% would be
held by the shareholders of Concept Gold, Inc.

                        ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                              (A Development Stage Company)
               Notes to the Consolidated Financial Statements (Continued)
                               December 31, 1996 and 1995

NOTE 5 - STOCKHOLDER TRANSACTIONS (Continued)

In November of 1992, the Company issued 14,000,000 shares for the marketing
and manufacturing rights to the "Plasma Arc Technology."  The value of the
rights was recorded at predecessor cost which was $-0-.

Also in November of 1992, the Company issued 2,000,000 shares to an investor
group for services performed, and 2,000,000 shares were issued and kept in
treasury for the private placement.  1,808,000 shares were sold for cash of
$455,500 with the remaining 192,000 shares remaining in treasury at December
31, 1992.  During 1993 the remaining 192,000 shares were sold for cash at
$0.25 per share.

In June 1993, the board of directors approved the cancellation of 2,000,000
shares issued to Nu-Arc Scientific, Inc.

In July of 1993, the Company issued 332,000 shares of common stock for cash at
$0.50 per share.

As mentioned in Note 3, Nu-Arc Scientific, Inc. sold some of its stock in the
Company to pay liabilities incurred by the Company, with the remainder being
contributed to capital.

During 1993, Edward Taylor and Carole Taylor, major shareholders of the
Company, filed for bankruptcy.  Their stock was sold at a sheriff's sale to a
group of investors and certain shareholders of the Company, thus changing the
majority control of the Company.  In 1994 some of these shares were used to
settle debts of the Company. (See Note 8)

During 1994, the board of directors approved the cancellation of 57,000 shares
issued to Nu-Arc Scientific, Inc.

During 1995, 80,000 shares issued to a vendor in lieu of the payment were
returned to the Company and were canceled.  The corresponding liability was
added back to accounts payable.

NOTE 6 - GOING CONCERN

The Company's financial statements prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.  However, the Company has not yet realized significant revenue from
the sale of the purification systems, and must rely on proceeds from stock
sales to continue operations.  The Company plans to continue to market the
systems in order to increase revenues to a level sufficient to support
operations. Until these sales levels are reached, without realization of
additional adequate financing, it would be unlikely that the Company will be
able to pursue and realize its objectives.

                        ENVIRONMENTAL PLASMA ARC TECHNOLOGY, INC.
                              (A Development Stage Company)
               Notes to the Consolidated Financial Statements (Continued)
                               December 31, 1996 and 1995

NOTE 7 - NOTE PAYABLE

Notes payable at December 31, 1996 and 1995 are as follows:

                                                   1996          1995
                                                   ----          ----
Note payable to an individual, interest at
12%, was due on demand and was unsecured.         $   -        $ 2,485
                                                   ======       =======

NOTE 8 - STOCK SETTLEMENTS

During 1994, the Company negotiated stock settlement agreements with several
vendors and creditors of the Company.  The board of directors also approved
the settlement of several obligations of Nu-Arc Scientific, Inc. and Edward
and Carole Taylor, with stock of the Company owned by shareholders of the
Company.  This was done to alleviate the risk of any future claims being
brought against the Company's right to market the technology purchased from
Nu-Arc Scientific, Inc. and Edward and Carole Taylor.

Approximately $271,553 of accounts payable and accrued expenses recorded on
the books of the Company at December 31, 1993 were satisfied through these 
settlement agreements.

During 1996, the Company settled accounts payable of $229,601 by issuing
920,000 shares of its common stock.  The Company also settled shareholder
loans totaling $381,921 by issuing 8,919,000 shares of its common stock.

NOTE 9 - INTANGIBLE ASSETS

In November of 1993, a group of investors and certain shareholders of the
Company acquired the patent rights of the "Plasma Arc Technology".  The group
of investors and certain shareholders of the Company contributed the patent to
the Company. No dollar value has been assigned to the patent.