<PAGE>   1
                                   Form 10-KSB

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB

[X]   15,ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 [FEE REQUIRED]

               For the fiscal year ended    April 30, 1997
                                        -------------------------

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

        For the transition period from___________  to ____________

                        Commission file number 93-67656-S

                        LEADING-EDGE EARTH PRODUCTS, INC.
                 (Name of small business issuer in its charter)

             Oregon                                       93-1002429
----------------------------------------              ------------------------
(State of incorporation or organization)              (I.R.S. Employer ID No.)

         319 Nickerson St.  #186,   Seattle, WA                 98109
         ----------------------------------------             ----------
         (Address of principal executive offices)             (Zip Code)


Issuer's telephone number   800-788-3599  
                         ------------------

Securities registered under Section 12 (b) of the Exchange Act:

<TABLE>
<CAPTION>
 Title of each Class            Name of each exchange on which registered
 -------------------            -----------------------------------------
<S>                            <C>
        none                                       none
</TABLE>


Securities registered under Section 12 (g) of the Exchange Act:

                                      none
--------------------------------------------------------------------------------
                                (Title of class)

   Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 9d) of the Exchange Act during the past 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 is not contained in this form, and no disclosure will 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. [X]


State issuer's revenues for its most recent fiscal year: $254,359
                                                        -----------

State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock as of October 27, 1997: $12,657,192

State number of shares outstanding of the Registrants common stock as of October
27, 1997 28,326,400


<PAGE>   2

                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

PART 1

ITEM 1.        DESCRIPTION OF BUSINESS.

INTRODUCTION. Leading-Edge Earth Products, Inc., an Oregon Company (the Company;
also referred to as LEEP), is the result of a merger on December 29, 1992, of
Leading-Edge Earth Products, a Washington corporation, and Crystal Asset
Management, an Oregon corporation. The merger was accounted for as a pooling of
interest. The objective of the Company is to develop lightweight,
highly-insulated, composite building panels to form entire wall, roof, floor and
partition sections for residential and non-residential building construction
applications. The panels are intended to be used as a substitute for wood and
other traditional forms of construction. The Company believes its products will
have major worldwide appeal for single-family and multi-family residential
construction, including third-world housing, as well as non-residential
construction.

The Company does research and development and is forming affiliate companies for
the purpose of using the technology developed by the Company. Other than
research and development the Company has had only nominal business activity.
During 1996 and 1997 the Company recognized some fee income and expenses related
to the use of its technology. See Management's Discussion and Analysis of
Operations below. The Company conducted research and development activities at a
series of locations beginning in Rainier, Washington (1992-1993); Shelton,
Washington (1993-1994); and Seattle, Washington (1994-1996). Commencing in 1995,
the Company began seeking a strategic alliance through which manufacturing
processes and further materials development could be financed and undertaken.
This search was concluded by an agreement in December 1995 between the Company
and a Pennsylvania-based group, WLP, Associates, Ltd. (WLP), which resulted in
the formation of an independent licensee company in which LEEP maintains a
minority interest, Agile Building Technology, Inc. (Agile), and Agile Investment
Corporation (AIC), both Pennsylvania-based companies. Agile was designed to be
the operating company, and AIC, a holding company, both affiliated with the
Company.

Upon Agile commencing operations, the Company's R&D staff was disbanded in
Seattle and the Company's only remaining employees, going into calendar 1996,
were a corporate communication assistant and its president, Grant C. Record. Mr.
Record moved to the Agile location to represent the Company and consult in
Agile's development activities in support of the Agile License in early January,
1996.

AGILE BUILDING TECHNOLOGY, INC. Between January 1996 and November 1996, Agile,
with the Company's support, developed to prototype levels two product groups for
the building construction industry. The first product group, Group 1, contained
(a) non-load-bearing steel frame panels for mid-rise construction, and (b)
load-bearing steel frame curtain panels for residential and low-end commercial
construction. The second product group, Group 2, contains an Exterior Insulated
Sheathing System product known as "EX-SULATE," and a similar product for
insulating interior walls known as "IN-SULATE." IN-SULATE is an insulated
wallboard for finishing and insulating cement, steel and/or wood building
constructions. Although extensive formal and internal testing was conducted on
the Group 1 load-bearing products with encouraging results, these products were
de-emphasized and effectively abandoned in order to allow focus on the other
group. The Group 2 products do not require extensive testing before sale. A
complete manufacturing capability is in place for the Group 2 products.

During the third quarter of calendar 1996, Agile investors ceased to financially
support the Agile/LEEP 



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development activities. After the cancellation of the December 1995 Agreement
with WLP, new investors were identified and cultivated in order for Agile and
LEEP to keep developmental momentum. In December 1996, Agile completed
arrangements for a $800,000 bank line with Northern Central Bank of
Williamsport, Pennsylvania, and arrangements to purchase a complete, in-place,
operating Polyiso Foam Laminating production line from Winter Panel Company,
Brattleboro, Vermont, for $420,000. The Laminating Line installation was fully
funded out of the Northern Central bank line. Sales, marketing, and pilot
manufacturing activities were begun by Agile for the EX-SULATE and IN-SULATE
products in early 1997. On February 28, 1997, a new contract was signed which
replaced the Agile/LEEP December 1995 Agreement and gives Agile and LEEP
authority to independently develop their respective products and markets.
According to the terms of the February 28 Agreement, LEEP retained control of
35% of Agile. About 4,200,000 LEEP shares out of 11,000,000 held by AIC has been
returned to the Company, with the balance continuing to be held by WLP.

Agile's IN-SULATE and EX-SULATE products appear to have no direct competition at
this time.

PROPOSED NEW AFFILIATE. In November 1996, the Company began independent
development of another product known as LEEP STRUCTURAL CORE. Sufficient
development and testing was completed on LEEP STRUCTURAL CORE to attract and
interest the City of Twin Falls, Idaho, and investors, to assist the Company in
organizing and financing a proposed new affiliate company, Newco, to begin
manufacturing operations in Twin Falls. (See Management Discussion and Analysis
below.)

BACKGROUND. Wood, metal, and Portland concrete products are the predominant
materials used in the construction industry. The Company believes that
substitutes for traditional wood materials will be used for the future
generations of building components because of the dwindling supply of timber
occasioned by regulatory and environmental considerations. The Company believes
that the market will demand that future building materials be lightweight,
fire-resistant, water-resistant, sound-abating, rot-resistant and offer seismic-
and wind-resistant properties. The Company believes that many future
requirements cannot be met with current metal, wood and Portland concrete
products. The Company's LEEP STRUCTURAL CORE product addresses all of these
performance goals. Agile's products enhance sound-abating and water-resistance
properties as well as add decoration and finish advantages.

ENVIRONMENTAL CONSIDERATIONS. The Company's objective is to provide
environmentally friendly products that are nontoxic at every level from the
manufacturing process through the end product, and environmentally sound for all
other important considerations. As a practical matter, other than compliance
with OSHA standards for manufacturing, which is common to all U.S. manufacturing
companies, there are no major environmental considerations known by the Company,
relating to the Company's products, which are mandated by law at this time for
residential or low-end non-residential construction. The Company believes its
product performance specifications meet or exceed environmental requirements for
non-residential applications.


ABOUT THE TECHNOLOGY. The Company uses composite technology. Composite
technology is based on the principle that when two or more pieces of relatively
lightweight and/or structurally weak materials (sheets or beams) are laminated
together, the two or more pieces become a unitized composite member whose
structural strength-to-weight ratio is greatly improved, when compared with the
weight and corresponding strength of non-laminated, non-composite materials.
This laminated/composite technology is the basis for the Company's current and
future anticipated patent and other proprietary positions. Better
weight/strength ratio performance of products translates to less material being
required to construct buildings. This composite technology can be applied so as
to make products that weigh 200 pounds vs. 1,900 pounds, in the case of solid
concrete, brick or block comparisons; and 200 pounds vs. 900 pounds, in the case
of solid 



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hard-wood product comparisons.

As a result, when fully implemented, it is believed that the Company's
technology will enable avoidance of the loss of substantial amounts of the
planet's forest products, and contribute to major savings in transportation and
attendant fossil fuel use. In addition, there will be savings in both summer and
winter fuel costs because the Company's main product and Agile's products offer
thermal insulation properties that are superior to those of conventional
materials. Insurance rates will likely be favorably affected as well because of
the products' natural calamity-resistant properties.

RESEARCH AND DEVELOPMENT. In the year ending April 30, 1997, the Company
expended $84,519 performing research and development on its technology and
products. Since inception, the Company has spent $935,348 for this purpose.

The Company's main focus between November 1996 and the present has been LEEP
STRUCTURAL CORE panel development, although it has supported various aspects of
Agile's development over the period.

The Company and Agile both elected to temporarily stop development activities on
Magnesium Oxide and other slurry-based surface-covering skins in order to
concentrate on their respective core products. Both companies began to work with
a variety of alternative skin materials which recently came to market.
Additional slurry-based skin materials research and experimentation is planned
by LEEP. Agile does not plan any such materials research.

MANUFACTURING METHODS AND OUTLOOK. To date, prototype panels have been made
using rudimentary manual presses and conventional metal bending equipment. Sheet
metal was bent to the Company's proprietary design configuration. The front and
back metal parts (top and bottom), up to 20' long, were put in a manual
containment press; expanding foam chemical was added to the cavity and held for
an adequate expansion and solidification time. The completed metal panels were
then removed and tested during the initial eight month development and testing
phase. Over this phase of development, the panel configuration was evolved to
meet higher and higher levels of performance criteria up to the point that 4"
thick panels are now meeting Commercial Floor Load and Hurricane V wind-load
codes. To the Company's knowledge, this advanced performance level has never
before been attained by 4" foam/metal panels.

The next phase of manufacturing will be done by affiliates with more advanced
containment presses known as "Shuttle Presses." The fabrication of the first in
a series of five such presses is nearing completion and will be put into
operation during the last quarter of 1997. Within six months after the
initiation of the first Shuttle Press, two-shift operation of five such presses
is anticipated. A five-press operation is capable of manufacturing sufficient
panels to construct approximately two medium-sized commercial buildings per
week. Commercial sheet metal fabricators will supply the custom metal parts to
support Phase 2.

The final manufacturing configuration consists of: metal roll forming machines
(one each) which pre-form the top and bottom parts; two metal coil handlers; an
automatic foam generator; a 100-foot long custom laminator (which takes the
place of the individual containment presses); a flying cut-off saw; and
100-to-300 feet of cool-down/stabilizing chamber. In this configuration,
individual panels are automatically cut to custom lengths per work order
instructions which are computer driven. The custom lengths will be automatically
bonded together as they come out of the stabilization chamber, to custom form
specific, large panel sections to construct walls, roofs and floors. This last
Automated Laminator Production System can be operational during the summer of
1998, given adequate funding of the Company's affiliates. The longer lead time
metal forming machine design and fabrication has been funded, contracted and
started. The aim 



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of the current design and fabrication phase is to produce operating equipment by
the spring of 1998.

TESTING AND CODE APPROVALS

The Company's main product, LEEP STRUCTURAL CORE, has been tested extensively
using full ASTM specified test criteria for wind and floor loading capabilities.
The testing has been done internally. No test certifications are required at
this time. Such certified testing results are readily available, including those
from axial load compression tests that can be efficiently scheduled at
commercial labs for reasonable rates.

Agile has only light testing requirements for the Agile Group 2 products to meet
code approvals. Because the Group 2 products are manufactured using skin
materials manufactured by established industry companies that have passed all
required certifications, these products' testing requirements are such that the
Company's internal testing and technical calculations are sufficient to obtain
customer credibility.

The few certified tests required for most EX-SULATE and IN-SULATE applications,
namely, wind-load, acoustic, and thermal insulation, are easily calculated and
actual certified tests can be obtained after customer orders are received, but
before shipment.

MARKETS AND MARKETING. The Company believes that recent changes in the
construction industry create an increased desire by builders to buy
pre-manufactured, or fabricated, construction components. According to Automated
Builders Magazine (August 1996), panelized construction exceeded wood-frame
construction for the first time in history (39% vs.36%) in the United States in
calendar year 1995. The magazine also indicates the total of non-wood-frame
construction (i.e., modular, panelized and mobile home/pre-manufactured home)
exceeded wood-frame construction by a factor of 1.7 times in calendar 1995.
Builders may now buy pre-manufactured composite wood/foam building panels for
walls, roofs, partitions, floors, and other building components, as they satisfy
all structural specifications required by applicable building codes. Such
components are desirable since they decrease the time and expense involved in
constructing new buildings, while potentially increasing construction quality.

Company affiliates are expected to produce an array of structural panels from
which an architect can select the exact panels for each specific job. The panels
are planned to be manufactured and delivered to the construction site and
erected in relatively short times without the waste and cleanup usually involved
in wood or concrete construction. The wiring, plumbing access, and all such
contingencies can be engineered into each project. In some configurations, only
the exterior and interior finishes are applied at the construction site. In
other applications, finished surfaces can be factory supplied. The panels may be
drilled, routed and sawed, if necessary, on site; however, proper design and
panel selection will normally render field modifications unnecessary.

The Company's plan for marketing its building system involves two strategies.
The first is directed at the low-end non-residential construction market.
Planning and development of panel manufacturing, testing, pilot model
construction projects, and follow-on building construction projects for the
low-end non-residential market will be done exclusively by the Company. Company
affiliates will manufacture building panels for this market. The second
marketing strategy will be directed at residential construction, including
third-world housing markets. Marketing and sales programs are directed
principally at architects, designers, developers and builders who specialize in
the various markets.

After 18 to 24 months of initial manufacturing, the Company plans to use its
base products and technology to initiate directly, or by license, similar
manufacturing operations in the U.S. and throughout the world. The Company's
strategy is to use the initial operation/products/equipment specifications as a
template to 



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go forth and duplicate such operations in other places, once the product
marketing and production relationships and processes are established.

The Company believes that laws will be enacted in the United States over the
intermediate to longer term, that will strongly favor products of both the
Company and Agile, for their fire, wind and prospective seismic resistance
features. At present, the United States is one of the few remaining First-World
countries that still allow major residential construction to continue without
strong wind, fire, and seismic resistance ratings. The Company believes that
there are significant public-interest implications associated with America's
lack of stringent wind, fire and seismic resistant standards being enacted and
enforced by U.S. regulators; especially so, given the large number of lives and
properties lost in the U.S. each year to these calamities.

COMPETITION. The Company believes there are no panels currently available in the
residential building panel industry which have fire-resistance, load-bearing,
rot-resistance, and insulating characteristics that are competitive with the
Company's proposed building panel systems. There are, however, a significant
number of manufacturers in the United States who produce residential building
panels constructed of wood. Wood-engineered panels represent currently accepted
technology in an industry that is generally slow to accept change in technology.
This reluctance may make it more difficult for a small company, such as the
Company, or a licensee of the Company, to penetrate the market because it is
introducing a new type of construction product without the benefit of an
established company name. The non-residential building construction products
industry is highly competitive and is dominated by companies that are typically
large international enterprises who actively promote their building construction
products to designers and property owners. Such competition from established
competitors that have, or may have, significantly greater financial, technical,
manufacturing and marketing resources than the Company, could adversely affect
the Company's prospects.

The principal non-residential panels on the current market are those made using
sheet metal/foam technology. These panels are often called foam/metal curtain
panels. Most of these panels are not load-bearing. The market-dominating
producers currently show no willingness or desire to develop panels that are
competitive to Agile and the Company's products. The Company's main product is
also in the class of foam/metal panels; however, the Company's LEEP STRUCTURAL
CORE product is distinguished from the traditional manufacturers' products in
that it is load bearing and as such can be used for floors, roofs and
load-bearing walls.

PATENTS AND LICENSES. On July 24, 1994, the Company received notice from the
U.S. Patent & Trademark office that 47 claims the Company considers important,
were granted. Mexican notice of allowance of the same base patent, except with
broader claims being allowed, was received by the Company in November 1996.
Exclusive rights to use the patented technology in the United States and
nonexclusive rights outside of the U.S., are assigned to the Company by the
inventor. Non-domestic rights are subject to the Company's paying for all costs
associated with developing foreign business and paying the costs of applicable
foreign patent work. All U.S. rights for subsequent related technology (patented
or not) are assigned to the Company by the Company's founder and early
management. The Company recently filed for additional patent protection to cover
additional inventions, including the new LEEP STRUCTURAL CORE product related
technology. Earlier patent applications no longer believed useful to the Company
were abandoned during the year.

LICENSEE TRANSACTIONS. Effective as of August 29, 1996, the Company assumed an
agreement entered into by Grant Record on March 30, 1996. In this agreement, the
inventor disclosed certain proprietary information for the use of Magnesium
Oxide Technology (MgO) and the Company received an exclusive and assignable
right to the licensed technology, including enhancements made by the licensee.
The inventor 



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also agreed to provide certain consulting services for one year. The agreement
provided for a $25,000 license fee and minimum annual royalties of $25,000 for
seven (7) years. Consulting services were set at $2,000 per month. The Company
paid the full year's consulting agreement and more than one half of the first
year's fees by the time Agile's funding stopped. Nine months' time elapsed while
the Company studied its need for MgO-based technology in connection with its
LEEP STRUCTURAL CORE product. It was determined that newer elastomeric and
polymer-based cement products have come to the market and need to be considered
and studied to determine if such products are cost- and performance-effective.
Such effective products could eliminate the Company's requirement for additional
surface-covering skin research at this time.

LICENSOR TRANSACTIONS. An earlier agreement granting LSI (Traverse City, MI)
rights to develop and joint-venture with the Company in seven states, expired
and/or provisions provided by the agreement were replaced by agreements with
WLP.

AGILE LICENSE. The Company approved on December 4, 1995, and entered into a
comprehensive license agreement with Grant Record, WLP, Agile and Agile
Investment Corporation (AIC), under which the Company non-exclusively licensed
Agile to manufacture, market and sell products based on the Company's composite
building system concepts, patents, patents pending, pending patent applications,
trade secrets and future product developments (jointly or independently
accomplished). The final agreement, dated December 5, 1995, was replaced by a
February 28, 1997 Agreement after Agile was unable to continue to secure
adequate investment to sustain its activities, after raising approximately
$2,000,000 in cash and accomplishing ten months of intensive product
development, as described above. The new Agreement provides for autonomous
development and individual financing of the Company and Agile, respectively. The
agreement gives the Company the right to invest up to $4,000,000 in Agile and
take up to 49% ownership, if $1,000,000 is invested by December 31, 1997. The
Company has the right to manufacture Agile developed products anywhere outside a
500-mile radius of any Agile manufacturing plant. Agile has the right to
manufacture products developed by LEEP, but only in the Northeast United States.
Both of these rights, that of LEEP and that of Agile, may be subject to
renegotiation in connection with Agile's new investor agreement signed October
28, 1997. (See Management Discussion and Analysis, Item 6., Liquidity and
Capital Resources.) Approximately 4,200,000 LEEP shares which were held in AIC,
a holding company, on behalf of the Company and the Agile founders, were retired
and taken out of the Company's outstanding shares. The Company and Agile
continued their developments at Agile's physical facilities and both companies
kept their respective operational, product and market momentum.

CONTRACT EMPLOYEES. The Company signed a contract with David Moran in January
1997, whereby Mr. Moran became President of the Company. Grant Record,
President/Founder, remained as CEO upon Mr. Moran's joining the Company. Mr.
Record moved from Pennsylvania to Twin Falls, Idaho. Two technologists who
served Agile during the development period have supported the Company's target
LEEP STRUCTURAL CORE product and technology development. These personnel have
expertise in:

-       Machine design and fabrication

-       Polyisocyanurate (one of the technologists is a "father" of the American
        Polyiso-foam/metal industry)

-       Quality control, plant planning, manufacturing systems and product
        testing systems

The two contract employees representing the above critical operating functions,
have continued to work on the Company's products during the interim phase, with
an outlook towards long-term employment when the Company's first manufacturing
plant is operational. The agreement with Lenny H. Zallar, Chief Financial



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Officer, was terminated during the first quarter of 1997 due to funding delays.
Treasurer and director James R. Medley has acted in a near full-time capacity as
Financial Officer and Controller since Mr. Zallar's departure. Mr. Medley keeps
the books and records of the Company, and he is responsible for coordinating the
annual audit and all SEC reporting, including 10-K, 10-Q and 8-K reports.
Various consultants have been contracted to serve employee functions during the
Company's formative phase. An Agreement with EPO, Inc., was approved by the
Company's Board of Directors during the year ending April 30, 1996, which called
for EPO to receive an option for 100,000 shares of LEEP stock at $.50 per share,
a $4,200 per month fee, and various commission levels on money to be raised. No
fees are due and none have been paid. EPO will not claim any commission or other
compensation as a result of the agreement with EPO. The Company will honor the
100,000 share stock option which was given originally to help compensate for
past services rendered prior to the EPO Agreement. EPO has been a valuable ally
to the company and may be called upon for future services and agreements.

In addition to the contract employees and James R. Medley, there are full-time
employees at Agile working and assisting Company officers in the development of
Company products.

On October 28, 1997, Mr. Moran agreed to resign as President of the Company and
to become the CEO of the newly formed Agile Group, Inc.

ITEM 2. DESCRIPTION OF PROPERTY.

The Company's pilot production equipment and supplies, located at 500 South
Lander Street, in Seattle, Washington, were systematically packaged and shipped
to Pennsylvania over the period December 1995 to August 1996, for use in the
Agile facility under the Agile Licenses (reference: December 5, 1995 Agreement
replaced by February 28, 1997 Agreement). All remaining property and equipment
has been written off or sold. The Company occupied the Seattle facility pursuant
to a month-to-month rental agreement. Subsequent to development and testing of
the LEEP STRUCTURAL CORE, the Company required no development facility and
conducted no operations aside from research and development activities performed
with Agile in Pennsylvania at Agile's facilities. The Company is developing a
facility in Twin Falls, Idaho, for the purpose of manufacturing its products
(see Item 6). The Company or its proposed new affiliate company may rent or
acquire such facilities as deemed appropriate by Management.

Agile, in which the Company has significant investment (see Item 1), has
recently moved its executive offices to 30 W. 3rd Street, Williamsport,
Pennsylvania. The offices are leased on a year-to-year basis. Agile's pilot
production, research and short-run contracts are to be maintained at a leased
facility in the Williamsport/Lycoming County area. Agile seeks to lease or buy a
manufacturing facility, to expand the lamination operation in the Williamsport
plant. It is planned that the new facility will hold two Laminators of various
capabilities, and, depending on the product mix, be able to provide total annual
capacity to manufacture from 50,000,000 to 70,000,000 square feet of product per
machine (one production shift basis).

ITEM 3. LEGAL PROCEEDING.

On July 27, 1995, the Company filed an action against Timothy J. Metz in the
Superior Court of the Sate of Washington for King County, Cause No. 95-2-19488.
Mr. Metz is a former officer of the Company. The Company alleges that Mr. Metz
breached his contract with the company. The Company seeks: monetary damages
against Mr. Metz; an injunction enjoining Metz from violating the
confidentiality provisions of the contract; and a declaratory judgment that Mr.
Metz is not entitled to anything under his contract. On August 23, 1995, Mr.
Metz filed his answer to the company's action, and in addition filed a
counterclaim against the company and added Grant Record as a third party
defendant. In his counterclaim, 



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Mr. Metz seeks to establish co-ownership and rights to certain patents involving
building panels and means for joining such panels. Mr. Metz also alleges he was
wrongfully terminated, and seeks damages of $395,000 in connection therewith.
Additionally, Mr. Metz seeks unspecified damages, which he seeks to have
trebled, plus attorney fees. Mr. Metz sought to remove the Company's action
against him and his counterclaim and third party complaint to the United States
District Court for the Western District of Washington. His removal petition is
filed in United States District Court, Cause No. C95-1302. The company resisted
the removal petition, and requested that the matter be heard in the same court.
The United States District Court granted the Company's motion to remand to the
state court, and ordered that all proceedings in the United States District
Court pertaining to the patent litigation be stayed until the state court case
is resolved. Because of a personal tragedy, Mr. Metz has not been able to
respond to the discovery requested of him by the Company. The Company has not
used and does not use the technology to which Mr. Metz claims rights. Although
the suit has been pending for over a year, no discovery has taken place. Based
on the Company's knowledge of Mr. Metz's claims, the Company is of the opinion
that it has meritorious defenses and intends to defend vigorously against the
claims brought by Mr. Metz, and seek all remedies offered by the law.

The Company has made demands to Harvey and Gary Bryant (Bryant Investment
Company, Las Vegas, NV) for their return to the Company of, respectively,
250,000 shares each of the common, restricted stock of the Company due to
nonperformance of an earlier (1994) undertaking in which Bryant Investment
Company committed to raise a minimum of $1,000,000 for the Company. To date,
Bryant Investment Company has not responded to the Company's demands to return
the stock and the Company is contemplating legal action to retrieve and cancel
the shares.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On October 14, 1996, at the annual meeting of shareholders, the following
persons received 23,731,293 votes for and 15,337 votes against election to serve
as Directors of the Company until the next annual meeting.


Name

-       Grant C. Record

-       Donald C. Bazemore

-       James R. Medley

-       Way Lee

-       Grant Todd

-       A. Charles Bush

-       Richard Pell


At the same meeting, Management was given the authority to change auditors. The
votes in favor of such authorization were 23,497,202, with 15,200 against and
234,228 abstaining.

Consistent with the restructuring provided for in the February 28, 1997,
Agreement with Agile and WLP, Messrs. Bush and Pell resigned from the Company's
Board of Directors.



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<PAGE>   10

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The Company's Common Stock is traded in the over-the-counter market and prices
are quoted on the NASDAQ Bulletin Board.

The following sets forth the high and low price information for each quarter
during the last two fiscal years, as provided by the NASDAQ Bulletin Board
quotations. The quotations provided reflect inter-dealer prices without retail
markup, mark-down or commission and may not represent actual stock buyer costs.


<TABLE>
<S>                             <C>          <C>
Year Ended April 30, 1996       High         Low
First Quarter                   1-1/4        5/8
Second Quarter                  1            1/5
Third Quarter                   1-1/2        1/2
Fourth quarter                  2-1/4        1-1/4
Year Ended April 30,1997
First Quarter                   2-3/4        1-1/8
Second Quarter                  2            1-13/32
Third Quarter                   1-17/32      13/16
Fourth Quarter                  1-1/4        13/32
Year Ending April 30, 1998
First Quarter                   5/8          13/32

</TABLE>

The number of holders of record of the Company's Common Stock on September 10,
1997, is: 1,390.

The Company has never paid a cash dividend and the Board of Directors does not
anticipate declaring cash dividends in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.

PLAN OF OPERATION. The Company has yet to generate revenues from the sale of
building panels, however, $300,000 has been received in the form of License
revenue. $195,250 is due the Company from its affiliate, Agile, for fees and
services rendered. Due to cash flow constraints at Agile, as it ramps up its
production capacity to meet new orders, the Company has agreed with Agile that
payments on accrued revenues will be delayed until cash flow permits. Since
there is no date certain for the Company to receive payments on the receivable
from Agile, the Company has provided for a reserve of $222,750 as shown in the
financial statements to cover the license revenue and accrued interest due from
Agile. The operations of the Company since inception have been focused on
research and development (R&D). R&D activities were done by the Company from
1992 to 1996. R&D was done and paid for by Agile from January 1996 through
October 1996. The Company resumed direct R&D activities in November 1996.
Between November 1996 and the present, a viable structural panel product has
been developed by the Company. This product is known as "LEEP STRUCTURAL CORE."
Significant purchase of equipment and manufacturing facilities is expected by
affiliates during fiscal 1997/1998, as well as expansion of personnel.

The strategy of Management during fiscal 1997/1998 is to develop the LEEP
STRUCTURAL CORE product manufacturing capability and marketing through affiliate
companies performing manufacturing and marketing, while financing and marketing
in tandem with its affiliate company, Agile, who is developing 



                                       9
<PAGE>   11

the markets for its insulated wallboard product known as "IN-SULATE", and its
External Insulated Sheathing System product known as "EX-SULATE". All three
product lines are compatible and complementary and use the same basic
polyisocyanurate expanding foam lamination ("Polyiso") technology. The Company
believes that, over time, both Agile and the Company's new affiliate companies
will locate plants in the same locations to be able to share Polyiso chemical
unloading and storage facilities. Polyiso chemical shipping costs, intermediate
rail tank storage and in-plant, isolated temperature controlled storage are
major cost and logistic considerations with respect to efficient, economical
laminated Polyiso product manufacturing. Locating a Polyiso depot between future
Agile IN-SULATE/EX-SULATE and LEEP STRUCTURAL CORE plants lends these
operational pairings substantial advantage over future would-be competition.

With respect to Agile, considering Agile's bank facilities, equity investments
and long-term notes, over $3,000,000 has been invested in Agile and LEEP's
product developments and operations since Agile's inception in November 1995.
This investment has produced a group of new, well-timed products, including
Agile's EX-SULATE and IN-SULATE. EX-SULATE is an Exterior Insulated Sheathing
System Product which takes the place of multiple-step application external
finishing systems such as "Dryvet" (a 3-to-7-step, labor intensive competitive
product). IN-SULATE is an insulated wall board product for finishing the
interior of buildings, while providing thermal and sound insulation at the same
time. Agile purchased an operating production line at the Winter Panel
Corporation facility in Brattleboro, Vermont. Agile privately placed various
equities since November 1996, to develop its new products, markets, and sales
programs, and to modify the production line in Vermont to manufacture Agile's
products. Currently, the outlook for Agile's products, based on a growing number
of inquiries and several significant order commitments, encourage Agile to
prepare to order two additional Laminators similar to the one in Brattleboro.

The Agile products are fully developed and in pilot production. As such, Agile
is ready to upscale production quantities to pace their current visible market
demands. Management and Agile estimate that $20,000,000 first-year revenues of
Agile products are sufficient for Agile and the first of the Company's proposed
affiliate companies to begin side-by-side plant operations. The management and
directors of both the Company and Agile are in agreement and the process of
planning side-by-side, co-existing plants is underway. David Moran, the
Company's President, had been assisting Agile and the HKC investors (see
August 12, 1997 Amended Agreement, in Pennsylvania and Vermont to achieve the
next level of planning and product manufacturing efficiency at Agile. As of an
October 28, 1997 Agreement between Agile and the new investors, Mr. Moran
resigned as President of the Company and became the President of the Agile
Group, Inc.

The Company plans to form a new affiliate company in Twin Falls, Idaho. With
Agile and several private investors, the new affiliate company would build the
first side-by-side plants. The City of Twin Falls, Idaho, approved a
tax-advance-based loan in the amount of $500,000 as an incentive for the
Company's proposed new affiliate company to begin manufacturing operations in
Twin Falls. The Company made a purchase commitment to approximately 16 acres of
M-2 (heavy manufacturing) zoned industrial property on the Eastern Railroad
Company's north-south line. This commitment was subject to certain contingencies
having to do with rezoning and building permits. Subsequent to the City of Twin
Falls inviting the Company to participate in that industrial area development,
the location selected was strongly challenged by residents in the area. As a
result, the Company withdrew from that development to examine other of the
several opportunities and options in the region. The Twin Falls area offers
substantial transportation, work force, logistic and economic reasons to
encourage a continued aggressive outlook to manufacturing in the Twin Falls
area. The Company does not believe there is any need to expedite building a
manufacturing plant during the winter months as personnel and facilities are
available to manufacture the LEEP panels in Pennsylvania and ship them to Idaho
for developing the initial western markets between now and spring 1998, when
plant construction can begin in the Twin Falls area. Grant Record, CEO of the
Company, took 



                                       10
<PAGE>   12

up residence in Twin Falls in order to administer the planning for building
facilities. Options to purchase or lease turnkey manufacturing facilities will
be made available to Agile for one of the two new buildings now in planning for
the Twin Falls area.

The Company's proposed new affiliate company (Newco) and the Company's affiliate
company, Agile, will use the same basic technology, chemicals and equipment to
produce different products. Pilot product will be produced at a rate in
Pennsylvania which supports construction of two medium-sized commercial
buildings per week or one medium-sized refrigerated warehouse per day, for each
group of five (5) manual containment presses. By mid calendar 1998 the Company
projects that its affiliate companies will have production capacity to support
$90,000,000 in annual sales.

Newco will produce foam filled metal based structural panels using Manual
Presses in Agile's Pennsylvania facility. In the summer of calendar 1998, Newco
is expected to produce the LEEP STRUCTURAL CORE product on a new 100-foot
Laminator System in Idaho that will be capable of producing upwards of 48,000
square feet of LEEP STRUCTURAL CORE per ten-hour shift. In the interim it will
use shuttle containment presses which are currently in the final stage of
fabrication in Pennsylvania.

Agile purchased a used 100-foot long Polyiso Laminator during the last quarter
of calendar 1997, and in calendar 1998 it will order an additional laminator for
delivery in the middle of the calendar year. New capacity in Pennsylvania is
expected to allow Agile to produce foam insulation backed interior and exterior
sheeting products sufficient to meet projected market demand of sales of at
least $20,000,000.

LIQUIDITY AND CAPITAL RESOURCES. Investors have been doing "diligence and
planning" with the Company, with the intent of investing $6,000,000 in Agile--to
support manufacturing upgrades on present equipment and additional manufacturing
capacities to enable Agile to exceed $30,000,000 in sales revenues over the next
24 months--and an additional $3,700,000 for a proposed new affiliate company to
build the plant facilities necessary to begin manufacturing LEEP STRUCTURAL CORE
product in Idaho. The corporate budget for the next 12 months, independent of
manufacturing operations, is $500,000. The Company is planning with investors to
transact private placements for $500,000 at or around prevailing stock market
prices to support the Company's next 12-month overhead expenses.

The Company entered into an August 12, 1997 Amended Agreement with Harrison
Kramer Corporation ("HKC"), or assigns, on August 15, 1997. The Agreement gives
HKC until November 1997, if not extended, to consummate financing for a Company
affiliate to be formed in Idaho. Under the terms of the Agreement, HKC is to
receive an amount equal to 20% of a 5% royalty the Company will receive from the
investors, as a commission against product sales, if, as, and when such
royalties are received. The investor group to be identified by HKC will receive
51% of the ownership interest in the Company's Pacific Northwest manufacturing
operations and 1,000,000 shares of Rule 144 restricted stock of the Company,
upon completing the LEEP portion of the financing. HKC's investors will have a
right of first refusal to finance additional LEEP manufacturing plants in Canada
and America; however, that right shall be lost in the event they refuse to
sponsor two consecutive operations which are offered them by the Company. HKC
investors signed a binding agreement with Agile on October 28, 1997, to form
Agile Group, Inc. (AGI) and Agile Building Structures, Inc. (ABS), and to invest
$500,000 per month in ABS beginning November 31, 1997 and each month thereafter
for eleven consecutive months and to invest up to $400,000 prior to November 31,
1997. According to the terms of the October 28, 1997 Agreement, Agile will hold
49% of ABS, and AGI will hold 51%. Should AGI default on any monthly payment,
Agile has the right to control of ABS. AGI has the right to finance additional
joint venture operations on a 51%/49% basis and to provide all of the funding
for such operations. Should AGI not exercise the right, Agile has the right to
otherwise finance and control such future operations.



                                       11
<PAGE>   13

The Company obtained a revolving credit facility from Rothchild SA, Nassau,
Bahamas. The credit facility presently provides for monthly draws of $137,500
which can be paid down subsequently in stock with a 1.08 repayment multiple if
repaid in stock at the then current market price for stock. The advances can be
repaid in cash at a 1.03 multiple rate. (Refer to Note 14 to the Financial
Statements.)

RESULTS OF OPERATIONS. The Company financed its cost of operations for the year
ending April 30, 1997, from stock sales, stockholder loans, stockholders
exercising options for stock, and debt conversions. As of September 29, 1997,
the Company has $337,371 in short-term borrowing. For further analysis, see the
Company's Statement of Cash Flows.

The Company's audit expenses were extraordinary because of the bringing on board
of a new affiliate company. The Company also retained an executive search firm.
Lastly, professional services were provided by a developer of new technology.
For those reasons, legal and professional expenses increased to $181,120 from
last year's $76,421.

Because of the increased stock market trading activity of what is becoming a
more mature company, Management retained the services of three outside companies
to provide corporate and capital formation development activities which include:
organizing stock broker and analyst following, supporting a publishing and
mailing program, compiling and publishing research, identifying merger and
acquisition candidates, providing information about the Company to selected
investors, managing broker/dealer relations, assisting with investor programs,
development and maintenance of an Internet Home Page, and providing other
corporate consulting in the area of financial and corporate strategies. For this
reason G&A expenses were $266,323 for the year ending April 30, 1997.

ADOPTION OF NEW ACCOUNTING STANDARDS. The Company has adopted certain new
accounting standards that are described in the Notes to the Financial
Statements.

RISK AND UNCERTAINTIES. Matters discussed herein, contain forward-looking
statements that involve risk and uncertainties. The Company's results may differ
significantly from results indicated by forward looking statements. Factors that
might cause some differences, include, but are not limited to:

-       Changes in general economic conditions, including but not limited to
        increases in interest rates, and shifts in domestic building
        construction requirements;

-       Changes in government regulations affecting customers, the Company, or
        Agile;

-       Risks generally involved in the construction business, including
        weather, fixed price contracts and shortages of materials or price
        competitive labor;

-       Competition;

-       The ability of the Company to successfully bring the products from their
        development stage into full and profitable production;

-       The Company and/or Agile and HKC's ability to raise sufficient debt and
        equity capital to perfect business plans and to enable Agile to continue
        in existence, and the proposed new affiliate to begin operations;

                                       12
<PAGE>   14

-       The occurrences of incidents which could subject the Company to
        liability or fines;

-       Agile's ability to obtain the sales orders necessary to support the
        volume of production required to sustain successful operations.

ITEM 7. FINANCIAL STATEMENTS.

The Financial Statements appear in the Report following Part III.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

In a letter dated June 16, 1997, the registrant's certifying accountant, KPMG
Peat Marwick has declined to stand for re-election stating that they are
changing the profile of companies they wish to audit. A change in accountants
had been approved at a meeting of the stockholders. Please see Exhibit 1, and
two letters to the Company from KPMG Peat Marwick LLP: (1) dated August 19,
1997, Form 8-K/A filed August 20, 1997; and (2) dated June 27, 1997, found
attached to Form 8-K filed July 14, 1997.

With regards to the appointment of W. Alan Jorgensen, Certified Public
Accountant, as the Company's auditor for the year ending April 30,1997, please
see Form 8-K filed on July 14, 1997.

There were no disagreements with Accountants on Accounting and Financial
Disclosure.

There are no other reportable events under Item 304 of Reg 229.304.



                                       13
<PAGE>   15

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.

The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
Name                                Age     Position
----                                ---     --------
<S>                                 <C>     <C>                             
Grant C. Record                     61      Chief Executive Officer, Secretary, Director
David C. Moran                      58      President until October 1997
Donald C. Bazemore                  63      Director, Chairman of the Board
James R. Medley                     57      Director, Treasurer
Grant Todd                          47      Director
Way W. Lee                          72      Director

</TABLE>

GRANT C. RECORD was the Founder, Executive Vice President, Secretary, and
Chairman of the Board of Directors of the Company from December 1992 until he
became President on June 28, 1995. He relinquished the office of President and
became Chief Executive Officer on March 5, 1997. During 1991 and 1992, Mr.
Record developed the Company's base technology and early patent positions. From
1983 to 1991, Mr. Record was Executive Vice President of Magnum Technology, a
developer of advanced magnetic disks for the magnetic disk drive industry. Prior
to Magnum, Mr. Record founded and developed the Data I/O Corporation, which
enabled the early Intel microprocessor technology to gain rapid worldwide
acceptance and use. Data I/O is yet the world leader in semi-conductor memory
and logic device programming, after twenty-five years.

DAVID C. MORAN, who joined the Company in January 1997, was elected President of
the Company in March 1997. In October 1997, he transferred to Agile Group, Inc.
to be its President. Most recently, Mr. Moran was Senior Vice President for
Product Development at Champion Home Builders Co., where his duties included
leading corporate level product engineering, purchasing, product costing,
product design and interior decor groups. Prior to Champion, Mr. Moran was a
Division General Manager at Fleetwood Enterprises, Inc., with profit
responsibility for ten manufacturing facilities in four states. Before that he
was a General Manager at Wick Building Systems, Inc., and a Division Vice
President at Redman Industries, Inc.

DONALD C. BAZEMORE is Chairman of the Board. Mr. Bazemore has been a director of
the Company since 1995 and the primary architect for the Company since 1992. Mr.
Bazemore founded the DB Associates firm in 1970. DB Associates is one of the
oldest architectural firms in Seattle. Prior to DB Associates, Mr. Bazemore was
Director of Architecture for Leo A. Daly Associates in Seattle, where he was
responsible for several major Boeing Aircraft construction projects. Leo A. Daly
is a well-known internationally significant architecture and engineering firm.

JAMES R. MEDLEY is Treasurer of the Company. Mr. Medley was first elected
director in 1995. Mr. Medley is founder of Laux Medley Norris, Inc., Investment
Advisors in Seattle since 1976. Laux Medley Norris does business planning for
large and small companies and is responsible for portfolios up to $100,000,000
in value. Mr. Medley was King County Republican Central Committee Chairman, 1979
to 1981, and King County Chairman of the Reagan/Bush campaign for president in
1980.

GRANT TODD first became a director in 1995. Mr. Todd served as President for two
Fortune 500 company divisions; Guilford of Maine, division of Interface, Inc.,
Atlanta, GA, and Interface Flooring Systems, Division of Interface, Inc.,
Atlanta, GA. During his 20-year tenure in the Fortune 500 environment, Mr. 



                                       14
<PAGE>   16

Todd also held high level marketing and corporate development positions with
Interface.

WAY W. LEE has been a director of the Company since December 1992. He served as
President of Fibertech Corporation from 1972 to 1985, and as President of
Crystal Asset Management, Inc., from 1985 to December 1992. He also was a
director of Crystal Asset Management, Inc., until its reverse merger with LEEP.
Mr. Lee is the President of Way W. Lee General Contractor and Acme Industries
Door and Millwork.

ITEM 10.       EXECUTIVE COMPENSATION.

The following table sets forth certain information concerning the compensation
paid by the Company to Grant C. Record, President and CEO until March 5, 1997,
when he relinquished the position of President, but retained the position of
Chief Executive Officer; to David C. Moran, President; and to Lennie H. Zallar,
Vice-President and Chief Financial officer until January 1997 :

<TABLE>
<CAPTION>
                        SUMMARY ANNUAL COMPENSATION TABLE
------------------------ ----------------------------------- ----------------- -----------------
                                                                  Awards           Payouts
                                                             ----------------- -----------------
<S>                                                          <C>               <C>
Grant C. Record          President 1995 to January 1997;         $60,000             -0-
                         CEO since 1995
                                                             ----------------- -----------------
David C. Moran           President until October 1997            $32,636           $10,000

                                                             ----------------- -----------------
Lennie H. Zallar         Vice-President and Chief                $33,000           $13,702
                         Financial Officer until January
                         1997

</TABLE>

NON-QUALIFIED STOCK OPTIONS. The Company has issued non-qualified stock options
to selected employees, officers, directors, consultants and advisors. As of
April 30, 1997, options to purchase 1,127,305 shares of Common Stock were
outstanding at an average exercise price of approximately $.73 per share.
Subsequent to fiscal-year-end 1997, board members received a total of 250,000
options exercisable at $.375 per share; options expire in three years from date
of issue.

As of April 30, 1997, there were no options outstanding to purchase shares of
common Stock granted to Grant C. Record; there was an agreement to grant a
300,000 share option with piggyback registration rights (or S-8 Registration as
appropriate) to David C. Moran. (See Note 1(f) to the Financial Statements.)

The following table sets forth information as to all options exercised during
the fiscal year ended April 30, 1997:

<TABLE>
<CAPTION>
Names                             Shares Acquired on Exercise          Value Realized (1)
-----                             ---------------------------          ------------------
<S>                               <C>                                  <C>     
Donald C. Bazemore                          150,000                         $257,500
Carmen Manzonelli                            50,000                         $ 52,000

</TABLE>

Note: The Company is unable to calculate the value of un-exercised in-the-money
options because of the highly restricted nature of the option shares.

(1) "Value Realized" is based on NASDAQ bulletin board quoted prices for
publicly traded stock, and does not represent the fair market value of the
highly restricted shares.

EMPLOYMENT AGREEMENTS. The Company has entered into six employment agreements
since 1992. One agreement was with former financial officer, Gary Nees. Mr. Nees
resigned during the fiscal year 



                                       15
<PAGE>   17

1994/95 and his severance was amicable. The company agreed to extend certain
stock options for Mr. Nees (shown herein) for five years. An employment
agreement with Tim Metz, former President/CEO, is in dispute. Kirk Metz, a
former employee (deceased), is owed certain moneys from past services rendered.
The Company's current Management believes the contract with Kirk Metz is
abandoned during calendar year 1994. Approximately $49,992 is accrued for Kirk
Metz's estate (Kirk Metz died in early 1996). The fourth employment agreement is
with Grant C. Record, CEO. This contract is current and active. The terms of Mr.
Record's employment contract were disclosed in the SEC registration filing. The
fifth employment contract was a consulting contract for employment of Lennie H.
Zallar as Vice-President and CFO. This contract was terminated during the year
ending April 30, 1997. The sixth employment agreement is with David C. Moran,
President as dated January 7, 1997. This contract appears on Form 8-K filed on
March 27, 1997.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of September 10, 1997, by (1) each
person who is known by the Company to own beneficially more than 5% of the
Common Stock, (2) each of the Company's primary investors and executive
officers, and (3) all directors and executives officers as a group. Each named
beneficial owner has sole voting and investment power with respect to the shares
listed unless otherwise indicated.



<TABLE>
<CAPTION>
 Title of Class         Name and Address Beneficial Owner             Amount        % of Class
                                                                                       (1)
----------------- ---------------------------------------------- ----------------- -------------
<S>               <C>                                            <C>                  <C>   
Common Stock      Grant C. Record (2)                            6,450,662 shares     23.38%
                  616 Blue Lake Blvd., #139, Twin Falls. ID
                  83301
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      Donald C. Bazemore (2)                           239,939 shares     0.87%
                  401 2nd Ave. So., Seattle, WA 98104
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      David C. Moran (3)                               413,690 shares     1.50%
                  906 Oxford Circuit, Brentwood, TN 37027
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      Way W. Lee (2)                                   281,762 shares     1.02%
                  5210 SE 26th, Portland, OR 97202
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      Grant Todd (2)                                   264,862 shares     0.96%
                  1701 Lake Side Lane, Atlanta, GA 30339
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      James R. Medley (4)                              116,319 shares     0.42%
                  10002 Aurora Ave. No., #3345, Seattle, WA
                  98133
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      Agile Building Technology, Inc.                2,000,000 shares     7.25%
                  30 W. 3rd St., 3rd Floor, Williamsport, PA
                  17701
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      Agile Investment Corporation, Inc.             2,501,096 shares     9.06%
                  30 W. 3rd St., 3rd Floor, Williamsport, PA
                  17701
----------------- ---------------------------------------------- ----------------- -------------
Common Stock      All six executive officers and Directors as    7,767,234 shares     28.15%
                  a group (5), (6)
</TABLE>

(1) No special note(s).
(2) The amount beneficially owned includes 50,000 shares of Common Stock
    issuable upon the exercise of options.
(3) The amount beneficially owned includes 300,000 shares of Common Stock
    issuable upon the exercise of options.
(4) The amount beneficially owned includes 75,000 shares of Common Stock
    issuable upon the exercise of options.
(5) The amount beneficially owned includes 575,000 shares of Common Stock
    issuable upon the exercise 
(6) Excluding Mr. Moran, who is no longer an executive officer as of October
    1997, the total is 7,353,544 shares or 26.65% of Class.


                                       16
<PAGE>   18
of options.

In connection with the Company's formation and investment in AIC, the ownership
interest in AIC changed per the agreement dated December 4, 1995, depending on
the relative financial performance of AIC and WLP. WLP's and AIC's financing
performance during the period December 4, 1995, to April 30, 1997, was such that
as of April 30, 1997, ownership of AIC was 56% held by WLP, and the 44% balance
held by the Company at the close of the reporting period. As a result of the
February 28, 1997 Agreement, AIC distributed 4,216,601 shares of LEEP common
stock to the Company and the Company released all of its ownership in AIC. The
4,216,601 shares were retired by the Company.

ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

LICENSE AGREEMENT. On May 21, 1994, the Company and Grant C. Record entered into
a Purchase of Royalty Rights and Assignment of Technology Agreement, which,
among other things, canceled the Amended License Agreement dated June 10, 1993
as subsequently amended on August 5, 1993, and irrevocably assigned to the
Company from Mr. Record, all rights to patent applications, and any reissues,
divisions and continuations thereof, as well as any technology, process and/or
materials developed by Mr. Record and/or Timothy W. Metz, the Company's former
President. This assignment covers the United States only, however, the Company
is assigned the right to develop foreign construction projects provided the
Company is responsible for the costs of all relevant foreign patent protections
for the particular countries involved.

STOCK OPTIONS. In July 1996, Donald C. Bazemore, Chairman of the Board of
Directors of the Company, exercised 150,000 non-qualified stock options. Payment
was made in the form of an $80,000 8% note payable to the Company. The note is
secured by existing shares of the Company's stock held by the optionee. As long
as the optionee has sufficient shares of the Company's stock as collateral for
the note based on the market price of the stock, no interest will accrue and no
amount will be due under the note. The collateral stock and the shares issued
against the note are held by the Company. No transfers are permitted until the
note is fully paid. The Company also entered into an agreement with Mr. Bazemore
to provide architectural and sales services to the Company. In the 1996/1997
fiscal year, the company paid his company, DB Associates, $6,665. Mr. Bazemore
also performs architectural services for Agile, a Company affiliate. The
"Architectural Services Agreement," described in 5(a) of the notes to Financial
Statements, has not yet resulted in any fees paid because neither the company
nor its affiliates have sold any panels as required by the Agreement.



                                       17
<PAGE>   19

ITEM 13.       EXHIBITS, AND REPORTS ON FORM 8-K.

(A) FINANCIAL STATEMENTS AND EXHIBITS

1.  FINANCIAL STATEMENTS:

-   Independent Auditors' Report

-   Balance Sheets as of April 30, 1997 and 1996

-   Statements of Operations for years ended April 30, 1997 and 1996, and from
    December 23, 1991 (inception) through April 30, 1997

-   Statement of cash flows for years ended April 30, 1997 and 1996 and from
    inception 

-   Statements of Stockholders' Deficit for years ended April 30, 1997 and 1996,
    and from December 23, 1991 (inception) through April 30, 1997

-   Notes to Financial Statements


2.  EXHIBITS

-   Exhibit 4, Instruments defining rights of holders

-   Exhibit 10.1, Agreement between Leading Edge Earth Products, Inc., and
    Jasari International, Inc., dated June 16, 1997

-   Exhibit 10.2, Agreement between Kane International, Ltd. and Leading Edge
    Earth Products, Inc., dated June 16, 1997

-   Exhibit 10.3, Agreement between Soralena Enterprises Limited and Leading
    Edge Earth Products, Inc., dated June 16, 1997

-   Exhibit 10.4, Agreement between Leading Edge Earth Products, Inc., and
    Harrison Kramer Corporation, dated August 12, 1997

-   Exhibit 10.5, Agreement between Leading Edge Earth Products, Inc., and
    Rothchild Group S.A., dated July 1, 1997

-   Exhibit 16.1, Letter from KPMG Peat Marwick to Leading Edge Earth Products,
    Inc., dated June 27, 1997

-   Exhibit 16.2, Letter from KPMG Peat Marwick to Leading Edge Earth Products,
    Inc., dated August 19, 1997

-   Exhibit 21, Affiliate companies of the registrant

-   Exhibit 27, Financial Data Schedule

-   Exhibit 99, J. Ratkovich note

(B) REPORTS ON FORM 8-K

1.  Letter of engagement from Grant C. Record, CEO, Leading Edge Earth Products,
    Inc., to David Moran, dated January 7, 1997 -- please see Form 8-K filed on
    March 27, 1997

2.  Agreement between Leading-Edge Earth Products, Inc., Grant Record, Agile
    Building Technology, Inc., WLP Associates, and Agile Investment Corporation,
    dated February 28, 1997 -- please see Form 8-K filed on March 27, 1997

3.  Letter from KPMG Peat Marwick to Securities and Exchange Commission, dated
    June 27, 1997 -- please see appended to Form 8-K filed on July 14, 1997


                                       18
<PAGE>   20

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
Leading-Edge Earth Products, Inc.:


        I have audited the accompanying balance sheet of Leading-Edge Earth
Products, Inc. (a development stage enterprise) as of April 30, 1997, and the
related statements of operations, stockholders' deficit, and cash flows for the
years ended April 30, 1997 and 1996 and the period from December 23, 1991
(inception) to April 30, 1997. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on these
financial statements based on my audits.

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

        In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Leading-Edge Earth
Products, Inc. (a development stage enterprise) as of April 30, 1997, and the
results of its operations and its cash flows for the years ended April 30, 1997
and 1996, and the period from December 23, 1991 (inception) to April 30, 1997 in
conformity with generally accepted accounting principles.

        The accompanying financial statements have been prepared assuming that
Leading-Edge Earth Products, Inc. (a development stage enterprise) will continue
as a going concern. As discussed in note 3 to the financial statements, there is
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



                                    W. Alan Jorgensen, CPA


November 3, 1997
Seattle, WA


<PAGE>   21

                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A Development Stage Enterprise)

                         Condensed Balance Sheet April 30, 1997

<TABLE>
<CAPTION>
                                                             30-Apr-97
----------------------------------------------------------------------
<S>                                                            <C>   
ASSETS
Current assets:
     Cash                                                      $5,897
     Receivables from affiliate, net of adjustment 
       of $222,750                                              4,070
     Inventory
     Prepaid expenses and deposits                              6,500
                                                        --------------
                  Total current assets                         16,467

Property, plant and equipment
     Less accumulated depreciation
                                                        --------------
                  Net plant and equipment

Other assets:
     Intangible asset                                          25,822
     Less accumulated amortization                             (1,148)
                                                        --------------
                  Total other assets                           24,674

                                                        --------------
                  Total assets                                $41,141
----------------------------------------------------------------------


LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
     Notes payable                                             74,630
     Accounts payable                                         197,342
     Accrued contract salary                                  334,728
     Accrued royalties and interest payable                    96,661
     Loans from shareholder                                   324,575
                                                        --------------
                  Total current liabilities                 1,027,936

Shareholders' equity (deficit):
     Common stock, no par value                             4,140,333
     Note receivable from shareholders                       (483,784)
     Deficit accumulated during development stage          (4,643,344)
                                                        --------------
                  Total shareholders' deficit                (986,795)

                                                        --------------
                  Total liabilities and shareholders' 
                    equity                                    $41,141

</TABLE>

<PAGE>   22

                        LEADING-EDGE EARTH PRODUCTS, INC.

Condensed Statements of Cash Flows for Years ended April 30, 1997 and 1996 and
period from December 23, 1991 (inception) through April 30, 1997

<TABLE>
<CAPTION>
                                                                                      Period from
                                                                                      Dec. 23, 1991
                                                                  Years ended       (inception)thrgh
                                                           30-Apr-97      30-Apr-96     30-Apr-97
----------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>          <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                             $  (838,139)     $(402,536)   $(4,643,344)
Adjustments to reconcile net loss to cash
flows used in operating activities:
    Noncash compensaton expenses related to
       nonqualified stock options granted                                    41,500      1,199,339
    Depreciation and amortization                              1,148          5,200         15,324
    Write-off of long-term assets                             36,534         31,264        147,089
    Noncash compensation expenses
        related to stock grants                              257,128                       841,876
    Accrued royalty obligation                                37,000                       237,000
    Changes in operating assets and liabilities:
    Receivables                                               64,055        (68,125)        (4,070)
    Inventory                                                  4,778                             0
    Prepaid expenses and deposits                             31,901        (36,028)        (6,500)
    Accounts payable                                         175,944        220,983        591,368
    Accrued salary obligations                               106,975         93,457        349,352
    Accrued interest payable                                  29,243         41,579        261,696
                                                         -----------    -----------    -----------
                            Net cash used                    (93,433)       (72,706)    (1,010,870)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Equipment purchases and disposals                         11,000        (10,343)      (159,064)
    Purchase intangible                                      (25,822)                      (26,822)
    Pmts on notes receivable fm stockholders                                                 6,500
                                                         -----------    -----------    -----------
                            Net cash used in investing       (14,822)       (10,343)      (179,386)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Sale of common stock                                                     10,000        370,000
    Exercise of stock options                                 25,000         23,541         67,537
    Exercise of Class A warrants                                                             3,300
    Contributed capital                                                                    100,910
    Proceeds from notes payable                               74,630                       272,130
    Proceeds from loans from stockholders                     40,822        202,700        620,155
    Payments on notes payable                                                (4,500)       (13,500)
    Payments on loans from stockholders                      (32,000)      (143,379)      (224,379)
                                                         -----------    -----------    -----------
                            Cash provided by financing       108,452         88,362      1,196,153

                            Net change in cash                   197          5,313          5,897

Cash at beginning of period                              $     5,700    $       387    $         0
                                                         -----------    -----------    -----------
Cash at end of period                                    $     5,897    $     5,700    $     5,897
                                                         ===========    ===========    ===========
</TABLE>



<PAGE>   23

                        LEADING-EDGE EARTH PRODUCTS, INC.
<TABLE>
<CAPTION>

Condensed Statements of Cash Flows for Years ended April 30, 1997 and 1996 and
period from December 23, 1991 (inception) through April 30, 1997                           (Continued)
----------------------------------------------------------------------------------------------------------
                                                                                           Period from
                                                                                          Dec. 23, 1991
                                                                  Years ended            (inception)through
                                                            30-Apr-97      30-Apr-96        30-Apr-97
----------------------------------------------------------------------------------------------------------
<S>                                                         <C>            <C>             <C>   
SUPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
    Fixed assets acquired under contract                                                          $ 4,976
    Fixed assets acquired with a note payable                                                      13,725
                                                            -----------   ------------   -----------------
                                                                                                   18,701

    Notes receivable in exchange for common stock             $355,000                            607,599
    Offset of notes receivable from stockholder
        with related loans from stockholders                                 $117,315             117,315
    Cancellation of notes payable in exchange
        for common stock                                                      200,000             457,725
    Acounts payable for services for common stock                             238,000             276,240
    Cancellation of accounts payable in return
        of plant and equipment                                                                     22,500
    Common stock issued for payment of accrued
        royalties and interest payable                          29,000         58,011              58,011
    Grant of stock options in payment of accrued salary                                           120,000
    Cancellation of note receivable initially received
        for payment of shares upon exersise of options
    Shares in exchange for note payable                         40,000                             40,000
    Increase in shareholder loan for accounts payable           87,127                             87,127
    Note exchange for option exercise, 500,000 shares issued     3,500

                                                            -----------   ------------   -----------------
                                                              $514,627       $613,326          $1,786,517
                                                            ===========   ============   =================

</TABLE>

<PAGE>   24

                        LEADING-EDGE EARTH PRODUCTS, INC.

        Statements of Operations years ended April 30, 1997 and 1996 and
        period from December 23, 1991 (inception) through April 30, 1997

<TABLE>
<CAPTION>
                                                                                   Period from
                                                                                  Dec. 23, 1991
                                                         Years ended            (inception)through
                                                  30-Apr-97       30-Apr-96        30-Apr-97
-------------------------------------------------------------------------------------------------
<S>                                             <C>                  <C>             <C>    
INCOME:
     Licence and consulting revenues            $    225,125        $271,875        $497,000
     Interest                                         27,592           8,127          35,719
     Other                                             1,642          14,322          15,964
                                                ------------    ------------    ------------
     Total income                                    254,359         294,324         548,683

RESEARCH AND DEVELOPMENT EXPENSES:
     Salaries                                                         14,642         418,827
     Supplies/shipping                                   301           4,362          91,130
     Professional fees                                26,665          43,387         187,165
     License fees
     Travel                                                                           11,418
     Rent                                                                             37,715
     Legal                                            14,931          18,926          33,857
     Depreciation/amortization                         1,148           2,088           7,412
     Utilities                                           162             625           6,371
     Write-down of assets                             41,312          31,264         141,453
                                                ------------    ------------    ------------
     Total research and development                   84,519         115,294         935,348

GENERAL AND ADMINISTRATIVE EXPENSES:
     Contract salaries and incentives                162,685         143,202       1,352,343
     Rent                                             15,459           9,456          79,321
     Depreciation                                                      3,112           7,912
     Office supplies                                  10,956           6,058          51,505
     Postage and shipping                              6,345           5,124          23,782
     Telephone                                        11,396          14,417         110,044
     Travel and entertainment                         32,968          40,250         175,860
     Relocation                                        3,398           2,321          18,567
     Payroll and payroll expenses                     12,468           3,035          15,503
     Legal and professional                          176,920          76,421         957,821
     Stockholder costs                                10,387           5,514          47,689
     Interest and bank charges                        30,307          51,654         139,901
     Promotion & corp. development                   266,323         195,745         462,068
     Insurance                                                         4,283           7,865
     Other                                             2,617           5,974          19,352
                                                ------------    ------------    ------------
     Total general and administrative                742,229         566,566       3,469,533

Adjustment for unpaid revenues from affiliate        222,750
Royalties and royalty buyout expense                  43,000          15,000         553,000
                                                ------------    ------------    ------------
                                     Net loss   $   (838,139)   $   (402,536)   $ (4,409,198)

Loss per common share                           $      (0.03)   $      (0.02)   $      (0.25)
Weighted average shares outstanding               28,863,150      21,485,377      17,669,546
                                                ============    ============    ============
</TABLE>


<PAGE>   25
                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A Development Stage Enterprise)

                       STATEMENTS OF STOCKHOLDERS' DEFICIT

                  Years ended April 30, 1997 and 1996 and from
              December 23, 1991 (inception) through April 30, 1997


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------

                                                                                              Price             Common stock
                                                                                               per      ----------------------------
                                                                                  Date        Share      Shares               Amount
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>          <C>         <C>              <C>        
Balances at December 31, 1991 (inception)                                                   $   -       11,936,830       $     5,000
Cash contributions and unreimbursed expenditures incurred on behalf of the                                                          
     Company                                                                    1/92-4/92                                     37,039
Net loss                                                                                                                            
                                                                                                        ----------------------------
Balances at April 30, 1992                                                                      -       11,936,830       $    42,039
Cash contributions and unreimbursed expenditures incurred on behalf of the
     Company                                                                    5/92-4/93       -              -              63,871
Common stock issued for payment of note payable                                 4/30/1993     0.348        168,725            58,725
Common stock issued for payment of accrued salary                               4/30/1993     0.116         40,000             4,654
Excess of market price over exercise price on options granted during the year                   -              -             332,710
Net loss                                                                                        -              -                 -  
                                                                                                        ----------------------------
Balances at April 30, 1993                                                                      -       12,145,555       $   501,999
Common stock issued for cash                                                    6/22/1993     0.541        665,000           360,000
Common stock issued for payment of services received                            6/22/1993     0.541         99,000            53,594
Common stock issued for payment of a loan from stockholder and related
     accrued interest                                                           7/27/1993     0.606        125,400            76,000
Exercise of stock options                                                       4/30/1994     0.065        100,000             6,500
Excess of market price over exercise price on options granted during the year                   -              -             825,129
Net loss                                                                                        -              -                 -  
                                                                                                                                    
                                                                                                        ----------------------------
Balances at April 30, 1994, carried forward                                                     -       13,134,955       $ 1,823,222
                                                                                                        ----------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                                                   Notes         Deficit             Total
                                                                                 receivable     accumulated          stock-
                                                                                   from         during the          holders'
                                                                                   stock-       development          equity
                                                                                   holders          stage           (deficit)
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>               <C>               <C>        
Balances at December 31, 1991 (inception)                                      $       -         $       -         $     5,000
Cash contributions and unreimbursed expenditures incurred on behalf of the                                                    
     Company                                                                           -                                37,039
Net loss                                                                               -             (34,725)          (34,725)
                                                                               -----------------------------------------------
Balances at April 30, 1992                                                     $       -         $   (34,725)      $     7,314
Cash contributions and unreimbursed expenditures incurred on behalf of the
     Company                                                                           -                 -              63,871
Common stock issued for payment of note payable                                        -                 -              58,725
Common stock issued for payment of accrued salary                                      -                 -               4,654
Excess of market price over exercise price on options granted during the year          -                 -             332,710
Net loss                                                                               -            (504,175)         (504,175)
                                                                               -----------------------------------------------
Balances at April 30, 1993                                                     $       -         $  (538,900)      $   (36,901)
Common stock issued for cash                                                           -                 -             360,000
Common stock issued for payment of services received                                   -                 -              53,594
Common stock issued for payment of a loan from stockholder and related
     accrued interest                                                                  -                 -              76,000
Exercise of stock options                                                           (6,500)              -                 -
Excess of market price over exercise price on options granted during the year          -                 -             825,129
Net loss                                                                               -          (1,559,781)       (1,559,781)
                                                                               -----------------------------------------------
Balances at April 30, 1994, carried forward                                    $    (6,500)      $(2,098,681)      $  (281,959)
                                                                               -----------------------------------------------
</TABLE>


                                     Page 1


<PAGE>   26
                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A Development Stage Enterprise)

                 STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Price             Common stock       
                                                                                               per      ----------------------------
                                                                                  Date        Share      Shares               Amount
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>          <C>        <C>              <C>         
Balances at April 30, 1994, brought forward                                                  $   -     13,134,955       $ 1,823,222
Common stock issued for payment of professional fees and royalty obligations    5/31/1994      0.499    1,054,863           526,500 
Exercise of options for cash                                                    6/30/1994      0.092      207,400            18,996 
Cash payment of note receivable from stockholder                                7/31/1994      0              -                 -   
Exercise of options for cancellation of note payable                            8/4/1994       0.116      197,680            23,000 
Grant of stock options in payment for accrued salary obligations                10/31/1994     0              -             120,000 
Exercise of options for notes receivable                                        11/94-2/95     0.132    1,859,172           246,099 
Common stock issued for payment of accounts payable                             12/31/1994     0.835       45,796            38,240 
Exercise of Class A warrants for cash                                           1/31/1995      2            1,650             3,300 
Exercise of Class A warrants for payment of note payable                        1/31/1995      2           50,000           100,000 
Net loss                                                                                       0              -                 -   
                                                                                                       -----------------------------
Balances at April 30, 1995                                                                       -     16,551,516       $ 2,899,357
Common stock issued for payment of accounts payable                             9/28/1995      0.625       20,800            13,000
Common stock issued for cash                                                    11/6/1995      0.800       12,500            10,000 
Common stock issued in exchange for investments in affiliates                   12/4/1995        -     11,884,615               -  
Common stock issued for payment of accounts payable                             12/10/1995     0.500      150,000            75,000
Exercise of options for cash                                                    12/27/1995     0.116      202,320            23,541
Common stock issued for payment of accounts payable                             1/12/1996      0.750      100,000            75,000
Offset of notes receivable from stockholders with related loans from                                                                
     stockholders                                                                                -            -                 -  
Common stock issued for payment of accounts payable                             3/11/1996      0.750      100,000            75,000
Common stock issued for payment of note payable and accrued interest and                                                            
     royalties                                                                  4/29/1996      1.032      250,000           258,011
Excess of market price over exercise price on options granted during the year   4/30/1996        -            -              41,500
Net loss                                                                                         -            -                 -   
                                                                                                       -----------------------------
Balances at April 30, 1996, carried forward                                                      -     29,271,751      $  3,470,409 
                                                                                                       -----------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                                                                    Notes         Deficit             Total
                                                                                  receivable     accumulated          stock-
                                                                                    from         during the          holders'
                                                                                    stock-       development          equity 
                                                                                   holders          stage           (deficit)
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>               <C>               <C>        
Balances at April 30, 1994, brought forward                                    $    (6,500)      $ (2,098,681)     $  (281,959)
Common stock issued for payment of professional fees and royalty obligations           -                 -             526,500
Exercise of options for cash                                                           -                 -              18,996
Cash payment of note receivable from stockholder                                     6,500               -               6,500
Exercise of options for cancellation of note payable                                   -                 -              23,000
Grant of stock options in payment for accrued salary obligations                       -                 -             120,000
Exercise of options for notes receivable                                          (246,099)              -                 -
Common stock issued for payment of accounts payable                                    -                 -              38,240
Exercise of Class A warrants for cash                                                  -                 -               3,300
Exercise of Class A warrants for payment of note payable                               -                 -             100,000
Net loss                                                                               -          (1,303,988)       (1,303,988)
                                                                               ------------------------------------------------
Balances at April 30, 1995                                                     $  (246,099)      $(3,402,669)      $  (749,411)

Common stock issued for payment of accounts payable                                    -                 -              13,000
Common stock issued for cash                                                           -                 -              10,000
Common stock issued in exchange for investments in affiliates                          -                 -                 -
Common stock issued for payment of accounts payable                                    -                 -              75,000
Exercise of options for cash                                                           -                 -              23,541
Common stock issued for payment of accounts payable                                    -                 -              75,000
Offset of notes receivable from stockholders with related loans from                                                       -
     stockholders                                                                  117,315               -             117,315
Common stock issued for payment of accounts payable                                    -                 -              75,000
Common stock issued for payment of note payable and accrued interest and                                                   -
     royalties                                                                         -                 -             258,011
Excess of market price over exercise price on options granted during the year          -                 -              41,500
Net loss                                                                               -            (402,536)         (402,536)
                                                                               -----------------------------                   
Balances at April 30, 1996, carried forward                                    $  (128,784)      $(3,805,205)      $  (463,580)
                                                                               ------------------------------------------------
</TABLE>
                                     Page 2


<PAGE>   27
                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A Development Stage Enterprise)

                 STATEMENTS OF STOCKHOLDERS' DEFICIT (CONTINUED)


<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
                                                                                                                                    
                                                                                                                               
                                                                                              Price        Common stock
                                                                                               per      ----------------------------
                                                                                  Date        Share      Shares               Amount
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>          <C>         <C>              <C>        
Balances at April 30, 1996, brought forward                                                  -          29,271,751       $ 3,470,409
                                                                                                      
Common stock issued for payment of accrued salaries                            6/15/1996      0.690         21,200            14,624
Common stock issued for payment of services                                    7/10/1996      1.000         75,000            75,000
Exercise of options for note receivable                                        7/20/1996      0.533        150,000            80,000
Removal of stop stock transfer for cash                                        8/10/1996         -             -               3,500
Common stock issued for note receivable                                        8/15/1996      1.000        275,000           275,000
Common stock issued for payment of note payable and accrued interest           8/22/1996      0.690        100,000            69,000
Exercise of options for cash                                                   10/3/1996      0.500         50,000            25,000
Common stock issued for payment of services                                    12/10/1996     1.000         75,000            75,000
Common stock issued for payment of services                                    3/10/1997      0.704         75,000            52,800
Common stock exchanged for stock of discontinued subsidiary                    3/25/1997         -      (4,216,601)              -  
Net loss                                                                                         -             -                 -  
                                                                                                        ----------------------------
Balances at April 30, 1997                                                                       -      25,876,350       $ 4,140,333
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             
                                                                                    Notes         Deficit            Total
                                                                                  receivable    accumulated          stock-
                                                                                     from        during the         holders'
                                                                                    stock-      development          equity
                                                                                   holders         stage           (deficit)
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>               <C>               <C>        
Balances at April 30, 1996, brought forward                                    $  (128,784)      $(3,805,205)      $(463,580)
                                                                               
Common stock issued for payment of accrued salaries                                    -                 -            14,624
Common stock issued for payment of services                                            -                 -            75,000
Exercise of options for note receivable                                            (80,000)              -               -
Removal of stop stock transfer for cash                                                -                 -             3,500
Common stock issued for note receivable                                           (275,000)              -               -
Common stock issued for payment of note payable and accrued interest                   -                 -            69,000
Exercise of options for cash                                                           -                 -            25,000
Common stock issued for payment of services                                            -                 -            75,000
Common stock issued for payment of services                                            -                 -            52,800
Common stock exchanged for stock of discontinued subsidiary                            -                 -               -
Net loss                                                                               -            (838,139)       (838,139)
                                                                               ----------------------------------------------
Balances at April 30, 1997                                                     $  (483,784)      $(4,643,344)      $(986,795)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes to financial statements.


                                     Page 3

<PAGE>   28

                        LEADING-EDGE EARTH PRODUCTS, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                 APRIL 30, 1997


(1)  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

        (a)    ORGANIZATION AND POOLING INTERESTS

               Leading-Edge Earth Products, Inc. believes its products have
               applications for single-family, multifamily residential, and low
               rise commercial construction. As of April 30, 1997, the Company
               is considered to be in a transition from the development stage to
               the production stage through its affiliates and thus the
               Company has not generated significant revenues from its research
               and development efforts and operations have been financed
               primarily through the issuance of equity securities, outside
               loans, and loans from shareholders. The Company received its
               first license fee revenue in 1995.

               The Company is the result of a merger on December 29, 1992 of
               Leading-Edge Earth Products, Inc., a Washington corporation
               incorporated on December 23, 1991 (old LEEP), and Crystal Asset
               Management, Inc. (CAM), an inactive public company incorporated
               in 1968 in the state of Oregon.

               This merger has been accounted for as a pooling of interests.
               Accordingly, the assets, Liabilities, equity and operations of
               both entities have been combined for all periods prior to the
               merger.

               December 23, 1991 is shown as the inception date of the Company
               inasmuch as that is the date old LEEP was incorporated and
               activities relating to the Company's business began.

        (b)    PROPERTY AND EQUIPMENT

               All remaining property and equipment has been written down to
               zero or sold as the Company expects all production to be carried
               out by affiliate.

               On August 29, 1996, the Company assumed an agreement entered into
               by Grant Record on March 30, 1996. In this agreement, the
               inventor disclosed certain proprietary 



<PAGE>   29

               information for the use of Magnesium Oxide Technology (MgO) and
               the Company received an exclusive and assignable right to the
               licensed technology, including enhancements made by the licensee.
               The MgO technology is used to control odors produced in the
               manufacturing process of its principal product. The Company
               obtained the right to use the technology by paying $25,822 which
               it financed with a stockholder loan. The Company shows this
               purchase as an intangible asset. Amortization has been taken on
               this asset from the date acquired by the Company using the
               straight-line method over 15 years. The continued right to use 
               the product depends on the Company's payment of $25,000 per year
               minimum royalty to the inventor. The Company's criteria for
               developing and/or holding slurry technology is that MgO slurry or
               equivalent be low cost, fire proof, water proof, and easy to
               apply.

        (c)    INCOME TAXES

               Deferred income tax assets and liabilities are computed for
               differences between the financial statement and tax basis of
               assets and liabilities that will result in taxable or deductible
               amounts in the future based on enacted tax laws and rates
               applicable to the periods in which the differences are expected
               to affect taxable income. Losses prior to 1995 will be
               capitalized. From 1995 on, the year in which the Company received
               its first license revenue, most losses should be carried forward.
               Valuation allowances are established when necessary to reduce tax
               assets to the amount expected to be realized. Income tax expense
               is the tax payable or refundable for the period plus or minus the
               change during the period in net deferred tax assets and
               liabilities.

        (d)    NET LOSS PER COMMON SHARE

               Net Loss per common share is computed based on weighted average
               number of common shares and common share equivalents outstanding.
               When dilutive, stock options are included as common share
               equivalents using the treasury stock method.

               There was no difference between primary and fully diluted
               earnings per share for all periods presented.


<PAGE>   30

               Shares outstanding for the loss calculations are net of 4,216,601
               shares which were retired during the last quarter of the
               reporting period.

        (e)    INVENTORY

               Inventory, consisting principally of raw materials used in
               producing test samples and to be used in full-scale production,
               has been written down to zero as the Company expects all
               production to be carried out by affiliates.


        (f)    STOCK-BASED COMPENSATION

               In October 1995, the Financial Accounting Standards Board issued
               Statement of Financial Accounting Standards No. 123 (SFAS 123)
               which addresses the accounting for stock-based compensation
               arrangements. SFAS 123 permits a company to choose either a new
               fair-value-based method or the current APB Opinion 25
               intrinsic-value-based method of accounting for stock-option-based
               compensation arrangements.

               Options to purchase 100,000 shares of restricted rule 144 stock
               issued during the year were canceled before year end at no cost
               to the Company and are not valued. Options to purchase 400,000
               shares of restricted rule 144 stock were valued at $147,597. The
               Black and Scholes method for valuing stock options was used with
               the following assumptions:

                      Grant date January 7, 1997 Options to purchase 300,000
                      shares Stock price at date of issue 0.97 Exercise price
                      0.75 Expected life is the full term of 3 years Volatility
                      has been measured to be 37.8%
                      There are no dividends included in the calculations
                      Risk free interest rate used is 5.5%

                      Grant date April 23, 1997 Options to purchase 100,000
                      shares Stock price at date of issue 0.53 Exercise price
                      0.50 Expected life is the full term of 5 years Volatility
                      has been measured to be 37.8%
                      There are no dividends included in the calculations
                      Risk free interest rate used is 6.0%



<PAGE>   31
        For the year ended April 30, 1996 options to purchase 200,000 shares of
        restricted rule 144 stock issued in June, 1995 expired without being
        exercised at no cost to the Company and are not valued. $41,500 was
        recognized as an expense during 1996 based on the intrinsic value of
        options granted during that year.

        The pro forma effect of valuing the options for financial reporting
        purposes would be to increase the net loss for fiscal 1997 by $147,597
        to $985,736. The effect on loss per share would be negligible for 1997.
        The Company has adopted SFAS 123 for the year ending April 30, 1997.

(2)     USE OF 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.

(3)     GOING CONCERN

        The Company's ability to continue as a going concern is dependent upon
        its success in transforming its building panel technology into a
        profitable operation. On December 4, 1995 the Company entered into an
        agreement with WLP Associates, Ltd. (WLP) of Williamsport, PA, to form
        Agile Building Technology, Inc.(Agile). That agreement has been canceled
        and a new agreement between the parties was finalized on March 15, 1997.
        Management believes this agreement will provide the necessary resources
        to transform its technology into a commercially viable product.

        Under the terms of the new Agreement, 2,000,000 shares of its common
        stock will remain the property of Agile Building Technology and the
        Company will retain its 35% ownership interest in Agile. LEEP received
        $98,000 cash during the reporting period. The Company has the right to
        receive an additional $226,820 in cash which has yet to be received by
        the Company. The Company will be permitted to develop joint venture
        arrangements with other interested parties and use its own or Agile's
        technologies.


<PAGE>   32

        The successful funding and development of affiliates as profitable
        manufacturing entities is important to the Company's ability to continue
        as a going concern. The accompanying financial statements have been
        prepared on the basis that the Company will be able to continue in
        existence as a going concern. These statements do not include any
        adjustments that might result from the outcome of this uncertainty.

(4)     INVESTMENTS IN AFFILIATE

        The Company has a 35% interest in Agile with the remaining 65% interest
        held by WLP. This investment is accounted for using the equity method.
        Any asset or equity distributions from Agile will be made in accordance
        with the respective ownership interests. Agile is established to
        manufacture building panels using technology developed jointly and/or
        independently by the Company and/or Agile and is just now starting
        production. Agile's primary assets are its investment in the Company's
        common stock, an operating production line at the Winter Panel
        Corporation facility in Brattleboro, Vermont, research and pilot
        production facilities in leased property located in Williamsport,
        Pennsylvania, and its license right to use certain technology developed
        by the Company, and technology and products jointly developed during the
        period from December 4, 1995 to date. The Company has recorded no value
        related to this investment due to the indeterminable values related to
        the Company's common stock and technology given or the common stock of
        Agile received in the investment transaction. Agile has incurred
        operating losses since its inception in December 1995 through the period
        ended April 30, 1997.

        The Company has not recognized its proportionate share of Agile's net
        losses as the Company has no obligation to fund any such losses and
        carries its investment in Agile at zero.

        As part of the cancellation of the December 4, 1995 agreement as
        discussed in note 3, a total of 4,216,601 shares of common stock have
        been released from escrow and subsequently retired.

(5)     RELATED PARTY TRANSACTIONS


        (a)  ARCHITECTURAL SERVICES AGREEMENT

               The Company has entered into an agreement with the owner of DB
               Associates, a stockholder and member of the Board 


<PAGE>   33

               of Directors, to provide architectural and sales services. In
               addition to normal hourly rates for architectural services, DB
               Associates shall be paid for sales and marketing efforts at the
               rate of $1.00 per panel for each panel sold to persons or
               companies for which DB Associates performs architectural work.

               DB Associates will alternatively receive $.25 per panel for
               providing architectural review for compliance with the Company's
               standards on projects with which DB Associates is not directly
               involved as architect.

        (b)    CONSULTING AGREEMENTS

               For the year ending April 30, 1997, the Company recognized
               approximately $152,000 in consulting revenues from Agile for
               services performed by an officer and stockholder of the Company.

               In June 1996 the Company entered a consulting agreement with an
               officer of the Company for which consultant was compensated
               $5,000 per month for July, August, and September. Beginning in
               October consultants compensation became $10,416.67 per month. The
               consulting agreement was canceled in February of 1997.

               In January of 1997 the Company entered a consulting agreement
               with an officer of the Company for which the consultant is
               compensated $10,417 per month and was granted options to purchase
               300,000 shares of company stock at $0.75 per share

               In January, 1996 the company entered a consulting agreement with
               a vendor and stockholder to provide certain corporate development
               activities including broker meetings, a publishing and mailing
               program, broker and shareholder relations, and other corporate
               consulting in the area of financial relations and strategic
               planning. This vendor received 225,000 shares of Company stock
               for services rendered during the year ended April 30, 1997.

        (c)    STOCK PURCHASE AGREEMENT WITH LEEP STRUCTURES, INC.

               On June 22, 1993, the Company entered into a stock purchase
               agreement with LEEP Structures, Inc. (LSI) of Michigan. Under the
               terms of this agreement LSI purchased 665,000 shares for the
               Company's common stock 


<PAGE>   34

               for $360,000. Additionally, LSI was granted an option to purchase
               up to 200,000 additional shares of the Company's common stock at
               $2.00 per share for a period of three years subject to the
               achievement of certain levels of sales by LSI. This option
               expired in June 1996.

               The agreement grants to LSI the right of first refusal to act as
               the Company's exclusive manufacturer's representative to market
               the Company's products in seven mid-western states. LSI also had
               the right of first refusal to participate with the Company in
               building a manufacturing facility in these states. The rights
               have expired and/or have been re-negotiated by WLP and Agile.

(6)  PREFERRED AND COMMON STOCK

        The Articles of Incorporation authorized issuance of up to 100,000,000
        shares of common stock and up to 10,000,000 shares of preferred stock.
        No preferred shares have been issued. The Board of Directors has the
        authority, without further stockholder action, to determine the
        preferences, limitations, and relative rights of the preferred stock,
        subject to the requirements on the Oregon Business Corporation Act.

        On March 4, 1994 the Company registered for sale with the Securities and
        Exchange Commission 6,000,000 shares of common stock to be issued upon
        exercise of outstanding warrants and 995,00 shares are subject to
        registration rights agreements which restrict the number of shares that
        a stockholder can sell into the market during any three-month period for
        a period of three years.

        On August 6, 1995 the Company's Board of Directors voted to withdraw the
        remaining unsold 6.943,500 shares of common stock registered for sale
        with the SEC on March 4, 1994.

        Of the Company's common stock outstanding at April 30, 1997, only the
        1,193,683 shares originally held by the stockholders of CAM and the
        995,000 shares registered on March 4, 1994 and subsequently sold, and
        those shares issued after December 29, 1992 where the holding
        restrictions had been satisfied are freely tradable, subject to
        aforementioned volume limitations. The shares issued pursuant to the
        agreement of merger dated December 29, 1992 and any shares issued
        subsequent thereto, are "restricted securities" under the Securities Act
        of 1933 and, therefor, are subject to limitations on transferability.


<PAGE>   35

        All warrants to purchase shares of common stock have been called or have
        expired.

        21,200 shares of stock was issued to an officer for services, 150,000
        shares were issued to a member of the Board in exchange for a fully
        secured note receivable, 225,000 shares were issued to a vendor for
        services rendered, 100,000 shares were issued to a stockholder in
        exchange for a note payable and accrued interest.

(7)     STOCK OPTIONS AND NOTES RECEIVABLE FROM STOCKHOLDERS

        (a)    STOCK OPTIONS

               The board of Directors has issued non-qualified stock options to
               certain directors, employees, investors and consultants. All
               outstanding options are exercisable as of April 30, 1997. The
               options are for restricted shares under Rule 144 of the SEC.

<TABLE>
<CAPTION>
                                                          PRICE PER
                                              SHARES        SHARE
                                           -----------------------
<S>                                         <C>          <C>      
               Balance at April 30, 1992           --    $      --
               Granted                      2,416,660    .07 - .50

               Balance at April 30, 1993    2,416,660    .07 - .50
               Granted                      1,071,786    .41 -2.00
               Exercised                     (100,000)         .07

               Balance at April 30, 1994    3,388,446    .07 -2.00
               Granted                        520,000    .13 - .50
               Exercised                   (2,264,252)   .07 - .50
               Expired                        (80,960)   .50 - .59

               Balance at April 30, 1995    1,563,234    .07 -2.00
               Granted                        225,000    .50 - .70
               Exercised                     (202,320)         .12
               Expired                       (405,311)   .43 -2.00

               Balance at April 30, 1996    1,180,603    .07 -2.00
               Granted                        500,000    .50 -1.00
               Exercised                      (50,000)         .50
               Expired                       (603,298)   .07 -2.00

               Balance at April 30, 1997    1,027,305    .41 -2.00
</TABLE>

        (b)    NOTES RECEIVABLE FROM STOCKHOLDERS

               In November 1994 and January 1995, the Company issued a total of
               784,569 shares of unregistered common stock to a foreign,
               off-shore corporation upon exercise of stock options that the
               foreign corporation had purchased from an officer and director of
               the Company. Payment upon 


<PAGE>   36

               exercise of the options was made in the form of demand notes
               payable to the Company in the amount of $128,784, payable between
               November 30, 1995 and January 6, 1996, with interest accruing at
               8%. The officer responsible for the original transfer of the
               784,659 shares left the Company during the fiscal year ended
               April 30, 1996. The note has expired and the Company's shares are
               not legally transferable. In February 1995, the Company issued
               1,074,603 shares of unregistered common stock to another foreign
               off-shore corporation upon exercise of stock options that the
               foreign corporation had purchased from an officer and director of
               the Company. Payment upon exercise of the options was made in the
               form of a $117,315 note bearing interest at 8% per annum. This
               note was paid during the fiscal year ended April 30, 1996 by
               offsetting amounts owed by the Company to the selling optionee
               (director/officer) and the foreign company. During fiscal year
               1994, options to purchase 100,000 shares were exercised by an
               officer and director of the Company at an exercise rate of $.065
               per share. The aggregate purchase price of $6,500 was paid by a
               note receivable due one year after issuance bearing interest at a
               rate of 6%, such note was paid in full during fiscal year 1995.
               In August, 1996 a stockholder provided funding to Agile in
               exchange for LEEP stock for which the Company received a note
               receivable for $275,000 with interest at 15%., An officer of the
               Company exercised options to purchase 150,000 shares of stock
               using a full recourse note for $80,000 with collateral in the
               form of Company stock. The collateral stock and the shares issued
               against the note are held by the Company. No transfers are
               permitted until the note is fully paid.

               The outstanding balance of these receivables at April 30, 1997 is
               shown on the balance sheet as a reduction in equity.


(8)      NOTES PAYABLE AND LOANS FROM STOCKHOLDERS

        (a)    NOTES PAYABLE

               The Company owed $74,630 and $40,000 in unsecured, demand notes
               payable at April 30, 1997 and 1996, respectively, whereby
               interest accrues at .75% per month.

        (b)    LOANS FROM STOCKHOLDERS


<PAGE>   37

               At April 30, 1997 and 1996, the Company owed $324,575 and
               $177,798, respectively, in unsecured, demand notes payable to
               stockholders with interest accruing at 8% or 10% per annum.

(9)     INCOME TAXES

        Deferred tax assets primarily consist of capitalized start up expenses
        and net operating loss carry forwards. There are no significant deferred
        tax liabilities. A valuation allowance has been established to reduce
        the deferred tax assets to zero as a result of the development stage of
        the Company and its recurring losses. Differences between the cumulative
        net loss for financial reporting purposes and that available for income
        tax purposes arise primarily as a result of nondeductible expenditures
        paid by the issuance of options for securities and capitalized start up
        expenses.

        Net operating loss carry forwards for federal income tax purposes which
        are available to offset future taxable income, if any, expire as
        follows:

<TABLE>

<S>                                                       <C>       
                             2007                         $    3,000
                             2008                             15,000
                             2009                              7,000
                             2010                             31,000
                             2011                          1,091,000
                             2012                          1,627,000
</TABLE>

(10)    FAIR VALUE OF FINANCIAL INSTRUMENTS

        The Company's financial instruments include cash, receivables, accounts
        payable, notes payable and loans from stockholders. Except for notes
        receivable from stockholders and loans from stockholders, the Company
        believes that the fair value of these financial instruments approximates
        their carrying amounts based on current market indicators, such as
        prevailing market rates.


(11)    INVESTMENT SERVICES AGREEMENT

        On June 13, 1994, the Company entered into a consulting agreement with
        an investment company. The Company agreed to pay the investment company
        a consulting fee of 5% of all moneys raised on the Company's behalf. As
        part of the agreement, the Company also issued 500,000 of restricted
        common shares to the owners of the investment company upon 


<PAGE>   38

        signing of the agreement. Pursuant to the agreement, an additional
        500,000 restricted common shares were to be issued after the sale of
        800,000 shares of Company stock. This agreement expired in December 1994
        and the Company has requested return of the original 500,000 shares due
        to nonperformance by the investment company.

(12)    COMMITMENTS AND CONTINGENCIES

        On March 30, 1996, the Company entered into a licensing agreement with
        Polymag Products Research Company and Leonard Moon under which the
        Company received the right to use proprietary magnesiumoxide technology.
        The agreement required the payment of $25,000 in cash, a minimum annual
        royalty of $25,000 and a consulting fee of $2,000 per month for twelve
        months. The minimum annual royalty fee has been prorated at $18,750 for
        the first year. The consulting fee was paid in full and initial
        royalties were paid but subsequent royalties are not being paid while
        the Company investigates other solutions which are compatible with the
        Companies latest panel technology.

        On July 27, 1995, the Company filed a complaint for Declaratory Judgment
        and Injunction with the Superior Court of Washington in Seattle,
        Washington, enjoining a former officer of the Company, Tim Metz (Mr.
        Metz), not to use any patented or trade secret information covered by
        his employment agreement. At the same time, suit was brought against Mr.
        Metz in conjunction with severance details as it relates to his
        employment contract and method of compensation. Mr. Metz filed suit in
        the same time frame claiming certain rights to technology and damages in
        excess of $395,000. Although the suit has been pending for over a year,
        no discovery has taken place. Based on the Company's knowledge of Mr.
        Metz's claims, the Company is of the opinion that it has meritorious
        defenses and intends to defend vigorously against the claims brought by
        Mr. Metz.

        On August 6, 1995, the Company entered into a Memorandum of Basic
        Understanding (MOBU) with Advanced Technology Builders, Inc. (ATB) of
        Bainbridge Island, Washington, under which ATB will become a long-term,
        price protected customer for the Company's building panels. According to
        the MOBU, ATB will order sufficient panels to construct fifteen
        residential townhouse units on Bainbridge Island. This order
        relationship has been transferred to Agile.

(13)    FOURTH QUARTER ADJUSTMENTS


<PAGE>   39

        As a result of the agreement completed in March of 1997 with Agile and
        WLP the Company does not expect to collect license and consulting
        revenues and interest due from Agile until Agile is in production and is
        in a position to make payments on its payables to the Company.
        Consequently the Company has established a reserve for receivables from
        Agile by $222,750

(14)    SUBSEQUENT EVENTS

        In May, 1997 the Company signed a contingent earnest-money agreement and
        placed $15,000 in trust on the purchase of property to be used by a yet
        to be formed subsidiary in Twin Falls Idaho. Management has decided to
        withdraw its offer to purchase and is arranging to recover the
        earnest-money deposit and apply it to another property in Idaho.

        In June of 1997 the Company made a down payment to purchase metal to be
        used by the yet to be formed affiliate in Twin Falls Idaho.

        In May, 1997 the Company issued 62,500 shares to a vendor to reduce
        accounts payable to the vendor and 75,000 shares to a vendor for
        services rendered. In June, 1997 the Company issued 37,272 shares to a
        stockholder in exchange for a note payable, 81,977 shares to a vendor in
        exchange for accounts payable due, 113,690 shares to an officer for
        accrued contract salary due, 28,819 to an officer for accounts payable
        due, and 114,133 to a board member for cash. In August, the Company
        issued 316,800 shares of stock in payment on its credit line established
        with a credit facility in June. In October 1997 the Company agreed to
        issue 424,000 shares of rule 144 stock in exchange for stockholder debt.

        In September, 1997 the Company granted options to purchase 250,000
        shares of rule 144 stock at $0.375 to its directors.

        In June, 1997 the Company obtained a line of credit which allows
        borrowing up to $550,000, depending on the market price of the Company's
        stock, to be paid back monthly with Company stock or cash. In August the
        Company drew down $137,500 on this agreement which has since been paid
        back with stock. See Exhibit (3)10.5.

        The Company entered into an agreement with consultant to introduce the
        Company to foreign opportunities and obtain executed confidentiality
        agreements in a form satisfactory to the Company for such opportunities.
        Consultant received 400,000 regulation "S" shares of Company common
        stock. Additional fees may be earned by Consultant and must be paid 


<PAGE>   40

        from transaction proceeds approved by the Company. Consultant will also
        receive, at equivalent fair market value for services rendered, shares
        of common stock to be exchanged during the first period at $.40/share,
        and for such valuation as may be mutually agreed for services in
        addition to those agreed. This agreement provides that 400,000 shares be
        issued to consultant under Reg."S" U.S. security provisions.

        The Company entered into an agreement with a consultant to advise on and
        assist (1) establishment of international joint ventures, strategic
        alliances and merger/acquisition possibilities, (2) development and
        operation of the Company's products abroad, and (3) establishment of one
        or more international business relationships with similar companies
        engaged in the same field as the Company. Consultants received 400,000
        Regulation "S" shares of Company common stock. Additional fees may be
        earned by Consultant and must be paid from transaction proceeds approved
        by the Company. Consultant will also receive, at equivalent fair market
        value for services rendered, shares of common stock to be exchanged
        during the first period at $.40/share, and for such valuation as may be
        mutually agreed for services in addition to those agreed. This agreement
        provides that 400,000 shares be issued to consultant under Reg."S" U.S.
        security provisions.


        The Company entered into an agreement with a consultant to provide
        marketing, international consulting and general corporate guidance.
        Consultant received 400,000 Regulation "S" shares of Company common
        stock. Additional fees may be earned by Consultant and must be paid from
        transaction proceeds approved by the Company. Consultant will also
        receive, at equivalent fair market value for services rendered, shares
        of common stock to be exchanged during the initial period at $.40/share,
        and for such valuation as may be mutually agreed for services in
        addition to those agreed. This agreement provides that 400,000 shares be
        issued to consultant under Reg."S" U.S. security provisions.

        In October 1997 the consulting agreement starting in January, 1997
        described in (5)(b) above was canceled when the company's president
        transferred to Agile Group, Inc.



<PAGE>   41

                                   SIGNATURES

In accordance with Section 13 or 15(d) or 15(d) of the Exchange Act, the
registrant causes this report to be signed on its behalf by the undersigned or,
their in duly authorized representatives, and in the capacities, and on the date
indicated.

                        LEADING-EDGE EARTH PRODUCTS, INC.



                   By: Grant C. Record, its CEO and Secretary

                              Date October 20, 1997

<TABLE>
<CAPTION>
Signature                    Title                               Date
---------                    -----                               ----
<S>                          <C>                                 <C>
Grant C. Record              Secretary and Director              10/23/97


Donald a. Bazemore           Chairman of the Board               10/20/97
                             of Directors


James R. Medley              Treasurer and Director              10/27/97


Way W. Lee                   Director                            10/20/97


Grant Todd                   Director                            ________

</TABLE>