SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

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

                    For the fiscal year ended April 30, 2001

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934

          For the transition period from May 1, 2000 to April 30, 2001.


                         Commission file number O-28557

                                 Humatech, Inc.
             (Exact name of registrant as specified in its charter)


                   Illinois                                   36-3559839
       (State or other jurisdiction of                     (I.R.S. Employer
        incorporation or organization)                    Identification No.)


             1718 Fry Road, Suite 450
                  Houston, Texas                                  77084
     (Address of principal executive offices)                  (Zip Code)


        Registrant's telephone number, including area code (281) 828-2500


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

         Check if there is no disclosure of delinquent  filers  pursuant 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. [ ]

         State issuer's revenues for its most recent fiscal year.   $195,805

         State the aggregate market value of voting and non-voting common equity
held by  non-affiliates  computed by  reference to the price at which the common
equity was sold, or the average bid and asked prices of such common  equity,  as
of a specified  date within the past 60 days.  (See  definition  of affiliate in
rule 12b-2 of the Exchange Act.) $4,779,672,  based on the closing price of $.46
for the common stock on August 9, 2001.

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common  stock,  as of the latest  practicable  date.  As of August 9,
2001,  there were 10,390,593  shares of common stock,  no par value,  issued and
outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to rule 424(b) or (c) of the Securities Act of 1933 ("Securities  Act).
The listed documents  should be clearly  described for  identification  purposes
(e.g.,  annual  report to security  holders for fiscal year ended  December  24,
1990). None.

                     Transitional Small Business Disclosure
                               Format (check one):

                               Yes    No X
                                  ---   ---


<PAGE>

                                 HUMATECH, INC.

                                TABLE OF CONTENTS
                                -----------------


                                     PART I

Item 1   Description of Business.

Item 2   Description of Property

Item 3   Legal Proceedings

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


                                     PART II

Item 5   Market for Common Equity and Related Stockholder Matters.

Item 6   Management's Discussion and Analysis or Plan or Operations.

Item 7   Financial Statements.

Item 8   Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure.


                                    PART III

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

Item 10  Executive Compensation

Item 11  Security Ownership of Certain Beneficial Owners and Management.

Item 12  Certain Relationships and Related Transactions.

Item 13 Exhibits and Reports on Form 8-K.



                                       2

<PAGE>


                                     PART I

This Annual Report includes forward-looking statements within the meaning of the
Securities  Exchange Act of 1934 (the AExchange Act). These statements are based
on management's beliefs and assumptions,  and on information currently available
to management.  Forward-looking  statements  include the information  concerning
possible or assumed  future results of operations of the Company set forth under
the  heading  AFinancial  Information-Management's  Discussion  and  Analysis of
Financial  Condition  or  Plan of  Operation.  Forward-looking  statements  also
include statements in which words such as Aexpect, Aanticipate,  Aintend, Aplan,
Abelieve, Aestimate, Aconsider or similar expressions are used.

Forward-looking  statements  are not  guarantees  of  future  performance.  They
involve risks,  uncertainties and assumptions.  The Company's future results and
shareholder   values  may  differ  materially  from  those  expressed  in  these
forward-looking  statements.  Readers are cautioned not to put undue reliance on
any forward-looking statements.

ITEM 1 - DESCRIPTION OF BUSINESS

History of the Company
----------------------

The Company was  incorporated in the State of Illinois on February 2, 1988 under
the name of Midwest Enterprise  Consultants,  Inc. as a consulting and marketing
service company (Midwest).

On April 6, 1997,  the Company  entered into an Agreement for the Sale of Assets
whereby it acquired all of the assets and certain  liabilities of  International
Humate Fertilizer Co. (a Nevada corporation) (IHFC), whose offices were, at that
time, located in Mesa, Arizona.

On April 16,  1997,  the  Company  issued  5,884,614  shares of common  stock to
International  Humate  Fertilizer Co. (IHFC), a Nevada  corporation,  to acquire
100.0% of the assets of IHFC. IHFC then  distributed the 5,884,614 shares of the
Company's  stock  to its  stockholders.  For  accounting  purposes,  IHFC is the
surviving  entity and all assets and liabilities were acquired by the Company at
the historical founder's cost of IHFC.

On May 5, 1997,  Midwest  filed a change of name with the State of  Illinois  to
Humatech,  Inc. (Humatech) to reflect its continuance of the business operations
of IHFC.

International Humate Fertilizer Co. (IHFC) is a Nevada corporation  incorporated
on February 21, 1996 under the laws of the State of Nevada. IHFC was capitalized
with  the  transfer  of  certain  assets  and  assumption  of  all   outstanding
liabilities of a Texas sole  proprietorship of the same name,  effective July 1,
1996.  With  the  acquisition  of  IHFC,  the  Company  became  engaged  in  the
development, manufacture and sale of carbon-based humate products for use in the
commercial agriculture, animal feed and home horticulture markets.

On July 23, 1997,  Humatech  filed a request for  clearance of quotations on the
OTC  Bulletin  Board  under  SEC  Rule  15c2-11,  Subsection  (a)(5)  with  NASD
Regulation  Inc. A  Clearance  Letter was issued to Humatech on January 15, 1998
and the Company was issued its trading symbol HUMT.

In November 1998, the Company entered into a letter of intent for the purpose of
establishing a joint venture to promote and sell the Company's products into the
European Union of Countries.  As of August 8, 2001, the Company has not made any
investment into this proposed joint venture.  The Company conducts business with
foreign  entities under equal terms and conditions to those of domestic sales to
unrelated third parties.


                                       3

<PAGE>

Industry and Business overview
------------------------------

In 1980,  the United  States  Department of  Agriculture  released a report that
cited the concerns expressed by farmers,  environmental  groups, and the general
public  about  the  adverse  effects  the  petroleum  based  U.  S.  Agriculture
production  system has had on the productive  capacity of U.S. soils.  They were
especially  concerned  about the intensive use of the  monoculture of cash crops
and  the  extensive  use  of  agricultural   chemicals,   both  fertilizers  and
pesticides. Among the major concerns were:

   1. Increased  cost of, and dependence  on,  external  inputs of chemicals and
      energy.
   2. Continued  decline in soil  productivity  from  excessive soil erosion and
      nutrient runoff losses.
   3. Contamination of surface and groundwater from fertilizers and pesticides.
   4. Hazards to human and animal  health and to food  quality  and safety  from
      agricultural chemicals.
   5. Demise of the family farm and localized marketing system.

As a  result  of  these  concerns  and  others,  a  new  philosophical  view  of
agriculture,  termed sustainable agriculture by those who promote its terms, has
developed. A sustainable agriculture system centers around the need to develop a
more  environmentally  compatible  agricultural system, one that has a long-term
dimension,  makes more efficient use of energy,  does not destroy the ecological
balance of the environment,  is non-polluting  and is favorable for the survival
of humans  and all  other  species.

The scientific  agriculturists,  backed by special interests,  have historically
taken a mechanistic  view of nature.  These views  emphasize the  development of
crop technologies (e.g. hybrids and genetically  engineered plants) and chemical
technologies (e.g. highly soluble Nitrogen-Phosphorus-Potassium-Sulfur (N-P-K-S)
fertilizers and pesticides) as a means of producing high yields,  at the expense
of  nutritional  quality,  and  protecting  the crops from  pests by  artificial
pesticides.  These industrially centered technologies have caused a reduction in
soil fertility,  and plant vitality,  which causes reductions in crop yields and
the costs of production to rise.  This  generates a tremendous  economic loss in
the agricultural  market. It also creates plant nutrient  shortages and stresses
that reduce  natural  plant pest and disease  resistance,  which  results in the
production of a food supply that is lacking both in nutrients essential for good
shelf life and taste,  as well as in providing  for  excellent  animal and human
health.

These  scientific  agriculturists  have also  helped  destroy  fertile  soils by
emphasizing  the application of  industrially  produced  poisons and the massive
off-farm  marketing  of feeds and foods at great  distances  from their point of
production.  This continued  removal and export of products from the farm to the
city and  overseas  has  resulted  in a mining of the soil,  removing  humus and
mineral elements. All plant, animal and human waste (a source of organic matter)
should  theoretically  be  returned  to the soil where it can aid  future  plant
growth. By politically NOT encouraging the establishment of distribution systems
that could have been  designed to return plant,  animal,  and human waste to the
farms, these public policies have indirectly  destroyed the previously  existing
soil humus on farms.  Unless  financially  viable  alternatives are developed to
reverse these  policies,  the ability of farmers to produce food may be limited.

In  the  early  1900's  a  concept  of  Alternative  Agriculture  evolved  which
emphasizes  a holistic  approach  to  agriculture  production  as opposed to the
reductionism  approach  of  the  scientific   agriculturists.   The  alternative
agriculturists  have of necessity moved away from the industrial  agriculturists
by selectively  employing  production  practices  that are more  environmentally
compatible.  These more holistic  approaches  emphasize the need to give greater
consideration to the natural biological processes of plant growth. Proponents of
the  biological  approach  to  agriculture  production  systems  provided  sound
arguments  that  the  use of  concentrated  synthetic  soluble  fertilizers  and
pesticides have an adverse effect on the biological health of the soil,  plants,
animals, and humans.

The  evolving  concepts  of  biodynamic,  organic,  biological,  and  ecological
agriculture  production  systems  have  paved  the  way  to the  development  of
sustainable  agriculture.  These  philosophies,  many  developed  by the growers
themselves,  have given new theories to the scientific  community as a basis for
new innovative  research projects.  Results from these researchers have provided
insights  for a better  understanding  of  humus-orientated  soil  fertility,  a
practice recently termed Humus Farming.

                                       4
<PAGE>

It is believed that the humic  component of soils greatly  influences the soil's
productive capacity. For example the humic components aid soil in holding water,
improve soil structure,  improve nutrient uptake by plants, aid in improving air
and water infiltration,  and a host of other desirable features.  These features
reduce certain farm expenses and increase production and farm profits.

A major  component of the  sustainable  agriculture  movement is the belief that
plant  growth is  influenced  by nutrient  flow into and out of the soil organic
matter  fraction.  The  older  concept  that  plant  nutrients  come from a soil
nutrient  solution is believed to be a minor  mechanism by which  plants  obtain
their  nutrients.  Plants grow and reproduce more efficiently when their mineral
nutrients are available in a colloidal and/or chelated form (minerals associated
with organic compounds) just as do animals and humans.

The Company's  high  technology  organic  solutions are expected to play a major
role in the implementation of many of the "Sustainable  Agriculture"  production
philosophies.  Some  economically  viable roles the  Company's  high  technology
organic solutions play are:

   (1) Our organic based growth solutions help supply the soil with humus in the
   form  of very  large  complex  humic  compounds.  These  compounds  have  the
   capability  of holding  nutrients  for future plant use.  Some of these large
   molecules  have been  termed  humic  and  fulvic  acids.  The  smaller  humic
   molecules efficiently help plants obtain needed trace minerals.

   (2) The Company's  high  technology  organic  solutions  supply the soil with
   various trace  minerals that have been mined from most  cultivated  soils.  A
   lack of available trace minerals within the soil and plant has resulted in an
   inability of the plant to maintain its defenses  against  insects and disease
   causing agents.  Also, the consumer of harvested plant products  suffers when
   he consumes these mineral and vitamin deficient foodstuffs.  The formation of
   the vitamin and mineral industry has come about because of these deficiencies
   in our food supply.

   (3) The application of our high  technology  organic  solutions/products  can
   help correct the many weaknesses of the production  practices  recommended by
   the scientific agriculturists. Applying our high technology organic solutions
   can reduce the supposed  requirements  for high  application  rates of highly
   soluble N-P-K-S  fertilizers.  Applying a more balanced fertilizer can reduce
   production costs, help reduce water contamination,  and can indirectly aid in
   reducing soil erosion. By maintaining the plant's natural defense mechanisms,
   the need for pesticides is reduced;  thus,  maintaining  the plant's  natural
   defense mechanisms reduces the problems of pesticide  contamination of soils,
   water, and plant products. Also food grown on fertile soils transports better
   and has a longer shelf life.

Scientific trials conducted previously,  and current trials to be concluded with
results to be published, will show healthy soils that help grow nutritious feeds
and foods  result in the growth of  healthier  animals  and  people.  Slowly and
surely,  agriculture and health will be joined at the farm, consumer, and public
policy levels.  We all need to become a part of the newly  emerging  sustainable
agriculture  production  system.  Supporting  and  encouraging  the marketing of
environmentally  safe high technology  organic solution  products is one step in
this humanitarian effort to overcome the damaging agricultural and environmental
occurrences we face each day.

The Company  recognizes this and has been established on the need to use quality
high  technology  organic  solution  products,  to improve  crop yields  through
reduced plant stress,  increased soil fertility,  and a more viable substrate of
soil bacteria.

Product Introduction and Background Information
-----------------------------------------------

The Company is the manufacturer  and distributor of its high technology  organic
based  products for plants and  animals.  The Company  sells its products  under
various product trade names developed for each of the identified  market venues:
(A) growers of agricultural crops, (B) golf courses and commercial  landscapers,
(C) mass merchandisers and independent  nurseries in the lawn and garden market,
and (D) animal feed supplements to the animal feeding industry.  The Company has
determined that its markets are both domestic and foreign.

                                       5
<PAGE>

The Company has been selling its products since 1978 through various efforts and
different entities. Though small in size, the Company believes that its years of
research and development,  field trials and customer sales have earned it a good
reputation for it's products and served to refine its production processes.  The
Company has developed a unique  process to produce  organic based  nutrients for
plant and animal growth and health at an extremely low cost.

The Company and two major  Universities  have undertaken  efforts to acquire and
develop  data on the most  appropriate  uses  for  humates  and have  undertaken
several extensive  controlled research and development projects resulting in the
conduct  and  completion  of field  trials and tests  using  humate-based  trace
element  products  throughout the world,  which provided  excellent  biochemical
science data. The Company's  current  products have been tested in the Far East,
Europe,  the United States and Mexico.  The Company has developed the industry's
most diverse  product line of  humate-based  products  including dry, liquid and
foliar spray formulations.

A brief  discussion of several  important terms will clarify the significance of
humic substances,  what the Company does and proposes the do in the future,  and
what products and services will be marketed.

   ORGANIC MATTER:  Organic matter is a grouping of carbon containing  compounds
   which have  originated  from  living  beings and  deposited  on or within the
   earth's  structural  components.  Soil organic matter includes the remains of
   all plant and animal  bodies,  which have  fallen on the  earth's  surface or
   purposely applied by man in the form of organically  synthesized  pesticides.
   When organic matter is burned, there remains a residual ash. The residual ash
   is composed of the minerals,  trace  elements  required by plants and animals
   during their normal growth  processes.  Thus organic matter contains  mineral
   elements required by plants and animals.

   HUMUS:  Humus is a brown to  black  variable  complex  of  carbon  containing
   compounds not  recognized  under a light  microscope  as possessing  cellular
   organization in the form of plant and animal bodies.  Humus is separated from
   the non-humic  substances  such as  carbohydrates  (a major  fraction of soil
   carbon), fats, waxes, alkanes,  peptides, amino acids, proteins,  lipids, and
   organic acids by the fact that distinct  chemical formulae can be written for
   these non-humic  substances.  Microorganisms  within the soil rapidly degrade
   most small molecules of non-humic substances.  In contrast soil humus is slow
   to decompose  (degrade)  under natural soil  conditions.  When in combination
   with soil  minerals,  soil humus can persist in the soil for several  hundred
   years. Humus is the major soil matter component,  making up 65% to 75% of the
   total. Humus assumes an important role as a fertility component of all soils,
   far in excess of the percentage contribution it makes to the total soil mass.

   HUMIC  SUBSTANCES:  Humic  substances are the components of humus and as such
   are high  molecular  weight  compounds that together form the brown and black
   hydrophilic,   molecularly  flexible,  polyelectrolytes  called  humus.  They
   function to give the soil structure, porosity, water holding capacity, cation
   and anion  exchange,  and are involved in the chelation of mineral  elements.
   Humic  substances can be subdivided into three major fractions (1) humin, (2)
   humic acids, and (3) fulvic acids.

   HUMATES:  Humates are metal (mineral) salts of humic or fulvic acids.  Within
   any humic  substance,  there are a large number of complex humate  molecules,
   and the humate  composition  of any one humic  substance  is specific for the
   substance. Thus there exists a large variability in the molecular composition
   of different humic substances.

   The most biochemically active and plant responsive components of fertile soil
   are humic and fulvic acids.  The  decisions to replace and maintain  adequate
   levels of  humic/fulvic  acids in the soil  creates a positive  economic  and
   ecological impact in the markets the Company is selling its products.

As  stated,  humic  acids are the end result of the  decomposition  of plant and
animal  matter,  which exist in the final phase of the  humification  process of
soils. Humification is the process wherein crop residues,  leaves, stalks, cover
crops,  manure's,  etc., are first broken down by soil micro-organisms.  Various
enzymes, fungi and bacteria then break down the cellulose.  Further activity and
breakdown  by  very  specific   fungi  and  bacteria   finally   result  in  the
mineralization  of humic acids from the material that is commonly referred to as
humus.  Simply put, humic acids are derived from various organic  materials that
are commonly turned under by farmers  throughout the world to derive  well-known
benefits.

                                       6
<PAGE>

Humic  substances  play a vital  role in soil  fertility  and plant  and  animal
nutrition.  Plants grown on soils which contain adequate humin, humic acids, and
fulvic acids are less subject to stress,  are healthier,  produce higher yields,
and as a result  the  nutritional  quality  of  harvested  foods  and  feeds are
superior.  The value of humic  substances in soil fertility and plant  nutrition
relates to the many functions these complex organic  compounds perform as a part
of the life cycle on earth.  The  life-death  cycle  involves a recycling of the
carbon containing structural components of plants and animals - through the soil
and air - and back into the living plant, and animal.

Humates are  commercially  obtained  from large  layers of  oxidized  leonardite
deposits in the earth  formed by  decomposition  of organic  material.  In their
natural state, humic acids are acidic in nature, and completely insoluble.  Only
through an exact and scientific process,  which has been developed over the past
20 years by the  Company,  can these humic acids be  extracted  in a manner that
will  produce a viable,  efficacious  product  that  consistently  exhibits  the
attributes expected by all concerned.

Market overview and competition
-------------------------------

According to the research firms, industry reports,  trade journals,  and our own
marketing information,  the overall market potential for high tech organic based
growth products industry worldwide is projected to exceed $10 billion annually.

The area of largest  growth and  potential in the high tech organic based growth
products market is the animal feed  ingredients,  and the garden,  nursery,  and
home improvement market segments.  Currently,  these market segments do not have
any major competition and are ready for someone to become a market leader with a
wide variety of market driven products.

Environmental matters
---------------------

The  Company is and will  continue  to be subject to  extensive  and  frequently
changing  federal,  state and local laws and substantial  regulation under these
laws  by  governmental  agencies,  including  the  United  States  Environmental
Protection  Agency  (EPA),  the  Occupational  Safety and Health  Administration
(OSHA),  various state  agencies and county and local  authorities.  Among other
things,  these regulatory  bodies impose  requirements to control air, soil, and
water  pollution,   to  protect  against  occupational  exposure  to  chemicals,
including health and safety risks,  and to require  notification or reporting of
the storage,  use and release of certain  hazardous  chemicals  and  substances.
There can be no  assurance  that the  Company  will not be  subject to claims of
employees  relating to future  exposure to hazardous  chemicals and  substances,
which  could  have a  material  adverse  effect on the  Company.  Failure by the
Company to comply with applicable laws and regulations could subject the Company
to civil remedies, including fines and injunctions as well as potential criminal
sanctions, which could have a material adverse effect on the Company.

Federal and state  authorities do not regulate the  manufacture  and sale of the
Company's specific products. The Company has obtained all required general state
permits and licenses to operate its  facilities.  There can be no assurance that
the  Company's   operation  and  profitability  will  not  be  subject  to  more
restrictive  regulation or that operations and profitability will not be subject
to more restrictive regulation or increased taxation by federal, state, or local
agencies.

Inflation
---------

Inflation  has  not  historically  been  a  material  factor  in  the  Company's
operations and is not expected to have a material  impact on the Company or it's
operations in the future.

Trade names and products
------------------------

The  following is a brief  description  of the  Company's  current  product line
developed and distributed into identified market segments:

                                       7

<PAGE>

Agriculture Market:

   AGRI(Y)HUME(TM).   (Chipped  or  Powder).  A  highly  oxidized,   salt  free,
   carbon-rich  leonardite  specifically  blended to provide the highest quality
   and richest  concentration of humic and fulvic acids  available.  It contains
   over 40 naturally occurring elements.

   MAXIMIZE.(TM)  A  multi-functional  humic and  fulvic  acid  liquid  extract.
   MAXIMIZE(TM)  increases  nutrient uptake,  accelerates  root growth,  reduces
   fruit shed, provides even maturity , and acts as a food source for beneficial
   micro-organisms. MAXIMIZE(TM) is also effective as an extender for herbicides
   and fungicides.

   SLINGSHOT(TM).  A concentrated liquid fulvic acid extract.  Due to its unique
   carbon based molecular  structure,  SLINGSHOT(TM) a very effective  chelating
   compound and may be piggybacked with insecticide applications.

   NITRO-PLUS(TM).  (18-0-0).  This  product has a liquid  humic and fulvic acid
   base,  the same as in the product  MAXIMIZE(TM),  and is  fortified  with 18%
   nitrogen,  which  enhances  the delivery of nitrogen to the plant in the most
   compatible  salt free form  available.  This product may also be  piggybacked
   with insecticide application.

   MACRO(Y)PLUS(TM)(8-16-4).  This  product  has a liquid  humic and fulvic acid
   base,  the same as in the product  MAXIMIZE(TM),  and is fortified with N-P-K
   and selected  trace  elements.  Designed for use as a major  nutrient  foliar
   fertilizer  to promote  bloom and fruit set,  reduce  shedding,  and act as a
   natural plant growth  regulator.  This product may also be  piggybacked  with
   insecticide application.

   IRON-PLUS(TM) (12-0-0). This product has a liquid humic and fulvic acid base,
   the same as in the product MAXIMIZE(TM),  and is fortified with 12% nitrogen,
   plus 4% Iron,  6% sulfur,  1% zinc,  1% calcium,  .5%  manganese and selected
   trace  elements.  A product for foliar  applications on citrus and turf where
   iron uptake is limited by excessive  soil-based  salts. This product may also
   be piggybacked with insecticide applications.


                                       8
<PAGE>

   ZINC-PLUS(TM) (12-0-0). This product has a liquid humic and fulvic acid base,
   the same as in the product MAXIMIZE(TM),  and is fortified with 12% nitrogen,
   plus 4% zinc,  6% sulfur,  1% iron,  1% calcium,  .5%  manganese and selected
   trace elements. A product designed to help retard plant shutdown and decrease
   shedding which is best utilized for late season foliar  application on cotton
   and other row crops.  This product may also be piggybacked  with  insecticide
   applications.

   CALCIUM(Y)PLUS(TM)  (13-0-0). This product contains 12.5% calcium in a fulvic
   acid base. This truly soluble calcium and nitrogen provides fast plant growth
   and reduced shed of blooms and fruit.  Boron can be added to this combination
   and will eliminate blossom end rot in most flowering plants.

Animal Feed Market:

   BOVI-PRO(TM) An organic, non-toxic feed ingredient that has been field tested
   to provide the  following  results:  1) increases  the  viability of rumin in
   stomachs of ruminant  animals;  2) reduces feedlot animal waste; 3) increases
   average daily weight gain; 4) reduces  (improves) feed  conversion  ratio; 5)
   reduces stress from shipping fever; 6) increases calcium intake. All the data
   on the benefits of BOVI-PRO(TM)  have been gathered from scientific  research
   from extensive research trials at a major University.

   PROMAX(TM).  An organic,  non-toxic  feed  ingredient  used for  non-ruminant
   animals that  accomplishes  the  following:  1) reduces  feedlot animal waste
   order;  2) increases  average daily weight gain; 3) reduces  (improves)  feed
   conversion  ratio; 4) reduces stress from shipping fever. All the data on the
   benefits of  PROMAX(TM)  have been  gathered  from  scientific  research from
   extensive research trials at a major University.

Home, Lawn And Garden Market:

   PERK-UP(TM). A pre-diluted product ready to use foliar spray for house plants
   which enhances plant growth and bloom setting,  increases  plant health,  and
   greens house plants.

   GREENSKEEPERS  SOIL  BUILDER(TM).  A  multi-functional  humic and fulvic acid
   liquid extract that will  accelerate the release humic material that improves
   soil  structure,  fertility,  optimizes plant health,  maximizes  garden crop
   yield and acts as a food source for beneficial  microorganisms,  and enhances
   the   effectiveness  of  fertilizers.   When  diluted,   GREENSKEEPERS   SOIL
   BUILDER(TM)  is also effective as a transplant  solution that  eliminates the
   shock of transplanting potted plants, trees, and shrubs.

   GREENSKEEPERS LAWN FOOD(TM).  GREENSKEEPERS  SOIL BUILDER(TM)  fortified with
   18%  nitrogen  helps  carry  nitrogen  delivery  to the  plant  in  the  most
   compatible  salt free form available,  thus maximizing  plant response to the
   uptake  of  nitrogen  without  burning  lawns.   This  product  may  also  be
   piggybacked with insecticide application

   GREENSKEEPERS  PLANT  FOOD(TM).  The product is fortified with N-P-K (8-16-4)
   and selected  trace  elements  which is designed for use as a major  nutrient
   foliar  fertilizer  to promote  bloom and fruit  set,  reduce  shedding,  and
   improve garden  production.  Its unique salt free  composition  will not burn
   foliage. This product may be piggybacked with insecticide applications.

   ORGANI-GRO  COMPLETE(TM).  A fortified  chipped or powder  based 8-12-4 truly
   complete humate based plant food and soil  conditioner  that greatly enhances
   the plant vigor and color, and improves overall soil health.  This product is
   a highly oxidized,  salt free, carbon-rich leonardite specifically blended to
   provide the highest  quality  and richest  concentration  of humic and fulvic
   acids available and over 40 naturally occurring elements.

Environment/Bio-Remediation market:

   SALT AWAY(TM) and BIOLIMINATE(TM) This two product line system is designed to
   bioremediate  soils on site for removal of salt and oil  contamination.  SALT
   AWAY(TM) is a multi-component  aqueous solution which, when properly applied,
   reduces  excess salt in the soil to a level that allows plant growth to begin
   again.  BIOLIMINATE(TM)  markedly  accelerates the  biodegradation of organic
   hazardous  waste in the soil.  BIOLIMINATE(TM)  addresses  two factors  which
   limit the biodegradation  process: 1) The lack of homogeneous exposure of the
   contaminant  to indigenous or applied  bacteria,  and 2) the viability of the
   bacteria available to metabolize the contaminant.


                                       9
<PAGE>

ITEM 2 - DESCRIPTION OF PROPERTY

The Company's executive and administrative offices are located at 1718 Fry Road,
Suite 450;  Houston,  Texas;  77084.  These  offices  are subject to a long-term
operating  lease  covering  a period  of three  (3) years  with  monthly  rental
payments of approximately  $1,418.  The lease contains an option to renew for an
additional three (3) years at the then current market rental rates.

The Company's  warehouse,  manufacturing  and  distribution  facility is located
27711 Katy Freeway #5; Katy,  Texas,  77494.  The Company  executed an operating
lease for this  facility on September 1, 1999.  The term of the lease is for one
(1) year and requires monthly payments of  approximately  $1,850.  Additionally,
the Company  must  provide  insurance  coverage in an amount  acceptable  to the
lessor, as defined in the lease agreement.

ITEM 3 - LEGAL PROCEEDINGS

The Company is not  involved in any legal  proceedings  as either  plaintiff  or
defendant,  nor is it aware of any threatened legal proceedings,  as of the date
of filing.

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

No matters were  submitted to the security  holders for a vote during the period
covered by this report.


                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

On July 23, 1997,  Humatech  filed a request for  clearance of quotations on the
OTC  Bulletin  Board  under  SEC  Rule  15c2-11,  Subsection  (a)(5)  with  NASD
Regulation  Inc. A  Clearance  Letter was issued to Humatech on January 15, 1998
and the Company was issued its trading symbol HUMT.  The Company's  first posted
trade was  conducted  on  February  5,  1998.  The quoted  market  prices of the
Company's common stock on the NASDAQ Electronic  Bulletin Board, per data listed
by National Quotation Bureau, Inc., are as follows:

                                                                High       Low
                                                                -----     -----

  First quarter 2000 (May 1, 1999 - July 31, 1999)              $5.13     $0.30
  Second quarter 2000 (August 1, 1999 - October 31, 1999)       $4.69     $1.44
  Third quarter 2000 (November 1, 1999 - January 31, 2000)      $4.06     $1.63
  Fourth quarter 2000 (February 1, 2000 - April 30, 2000)       $3.13     $1.00
  First quarter 2001 (May 1, 2000 - July 31, 2000)              $3.00     $1.75
  Second quarter 2001 (August 1, 2000 - October 31, 2000)       $2.00     $.41
  Third quarter 2001 (November 1, 2000 - January 31, 2001)      $.93      $.34
  Fourth quarter 2001 (February 1, 2001 - April 30, 2001)       $.87      $.42


Dividend policy
---------------

The Company has never paid or declared a cash dividend on its common stock.  The
Board of  Directors  does not  intend to declare  or pay cash  dividends  in the
foreseeable future. It is the current policy to retain all earnings,  if any, to
support future growth and expansion.

                                       10
<PAGE>

Recent Sales of Unregistered Securities

In May 2000, the Company issued 77,000 shares of restricted, unregistered common
stock to Linzy Capital, Inc. of Las Vegas, Nevada for the performance of various
public  relations,  capital  acquisition  and  other  financial  services.  This
transaction was valued at  approximately  $96,250,  which equaled the discounted
closing price of the Company's  common stock as quoted on the NASDAQ  Electronic
Bulletin Board on the trade date closest to the transaction  date and charged to
operations at the time of issuance.

In June,  2000,  the Company  issued an aggregate  77,778 shares of  restricted,
unregistered common stock to White Mountain Capital Group, LLC of Highland, Utah
for  cash  proceeds  of  approximately  $70,000,  which  was  in  excess  of the
discounted  closing price of the Company's  common stock as quoted on the NASDAQ
Electronic Bulletin Board on the trade date closest to the transaction date.

In August 2000,  the Company  issued an aggregate  44,000 shares of  restricted,
unregistered  common stock to three individuals for various  services,  as noted
below. These transactions were valued at an aggregate of approximately  $44,000,
which  equaled  the  invoiced  price of the related  services by the  respective
service provider and the agreed-upon number of shares to be issued in settlement
between  both  parties.  Further,  the  valuation  of  these  transactions  also
approximated  the discounted  quoted closing price of the Company's common stock
on the date of the  transaction  and were charged to  operations  at the time of
issuance.

       Kark Kuehn - TurboFeeder design - 3,000 shares valued at $3,000 Eric
       Hooper - Website design and maintenance - 15,000 shares valued at $15,000
       Gerry Hooper - Website design and maintenance - 1,000 shares valued at
       $1,000 deJong & Associates - various public relations, capital
       acquisition and other financial services -
         25,000 shares valued at $25,000.
         Note that Eric Hooper is the son-in-law of David G. Williams, President
         and controlling shareholder of the Company.

In September 2000, the Company issued 439,096 shares of restricted, unregistered
common stock to U. S.  Finance,  Inc.,  a  corporation  affiliated  with John D.
Rottweiler, the Company's Vice President and Chief Financial Officer, in payment
of outstanding debt of approximately $217,877 and accrued, but unpaid,  interest
of approximately $45,581.

In  September  2000,  the  Company  issued   1,007,030   shares  of  restricted,
unregistered  common stock to John Duke  Rottweiler,  son of John D. Rottweiler,
the  Company's  Vice  President  and Chief  Financial  Officer,  in  payment  of
outstanding debt of approximately $554,450 and accrued, but unpaid,  interest of
approximately $49,568.

In September 2000, the Company issued 77,500 shares of restricted,  unregistered
common stock to Ronald Issacson of Apache Junction, Arizona for cash proceeds of
approximately  $50,000,  which  approximated the discounted closing price of the
Company's common stock as quoted on the NASDAQ Electronic  Bulletin Board on the
trade date closest to the transaction date.

In December 2000 and March 2001,  the Company issued 50,000 and 33,334 shares of
restricted,  unregistered common stock,  respectively,  to Newel Barney of Mesa,
Arizona for cash proceeds of  approximately  $30,000 and $20,000,  respectively,
which was in excess of the  discounted  closing  price of the  Company's  common
stock as quoted  on the  NASDAQ  Electronic  Bulletin  Board on the  trade  date
closest to the transaction date.

In February  and March  2001,  the Company  issued  62,500 and 35,500  shares of
restricted, unregistered common stock, respectively, to Clifford Barber of Mesa,
Arizona for cash proceeds of  approximately  $25,000 and $14,199,  respectively,
which was in excess of the  discounted  closing  price of the  Company's  common
stock as quoted  on the  NASDAQ  Electronic  Bulletin  Board on the  trade  date
closest to the transaction date.

In February 2001,  the Company issued 13,000 shares of restricted,  unregistered
common stock to Wall Street Daily Press Services for the  performance of various
public  relations and other financial  services.  This transaction was valued at
approximately  $6,500,  which  equaled  the  discounted  closing  price  of  the
Company's common stock as quoted on the NASDAQ Electronic  Bulletin Board on the
trade date closest to the transaction date and charged to operations at the time
of issuance.


                                       11
<PAGE>

In March 2001,  the Company  issued  18,741 shares of  restricted,  unregistered
common stock to James Adair of Mesa,  Arizona for cash proceeds of approximately
$7,496,  which was in excess of the  discounted  closing  price of the Company's
common stock as quoted on the NASDAQ Electronic Bulletin Board on the trade date
closest to the transaction date.

On May 7, 2001,  the Company  issued 75,000 shares of  restricted,  unregistered
common stock to an existing shareholder for $30,000 cash.

On June 4, 2001, the Company filed a Registration Statement under The Securities
Act of 1933 on Form S-8 registering an aggregate 325,000 shares of common stock.
The Company  issued  300,000  shares to an individual  providing  evaluation and
advise related to mergers and acquisitions,  advising corporate management,  and
in performing  general  administrative  duties for  publicly-held  companies and
development stage investment ventures.  The Company also issued 25,000 shares to
the  Company's  legal  counsel  for prior,  current  and future  services  to be
rendered to the Company.

In  August  2001,  the  Company  completed  negotiations  to sell  an  aggregate
1,375,000  shares  of  restricted,   unregistered  common  stock,   representing
approximately  13.23% of the issued and outstanding common stock as of April 30,
2001,  for total  proceeds of $550,000 cash to an unrelated  third party under a
private  placement  letter  utilizing an exemption from  registration  under the
applicable Securities laws. As of August 8, 2001, the Company has received total
proceeds of  approximately  $125,000  under this  agreement  and is scheduled to
receive $425,000 by the close of business on August 13, 2001.

Additionally, the Company will issue a series of Stock Warrants to the purchaser
of the  1,375,000  shares  of  common  stock  to  purchase  up to an  additional
1,375,000 shares of restricted, unregistered common stock as follows: Series A -
343,750 shares at $2.00 per share,  expiring on the second  anniversary  date of
the warrant; Series B - 343,750 shares at $3.00 per share, expiring on the third
anniversary  date of the warrant;  Series C - 343,750 shares at $4.00 per share,
expiring  on the fourth  anniversary  date of the warrant and Series D - 343,750
shares  at $5.00  per  share,  expiring  on the  fifth  anniversary  date of the
warrant.



ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion contains certain  forward-looking  statements that are
subject to business and economic risks and uncertainties, and our actual results
could differ  materially from those  forward-looking  statements.  The following
discussion regarding our financial statements should be read in conjunction with
the financial statements and notes thereto.


Results of Operations  for the year ended April 30, 2001 as compared to the year
ended April 30, 2000.

During the year ended April 30,  2001,  the  Company  reported  net  revenues of
$195,805,  as compared to $207,414 for the year ended April 30, 2000, a decrease
of 5.6 %. Of the  $195,805 in net  revenues  for the year ended April 30,  2001,
$154,685 (79%) were from domestic sources, while $41,120 (21%)were from sales to
Humatech,  Ltd., a related party joint venture in the United  Kingdom.  Although
there are no formal  agreements  in place,  and the  Company has made no capital
contribution to Humatech,  Ltd., Management of the Company expects to eventually
own a minority  interest in this entity.  As of April 30, 2001, and for the year
then ended, the Company  conducts  business with this foreign entity under equal
terms and conditions to those of domestic sales to unrelated third parties.


                                       12
<PAGE>

For the year  ended  April 30,  2001,  the  Company  had cost of sales  equal to
$222,284,  or 113% of net  revenues,  as  compared  to  $128,545 or 24.6% of net
revenues, for the year ended April 30, 2000. This increase in cost of sales as a
percentage  of net revenues is due  primarily to loss of operating  efficiencies
associated with a lower level of sales. Of the $222,284 in cost of sales for the
year ended April 30, 2001,  $56,256 (25%) was  materials  cost,  while  $166,028
(75%) was other direct costs.

Gross profit was equal to a loss of $27,979,  for the year ended April 30, 2001,
as compared to $393,588,  or 75% of net  revenues,  for the year ended April 30,
2000. As discussed  above,  this decrease in gross profit as a percentage of net
revenues is due primarily to decreased operating efficiencies  associated with a
lower level of sales.

During the year ended April 30, 2001, the Company incurred operating expenses of
$958,371,  resulting in an operating and net loss of $984,850,  as compared with
operating  expenses  and  operating  and net  loss  of  $723,239  and  $329,651,
respectively, for the year ended April 30, 2000.

Of the  $958,371 in operating  expenses  for the year ended April 30, 2001,  the
Company  recorded  $465,317 in other operating  expenses as compared to $256,266
for the year ended April 30, 2000.  Interest expense  increased from $60,742 for
the year ended  April 30,  2000 to $55,393  for the year ended  April 30,  2001.
Commissions  and other sales and marketing  expenses  increased from $48,291 for
the year ended April 30, 2000 to $67,729 for the year ended April 30, 2001.

As a result of the  above,  the  Company  incurred a net loss for the year ended
April 30, 2001 of $975,450 as compared to $329,651  for the year ended April 30,
2000.


Liquidity and Capital Resources

For the year ended April 30, 2001,  cash used in operating  activities was equal
to $340,711.

At April 30, 2001, the Company  reported  total current  assets of $437,561,  as
compared to $542,930 for the year ended April 30, 2000. At April 30, 2001,  cash
was  equal to $311,  as  compared  to  $26,810  for  April  30,  2000,  accounts
receivable - trade was equal to  $276,285,  as compared to $368,769 at April 30,
2000, and inventories  were equal to $160,965,  as compared to $147,351 at April
30, 2000.

At April 30, 2001,  the Company had a relatively  limited  amount of cash, and a
relatively large accounts receivable - trade.  Assuming that the Company is able
to collect  its  accounts  receivable  - trade in a timely  fashion,  management
believes that the Company's current assets are sufficient to sustain  operations
for  the  foreseeable  future.  Although  management  does  not  anticipate  any
difficulties in collecting its accounts receivable,  in the event that unforseen
difficulties in collecting its accounts  receivable do arise, or in the event of
a  decrease  in the  volume of sales,  the  Company  may not be able to  sustain
operations. In such an event, the Company will have to either suspend operations
or seek additional  funds from short and long term borrowing  sources or through
the sale of common stock.


Total assets at April 30, 2001 were $698,509 as compared to $808,399.

Total  current  liabilities  increased  from  $1,094,324  at April  30,  2000 to
$1,340,045 at April 30, 2001.  This increase was due primarily to an increase in
amounts due to officers from  $1,042,980 to $854,357 and an increase in accounts
payable from $80,275 to $165,962.

Total  liabilities  decreased from $2,150,420 at April 30, 2000 to $1,750,058 at
April 30, 2001.

As a result of the  above  total  stockholders  equity  went  from a deficit  of
$1,342,178 at April 30, 2000 to a deficit of $1,086,549 at April 30, 2001.


                                       13
<PAGE>

The Company's  independent certified public accountants' report on the April 30,
2001  financial  statements   contained  an  explanatory   paragraph  expressing
substantial  doubt as to the Company's  ability to continue as a going  concern.
The Company has suffered  recurring  losses from  operations and has significant
short-term debt that raise  substantial doubt about its ability to continue as a
going concern.




ITEM 7 - FINANCIAL STATEMENTS

The  financial  statements  called for under this item appear  under the caption
Index to Financial Statements (Page F-1 hereof).

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

None.

                                    PART III

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


                Name                     Age                 Position
      ----------------------------       ---           -----------------------

      David G. Williams                  52            President and Director
      John D. "J. D." Rottweiler         56            Chief Financial Officer

David G. Williams, Chief Executive  Office/President/Director:  Mr. Williams has
more than two decades  experience in the humate  industry and as an entrepreneur
involved in the broad and extensive  management  of financial  responsibilities,
staffing,  manufacturing and production,  and developing sales worldwide. He has
completed  major  product  development  projects  through  years of research and
development, field trials and tests that have produced the company's current and
future product lines.  Currently  responsible for the developing and maintaining
the vision of the company, overseeing sales and marketing,  product development,
production,  and customer  service.  Mr. Williams  continues to develop business
opportunities and strategic alliances with other companies and organizations.

John    D.    Rottweiler,     Executive    Vice    President/Chief     Financial
Officer/Secretary/Director:  Mr.  Rottweiler  has over 25  years  of  experience
providing  extensive  management  and  operational  consulting  in the planning,
organizing, and directing of businesses in several industries. Served as officer
and  director of both private and public  companies  in the finance,  insurance,
real  estate,  and  manufacturing  industries.  Owner and founder of  investment
banking  business that provided capital  financing,  as principal and agent, for
private and public  ventures.  He is graduate from the University of Utah with a
Bachelor of Science in Management, Bachelor of Science in Marketing, and Masters
of Business Administration.

Terry L. Williams,  National  Retail Sales  Director:  His  background  includes
retail sales and marketing, and custom home development. He has over 25 years of
experience in executive  sales and  marketing  positions,  Universal  Importers.
Inc., and HumaTech, Inc. He developed national trade show and marketing programs
in the retail market industry. Mr. Williams has extensive development, marketing
and  construction  experience  as the owner and founder of Williams  Development
Co., Inc., a real estate development and marketing company.


                                       14
<PAGE>

The Company also utilizes a Management  Advisory Group,  which consults with the
Company's  Board of Directors  for product  development,  technical and business
operation  issues  on an  as-needed  basis.  The  members  of this  group are as
follows:

Technical Advisory Board:
-------------------------

Dr.  Robert E. Pettit,  Member  Technical  Advisory  Board:  Emeritus  Associate
Professor,  Texas  A&M  University,  Associate  Professor  of  Plant  Pathology,
Department of Plant  Pathology &  Microbiology,  and  International  Agriculture
Consultant. Dr. Pettit has held the position of Director of Research and Product
Development,  International Hu, ,Co.  Professional  experience includes numerous
years of developing and teaching graduate and undergraduate courses In the areas
of  "Diseases  of  Field  Crops",  "Bacterial  Plant  Diseases",  "DIof  Fruits,
Vegetables,  and Ornamental" and "Plant  Pathogenic  Fungi".  In the Ic area Dr.
Petitt was responsible for numerous  research and development and grant projects
concerning the "Diseases of Peanut" "Mycotoxins and Microflora Damage in Pecans"
and  Mycotoxins of Corn and Other Feed Grains" As an educator and consultant his
profession has taken him to over 20 different foreign countries, and allowed him
to publish in excess of 100 articles and abstracts in references  journals,  and
several books throughout the world.

Esper K. Chandler,  Member Technical  Advisory Board:  Independent  Agricultural
Consultant & Fanner. Mr. Chandler has over 30 years experience as owner of Texas
Plant and Soil Lab., Inc., an agriculture testing and consulting service,  owner
and operator of family cattle and row crop farm  operations,  and held executive
position  in  Pennzoil-United   American  Plant  Food  Corporation,   Occidental
Petroleum Corporation and National Plant Food Institute.

Jack A. Moreman,  Member Technical Advisor Board: Executive Vice President,  BIO
AG Technology  with  responsibilities  involving the management of oil field and
agriculture BioRemediation projects for the company. Previous experience include
Professor at  Clarendon  College for 20 years,  General  Manager of JA Land Co.,
which included managing 400,000 acres of farm and grazing business and Assistant
n Director of Ranch Programs at Texas Christian University.

Russell K Harris, Member Technical Advisory Board: Independent mining consultant
with over 20 years experience in the mining/extraction  industry.  Over fourteen
(14) years of business, management, and engineering,  experience at Shell Mining
Company.  Specific  responsibilities  in the areas of process  enhancement  team
management, facilities design and construction, executive office support, market
and profitability  analysis, and information systems.  Coordinated  productivity
and cost  enhancement  task  force at a large  mining  complex.  Provided  staff
support for the senior  management  teams  related to strategy  development  and
shareholder relations. Mr. Harris has developed forecasts of specific supply and
demand  conditions,  and  operational  competitiveness  for  proposed  expansion
projects and existing  facilities.  Also, updated hardware,  streamlines systems
applications,  developed a responsible team, and rolled computing responsibility
to  department  managers,  which  included  all computer  needs for  operations,
preventative  maintenance,  payroll,  warehousing  purchasing,  accounting,  and
engineering.  Performed  initial mine systems  design along with cost  reduction
projects,  short arid long term mine planning and mine life capital forecasting.
Participated  in initial  construction  of major mine  including  overseeing the
general  contractor in the areas of design,  construction,  cost  control,  site
layout and all earthwork track, piping and minor building.

Consultants
-----------

Dr.  Norbert K. Chirase:  Research  Scientist for the Beef Cattle Program at the
Texas A&M University  Research Center in Amarillo,  Texas.  Jointly appointed as
Professor  of Animal  Science at West  Texas A&M  University.  Graduate  Faculty
Member,  Department  of  Animal  Science  Tom A&M  University  and  Division  of
Agriculture, at West Texas A&M University.

                                       15
<PAGE>

Dr. John D.  McGlone,  Ph.D.:  Dr.  McGlone is a Professor  and  Director,  Pork
Industry Institute  Department of Animal Science and Food Technology YAM a joint
appointment in the Department of Cell Biology & Anatmoy at Texas Tech University
and Health  Sciences  Center He  received  his  Bachelor  of Science and Masters
degrees From Washington State  University.  Dr McGlone attended and received his
Ph.D. from the University of Illinois.  He is the author of numerous  scientific
and technical articles and publications in prestigious  journals and contributed
to many books.

Dr. Helen P. Stebbens,  Ph.D Nutritionist Dr. Stebbens studied at the University
of Aberdeen in the field of Animal  Science.  After  completing  curriculum with
honors, Dr. Stebbens attended the world-renowned University of Edinburgh and was
awarded her PhD. As a  consultant  for the animal feed  industry  she has gained
over 10 years of experience  throughout the United Kingdom.  Before founding HRS
Animal  Nutrition  Consultancy in 1998, Dr Stebbens  developed her career in the
U.K. with industry  professionals  such as Trident  Feeds,  Crina UK Limited and
Dalgety Agriculture.  Her accomplishments have granted acclimates in the private
and public sector.

Mike Baker:  Management Consultant at Porcine Services in Suffolk,  England. Mr.
Baker studied at Harper Adams  Agricultural  College and developed his career in
commercial  management  before moving to the  prestigious  Stotfold  Development
Unit,  a research  facility  owned by the Meat &  Livestock  Commission.  As the
manager of Stotfold  Mr.  Baker was  responsible  for the  operation of numerous
commercial and in-house research and development projects. He also developed new
management  strategies for feeding sows, piglets and deprived piglets. Mr. Baker
is a regular  contributor to the press and a frequent speaker at conferences and
seminars.  Mr.  Baker owns and  operates  the only  privately-owned  independent
trails unit in the United  Kingdom  where he has conducted  contract  trails for
clients such as SCA, Tucks Foods,  Quality Equipment Park Tonks, LTD,  Vistavet,
HurnaTech and two European companies.

Matt  Sutton-Vermeulen:  Mr.  Vermeulen  is a  President  of Vector  Marketing a
consulting  firm to major  firms in the animal  feed  industry.  He brings  over
fifteen  years of  consulting  experience  in corporate  strategic  and tactical
planning in product development, market evaluation, price analysis, distribution
management and  competitive  market  analysis.  Graduated from the University of
Nebraska with Bachelor of Science in Animal Science.

Compliance with Section 16(a) of the Securities Exchange Act of 1934.

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors and executive  officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports of  ownership  and reports of changes in  ownership  of Common Stock and
other equity securities of the Company. Officers, directors and greater than ten
percent shareholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.

David  G.  Williams,  the  Company's  President,  has  filed a Form 3 -  Initial
Statement of Beneficial  Ownership of Securities,  as required by Section 16(a).
Form 3 reflects 4,473,334 shares currently held by him.

John D. Rottweiler,  the Company's Chief Financial Officer, has filed a Form 3 -
Initial Statement of Beneficial Ownership of Securities,  as required by Section
16(a). Mr.  Rottweiler's  Form 3 reflects 7,000 shares currently held by him, as
well as 75,600 and 2,860  shared held by Panzer  Trust and U.S.  Finance,  Inc.,
respectively, both entities affiliated with Mr. Rottweiler.

To the Company's knowledge, John Duke Rottweiler, the son of John D. Rottweiler,
the  Company's  Chief  Financial  Officer,  has  not  filed  a Form 3 -  Initial
Statement of Beneficial  Ownership of Securities,  as required by Section 16(a).
If  filed,  Mr.  Rottweiler's  Form 3  would  have  reflected  1,007,030  shares
currently held by him.

To the Company's knowledge,  U. S. Finance, Inc., an entity affiliated with John
D. Rottweiler,  the Company's Chief Financial Officer,  has not filed a Form 3 -
Initial Statement of Beneficial Ownership of Securities,  as required by Section
16(a).  If filed,  U. S.  Finance,  Inc.'s Form 3 would have  reflected  541,956
shares currently held by him.


                                       16
<PAGE>

To  the  Company's   knowledge  all  other  Section  16(a)  filing  requirements
applicable  to the  Company's  officers,  directors and greater than ten percent
shareholders were complied with.

ITEM 10 - EXECUTIVE COMPENSATION

The following  Summary  Compensation  Table sets forth, for the years indicated,
all cash  compensation  paid,  distributed  or accrued for  services,  including
salary and bonus  amounts,  rendered  in all  capacities  for the Company to its
President and Chief  Executive  Officer and any other  executive  officer of the
Company which received  remuneration in excess of $100,000 during the referenced
periods. All other compensation related tables required to be reported have been
omitted as there has been no  applicable  compensation  awarded to, earned by or
paid to any of the Company's executive officers in any fiscal year to be covered
by such tables.



                (Remainder of this page left blank intentionally)





                                       17
<PAGE>
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE


                                      Annual Compensation         Long-Term
                                      -------------------         ---------
                                                                 Compensation
                                                                 ------------
                                                                   Awards                    Payouts
                                                                   ------                    -------
                                                      Other      Restricted   Securities                   All
                                        Salary/       Annual       Stock      Underlying      LTIP        Other
Name/Title                     Year      Bonus     Compensation    Awards    Options/SARs   Payouts   Compensation
----------                     ----     -------    ------------    ------    ------------   -------   ------------
<S>                            <C>      <C>        <C>             <C>       <C>            <C>       <C>
David G. Williams, President   2000      ____          ____         ____         ____         ____           ____
                               1999    $170,833         NA           NA           NA           NA      $1,568 (1)
                               1998    $146,333         NA           NA           NA           NA          $4,938
                               1997    $106,667         NA           NA           NA           NA          $2,178

John D. Rottweiler,            2000      ____          ____         ____         ____         ____           ____
Chief Financial Officer        1999    $120,833         NA           NA           NA           NA       $ -0- (2)
                               1998     $96,667         NA           NA           NA           NA           $ -0-
                               1997     $66,667         NA           NA           NA           NA           $ -0-

</TABLE>


[footnotes on next page]

(1)Represents  payments  received pursuant to a royalty  agreement.  Mr Williams
   also receives certain payments pursuant to contractual agreements for various
   equipment leases.

(2)Mr.  Rottweiler  is also a creditor  to the  Company  through an  approximate
   $7,270 note payable to The JDR Trust.

Director Compensation

The Company does not currently  pay a director fee for  attending  scheduled and
special  meetings  of the  Board  of  Directors.  The  Company  does not pay the
expenses of all of its directors in attending board meetings.  Further,  none of
the  Management  Advisory  Board  members  receive  any  compensation  for their
service.

<TABLE>
<CAPTION>


                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)


                            Number of Securities      Percent of Total
                                 Underlying        Options/SAR's Granted
                           Options/SAR's Granted      to Employees In         Exercise of Base
Name                                (#)                 Fiscal Year             Price ($/Sh)           Expiration Date
-------------------------- ----------------------- ----------------------- ----------------------- ------------------------
<S>                        <C>                     <C>                     <C>                     <C>
David G. Williams                   -0-                      --                      --                      --

John D. Rottweiler                  -0-                      --                      --                      --

</TABLE>


                                       18
<PAGE>
<TABLE>
<CAPTION>

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES
                                                                     Number of Unexercised
                                                                     Securities Underlying        Value of Unexercised
                                                                  Options/SARs At FY-End (#)    In-The-Money Option/SARs
                          Shares Acquired On                       Exercisable/Unexercisable         At FY-End ($)
          Name               Exercise (#)      Value Realized ($)                               Exercisable/Unexercisable
------------------------- -------------------- ------------------ ---------------------------- ---------------------------
<S>                       <C>                  <C>                <C>                          <C>
David G. Williams                 -0-                 -0-                    - 0 -                         --

John D. Rottweiler                -0-                 -0-                    - 0 -                         --

</TABLE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  information  table sets forth certain  information  regarding the
Company's  common stock ownership on July 14, 2000 by (1) any person  (including
any Agroup) who is known by the  Company to own  beneficially  more than 5.0% of
its outstanding common stock, (2) each director and executive  officer,  and (3)
all executive officers and directors as a group:

      Name and Address                          Shares owned    Percentage owned
      ----------------                         --------------   ----------------

David G. Williams                               4,107,455 (1)         39.54%
     1718 Fry Road, Suite 450
     Houston TX 77084

John D. Rottweiler                              1,555,986 (2)         14.97%
     1718 Fry Road, Suite 450
     Houston TX 77084

Bradford A. Musil & T. Bryan Fujimoto
     4779 W. Tyson Street
     Chandler AZ 85226                            738,100 (3)          7.10%

Cede & Company                                  2,613,203 (4)         25.15%
     P. O. Box 20, Bowling Green Station
     New York NY 10274

All officers and directors as a group,
     including affiliates                         5,664,241           54.51%

(1)  Represents beneficial ownership via shares directly owned by David Williams
     (3,773,344  shares);  David or  Rachel  Williams,  wife of  David  Williams
     (269,911 shares) and the related children of David Williams: Marie Williams
     (12,500  shares);  Michelle  Williams  (12,500  shares);  Suzanne  Williams
     (12,500  shares);  Shane Williams (12,500 shares) and Eric and Becky Hooper
     (15,000 shares).

(2)  Represents  beneficial  ownership of shares by Bonita  Rottweiler,  wife of
     John D. Rottweiler  (5,000 shares);  John Duke  Rottweiler,  son of John D.
     Rottweiler (1,009,030 shares) and U. S. Finance,  Inc., a corporation owned
     by  John  Duke  Rottweiler  and  Phillip  D.  Rottweiler,  sons  of John D.
     Rottweiler (541,956 shares).

(3)  Represents  beneficial  ownership of shares  directly  owned by Bradford A.
     Musil & T. Bryan Fujimoto  Trust UA 4/1/93  (578,100  shares);  Bradford A.
     Musil (150,000 shares) and T. Bryan Fujimoto (10,000 shares).

(4)  Represents  the  aggregate sum of all shares held in street name by various
     shareholders.



                                       19
<PAGE>
<TABLE>
<CAPTION>

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has an  Agreement  of Product  Development  and Funding  between the
Company  and The  Everett  Stewart  and Beulah  Stewart  Family  Trust,  a Trust
controlled  by a  shareholder  of the  Company.  The  Agreement  pertains to the
funding  necessary  for the  research  and  development  of a prototype  turbine
driven,  positive  displacement  pump to  apply  and  distribute  the  Company's
products in an  agricultural  setting in liquid form.  The Agreement  requires a
minimum  funding of  $100,000  and the Trust  reserves  the  exclusive  right to
provide additional  funding for this equipment.  As of April 30, 2001, the Trust
had funded an  aggregate  of  $330,000  under the terms and  conditions  of this
Agreement.  Repayment  of the funds  advanced  are required at a rate of 6.0% of
gross sales of equipment  to be  developed  and are due and payable in the month
following  collection  of  funds  related  to the  sale or  utilization  of this
equipment.  The Agreement  requires a total agreed repayment of $450,000.  As of
April 30,  2001 and  subsequent  thereto,  the  Company  has not  completed  the
development of the equipment prototype and,  accordingly,  has no gross sales of
the underlying equipment.

The  Company  has a license  agreement  with David G.  Williams,  the  Company's
President and controlling shareholder for the use of all copyrights, trademarks,
patents, trade secrets,  product formulas,  customer lists and other proprietary
information owned by IHFC by virtue of the incorporation of the predecessor sole
proprietorship.  The  agreement  requires a payment  of 1.0% of the total  gross
sales of the Company to David G. Williams.

The Company  entered into an employment  agreement  with David G.  Williams,  to
serve as the Company's  President  and Chief  Executive  Officer.  The agreement
covers the term from July 1, 1996 through June30, 2001 and automatically  renews
for  successive  two (2) year terms unless  either the  President or the Company
gives sixty (60) days written notice to the other. The agreement requires annual
compensation  payments of  $128,000  for the first year of the  agreement  term;
$150,000  for the  second  year  of the  agreement  term  and  $175,000  for all
successive years of the agreement term.

The Company  entered into an  employment  agreement  with John D.  Rottweiler to
serve as the Company's Executive Vice President and Chief Financial Officer. The
agreement  covers  the  term  from  July  1,  1996  through  June30,   2001  and
automatically  renews  for  successive  two (2) year  terms  unless  either  the
Executive  Vice President or the Company gives sixty (60) days written notice to
the other. The agreement  requires annual  compensation  payments of $80,000 for
the first  year of the  agreement  term;  $100,000  for the  second  year of the
agreement term and $125,000 for all successive years of the agreement term.

As of April 30,  2001 and 2000,  total  cumulative  amounts  unpaid  under these
agreements are as follows:

                                                                          2001           2000
                                                                       ----------     ----------
<S>                                                                    <C>            <C>
         Officer compensation                                          $1,042,980     $  854,357
         Royalty fees                                                           -              -
                                                                       ----------     ----------

                                                                       $1,042,980     $  854,357
                                                                       ==========     ==========

Future amounts due under the employment agreements are as follows:
                                                                       Year ending
                                                                        April 30,       Amount
                                                                       -----------    ----------

                                                                          2002        $  300,000
                                                                          2003           300,000
                                                                          2004            50,000
                                                                                      ----------

                                                                         Totals       $  650,000
                                                                                      ==========
</TABLE>


                                       20
<PAGE>

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

   Exhibit No.                     Description
   ----------                      -----------

         3.1      Articles of Incorporation of Midwest  Enterprise  Consultants,
                  Inc.

         3.2      Amendment  to  the  Articles  of   Incorporation   of  Midwest
                  Enterprise Consultants, Inc.

         3.3      Amendment  to  the  Articles  of   Incorporation   of  Midwest
                  Enterprise Consultants, Inc.

         3.4      Bylaws of Humatech, Inc.

         10.1     Asset purchase agreement by and between  International  Humate
                  Fertilizer Co. and Midwest Enterprise Consultants, Inc.

         10.2     Employment  agreement  by  and  between  International  Humate
                  Fertilizer Co. and David G. Williams

         10.3     Employment  agreement  by  and  between  International  Humate
                  Fertilizer Co. and John D. Rottweiler

         10.4     Royalty   agreement  by  and  between   International   Humate
                  Fertilizer Co. and David G. Williams

         10.5     Joint venture agreement for Humatech, Ltd.

         10.6     Marketing  agreement  by and between  Humatech,  Inc. and Club
                  Marketing Services

         10.7     Agreement  of Product  Development  and  Funding  between  The
                  Everett  Stewart and Beulah Stewart Family Trust (a Trust) and
                  Humatech, Inc.

         10.8     Lease of Premises located in Houston, Texas.

         10.9     Lease of Premises located in Katy, Texas.


   (b) Reports on Form 8-K

   There were no reports on Form 8-K filed during the period of this report.





                                       21
<PAGE>

                                   SIGNATURES


In  accordance  with  Section  13 or 15(d)  of The  Securities  Act of 1993,  as
amended,  the  Company  caused  this  report to be  signed on its  behalf by the
undersigned, thereto duly authorized.

                                                                  HUMATECH, INC.

Dated: August 10, 2001                       By:      /s/ David G. Williams
       ---------------                          --------------------------------
                                                               David G. Williams
                                                            Chairman, President,
                                            Chief Executive Officer and Director


In accordance with The Securities Exchange Act of 1934, as amended, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the date as indicated.

Dated: August 10 , 2001                        By:     /s/ David G. Williams
       ----------------                           ------------------------------
                                                               David G. Williams
                                                             Chairman, President
                                            Chief Executive Officer and Director


Dated: August 10 ,2001                        By:     /s/ John D. Rottweiler
       ---------------                           -------------------------------
                                                              John D. Rottweiler
                                            Chief Financial Officer and Director





                                       22

<PAGE>

                                 HUMATECH, INC.

                              Financial Statements
                                       and
                                Auditor's Report

                             April 30, 2001 and 2000










                               S. W. HATFIELD, CPA
                          certified public accountants

                      Use our past to assist your future sm


<PAGE>



                                 HUMATECH, INC.

                                    CONTENTS



                                                                          Page
                                                                          ----

Report of Independent Certified Public Accountants                         F-3

Financial Statements

   Balance Sheets
     as of April 30, 2001 and 2000                                         F-4

   Statements of Operations and Comprehensive Income
     for the years ended April 30, 2001 and 2000                           F-5

   Statement of Changes in Stockholders' Equity
     for the years ended April 30, 2001 and 2000                           F-6

   Statements of Cash Flows
     for the years ended April 30, 2001 and 2000                           F-7

   Notes to Financial Statements                                           F-8




                                                                             F-2

<PAGE>


S. W. HATFIELD, CPA
certified public accountants

Member:    American Institute of Certified Public Accountants
               SEC Practice Section
               Information Technology Section
           Texas Society of Certified Public Accountants


               Report of Independent Certified Public Accountants
               --------------------------------------------------



Board of Directors and Stockholders
Humatech, Inc.

We have audited the accompanying  balance sheets of Humatech,  Inc. (an Illinois
corporation)  as of  April  30,  2001 and 2000  and the  related  statements  of
operations and comprehensive  income,  changes in stockholders'  equity and cash
flows for each of the years  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audits 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.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Humatech,  Inc. as of April 30,
2001 and 2000,  and the results of its operations and its cash flows for each of
the years  then  ended,  in  conformity  with  accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note B to the
financial statements,  the Company has suffered recurring losses from operations
and has  significant  short-term  debt that raise  substantial  doubt  about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note B. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



                                                      S. W. HATFIELD, CPA
Dallas, Texas
August 8, 2001




                      Use our past to assist your future sm

(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com

                                                                             F-3

<PAGE>



                                 HUMATECH, INC.
                                 BALANCE SHEETS
                             April 30, 2001 and 2000


                                                         2001           2000
                                                     -----------    -----------
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                          $       311    $    26,810
   Accounts receivable - trade,
     net of allowance for doubtful accounts
     of $6,477 and $-0-, respectively                    276,285        368,769
   Inventories                                           160,965        147,351
                                                     -----------    -----------
     Total current assets                                437,561        542,930
                                                     -----------    -----------

Property and Equipment - at cost
   Transportation equipment                              204,932        252,758
   Manufacturing and processing equipment                223,127        168,119
   Office furniture and fixtures                          19,012         19,012
                                                     -----------    -----------
                                                         447,071        439,889
   Accumulated depreciation                             (188,224)      (174,815)
                                                     -----------    -----------
     Net property and equipment                          258,847        265,074
                                                     -----------    -----------

Other assets                                               2,101            395
                                                     -----------    -----------

Total Assets                                         $   698,509    $   808,399
                                                     ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities
   Notes payable to banks and finance companies      $    65,443    $    84,500
   Customer deposits                                      25,800          8,800
   Accounts payable - trade                              165,962         80,275
   Accrued interest payable                                 --           66,392
   Deferred revenue                                       39,860           --
   Due to officers                                     1,042,980        854,357
                                                     -----------    -----------
     Total current liabilities                         1,340,045      1,094,324
                                                     -----------    -----------

Long-term Liabilities
   Long-term notes payable, net of current maturities    115,013        133,769
   Notes and commitments payable to affiliates           330,000        922,327
                                                     -----------    -----------
     Total liabilities                                 1,785,058      2,150,420
                                                     -----------    -----------

Commitments and Contingencies

Stockholders' Equity Common stock - no par value
     25,000,000 shares authorized
     8,455,114 issued and outstanding                  1,354,079        123,157
   Accumulated deficit                                (2,440,628)    (1,465,178)
                                                     -----------    -----------
     Total stockholders' equity                       (1,086,549)    (1,342,021)
                                                     -----------    -----------

Total Liabilities and Stockholders' Equity           $   698,509    $   808,399
                                                     ===========    ===========


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

                                                                             F-4

<PAGE>



                                 HUMATECH, INC.
                STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                       Years ended April 30, 2001 and 2000


                                                         2001           2000
                                                     -----------    -----------

Revenues
   Sales, net of discounts, returns and allowances
     of $42,522 and $2,291, respectively
       Domestic                                      $   154,685    $   207,414
       Related Party
         Foreign, principally United Kingdom              41,120        314,719
                                                     -----------    -----------
     Net revenues                                        195,805        522,133
                                                     -----------    -----------

Cost of Sales
   Materials                                              56,256         29,770
   Other direct costs                                    166,028         98,775
                                                     -----------    -----------
     Total cost of sales                                 222,284        128,545
                                                     -----------    -----------

Gross Profit                                             (26,479)       393,588
                                                     -----------    -----------

Operating Expenses
   Research and development expenses                       9,634         14,450
   Commissions and other sales and marketing expenses     67,729         48,291
   Officer compensation                                  300,000        300,000
   Other operating expenses                              465,317        256,266
   Interest expense                                       55,393         60,742
   Depreciation expense                                   60,298         43,490
                                                     -----------    -----------
     Total operating expenses                            958,371        723,239
                                                     -----------    -----------

Loss from operations                                    (984,850)      (329,651)

Other income (expense)
   Gain on disposal of fixed assets                        9,400           --
                                                     -----------    -----------

Loss before income taxes                                (975,450)      (329,651)

Provision for income taxes                                  --             --
                                                     -----------    -----------

Net Loss                                                (975,450)      (329,651)

Other Comprehensive Income                                  --             --
                                                     -----------    -----------

Comprehensive Income                                 $  (975,450)   $  (329,651)
                                                     ===========    ===========

Net loss per weighted-average
   share of common stock
   outstanding, calculated on
   Net Loss - basic and fully diluted                $     (0.10)   $     (0.04)
                                                     ===========    ===========

Weighted-average number of shares
   of common stock outstanding                         9,566,414      8,455,114
                                                     ===========    ===========



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

                                                                             F-5

<PAGE>
<TABLE>
<CAPTION>



                                 HUMATECH, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                       Years ended April 30, 2001 and 2000


                                             Common Stock
                                             ------------         Accumulated
                                         Shares        Amount       deficit         Total
                                      -----------   -----------   -----------    ----------
<S>                                   <C>           <C>           <C>            <C>
Balances at May 1, 1999                 8,455,114   $   123,157   $(1,135,527)   $(1,012,370)

Net loss for the year                        --            --        (329,651)      (329,651)
                                      -----------   -----------   -----------    -----------

Balances at April 30, 2000              8,455,114       123,157    (1,465,178)    (1,342,021)

Issuance of common stock for
   Cash                                   355,353       216,696          --          216,696
   Services and fees                      134,000       146,750          --          146,750
   Retirement of related party debt     1,446,126       867,476          --             --

Net loss for the year                        --            --        (975,450)      (975,450)
                                      -----------   -----------   -----------    -----------

Balances at April 30, 2001             10,390,593   $ 1,354,079   $(2,440,628)   $(1,086,549)
                                      ===========   ===========   ===========    ===========
</TABLE>






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

                                                                             F-6

<PAGE>
<TABLE>
<CAPTION>


                                 HUMATECH, INC.
                            STATEMENTS OF CASH FLOWS
                       Years ended April 30, 2001 and 2000


                                                                           2001         2000
                                                                         ---------    ---------
<S>                                                                      <C>          <C>
Cash Flows from Operating Activities
   Net loss for the period                                               $(975,450)   $(329,651)
   Adjustments to reconcile net loss to
     net cash provided by operating activities
       Depreciation                                                         60,298       43,490
       Gain on disposal of fixed assets                                     (9,400)        --
       Common stock issued for payment of consulting fees                  146,750         --
       Common stock issued for payment of accrued interest                  29,144         --
       (Increase) Decrease in
         Accounts receivable - trade                                        92,484     (364,148)
         Inventory                                                         (13,614)     (58,032)
         Deposits and other                                                 (1,706)         (35)
       Increase (Decrease) in
         Accounts payable - trade                                           85,687       (4,676)
         Accrued interest payable                                             (387)      44,042
         Due to officers                                                   188,623      224,597
         Customer deposits                                                  17,000       (1,700)
         Deferred revenue                                                   39,860         --
                                                                         ---------    ---------
Cash flows provided by (used in) operating activities                     (340,711)    (446,113)
                                                                         ---------    ---------

Cash Flows from Investing Activities
   Proceeds from disposition of property and equipment                       9,400         --
   Purchase of property and equipment                                       (5,251)     (42,488)
                                                                         ---------    ---------
Cash flows used in investing activities                                      4,149      (42,488)
                                                                         ---------    ---------

Cash Flows from Financing Activities
   Increase (Decrease) in cash overdraft                                      --         (1,819)
   Proceeds from loans payable to affiliates                               180,000      599,250
   Principal payments on loans payable                                     (86,633)     (82,020)
   Proceeds from issuance of common stock                                  216,696         --
                                                                         ---------    ---------
Cash flows provided by (used in) financing activities                      310,063      515,411
                                                                         ---------    ---------

Increase (Decrease) in Cash and Cash Equivalents                           (26,499)      26,810

Cash and cash equivalents at beginning of year                              26,810         --
                                                                         ---------    ---------

Cash and cash equivalents at end of year                                 $     311    $  26,810
                                                                         =========    =========

Supplemental Disclosure of Interest and Income Taxes Paid
     Interest paid for the period                                        $  26,313    $  16,700
                                                                         =========    =========
     Income taxes paid for the period                                    $    --      $    --
                                                                         =========    =========

Supplemental Disclosure of Non-Cash Investing and Financing Activities
     Acquisition of property and equipment
       with debt from financing companies,
       banks and related parties                                         $  48,820    $ 158,935
                                                                         =========    =========

     Retirement of related party debt and accrued interest
       with issuance of common stock                                     $ 867,476    $    --
                                                                         =========    =========
</TABLE>


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

                                                                             F-7

<PAGE>



                                 HUMATECH, INC.

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - Organization and Description of Business

Humatech,  Inc. (Company) was incorporated on February 2, 1988 under the laws of
the State of Illinois.  Due to the April 16, 1997  acquisition  of a significant
business  operation,  the Company changed its operating year-end to April 30 and
changed its corporate name to Humatech, Inc.

On April 16, 1997,  the Company  acquired the assets and certain  liabilities of
International Humate Fertilizer Co. (IHFC), a Nevada corporation incorporated on
February  21,  1996  under the laws of the State of Nevada.  IHFC was  initially
capitalized   with  the  transfer  of  certain  assets  and  assumption  of  all
outstanding  liabilities  of a  Texas  sole  proprietorship  of the  same  name,
effective July 1, 1996. With the acquisition of IHFC, the Company became engaged
in the development, manufacture and sale of carbon-based humate products for use
in the commercial agriculture, animal feed and home horticulture markets.

For  segment  reporting  purposes,  the Company  operated  in only one  industry
segment during the periods represented in the accompanying  financial statements
and makes all  operating  decisions and  allocates  resources  based on the best
benefit to the Company as a whole.

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


NOTE B - Going Concern Uncertainty

The  Company has  incurred  cumulative  net  operating  losses of  approximately
$(2,440,000)   and  has  used  cumulative   cash  in  operating   activities  of
approximately  $(885,000)  during the period from May 1, 1997 through  April 30,
2001.

Management continues to be of the opinion that continued  marketplace  education
about the  Company's  products,  foreign  demand for the  Company's  animal feed
supplement  products and current marketing efforts directed toward retail market
consumption  will provide  sufficient  cash to support the Company's  day-to-day
liquidity  requirements as well as retire  outstanding debt and delinquent trade
payables.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.


NOTE C - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     The Company considers all cash on hand and in banks,  including accounts in
     book overdraft  positions,  certificates of deposit and other highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

                                                                             F-8

<PAGE>



                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C - Summary of Significant Accounting Policies - Continued

2.   Accounts receivable and revenue recognition
     -------------------------------------------

     In  the  normal  course  of  business,  the  Company  periodically  extends
     unsecured  credit to  unrelated  customers,  principally  located in Texas,
     Arizona,  and to related  and  unrelated  parties  domiciled  in the United
     Kingdom.  Because of the credit risk  involved,  management has provided an
     allowance for doubtful accounts which reflects its opinion of amounts which
     will  eventually  become  uncollectible.  In the  event  of  complete  non-
     performance,  the maximum exposure to the Company is the recorded amount of
     trade  accounts  receivable  shown  on the  balance  sheet  at the  date of
     non-performance.

     Revenue  is  recognized  by the  Company  at the point at which an order is
     shipped at a fixed price, collection is reasonably assured, the Company has
     no  remaining  performance  obligations  and  no  right  of  return  by the
     purchaser exists.

3.   Inventory
     ---------

     Inventory  consists of finished goods, raw materials and related  packaging
     materials necessary to manufacture  humate-based fertilizer products. These
     items are carried at the lower of cost or market using the first-in, first-
     out method.

4.   Property, plant and equipment
     -----------------------------

     Property and  equipment are recorded at  historical  cost.  These costs are
     depreciated  over the  estimated  useful  lives of the  individual  assets,
     generally 4 to 10 years, using the straight-line method.

     Gains and losses from  disposition of property and equipment are recognized
     as incurred and are included in operations.

5.   Research and development expenses
     ---------------------------------

     Research and development expenses are charged to operations as incurred.

6.   Advertising expenses
     --------------------

     Advertising and marketing expenses are charged to operations as incurred.

7.   Income taxes
     ------------

     The Company  utilizes  the asset and  liability  method of  accounting  for
     income taxes.  At April 30, 2001 and 2000,  respectively,  the deferred tax
     asset and deferred  tax  liability  accounts,  as recorded  when  material,
     consist entirely the result of temporary differences. Temporary differences
     represent  differences in the recognition of assets and liabilities for tax
     and financial reporting purposes, primarily allowance for doubtful accounts
     and accumulated depreciation.


                                                                             F-9

<PAGE>



                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE C - Summary of Significant Accounting Policies - Continued

8.   Loss per share
     --------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,  whichever  is  later.  As  of  April  30,  2001,  the  Company's
     outstanding stock options are considered anti-dilutive due to the Company's
     net  operating  loss  position.  As of April 30,  2000,  the Company had no
     warrants and/or options issued and outstanding.


NOTE D - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.


NOTE E - Fixed Assets

During Fiscal 2000, all equipment being financed under related party leases were
refinanced  directly in the Company's name. Included in the amounts reflected in
the  accompanying  balance  sheet are the  following  fixed  assets on long-term
capital leases:

                                                           2000         2000
                                                         ---------    ---------
       Vehicles
         Related party                                   $  29,480    $  29,480
       Manufacturing and processing equipment
         Unrelated                                          68,511       19,691
         Related party                                        --           --
                                                         ---------    ---------
                                                            97,991       49,171
       Accumulated depreciation                            (42,554)     (31,994)
                                                         ---------    ---------

                                                         $  55,437    $  17,177
                                                         =========    =========

NOTE F - Inventory

Inventory consists of the following at April 30, 2001 and 2000, respectively:

                                                           2001         2000
                                                         ---------    ---------

         Raw materials                                   $ 153,390    $ 126,762
         Work-in-process                                      --         14,673
         Finished goods                                      7,575        5,916
                                                         ---------    ---------

         Totals                                          $ 160,965    $ 147,351
                                                         =========    =========


                                                                            F-10

<PAGE>
<TABLE>
<CAPTION>


                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE G - Notes payable to banks and finance companies

                                                                                  2001      2000
                                                                                  -------   -------
<S>                                                                               <C>       <C>
$64,820 installment note payable to a bank. Interest at the Wall Street Journal
   Prime Rate plus 2.5% (10.00% at April 30, 2001). Payable in monthly
   installments of approximately $2,123, including accrued interest. Final
   payment due in July 2001. Collateralized by all inventory, accounts
   receivable, equipment and intangibles and the personal guaranty of the
   Company's President and controlling
   shareholder                                                                    $ 5,777   $30,760

$26,849 installment note payable to an automotive finance
   company.  Interest at 12.99%.  Payable in monthly
   installments of approximately $611, including accrued
   interest.  Final payment due in October 2002
   Collateralized by transportation equipment                                      12,261    17,766

$9,577 installment note payable to an equipment leasing
   company.  Interest at 8.86%.  Payable in monthly installments
   of approximately $437, including accrued interest.  Final
   payment due in March 2001.  Collateralized by
   manufacturing equipment                                                           --       4,808

$8,000 installment note payable to an equipment leasing
   company.  Interest at 10.86%.  Payable in monthly
   installments of approximately $373, including accrued
   interest.  Final payment due in October 2001
   Collateralized by manufacturing equipment                                        3,459     6,711

$48,820 installment note payable to an equipment leasing
   company.  Interest at 10.00%.  Payable in monthly
   installments of approximately $1,053, including accrued
   interest.  Final payment due in January 2005.  Collateralized
   by manufacturing equipment                                                      40,081      --

$37,768 installment note payable to a bank.  Interest
   at 9.75%.  Payable in monthly installments of
   approximately $625, including accrued interest
   Final payment due in September 2006.  Collateralized
   by transportation equipment                                                     31,346    35,649

$29,480 installment note payable to a bank.  Interest at 12.74%
   Payable in monthly installments of approximately $800,
   including accrued interest.  Final payment due in May 2002
   Collateralized by transportation equipment                                       9,546    15,989
</TABLE>


                                                                            F-11

<PAGE>
<TABLE>
<CAPTION>



                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE G - Notes payable to banks and finance companies - Continued

                                                                                   2001         2000
                                                                                 ---------    ---------
<S>                                                                              <C>          <C>
$32,521 installment note payable to a bank.  Interest at 9.25%
   Payable in monthly installments of approximately $682,
   including accrued interest.  Final payment due in November
   2004.  Collateralized by transportation equipment                                25,341       30,867

$66450 installment note payable to a bank.  Interest at 10.50%
   Payable in monthly installments of approximately $1,707,
   including accrued interest.  Final payment due in January 2004
   Collateralized by transportation equipment and manufacturing
   equipment                                                                        48,731       64,798

$14,195 installment note payable to a bank.  Interest at 12.50%
   Payable in monthly installments of approximately $669, including
   accrued interest.  Final payment due in September 2001
   Collateralized by manufacturing equipment                                         3,914       10,921
                                                                                 ---------    ---------

Total notes payable to banks and finance companies                                 180,456      218,269

     Less current maturities                                                       (65,443)     (84,500)
                                                                                 ---------    ---------

     Long-term portion                                                           $ 115,003    $ 133,769
                                                                                 =========    =========

Future maturities of long-term debt are as follows:

                                                                                Year ending
                                                                                  April 30     Amount
                                                                                 ---------    ---------

                                                                                 2002         $  65,443
                                                                                 2003            45,937
                                                                                 2004            38,768
                                                                                 2005            20,561
                                                                                 2006             6,844
                                                                                 2007             2,903
                                                                                              ---------

                                                                                 Totals       $ 180,456
                                                                                              =========
</TABLE>

The Company is  periodically  irregular  in making  scheduled  payments on notes
payable to banks and other financing entities.  Accordingly,  the lender(s) may,
at their  sole  discretion,  declare  the then  outstanding  indebtedness  to be
immediately due and payable and begin  foreclosure on the respective  underlying
assets,  which could  possibly have a material  adverse  effect on the Company's
financial condition and operations.


                                                                            F-12

<PAGE>
<TABLE>
<CAPTION>



                                                           HUMATECH, INC.

                                              NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE I - Long-term Notes and Commitments Payable to Affiliates

                                                                                   2001       2000
                                                                                  --------   --------
<S>                                                                               <C>        <C>
$554,450 term note payable to two individuals related
   to the Company's Executive Vice President and
   Chief Financial Officer.  Interest at 9.0%.  Principal
   and accrued interest due at maturity in July 2002
   Unsecured.  Principal and accrued interest were
   retired on September 2000 with the issuance of
   1,007,030 shares of unregistered, restricted
   common stock                                                                   $   --     $554,450

$217,877 term note payable to a corporation affiliated
   with the Company's Executive Vice President and
   Chief Financial Officer.  Interest at 9.0%.  Principal
   and accrued interest due at maturity in July 2004
   Unsecured.  Principal and accrued interest were
   retired on September 2000 with the issuance of
   439,096 shares of unregistered, restricted
   common stock                                                                       --      217,877

Agreement of Product Development and Funding between the Company and a
   shareholder. Repayment at a rate of 6.0% of gross sales of equipment to be
   developed with the funding received under this agreement. Total agreed
   repayment will be $450,000. As of April 30, 2001 and subsequent thereto, the
   Company has not completed the development of the product and, accordingly,
   has no
   gross sales of the underlying product                                           330,000    150,000
                                                                                  --------   --------

Total long-term notes and commitments payable to affiliates                       $330,000   $922,327
                                                                                  ========   ========
</TABLE>

NOTE J - Due to Officers

The Company has a license agreement with the Company's President and controlling
shareholder for the use of all copyrights,  trademarks,  patents, trade secrets,
product formulas, customer lists and other proprietary information owned by IHFC
by virtue of the  incorporation  of the  predecessor  sole  proprietorship.  The
agreement  requires a payment of 1.0% of the total gross  sales of the  Company.
For the years ended April 30, 2001 and 2000,  respectively,  the Company paid or
accrued approximately $2,291 and $5,221 for royalties under this agreement.

The Company entered into an employment  agreement with an individual to serve as
the Company's  President and Chief Executive Officer.  The agreement covered the
initial term from July 1, 1996 through  June 30, 2001 and  automatically  renews
for  successive  two (2) year terms unless  either the  President or the Company
gives sixty (60) days written notice to the other. The agreement requires annual
compensation  payments of  $128,000  for the first year of the  agreement  term;
$150,000  for the  second  year  of the  agreement  term  and  $175,000  for all
successive years of the agreement term.


                                                                            F-13

<PAGE>



                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE J - Due to Officers - Continued

The Company entered into an employment  agreement with an individual to serve as
the  Company's  Executive  Vice  President  and  Chief  Financial  Officer.  The
agreement  covered the initial  term from July 1, 1996 through June 30, 2001 and
automatically  renews  for  successive  two (2) year  terms  unless  either  the
Executive  Vice President or the Company gives sixty (60) days written notice to
the other. The agreement  requires annual  compensation  payments of $80,000 for
the first  year of the  agreement  term;  $100,000  for the  second  year of the
agreement term and $125,000 for all successive years of the agreement term.

As of April 30,  2001 and 2000,  total  cumulative  amounts  unpaid  under these
agreements are as follows:


                                                           2001         2000
                                                        ----------   ----------
         Officer compensation                           $1,042,980   $  854,357
         Royalty fees                                         --           --
                                                        ----------   ----------

                                                        $1,042,980   $  854,357
                                                        ==========   ==========

Future amounts due under the employment agreements are as follows:

                                                        Year ending
                                                         April 30,     Amount
                                                        ----------   ----------

                                                              2002   $  300,000
                                                              2003      300,000
                                                              2004       50,000
                                                                     ----------

                                                         Totals      $  650,000
                                                                     ==========

NOTE L - Income Taxes

The  components  of income tax  (benefit)  expense for the years ended April 30,
2001 and 2000, respectively, are as follows:

                                                           2001         2000
                                                        ----------   ----------
       Federal:
         Current                                        $     --     $     --
         Deferred                                             --           --
                                                        ----------   ----------
                                                              --           --
                                                        ----------   ----------
       State:
         Current                                              --           --
         Deferred                                             --           --
                                                        ----------   ----------
                                                              --           --
                                                        ----------   ----------

       Total                                            $     --     $     --
                                                        ==========   ==========

As of April 30,  2001,  the Company has a net  operating  loss  carryforward  of
approximately  $2,107,000 to offset future  taxable  income.  Subject to current
regulations, this carryforward will begin to expire in 2012.



                                                                            F-14

<PAGE>
<TABLE>
<CAPTION>


                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE L - Income Taxes - Continued

The  Company's  income tax  expense for the years ended April 30, 2001 and 2000,
respectively, differed from the statutory federal rate of 34 percent as follows:

                                                                                  2001         2000
                                                                                ---------    ---------
<S>                                                                             <C>          <C>
     Statutory rate applied to earnings (loss) before income taxes              $(332,000)   $(112,000)

     Increase (decrease) in income taxes resulting from:
         State income taxes                                                          --           --
        Other including reserve for deferred tax asset                            332,000      112,000
                                                                                ---------    ---------

       Income tax expense                                                       $    --      $    --
                                                                                =========    =========

The deferred current tax asset on the April 30, 2001 and 2000, respectively,
balance sheet consists of the following:

                                                                                  2001         2000
                                                                                ---------    ---------

     Current deferred tax asset                                                 $ 716,000    $ 384,200
       Reserve                                                                   (716,000)    (384,200)
                                                                                ---------    ---------

       Net current tax asset                                                    $    --      $    --
                                                                                =========    =========
</TABLE>

The current  deferred tax asset results from the  availability  of the Company's
net operating loss carryforward to offset future taxable income. The Company has
fully  reserved  its  deferred  tax  asset  related  to its net  operating  loss
carryforward due to the uncertainty of future usage. During the year ended April
30, 2001 and 2000, the reserve for the deferred  current tax asset  increased by
approximately $331,800 and 125,000, respectively.


NOTE M - Common Stock Transactions

During Fiscal 2001, the Company sold an aggregate  355,353 shares of restricted,
unregistered  common stock to five (5) separate  unrelated  investors in private
placement  transactions,  for aggregate cash proceeds of approximately $216,675.
The  transactions  occurred between June 2000 and March 2001. The Company relied
upon various exemptions from registration in the issuance of these shares.

On May 1, 2000,  the Company issued  approximately  77,000 shares of restricted,
unregistered  common stock to a consulting firm for public  relations  services.
This transaction was valued at  approximately  $96,250,  which  approximated the
discounted quoted closing price of the Company's common stock on the date of the
transaction.

On August 8, 2000, the Company issued an aggregate  44,000 shares of restricted,
unregistered  common stock to various related and unrelated  individuals  and/or
companies for professional  services related to product  development,  corporate
website design and maintenance and public relations services. These transactions
were valued at an aggregate  $44,000,  which  equaled the invoiced  price of the
related services by the respective  service provider and the agreed-upon  number
of  shares to be  issued  in  settlement  between  both  parties.  Further,  the
valuation of these  transactions also approximated the discounted quoted closing
price of the Company's common stock on the date of the transaction.



                                                                            F-15

<PAGE>
<TABLE>
<CAPTION>


                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE M - Common Stock Transactions - Continued

On  February  2,  2001,  the  Company  issued  approximately  13,000  shares  of
restricted,  unregistered common stock to a consulting firm for public relations
services.   This   transaction  was  valued  at  approximately   $6,500,   which
approximated  the discounted  quoted closing price of the Company's common stock
on the date of the transaction.

On September  30, 2000,  the Company  issued an  aggregate  1,446,126  shares of
restricted,  unregistered common stock to two individuals and one entity related
to and  affiliated  with  the  Company's  Executive  Vice  President  and  Chief
Financial  Officer in  repayment  of notes  payable in the  aggregate  amount of
$772,327 and accrued interest of $95,149.


NOTE N - Stock Options

The Company's  Board of Directors has allocated an aggregate  281,241  shares of
the Company's  common stock for stock options  granted in  conjunction  with the
private  placement  sales of common stock during  Fiscal 2001.  The options were
fully earned and  exercisable at issuance.  The options expire between  December
2001 and November 2003 with exercise prices between $0.40 and $0.60 per share.

In May 2000, the Company issued 200,000 stock options to an individual providing
consulting services to the Company. The options are fully earned and exercisable
at  issuance,  expire on April 30, 2005 and have an exercise  price of $1.25 per
share.

There were no exercise  of any options  during the year ended April 30, 2001 and
subsequent thereto.

The following table summarizes all options granted during Fiscal 2001:

                             Options          Options          Options          Options       Exercise price
                             granted         exercised        terminated      outstanding       per share
                          -------------    -------------    -------------    -------------    -------------
<S>                       <C>              <C>              <C>              <C>              <C>

Financing options               281,241             --               --            281,241    $0.40 - $0.60
Consulting options              200,000             --               --            200,000            $1.25
                          -------------    -------------    -------------    -------------    -------------

     Totals                     481,241             --               --            481,241
                          =============    =============    =============    =============    =============
</TABLE>


The weighted  average  exercise price of all issued and  outstanding  options at
April 30, 2001 is approximately $0.79.

Had  compensation  cost for options  granted been  determined  based on the fair
values at the grant dates, as prescribed by SFAS 123, the Company's net loss and
net loss per share would not have changed significantly as the exercise price of
the options was relatively equivalent to the market price at the grant date. The
calculations  to  estimate  the fair  value of the  options  were made using the
Black-Scholes pricing model which required making significant assumptions. These
assumptions include the expected life of the options, which was determined to be
one year, the expected volatility,  which was based on fluctuations of the stock
price over a 12 month  period,  the expected  dividends,  determined  to be zero
based on past performance,  and the risk free interest rate, which was estimated
using the bond equivalent yield of 6.0% at April 30, 2001.


                                                                            F-16

<PAGE>


                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE O - Commitments

In April 1998, the Company entered into a Marketing  Services  Agreement with an
unrelated entity to provide  specialized  marketing  services that will generate
sales into specified mass merchandiser  outlets. The agreement provides that the
Company will pay the marketing  company a performance  fee equal to 10.0% of all
invoiced sales to the respective mass  merchandisers and covers virtually all of
the Company's products.

In November 1998, the Company entered into a letter of intent for the purpose of
establishing a joint venture to promote and sell the Company's products into the
United Kingdom.  During the 2nd calendar  quarter of 1999, the Company's  United
Kingdom distributor formed a new entity,  Humatech,  Ltd. It is anticipated that
the Company will eventually own a 45.0% interest in this entity. As of April 30,
2001,  the  Company  has made no capital  contribution  to  Humatech,  Ltd.  and
conducts  business with this foreign  entity under equal terms and conditions to
those of domestic sales to unrelated third parties.

The Company executed an operating lease for its manufacturing facility. The term
of the lease is for one (1) year and requires  monthly payments of approximately
$850.  Additionally,  the Company must provide  insurance  coverage in an amount
acceptable to the lessor, as defined in the lease agreement.


NOTE P - Subsequent Event

On May 7, 2001,  the Company  issued 75,000 shares of  restricted,  unregistered
common stock to an existing shareholder for $30,000 cash.

On June 4, 2001, the Company filed a Registration Statement under The Securities
Act of 1933 on Form S-8 registering an aggregate 325,000 shares of common stock.
The Company  issued  300,000  shares to an individual  providing  evaluation and
advise related to mergers and acquisitions,  advising corporate management,  and
in performing  general  administrative  duties for  publicly-held  companies and
development stage investment ventures.  The Company also issued 25,000 shares to
the  Company's  legal  counsel  for prior,  current  and future  services  to be
rendered to the Company.

In  August  2001,  the  Company  completed  negotiations  to sell  an  aggregate
1,375,000  shares  of  restricted,   unregistered  common  stock,   representing
approximately  13.23% of the issued and outstanding common stock as of April 30,
2001,  for total  proceeds of $550,000 cash to an unrelated  third party under a
private  placement  letter  utilizing an exemption from  registration  under the
applicable Securities laws. As of August 8, 2001, the Company has received total
proceeds of  approximately  $125,000  under this  agreement  and is scheduled to
receive $425,000 by the close of business on August 10, 2001.

Additionally, the Company will issue a series of Stock Warrants to the purchaser
of the  1,375,000  shares  of  common  stock  to  purchase  up to an  additional
1,375,000 shares of restricted, unregistered common stock as follows: Series A -
343,750 shares at $2.00 per share,  expiring on the second  anniversary  date of
the warrant; Series B - 343,750 shares at $3.00 per share, expiring on the third
anniversary  date of the warrant;  Series C - 343,750 shares at $4.00 per share,
expiring  on the fourth  anniversary  date of the warrant and Series D - 343,750
shares  at $5.00  per  share,  expiring  on the  fifth  anniversary  date of the
warrant.


                                                                            F-17