SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  First Amended
                                   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 __________ to __________.


                         Commission file number 0-28557


                                 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. [ X ]

         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.) $2,505,391, based on the closing price of $0.53
for the common stock on August 7, 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 7,
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                                              3

Item 2    Description of Property                                             10

Item 3    Legal Proceedings                                                   10

Item 4    Submission of Matters to a Vote of Security Holders                 10


                                     PART II

Item 5    Market for Common Equity and Related Stockholder Matters            11

Item 6    Management's Discussion and Analysis or Plan of Operations          13

Item 7    Financial Statements                                                15

Item 8    Changes In and Disagreements With Accountants on Accounting
          and Financial Disclosure                                            15


                                    PART III

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

Item 10   Executive Compensation                                              19

Item 11   Security Ownership of Certain Beneficial Owners and Management.     22

Item 12   Certain Relationships and Related Transactions.                     22

Item 13   Exhibits and Reports on Form 8-K.                                   24






                                       2
<PAGE>

                                     PART I

This Annual Report includes forward-looking statements within the meaning of the
Securities Exchange Act of 1934 (the "Exchange 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 "Management's Discussion and Analysis of Financial Condition or Plan
of Operation." Forward-looking statements also include statements in which words
such  as  "expect,"   "anticipate,"  "intend,"  "plan,"  "believe,"  "estimate,"
"consider" 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

         Humatech,  Inc. was originally 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.  From our inception until April 1997,
we were engaged primarily in the business of providing consulting services.

         On April 6, 1997, we acquired all of the assets and certain liabilities
from International  Humate Fertilizer Co., a Nevada corporation located in Mesa,
Arizona and wholly-owned by our Chairman,  David G. Williams. On May 5, 1997, we
changed our name to Humatech,  Inc. to more accurately  reflect our new business
of  the  development,   manufacture,   and  sale  of  carbon-based  animal  feed
supplements and fertilizer products.

Business Overview

Industry Overview
-----------------

         In 1980, the United States Department of Agriculture  released a report
entitled Report and  Recommendations  on Organic Farming 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 extensive use of cash crops and agricultural chemicals, both fertilizers and
pesticides. Among the major concerns were:

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


                                       3
<PAGE>

         As a result of these concerns and others, a new  philosophical  view of
agriculture,  termed  "sustainable  agriculture",  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.

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

         o    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.

         o    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.

         o    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.

         o    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.  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.


                                       4
<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.
Humatech has  developed a process  whereby humic acids are extracted in a manner
that will produce a viable,  efficacious product that consistently  exhibits the
attributes expected by all concerned.

Our Fertilizer Products

         We manufacture  and  distribute  organic based  fertilizer  products to
three primary groups:  (A) growers of agricultural  crops,  (B) golf courses and
commercial landscapers,  and (C) mass merchandisers and independent nurseries in
the lawn and garden  market.  Our fertilizer  products  accounted for 64% of our
sales last year.

         In the agriculture market, we offer the following fertilizer products:

         o    AGRI-HUME  (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.

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

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

         o    NITRO-PLUS  (18-0-0).  This  product has a liquid humic and fulvic
              acid base, the same as in the product  MAXIMIZE,  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.

         o    MACRO-PLUS  (8-16-4).  This  product has a liquid humic and fulvic
              acid base, the same as in the product  MAXIMIZE,  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.


                                       5
<PAGE>

         o    IRON-PLUS  (12-0-0).  This  product has a liquid  humic and fulvic
              acid base, the same as in the product  MAXIMIZE,  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.

         o    ZINC-PLUS  (12-0-0).  This  product has a liquid  humic and fulvic
              acid base, the same as in the product  MAXIMIZE,  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.

         o    CALCIUM-PLUS  (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.

       In the golf course,  commercial  landscaping,  and home,  lawn and garden
market, we offer the following fertilizer products:

         o    ORGANIC ADVANTAGE HOUSE PLANT SOLUTION READY TO USE. 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.

         o    ORGANIC  ADVANTAGE  SOIL  BUILDER.  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, ORGANIC ADVANTAGE SOIL BUILDER is also
              effective as a transplant  solution that  eliminates  the shock of
              transplanting potted plants, trees, and shrubs.

         o    ORGANIC  ADVANTAGE  LAWN FOOD.  This product,  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.

         o    ORGANIC  ADVANTAGE PLANT FOOD. 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.

         o    ORGANI-GRO  COMPLETE.  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.


                                       6
<PAGE>

Our Animal Feed Supplements Products
------------------------------------

         We  also   manufacture   and  distribute   organic  based  animal  feed
supplements to the animal feeding industry. Sales of our animal feed supplements
accounted for 10% of our sales last year.  Our animal feed  supplement  products
consist of:

         o    Promax LPX1605,  LPX1616, and DPX4610. All are organic,  non-toxic
              feed  ingredients  that have been  field  tested  to  provide  the
              following results: 1) provide an all-natural source of nutritional
              iron;  2) increase the  viability of rumin in stomachs of ruminant
              animals; 3) reduce feedlot animal waste; 4) increase average daily
              weight gain; 5) reduce (improve) feed conversion  ratio; 6) reduce
              stress from shipping fever;  and 7) increase  calcium intake.  All
              the data on the  benefits  of our LPX and DPX  products  have been
              gathered from scientific  research from extensive  research trials
              at Texas A&M University.

         o    PROMAX.   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
              have  been  gathered  from  scientific   research  from  extensive
              research trials at Texas Tech University.

Our Bio-Remediation Products
----------------------------

         We manufacture a limited line of products that assist in the removal of
contaminants from the soil. Our bio-remediation products did not account for any
of our sales last year, and are not expected to account for any material portion
of our sales in the fiscal year ended April 30, 2002. Our bio-remediation
products are:

         o    SALT  AWAY  and  BIOLIMINATE.   This  two-product-line  system  is
              designed  to  bio-remediate  soils on site for removal of salt and
              oil contamination. SALT AWAY 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
              markedly accelerates the biodegradation of organic hazardous waste
              in the soil.  BIOLIMINATE  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.

Distribution of Our Products
----------------------------

         In general, we will utilize three formal channels of distribution.  The
first is a network of 250 agriculture  dealers/distributors who will continue to
represent  and expand the sales volume of our products in the  agricultural  row
crop segment in almost every state.  The second is direct sales  representatives
who will market and distribute  products through large established buyer groups,
and  distributors  into  selected  markets  such as the lawn and garden and home
improvement  markets,  geographical  areas  not  represented  by an  established
dealer/distributor  network and key  accounts.  The third  channel is the use of
executive sales on strategic key accounts, and the international segment will be
managed by Company management on a selective basis. As the accounts and segments
become active  clients,  the  involvement  of our  executives and Advisory Board
Members will  decrease as direct  sales  representatives  are assigned  specific
responsibility to the clients.


                                       7
<PAGE>

         The  small  firms  that do exist  in the  humate  industry  to not have
established, specific, and formal channels of distribution. The competition uses
direct  sales by  executives  and owners in regional  areas where the product is
produced. Market penetration is very difficult beyond their sphere of influence.

         Several channels are necessary due to the type,  nature,  and number of
customer profiles,  geography,  seasonal variations, and efficient use of funds.
The current  sales and  marketing  strategy is to maximize  market  coverage and
efficiency  with a minimum  amount of cost to optimize  sales  revenues.  As the
Company  grows in revenues and  geographical  size, it is  anticipated  that the
distribution  channels and the sales and marketing  organization  will change to
meet market demands.  Our distribution  channels  outlined by market segment are
summarized as follows:

---------------------------- --------------- -------------- --------------------
Market Segments              Executive Sales  Direct Sales  Distributors/Dealers
---------------------------- --------------- -------------- --------------------
Agriculture--Row Crop                               XX               XX
Animal Feed Ingredient              XX              XX               XX
Lawn/Garden/Home Improvement                        XX               XX
Bioremediation                                      XX               XX
International                       XX                               XX
---------------------------- --------------- -------------- --------------------

Raw Materials and Manufacturing Our Products
--------------------------------------------

         We purchase a significant  amount of chemicals  and raw materials  from
the open market.  The majority our humates are purchased from a single supplier,
controlled  by our Chairman  David G.  Williams,  because the product is made to
specific  formulation not known to other suppliers and at a significantly  lower
price than other suppliers.

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

         The  market  place  does  not have any  significant  competitors,  with
respect to size, financial strength,  and market distribution,  that manufacture
humate-based  trace element products and animal feed ingredients.  The financial
and market strengths of competitive  firms do not present any major  competitive
factors.  Although  some of the subject  companies  have been in business a long
time, they are regional in scope and their experience  limits their sales to the
local  client  and  type of  crops  grown.  Most  of the  companies  are  small,
independent,  and  geographically  restricted that manufacture and market a very
limited  type of dry product or liquid  humic acid into the  agricultural  crops
arena. We will assist our  distributors  that are established in that same area,
through technical support, local advertising, and customer service.

         We intend to  establish  ourselves  in the market by  providing  a high
quality  product  at a  reasonable  cost  to  the  customer,  and  by  providing
exceptional personal service through our distribution channels. We believe that,
given  the  choice,   most  consumers  of  our  products  would  choose  to  use
environmentally-friendly products over chemical-based products.




                                       8
<PAGE>

Hoof and Mouth Disease Breakout in European Union
-------------------------------------------------

         In  February  2001,  an  outbreak  of Hoof and Mouth  Disease  occurred
throughout the United Kingdom,  and later in parts of Europe. As a result, there
was an  immediate  ban on the sale and  shipment of almost all products to local
farmers.

         At the time of the outbreak,  we had, through Humatech,  Ltd.,  started
test trials with one of the largest pig breeding  and genetics  companies in the
UK, had met with at least five  potential new  customers in the area,  and had a
purchase  order for $250,000 of our  fertilizer  products.  As a result of these
developments,  we had purchased a large amount of  inventory.  When the outbreak
occurred,  all sales were cancelled,  as were the test trials, leaving with us a
larger-than-usual amount of inventory and reduced sales.

         As a result of the outbreak,  we have focused our efforts  primarily in
the  United  States,  and  our  management  believes  that  we can  sustain  our
operations without overseas sales. However, when Hoof and Mouth Disease is under
control again in the UK, we intend to  re-approach  our potential  customers and
pursue sales overseas again.

Patents and Trademarks
----------------------

         We have applied for and received  trademark  protection for most of our
product  names.  We have applied for and received two patents.  The first was an
application  for an "animal  feed  additive  containing  humates and a method of
using this  additive",  applied for in 1999. The second was an application for a
"Positive Displacement Pump", applied for in 2001.

         We rely on intellectual  property laws and  confidentiality and license
agreements with key employees,  customers and others to protect our intellectual
property   rights.   Because  of  the  complexity  and  growing   importance  of
intellectual  property rights, there can be no assurance that we will be able to
protect  our  proprietary  rights on a global  basis.  Moreover,  the expense of
enforcing our rights may limit or prohibit us from effective protection.  To the
extent we engage in any activity  that is found to be the  proprietary  right of
another, we may have to cease or obtain a license.

Research and Development
------------------------

         During the last two fiscal years,  we have spent  approximately  25% of
our personnel  resources,  and 10% of our financial  resources,  on research and
development  activities.  These  costs are borne  primarily  by us,  and are not
directly  passed on to our customers  except in the  appropriate  pricing of our
products.

Environmental Matters
---------------------

         We currently  are, 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 we 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 our results of operations.  If we
fail to comply  with  applicable  laws and  regulations,  we could be subject to
civil remedies,  including  fines and injunctions as well as potential  criminal
sanctions,  which  could  have a  material  adverse  effect  on our  results  of
operations.


                                       9
<PAGE>

         Federal and state  authorities do not regulate the manufacture and sale
of our specific products. As a result, compliance with regulatory authorities is
not a material  expense,  nor does it  currently  have a material  impact on our
potential profitability. We have obtained all required general state permits and
licenses  to  operate  our  facilities.  There  can  be no  assurance  that  our
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 our operations
and is not expected to have a material impact on our operations in the future.

Foreign Operations
------------------

         In November 1998, we entered into a letter of intent for the purpose of
establishing  a joint venture to promote and sell our products into the European
Union of Countries. On November 12, 1998, we formed a new entity named Humatech,
Ltd.,  of which we own a 45%  interest,  with the  remaining  interest  owned by
Eurpean-based  investors.  We conduct  business with Humatech,  Ltd. under equal
terms and  conditions  to those of domestic  sales to unrelated  third  parties.
Sales to Humatech, Ltd. accounted for 15% of our sales last year.

Employees
---------

         As of August 7, 2001,  we employed a total of seven  full-time  and two
part-time  employees,  two of which were  officers,  3 of which were  engaged in
manufacturing  activities, 3 of which were engaged in sales activities,  and one
of which was engaged in administrative activities.

ITEM 2 - DESCRIPTION OF PROPERTY

         We maintain our executive and administrative  offices at 1718 Fry Road,
Suite 450, Houston,  Texas 77084. We are subject to a three (3) year lease which
expires on January  31,  2002 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.

         Our warehouse, manufacturing and distribution facility is located 27711
Katy Freeway,  Katy, Texas 77494. We executed a one (1) year operating lease for
this  facility  on  September  1,  2002,  which is now a  month-to-month  lease,
requiring  monthly  payments  of  approximately  $1,800.  At this  facility,  we
maintain all of our  manufacturing  equipment.  We anticipate that this facility
will be sufficient to handle our warehouse and production requirements until our
sales exceed approximately $5 to $6 million annually.

ITEM 3 - LEGAL PROCEEDINGS

         We are not  currently  involved  in any  legal  proceedings  as  either
plaintiff or  defendant,  nor are we  currently  aware of any  threatened  legal
proceedings.

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

         No matters were submitted to a vote of the security  holders during the
fiscal year.


                                       10
<PAGE>

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

         Our common stock is traded on the OTC  Bulletin  Board under the symbol
HUMT.  Our common stock is only traded on a limited or sporadic basis and should
not be deemed to constitute an established  public trading  market.  There is no
assurance that there will be liquidity in the common stock.

         Below is a table indicating the range of high and low transaction price
for the common stock for each quarterly period within the most recent two fiscal
years. The information  reflects  inter-dealer prices,  without retail,  markup,
markdown or commission and may not represent actual transactions.

                                                                   Prices
 Fiscal Year   Period                                            High   Low
 --------------------------------------------------------------------------

 2001          First Quarter (May 1, 2000 - July 31, 2000)       3.00   1.50
               Second Quarter (Aug 1, 2000 - Oct 31, 2000)       2.00   0.41
               Third Quarter (Nov 1, 2000 - Jan 31, 2001)        0.78   0.38
               Fourth Quarter (Feb 1, 2001 - April 31, 2001)     0.56   0.36

 2000          First Quarter (May 1, 1999 - July 31, 1999)       5.13   0.16
               Second Quarter (Aug 1, 1999 - Oct 31, 1999)       4.69   1.44
               Third Quarter (Nov 1, 1999 - Jan 31, 2000)        4.06   1.81 (1)
               Fourth Quarter (Feb 1, 2000 - April 31, 2000)     3.13   1.00

 2002          First Quarter (May 1, 2001 - July 31, 2001)       0.90   0.36

(1)      During the period from  December  10, 1999 to February  29,  2000,  the
Company's  common stock was de-listed  from the OTC Bulletin Board and traded on
the Pink Sheets. As a result, historical prices are unavailable.

Holders

         As of April 30, 2001, and August 7, 2001, there were  approximately 115
holders of record of the common stock.

Dividend Policy

         We have never  declared or paid cash  dividends on the common stock and
anticipate  that all future  earnings  will be retained  as working  capital and
business  expansion.  The  payment of any future  dividends  will be at the sole
discretion of the board of directors  and will depend upon,  among other things,
future  earnings,  capital  requirements,  our  financial  condition and general
business conditions.  Therefore, there can be no assurance that any dividends on
the common stock will be paid in the future.




                                       11
<PAGE>

Recent Sales of Unregistered Securities

         In May 2000, we 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.  The issuance was exempt from  registration
pursuant to section 4(2) of the Securities Act of 1933.

         In June,  2000,  we 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. The
issuance was exempt from registration pursuant to section 4(2) of the Securities
Act of 1933.

         In August 2000,  we issued an aggregate  44,000  shares of  restricted,
unregistered  common stock to four shareholders 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.  The issuances were exempt from registration  pursuant to section 4(2)
of the Securities Act of 1933.

  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, we 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. The issuance was exempt from registration pursuant to
section 4(2) of the Securities Act of 1933.

         In  September   2000,  we  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.  The issuance was exempt from  registration  pursuant to
section 4(2) of the Securities Act of 1933.


                                       12
<PAGE>

         In September 2000, we 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.  The  issuance  was exempt  from
registration pursuant to section 4(2) of the Securities Act of 1933.

         In December  2000 and March 2001, we 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.  The  issuance  was exempt from  registration
pursuant to section 4(2) of the Securities Act of 1933.

         In  February  and March  2001,  we 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.  The  issuance  was exempt from  registration
pursuant to section 4(2) of the Securities Act of 1933.

         In February 2001, we 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.  The issuance was exempt from registration pursuant to section 4(2)
of the Securities Act of 1933.

         In March 2001,  we 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.  The  issuance  was exempt from  registration
pursuant to section 4(2) of the Securities Act of 1933.

         All the proceeds of the above offerings,  unless  otherwise  indicated,
were used for general working capital purposes.

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.

Qualified Report of Independent Certified Public Accountants

         Our independent  accountant has qualified his report,  stating that the
audited financial  statements of Humatech,  Inc. for the period ending April 30,
2001 have been prepared  assuming the company will continue as a going  concern.
They note that 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.


                                       13
<PAGE>

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. 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.

         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,  or 14% of net  revenues,
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.


                                       14
<PAGE>

         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.

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.






                                       15
<PAGE>

                                    PART III

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

Directors and Executive Officers
--------------------------------

         The  following  table  sets  forth the  names  and ages of the  current
directors  and  executive  officers of the Company,  the  principal  offices and
positions with the Company held by each person and the date such person became a
director or executive  officer of the  Company.  The  executive  officers of the
Company are elected annually by the Board of Directors.  The directors serve one
year terms until their  successors  are elected.  The executive  officers  serve
terms of one year or until their death,  resignation  or removal by the Board of
Directors.  Unless described below, there are no family  relationships among any
of the directors and officers.

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

     David G. Williams52                               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.

         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:



                                       16
<PAGE>

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.


                                       17
<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.


                                       18
<PAGE>

         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.

         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.

Board Meetings and Committees
-----------------------------

         During the fiscal year ended April 30, 2001, the Board of Directors met
on a weekly  basis.  All the members of the Board  attended  the  meetings.  The
written actions were by unanimous consent.

         There are no committees of the Board of Directors.

ITEM 10 - EXECUTIVE COMPENSATION

Executive Officers and Directors
--------------------------------

         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  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.

         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 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.

Summary Compensation Table
--------------------------

         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.


                                       19
<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,             2001     $175,000 (3)     -0-           -0-          -0-          -0-        $1,940 (1)
President                      2000     $170,833          NA           NA            NA          NA         $1,568 (1)
                               1999     $146,333          NA           NA            NA          NA         $4,938

John D. Rottweiler,            2001     $125,000 (3)     -0-           -0-          -0-          -0-           -0-
Chief Financial Officer        2000     $120,833          NA           NA            NA          NA          $ -0- (2)
                               1999     $ 96,667          NA           NA            NA          NA          $ -0-

</TABLE>

(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.

(3)      Amounts accrued but not paid during the fiscal year.

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>


                                       20
<PAGE>
<TABLE>
<CAPTION>

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES


                                                             Number of Unexercised         Value of Unexercised
                                                             Securities Underlying      In-The-Money Option/SARs
                     Shares Acquired                       Options/SARs At FY-End (#)         At FY-End ($)
      Name           On Exercise (#)     Value Realized    Exercisable/Unexercisable    Exercisable/Unexercisable
                                               ($)
-----------------------------------------------------------------------------------------------------------------
<S>                  <C>                 <C>               <C>                          <C>
David G. Williams            -0-               -0-                   - 0 -                          --

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



</TABLE>







                                       21
<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  following  table  sets  forth,  as  of  August  7,  2001,  certain
information with respect to the Company's  equity  securities owned of record or
beneficially  by (i) each Officer and Director of the Company;  (ii) each person
who owns  beneficially  more than 5% of each class of the Company's  outstanding
equity securities; and (iii) all Directors and Executive Officers 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%

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).

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships and Related Transactions
----------------------------------------------

         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  International  Humate  Fertilizer  Co.  The
agreement  requires a payment of 1.0% of the total gross sales of the Company to
David G. Williams.


                                       22
<PAGE>

         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
                                                   ----------    ----------

         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
                                                                 ==========


                                       23
<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.

         10.7     Lease of Premises located in Houston, Texas.

         10.8     Lease of Premises located in Katy, Texas.

         (b)      Reports on Form 8-K

         None.



                                       24
<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: September 20, 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: September 20, 2001                         By:      /s/ David G. Williams
       ------------------                            ---------------------------
                                                               David G. Williams
                                                             Chairman, President
                                            Chief Executive Officer and Director


Dated: September 21,2001                          By:     /s/ John D. Rottweiler
       -----------------                             ---------------------------
                                                              John D. Rottweiler
                                            Chief Financial Officer and Director




                                       25
<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