SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-KSB

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

                    For the fiscal year ended April 30, 2000

[ ]      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. [ ]

         State issuer's revenues for its most recent fiscal year. $522,133

         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.) $6,791,738, based on the closing price of $1.69
for the common stock on August 7, 2000.

         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,
2000,  there were  8,499,114  shares of common stock,  no par value,  issued and
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

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

                     Transitional Small Business Disclosure
                               Format (check one):

                               Yes    No X
                                  ---   ---

<PAGE>

                                 HUMATECH, INC.

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

                                     PART I

Item 1     Description of Business.

Item 2     Description of Property

Item 3     Legal Proceedings

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


                                     PART II

Item 5     Market for Common Equity and Related Stockholder Matters.

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

Item 7     Financial Statements.

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


                                    PART III

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

Item 10    Executive Compensation

Item 11    Security Ownership of Certain Beneficial Owners and Management.

Item 12    Certain Relationships and Related Transactions.

Item 13    Exhibits and Reports on Form 8-K.



                                        2


<PAGE>

                                     PART I

This Annual Report includes forward-looking statements within the meaning of the
Securities Exchange Act of 1934 (the "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  "Financial  Information-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 of the Company
----------------------

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

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

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

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

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

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

In November 1998, the Company entered into a letter of intent for the purpose of
establishing a joint venture to promote and sell the Company's products into the
European  Union of Countries.  On November 12, 1998,  the Company and its United
Kingdom  distributor formed a new entity,  Humatech,  Ltd., of which the Company
owns a 45.0%  interest  in this  entity.  The  Company  conducts  business  with
Humatech,  Ltd.  under equal terms and  conditions to those of domestic sales to
unrelated third parties.

                                        3

<PAGE>

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

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

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

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

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

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

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

                                        4

<PAGE>

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

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

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

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

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

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

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

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

                                        5


<PAGE>

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

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

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

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

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

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

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

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

                                        6


<PAGE>

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

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

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

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

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

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

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

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

                                        7


<PAGE>

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

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

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

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

Inflation
---------

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

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

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

Agriculture Market:

         Dry Products
         ------------

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

         Liquid Products
         ---------------

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

                                        8


<PAGE>

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

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

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

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

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

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

Animal Feed Market:

         BOVI-PRO(TM) An organic,  non-toxic feed ingredient that has been field
         tested to provide the  following  results:  1) provides an  all-natural
         source of  nutritional  iron;  2) increases  the  viability of rumin in
         stomachs of ruminant  animals;  3) reduces  feedlot  animal  waste;  4)
         increases  average  daily  weight  gain;  5)  reduces  (improves)  feed
         conversion  ratio;  6)  reduces  stress  from  shipping  fever;  and 7)
         increases calcium intake.  All the data on the benefits of BOVI-PRO(TM)
         have been gathered from  scientific  research from  extensive  research
         trials at a major University.

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

Home, Lawn And Garden Market:

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

                                        9


<PAGE>

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

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

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

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

Environment/Bio-Remediation market:

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

ITEM 2 - DESCRIPTION OF PROPERTY

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

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

                                       10

<PAGE>

ITEM 3 - LEGAL PROCEEDINGS

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

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

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










                                       11


<PAGE>

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

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

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

     Fourth quarter 1998 (February 5, 1998 - April 30, 1998)    $1.44      $0.63

     First quarter 1999 (May 1, 1998 - July 31, 1998)           $0.63      $0.25
     Second quarter 1999 (August 1, 1998 - October 31, 1998)    $0.38      $0.20
     Third quarter 1999 (November 1, 1998 - January 31, 1999)   $0.45      $0.19
     Fourth quarter 1999 (February 1, 1999 - April 30, 1999)    $0.19      $0.13

     First quarter 2000 (May 1, 1999 - July 31, 1999)           $5.13      $0.30
     Second quarter 2000 (August 1, 1999 - October 31, 1999)    $4.69      $1.44
     Third quarter 2000 (November 1, 1999 - January 31, 2000)   $4.06      $1.63
     Fourth quarter 2000 (February 1, 2000 - April 30, 2000)    $3.13      $1.00

     First quarter 2001 (May 1, 2000 - July 31, 2000)           $3.00      $1.50


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

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

Recent Sales of Unregistered Securities

In February 1998,  the Company issued 50,000 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 $71,000, which equaled the closing price
of the Company's common stock as quoted on the NASDAQ Electronic  Bulletin Board
on the trade date closest to the  transaction  date and charged to operations at
the time of issuance.

In July 2000,  the Company  issued an aggregate of 44,000 shares of  restricted,
unregistered  common stock to four  investors  for the  performance  of services
rendered  to the  Company.  The  transactions  were  valued at an  aggregate  of
$44,000.  The  issuances  were exempt from  registration  under Rule 4(2) of the
Securities Act of 1933.

In July 2000,  the  Company  authorized  the  issuance of warrants to acquire an
aggregate of 285,000 shares of common stock of the Company.  Of these  warrants,
200,000  have an  exercise  price of $1.25 per share and are  exercisable  for a
period of three years,  75,000 have an exercise price of $3.00 per share and are
exercisable  for a period of five years,  and 10,000  have an exercise  price of
$3.00 per share and are exercisable for a period of three years.

                                       12

<PAGE>

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

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

Results of Operations  for the year ended April 30, 2000 as compared to the year
ended April 30, 1999

During the year ended April 30,  2000,  the  Company  reported  net  revenues of
$522,133, as compared to $157,524 for the year ended April 30, 1999, an increase
of over 230%. Of the $522,133 in net revenues for the year ended April 30, 2000,
$207,414  (39.7%) were from domestic  sources,  while $314,719  (60.3%)were from
sales to Humatech,  Ltd., a related party joint  venture in the United  Kingdom.
Although  there are no formal  agreements in place,  and the Company has made no
capital  contribution  to Humatech,  Ltd.,  Management of the Company expects to
eventually own a minority interest in this entity. As of April 30, 2000, 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,  2000,  the  Company  had cost of sales  equal to
$128,545,  or  25%  of net  revenues,  as  compared  to  $86,245,  or 55% of net
revenues, for the year ended April 30, 1999. This decrease in cost of sales as a
percentage of net revenues is due primarily to increased operating  efficiencies
associated  with a higher  level of sales.  Of the $128,545 in cost of sales for
the year ended April 30, 2000,  $29,770 (23%) was materials cost,  while $98,775
(77%) was other direct costs.

Gross profit was equal to $393,588,  or 75% of net revenues,  for the year ended
April 30, 2000,  as compared to $71,279,  or 45% of net  revenues,  for the year
ended April 30, 1999.  As discussed  above,  this  increase in gross profit as a
percentage of net revenues is due primarily to increased operating  efficiencies
associated with a higher level of sales.

During the year ended April 30, 2000, the Company incurred operating expenses of
$723,239,  resulting in an operating and net loss of $329,651,  as compared with
operating  expenses  and  operating  and net  loss  of  $479,533  and  $408,254,
respectively,  for the year ended April 30, 1999. This represents an increase in
operating expenses of over 50%, and a decrease in operating and net loss of 19%.

Of the  $723,239 in operating  expenses  for the year ended April 30, 2000,  the
Company recorded $256,266 in other operating  expenses as compared to$44,490 for
the year ended April 30,  1999.  This  increase  was due  primarily to increased
expenses  associated  with the  higher  level of sales from the  previous  year.
Interest  expense  increased  from  $28,577 for the year ended April 30, 1999 to
$60,742  for the year ended  April 30,  2000 as a result of an increase in notes
payable to banks and finance  companies  for  equipment  financing,  and accrued
interest due on a long-term note payable to an affiliate.  Commissions and other
sales and marketing expenses decreased from $73,319 for the year ended April 30,
1999 to $48,291 for the year ended  April 30,  2000 as a result of an  increased
amount of sales  directly by the Company  and through its United  Kingdom  joint
venture.

As a result of the  above,  the  Company  incurred a net loss for the year ended
April 30, 2000 of $329,651 as compared to $408,254  for the year ended April 30,
1999.

                                       13

<PAGE>

Liquidity and Capital Resources

For the year ended April 30, 2000,  cash used in operating  activities was equal
to $446,113.  Of the  adjustments  necessary  to reconcile  net loss to net cash
provided  by  operating  activities,  the  Company  reported  (i) an increase in
depreciation of $43,490,  reflecting  additional  equipment  acquired during the
year;  (ii) an increase in accounts  receivable  of $364,148  and an increase in
inventory of $58,032,  both reflecting the increase in sales for the year; (iii)
an increase in accrued  interest  payable of $44,042,  reflecting  the increased
borrowing  activity  by the  Company;  and (iv) an  increase  in amounts  due to
officers of $224,597, reflecting primarily unpaid salary due to officers.

At April 30, 2000, the Company  reported  total current  assets of $542,930,  as
compared to $93,940 for the year ended April 30, 1999,  an increase of over five
times.  At April 30,  2000,  cash was equal to  $26,810,  as compared to zero at
April 30, 1999, accounts  receivable - trade was equal to $368,769,  as compared
to $4,621 at April 30, 1999, and inventories was equal to $147,351,  as compared
to $89,319 at April 30, 1999. The increases in all categories was as a result of
the Company's increased sales during the year ended April 30, 2000.

At April 30, 2000,  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.

As a result of the  increase  in sales for the year ended  April 30,  2000,  the
Company's net property and equipment  increased  from $107,141 at April 30, 1999
to $265,074  at April 30,  2000.  The  equipment  was  obtained in order for the
Company to adequately fulfill the increased sales orders.

Total  assets at April 30,  2000 were  $808,399  as  compared  to  $201,441,  an
increase of over 300%.

Total  current  liabilities  increased  from  $890,734  at  April  30,  1999  to
$1,094,324  at April  30,  2000,  an  increase  of 22%.  This  increase  was due
primarily  to an increase in amounts due to officers  from  $629,760 to $854,357
and an increase  in accrued  interest  payable  from  $22,350 to  $66,392,  both
discussed  more  fully  above.  Notes and  leases  payable  to  affiliates  were
decreased  from  $56,746 at April 30, 1999 to zero at April 30, 2000 as a result
of the retirement of certain debt obligations owed to affiliates of the Company.

Total  liabilities  increased from $1,213,811 at April 30, 1999 to $2,150,420 at
April 30, 2000,  an increase of over 77%. In addition to the increase in current
liabilities  discussed above, the Company also reported long term notes payable,
net of current maturities equal to $133,769 as compared to zero for the previous
year, and notes and commitments payable to affiliates of $922,327 as compared to
$323,077 for the previous year,  reflecting primarily a $554,450 note payable to
two  individuals  related to the Company's  Executive  Vice  President and Chief
Executive Officer.

As a result of the  above,  total  stockholders  equity  went from a deficit  of
$1,012,370  at April 30, 1999 to a deficit of  $1,342,021  at April 30, 2000, an
increase of over 32%.

                                       14

<PAGE>

The Company's  independent certified public accountants' report on the April 30,
2000  financial  statements   contained  an  explanatory   paragraph  expressing
substantial  doubt as to the Company's  ability to continue as a going  concern.
The Company has suffered  recurring  losses from  operations and has significant
short-term debt that raise  substantial doubt about its ability to continue as a
going concern.

ITEM 7 - FINANCIAL STATEMENTS

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

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

None.









                                       15


<PAGE>

                                    PART III

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

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

        David G. Williams          50       President and Director
   John D. "J. D." Rottweiler      54       Chief Financial Officer


David G. Williams, Chief Executive Officer/President/Director:  Mr. Williams has
served as a Director and President of the Company since the  acquisition  of the
assets of IHFC in April 1997. Mr.  Williams was previously the President of IHFC
and the sole proprietor of the operations that were incorporated as IHFC.

Mr.  Williams's 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. He is 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  served  as  Executive  Vice
President  and Chief  Financial  Officer of the Company  since  April 1997.  Mr.
Rottweiler has served as the Executive  Trustee of The Phoenix Trust, a Phoenix,
Arizona based management consulting firm, from 1989 to the present. From 1989 to
1992,  Mr.  Rottweiler was the Director of Finance and Operations for Santa Cruz
Operations,  Inc., with  responsibility  for sales  administration and planning,
budgeting,  and  operational  analysis,   customer  service,  and  telemarketing
operations.

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.  He has served as officer and director of both
private  and public  companies  in the  finance,  insurance,  real  estate,  and
manufacturing  industries. He was the owner and founder of an investment banking
business that provided  capital  financing,  as principal and agent, for private
and  public  ventures.  He is a  graduate  from the  University  of Utah  with a
Bachelor of Science in Management, Bachelor of Science in Marketing, and Masters
of Business Administration.

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:

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  Humates,  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", "Diseases of
Fruits,  Vegetables,  and  Ornamental"  and  "Plant  Pathogenic  Fungi".  In the
academic 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.

                                       16


<PAGE>

Esper K. Chandler,  Member Technical  Advisory Board:  Independent  Agricultural
Consultant & Farmer. 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  Bio-Remediation  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 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 and 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  Texas A&M  University  and  Division of
Agriculture, at West Texas A&M University.

Dr. John D.  McGlone,  Ph.D.:  Dr.  McGlone is a Professor  and  Director,  Pork
Industry  Institute,  Department of Animal  Science and Food  Technology  with a
joint  appointment  in the  Department  of Cell  Biology & Anatomy 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.



                                       17

<PAGE>

Dr.  Helen  R.  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, HumaTech 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.

To the Company's knowledge,  David G. Williams, the Company's President and Sole
Director,  has not filed a Form 3 - Initial Statement of Beneficial Ownership of
Securities,  as required by Section 16(a). If filed,  Mr. Williams' Form 3 would
have reflected 4,473,334 shares currently held by him.

To the Company's  knowledge,  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 7,000 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.

ITEM 10 - EXECUTIVE COMPENSATION

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

                                       18


<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,             2000     $175,000          NA            NA            NA            NA        $5,221 (1)
President                      1999     $170,833          NA            NA            NA            NA        $1,568
                               1998     $146,333          NA            NA            NA            NA        $4,938
                               1997      $106,667         NA            NA            NA            NA        $2,178
John D. Rottweiler,            2000     $125,000          NA            NA            NA            NA        $  -0- (2)
Chief Financial Officer        1999     $120,833          NA            NA            NA            NA        $   -0-
                               1998      $96,667          NA            NA            NA            NA        $   -0-
                               1997      $66,667          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. The note was paid in full in fiscal
       year 2000.

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 Fiscal   Exercise of Base Price
Name                         (#)                       Year                    ($/Sh)               Expiration Date
------------------  ------------------------  ----------------------- ------------------------- ------------------------
<S>                 <C>                       <C>                     <C>                       <C>
David G. Williams            -0-                        --                       --                        --
John D. Rottweiler           -0-                        --                       --                        --

</TABLE>

                                       19

<PAGE>

<TABLE>

<CAPTION>

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


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


</TABLE>









                                       20


<PAGE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

       Name and Address                    Shares owned        Percentage owned

David G. Williams                            4,473,334              52.63%
     1718 Fry Road, Suite 450
     Houston TX 77084

John D. Rottweiler (1)                           7,000           Less than 1.0%
     1718 Fry Road, Suite 450
     Houston TX 77084

First Trust                                    578,100               6.80%
     131 South 42nd Place
     Phoenix AZ 85034

All officers and directors as a group,
     including affiliates                    4,480,334              52.72%


(1)  Represents  beneficial  ownership via shares owned by John Duke Rottweiler,
     son of  John  D.  Rottweiler   and  Bonita  Rottweiler,  wife  of   John D.
     Rottweiler.





                                       21


<PAGE>

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company has a long-term  capital  lease  payable to David G.  Williams,  the
Company's  President and controlling  shareholder for the use of a vehicle.  The
lease  has an  effective  interest  rate of 12.74%  and is  payable  in  monthly
installments of approximately $800,  including accrued interest.  The lease term
is from August 24,  1997 to July 28,  1999.  As of April 30, 1999 and 1998,  the
lease  has  an  outstanding  balance  of  approximately   $29,480  and  $29,480,
respectively.

The Company has a long-term  capital  lease  payable to David G.  Williams,  the
Company's  President and controlling  shareholder  for the use of  manufacturing
equipment.  The lease has an effective  interest rate of 12.5% and is payable in
monthly  installments of approximately  $303,  including accrued  interest.  The
lease term is from May 1, 1998 to April 30, 2001. As of April 30, 1999 and 1998,
the  lease  has  an  outstanding  balance  of  approximately  $9,646  and  $-0-,
respectively.

The Company has a long-term  capital  lease  payable to David G.  Williams,  the
Company's  President  and  controlling  shareholder  for the  use of  production
equipment.  The lease has an effective  interest rate of 12.5% and is payable in
monthly  installments of approximately  $346,  including accrued  interest.  The
lease term is from  August 1, 1998 to July 30,  2001.  As of April 30,  1999 and
1998, the lease has an outstanding  balance of  approximately  $10,350 and $-0-,
respectively.

The  Company  has  executed a $7,270  note  payable  to the JDR  Trust,  a trust
controlled by John D.  Rottweiler,  the Company's  Executive  Vice President and
Chief Financial Officer.  The note bears interest at 10.5% and all principal and
accrued  interest were due at maturity in August 1999. The note was paid in full
at  maturity  and was  unsecured.  At April 30,  1999 and 1998,  the note had an
outstanding balance of approximately $7,270 and $7,270, respectively.

The Company has a $217,877  term note  payable to a  corporation  controlled  by
family members affiliated with John D. Rottweiler,  the Company's Executive Vice
President and Chief Financial  Officer.  The note bears interest at 9.0% and all
principal  and  accrued  interest  due at  maturity  in July  2002.  The note is
unsecured.  At April 30, 1999 and 1998, the note had an  outstanding  balance of
approximately $173,077 and $138,088, respectively.

On June 30, 1999, the Company executed a term note payable with two individuals,
who are  family  members  affiliated  with  John D.  Rottweiler,  the  Company's
Executive Vice  President and Chief  Financial  Officer,  in the gross amount of
approximately  $153,650.  The loan bears interest at 9.0%. The principal balance
and accrued interest is due on or before July 1, 2004. The note is unsecured.

The Company has an  Agreement  of Product  Development  and Funding  between the
Company  and The  Everett  Stewart  and Beulah  Stewart  Family  Trust,  a Trust
controlled  by a  shareholder  of the  Company.  The  Agreement  pertains to the
funding  necessary  for the  research  and  development  of a prototype  turbine
driven,  positive  displacement  pump to  apply  and  distribute  the  Company's
products in an  agricultural  setting in liquid form.  The Agreement  requires a
minimum  funding of  $100,000  and the Trust  reserves  the  exclusive  right to
provide  additional funding for this equipment . As of April 30, 1999, the Trust
had funded an  aggregate  of  $150,000  under the terms and  conditions  of this
Agreement.  Repayment  of the funds  advanced  are required at a rate of 6.0% of
gross sales of equipment  to be  developed  and are due and payable in the month
following  collection  of  funds  related  to the  sale or  utilization  of this
equipment.  The Agreement  requires a total agreed repayment of $450,000.  As of
April 30,  1999 and  subsequent  thereto,  the  Company  has not  completed  the
development of the equipment prototype and,  accordingly,  has no gross sales of
the underlying equipment.

                                       22

<PAGE>

The Company had a operating  lease payable to David G.  Williams,  the Company's
President  and  controlling  shareholder  for the use of an airplane.  The lease
required  monthly payments of $2,560 and the Company was required to provide all
necessary  insurance  coverage and maintenance.  The lease term was from July 1,
1996 through June 30, 1999.  The lease was  terminated by mutual  consent of all
parties on July 31, 1998.

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

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

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

As of April 30,  1999 and 1998,  total  cumulative  amounts  unpaid  under these
agreements are as follows:

                                                         2000         1999
                                                        --------     --------

         Officer compensation                           $854,357     $629,760
         Airplane lease payments                               -            -
         Royalty fees                                          -            -
                                                        --------     --------

                                                        $854,357     $629,760
                                                        ========     ========

Future amounts due under the employment agreements are as follows:

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

                                                          2001        300,000
                                                          2002         50,000
                                                                     --------

                                                         Totals      $350,000
                                                                     ========




                                       23


<PAGE>

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

   (a) Exhibits

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

   Exhibits

     3.1      Articles of Incorporation of Midwest Enterprise Consultants, Inc.
     3.2      Amendment to the Articles of Incorporation  of Midwest  Enterprise
              Consultants, Inc.
     3.3      Amendment to the Articles of Incorporation  of Midwest  Enterprise
              Consultants, Inc.
     3.4      Bylaws of Humatech, Inc.
     10.1     Asset  purchase  agreement  by and  between  International  Humate
              Fertilizer Co. and Midwest Enterprise Consultants, Inc.
     10.2     Employment   agreement   by  and  between   International   Humate
              Fertilizer Co. and David G. Williams
     10.3     Employment   agreement   by  and  between   International   Humate
              Fertilizer Co. and John D. Rottweiler
     10.4     Royalty agreement by and between  International  Humate Fertilizer
              Co. and David G. Williams
     10.5     Joint venture agreement for Humatech, Ltd.
     10.6     Marketing  agreement  by  and  between  Humatech,  Inc.  and  Club
              Marketing Services
     10.7     Agreement of Product  Development  and Funding between The Everett
              Stewart and Beulah  Stewart  Family Trust (a Trust) and  Humatech,
              Inc.
     10.8     Lease of Premises located in Houston, Texas.
     10.9     Lease of Premises located in Katy, Texas.
     27.1     Financial Data Schedule


   (b) Reports on Form 8-K

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

                                       24


<PAGE>

                                   SIGNATURES

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

                                                                  HUMATECH, INC.

August 9, 2000                                      /s/ David G. Williams
                                            ------------------------------------
                                                               David G. Williams
                                                          President and Director

August 9, 2000                                      /s/ John D. Rottweiler
                                            ------------------------------------
                                                              John D. Rottweiler
                                            Chief Financial Officer and Director




                                       25

<PAGE>



                                 HUMATECH, INC.

                              Financial Statements
                                       and
                                Auditor's Report

                             April 30, 2000 and 1999









                               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, 2000 and 1999                                      F-4

   Statements of Operations and Comprehensive Income
     for the years ended April 30, 2000 and 1999                        F-5

   Statement of Changes in Stockholders' Equity
     for the years ended April 30, 2000 and 1999                        F-6

   Statements of Cash Flows
     for the years ended April 30, 2000 and 1999                        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,  2000 and 1999  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  generally   accepted  auditing
standards. 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,
2000 and 1999,  and the results of its operations and its cash flows for each of
the  years  then  ended,  in  conformity  with  generally  accepted   accounting
principles.

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
June 2, 2000

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>

<TABLE>

<CAPTION>

                                 HUMATECH, INC.
                                 BALANCE SHEETS
                             April 30, 2000 and 1999


                                                                 2000           1999
                                                             -----------    -----------
<S>                                                          <C>            <C>
                                     ASSETS
                                     ------
Current Assets
   Cash on hand and in bank                                  $    26,810    $      --
   Accounts receivable - trade,
     net of allowance for doubtful accounts
     of $-0- and $-0-, respectively                              368,769          4,621
   Inventories                                                   147,351         89,319
                                                             -----------    -----------
     Total current assets                                        542,930         93,940
                                                             -----------    -----------

Property and Equipment - at cost
   Transportation equipment                                      252,758        141,996
   Manufacturing and processing equipment                        168,119         86,453
   Office furniture and fixtures                                  19,012         10,955
                                                             -----------    -----------
                                                                 439,889        239,404
   Accumulated depreciation                                     (174,815)      (132,263)
                                                             -----------    -----------
     Net property and equipment                                  265,074        107,141
                                                             -----------    -----------

Other assets                                                         395            360
                                                             -----------    -----------

Total Assets                                                 $   808,399    $   201,441
                                                             ===========    ===========

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

Current Liabilities
   Cash overdraft                                            $      --      $     1,819
   Notes payable to banks and finance companies                   84,500         84,608
   Notes and leases payable to affiliates                           --           56,746
   Customer deposits                                               8,800         10,500
   Accounts payable - trade                                       80,275         84,951
   Accrued interest payable                                       66,392         22,350
   Due to officers                                               854,357        629,760
                                                             -----------    -----------
     Total current liabilities                                 1,094,324        890,734
                                                             -----------    -----------

Long-term Liabilities
   Long-term notes payable, net of current maturities            133,769           --
   Notes and commitments payable to affiliates                   922,327        323,077
                                                             -----------    -----------
     Total liabilities                                         2,150,420      1,213,811
                                                             -----------    -----------

Commitments and Contingencies

Stockholders' Equity
   Common stock - no par value
     25,000,000 shares authorized
     8,455,114 issued and outstanding                            123,157        123,157
   Accumulated deficit                                        (1,465,178)    (1,135,527)
                                                             -----------    -----------
     Total stockholders' equity                               (1,342,021)    (1,012,370)
                                                             -----------    -----------

Total Liabilities and Stockholders' Equity                   $   808,399    $   201,441
                                                             ===========    ===========

</TABLE>

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

                                                                             F-4

<PAGE>

<TABLE>

<CAPTION>

                                 HUMATECH, INC.
                STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                       Years ended April 30, 2000 and 1999


                                                            2000           1999
                                                        -----------    -----------
<S>                                                     <C>            <C>
Revenues
   Sales, net of discounts, returns and allowances
     of $-0- and $2,291, respectively
       Domestic                                         $   207,414    $   157,524
       Related Party
         Foreign, principally United Kingdom                314,719           --
                                                        -----------    -----------
     Net revenues                                           522,133        157,524
                                                        -----------    -----------

Cost of Sales
   Materials                                                 29,770         45,008
   Other direct costs                                        98,775         41,237
                                                        -----------    -----------
     Total cost of sales                                    128,545         86,245
                                                        -----------    -----------

Gross Profit                                                393,588         71,279
                                                        -----------    -----------

Operating Expenses
   Research and development expenses                         14,450         15,000
   Commissions and other sales and marketing expenses        48,291         73,319
   Officer compensation                                     300,000        291,667
   Other operating expenses                                 256,266         44,490
   Interest expense                                          60,742         28,577
   Depreciation expense                                      43,490         26,480
                                                        -----------    -----------
     Total operating expenses                               723,239        479,533
                                                        -----------    -----------

Loss from operations                                       (329,651)      (408,254)

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

Net Loss                                                   (329,651)      (408,254)

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

Comprehensive Income                                    $  (329,651)   $  (408,254)
                                                        ===========    ===========

Net loss per weighted-average
   share of common stock
   outstanding, calculated on
   Net Loss - basic and fully diluted                   $     (0.04)   $     (0.05)
                                                        ===========    ===========

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

</TABLE>

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, 2000 and 1999


                                    Common Stock
                                    ------------         Accumulated

                                Shares        Amount       deficit         Total
                             -----------   -----------   -----------    -----------
<S>                          <C>           <C>           <C>            <C>
Balances at May 1, 1998        8,455,114   $   123,157   $  (727,273)   $  (604,116)

Net loss for the year               --            --        (408,254)      (408,254)
                             -----------   -----------   -----------    -----------

Balances at April 30, 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)
                             ===========   ===========   ===========    ===========

</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, 2000 and 1999

                                                              2000         1999
                                                            ---------    ---------
<S>                                                         <C>          <C>
Cash Flows from Operating Activities
   Net loss for the period                                  $(329,651)   $(408,254)
   Adjustments to reconcile net loss to
     net cash provided by operating activities
       Depreciation                                            43,490       26,480
       Common stock issued for payment of consulting fees        --           --
       (Increase) Decrease in
         Accounts receivable - trade                         (364,148)         611
         Inventory                                            (58,032)      10,340
         Deposits and other                                       (35)
       Increase (Decrease) in
         Accounts payable - trade                              (4,676)       6,131
         Accrued interest payable                              44,042       14,115
         Due to officers                                      224,597      206,791
         Customer deposits                                     (1,700)      10,500
                                                            ---------    ---------
Cash flows provided by (used in) operating activities        (446,113)    (133,286)
                                                            ---------    ---------

Cash Flows from Investing Activities

   Purchase of property and equipment                         (42,488)     (42,212)
                                                            ---------    ---------
Cash flows used in investing activities                       (42,488)     (42,212)
                                                            ---------    ---------
Cash Flows from Financing Activities
   Increase (Decrease) in cash overdraft                       (1,819)       1,819
   Proceeds from loans payable to affiliates                  599,250      184,989
   Principal payments on loans payable                        (82,020)     (16,148)
                                                            ---------    ---------
Cash flows provided by (used in) financing activities         515,411      170,660
                                                            ---------    ---------

Increase (Decrease) in Cash and Cash Equivalents               26,810       (4,838)

Cash and cash equivalents at beginning of year                   --          4,838
                                                            ---------    ---------

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


Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid for the period                           $  16,700    $  14,462
                                                            =========    =========
     Income taxes paid for the period                       $    --      $    --
                                                            =========    =========

Supplemental Disclosure of
   Non-Cash Investing and Financing Activities
     Acquisition of property and equipment
       with debt from banks and related parties             $ 158,935    $  19,936
                                                            =========    =========

</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
$(1,465,000)   and  has  used  cumulative   cash  in  operating   activities  of
approximately  $(544,000)  during the period from May 1, 1997 through  April 30,
2000. Further,  in prior periods,  the Company was irregular in making scheduled
payments on notes payable to banks and other  financing  entities.  Accordingly,
the lender(s) could have, at their sole discretion, declare the then outstanding
indebtedness  to be  immediately  due and  payable.  The lender  could have then
foreclose on a significant  portion of the Company's assets,  which could have a
material adverse effect on the Company's financial condition and operations.

Management  is of the opinion that current  sales trends and foreign  demand for
the  Company's  products 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 and
     Arizona,  and to a related party account  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  at the time  materials are shipped to the Company's
     customers.

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, 2000 and 1999,  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, 2000 and 1999,  the Company
     has 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        1999
                                                   --------    --------
       Vehicles
        Related party                              $ 29,480    $ 29,480
       Manufacturing and processing equipment
        Unrelated                                    19,691      19,691
        Related party                                  --        14,196
                                                   --------    --------
                                                     49,171      63,367
       Accumulated depreciation                     (31,994)    (23,838)
                                                   --------    --------

                                                   $ 17,177    $ 39,529
                                                   ========    ========




                                                                            F-10

<PAGE>

<TABLE>

<CAPTION>

                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE F - Inventory

Inventory consists of the following at April 30, 2000 and 1999, respectively:

                                                                   2000        1999
                                                                 ---------   ---------
<S>                                                              <C>         <C>
         Raw materials                                           $ 126,762   $  88,195
         Work-in-process                                            14,673        --
         Finished goods                                              5,916       1,124
                                                                 ---------   ---------

         Totals                                                  $ 147,351   $  89,319
                                                                 =========   =========


NOTE G - Notes payable to banks and finance companies

                                                                   2000        1999
                                                                 ---------   ---------

$64,820 installment note payable to a bank.  Interest
   at the Wall Street Journal Prime  Rate  plus  2.5%
   (10.75%  at April  30,  1999).  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.                                                  $  30,760   $  53,860

$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.                      17,766      21,536

$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       9,212

$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/                        6,711          --

$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.                                     35,649          --

                                                                                                                                F-11

</TABLE>

                                                                            F-11

<PAGE>

<TABLE>

<CAPTION>

                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE G - Notes payable to banks and finance companies - Continued
                                                                             2000         1999
                                                                           ---------    ---------
<S>                                                                        <C>          <C>
$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                                 15,989         --

$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                          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                                                                  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                                  10,921         --
                                                                           ---------    ---------

Total notes payable to banks and finance companies                           218,269       84,608

     Less current maturities                                                 (84,500)     (84,608)
                                                                           ---------    ---------

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

Future maturities of long-term debt are as follows:

                                                                          Year ending
                                                                            April 30      Amount
                                                                           ---------    ---------
                                                                              2001      $  84,500
                                                                              2002         52,092
                                                                              2003         33,259
                                                                              2004         27,701
                                                                              2005         10,824
                                                                              2006          6,829
                                                                              2007          3,064
                                                                                        ---------

                                                                             Totals     $ 218,269
                                                                                        =========

</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.  Due to these  conditions,  all installment
notes were classified as current in the Fiscal 1999 financial statements. During
Fiscal 2000, the Company was been more diligent in making scheduled  payments as
required.

                                                                            F-12

<PAGE>

<TABLE>

<CAPTION>

                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE H - Notes and leases payable to affiliates
                                                                        2000         1999
                                                                      ---------    ---------
<S>                                                                   <C>          <C>
Capital lease payable to the Company's President and
   controlling shareholder for the use of a vehicle.
   Interest at 12.74%. Payable in monthly installments
   of approximately  $800,  including accrued interest.
   Lease term from August 24, 1997 to July 28, 1999.
   Lease canceled and equipment refinanced in the
   Company's name during Fiscal 2000.                                 $    --      $  29,480

Capital lease payable to the Company's President and
   controlling shareholder for the use of equipment.
   Interest at 12.5%.  Payable in monthly installments
   of approximately $303,  including accrued interest.
   Lease term from May 1, 1998 to April 30, 2001.
   Lease canceled and equipment refinanced in the
   Company's name during Fiscal 2000                                       --          9,646

Capital lease payable to the Company's President and
   controlling shareholder for the use of equipment.
   Interest at 12.5%.  Payable in monthly installments
   of approximately  $346,  including accrued interest.
   Lease term from August 1, 1998 to July 30, 2001.
   Lease canceled and equipment refinanced in the
   Company's name during Fiscal 2000.                                      --         10,350

$7,270 note payable to a trust controlled by the Company's
   Executive Vice President and Chief Financial Officer.
   Interest at 10.5%.  Principal and accrued interest due
   at maturity in August 1999.  Unsecured                                  --          7,270
                                                                      ---------    ---------

Total notes and leases payable to affiliates                          $    --      $  56,746
                                                                      =========    =========


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

                                                                        2000         1999
                                                                      ---------    ---------
$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.                 $ 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.                                                           217,877      173,077


</TABLE>






                                                                            F-13

<PAGE>

                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

                                                              2000       1999
                                                              -------    -------
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, 2000
   and subsequent thereto, the Company has not completed
   the  development  of the equipment  prototype  and,
   accordingly, has no gross sales of the underlying
   product.                                                   150,000    150,000
                                                              -------    -------

Total long-term notes and commitments payable to affiliates  $922,327   $323,077
                                                              =======    =======


NOTE J - Due to Officers

The  Company  had a  operating  lease  payable to the  Company's  President  and
controlling  shareholder for the use of an airplane.  The lease requires monthly
payments  of $2,560  and the  Company  was  required  to provide  all  necessary
insurance coverage and maintenance. The lease term was from July 1, 1996 through
June 30, 1999. The lease was terminated by mutual consent of all parties on July
31, 1998.

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, 2000 and 1999,  respectively,  the Company paid or
accrued approximately $5,221 and $1,568 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 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 an individual 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,  2000 and 1999,  total  cumulative  amounts  unpaid  under these
agreements are as follows:

                                               2000       1999
                                              --------   --------
         Officer compensation                 $854,357   $629,760
         Airplane lease payments                    -           -
         Royalty fees                               -           -
                                              --------   --------
                                              $854,357   $629,760
                                              ========   ========

                                                                            F-14

<PAGE>

<TABLE>

<CAPTION>
                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE J - Due to Officers

Future amounts due under the employment agreements are as follows:

                                               Year ending
                                                April 30,       Amount
                                               -----------   -----------
                                                  2001       $   300,000
                                                  2002            50,000
                                                             -----------
                                                 Totals      $   350,000
                                                             ===========
NOTE L - Income Taxes

The  components  of income tax  (benefit)  expense for the years ended April 30,
2000 and 1999, respectively, are as follows:
                                                   2000          1999
                                               -----------   -----------
                      Federal:
                           Current             $         -   $         -
                           Deferred                      -             -
                                               -----------   -----------
                                                         -             -
                                               -----------   -----------
                      State:
                           Current                       -             -
                           Deferred                      -             -
                                               -----------   -----------
                                                         -             -
                                               -----------   -----------

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

As of April 30,  2000,  the Company has a net  operating  loss  carryforward  of
approximately  $1,130,000 to offset future  taxable  income.  Subject to current
regulations, this carryforward will begin to expire in 2012.

The  Company's  income tax  expense for the years ended April 30, 2000 and 1999,
respectively, differed from the statutory federal rate of 34 percent as follows:

                                                                  2000       1999
                                                                ---------  ---------
<S>                                                             <C>        <C>
Statutory rate applied to earnings (loss) before income taxes   $(112,000) $(138,800)
Increase (decrease) in income taxes resulting from:
   State income taxes                                                   -          -
   Other including reserve for deferred tax asset                 112,000    138,800
                                                                ---------  ---------

     Income tax expense                                         $       -  $       -
                                                                =========  =========
</TABLE>

The  deferred  current tax asset on the April 30,  2000 and 1999,  respectively,
balance sheet consists of the following:
                                                   2000       1999
                                                 ---------  ---------
                  Current deferred tax asset     $ 384,200  $ 263,800
                    Reserve                       (384,200)  (263,800)
                                                 ---------  ---------

                  Net current tax asset          $       -  $       -
                                                 =========  =========

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, 1999 and 1998, the reserve for the deferred  current tax asset  increased by
approximately $125,000 and 138,800, respectively.

                                                                            F-15

<PAGE>

                                 HUMATECH, INC.

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE M - 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,
2000 and for the year then ended,  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.

On  September  1,  1999,  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.






                                                                            F-16