U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

         Annual Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934 for the Fiscal Year Ended July 31, 2002

                        Commission File Number 000-30370

                           CYNTECH TECHNOLOGIES, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Utah                                                 87-0443172
--------------------------------                             -------------------
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                               Identification No.)

        4305 Derbyshire Trace, SE
               Conyers, GA                                         30094
----------------------------------------                         ----------
(Address of principal executive offices)                         (Zip Code)

                                 (770) 760-8732
                -------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

  Title of each class                  Name of each exchange on which registered
  -------------------                  -----------------------------------------
         None                                            None

Securities registered pursuant to Section 12(b) of the Act:

                         Common Stock, Par Value $0.001
                         ------------------------------
                                (Title of Class)

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

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

State issuer's revenues for its most recent fiscal year. As of March 23, 2004,
issuer has not had any revenues.

State the aggregate market value of the voting and nonvoting common equity held
by nonaffiliates 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. As of March 23, 2004, the aggregate
market value of the voting and nonvoting common equity held by nonaffiliates of
the issuer was approximately $2,705,367.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of March 23, 2004, issuer had
47,141,878 shares of issued and outstanding common stock, with a par value of
$0.001 per share.

DOCUMENTS INCORPORATED BY REFERENCE: None.

Transitional Small Business Disclosure Format:  Yes  [ ]    No  [X]

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                           TABLE OF CONTENTS

  Item                         Description                                  Page

          Special Note about Forward-Looking Information...................   1

                                 Part I
Item 1    Description of Business..........................................   2
Item 2    Description of Property..........................................  19
Item 3    Legal Proceedings................................................  19
Item 4    Submission of Matters to a Vote of Security Holders..............  20

                                 Part II
Item 5    Market for Common Equity and Related Stockholder Matters.........  21
Item 6    Management's Discussion and Analysis or Plan of Operation........  26
Item 7    Financial Statements.............................................  29
Item 8    Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure............................  29
Item 8A   Controls and Procedures..........................................  29

                                Part III
Item 9    Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act..............  30
Item 10   Executive Compensation...........................................  32
Item 11   Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters................................  33
Item 12   Certain Relationships and Related Transactions...................  35
Item 13   Exhibits and Reports on Form 8-K.................................  38
Item 14   Principal Accountant Fees and Services...........................  41

          Signatures.......................................................  43

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                 SPECIAL NOTE ABOUT FORWARD-LOOKING INFORMATION

         This report includes forward-looking statements based on management's
beliefs, assumptions and plans for the future, information currently available
to management, and other statements that are not historical in nature.
Forward-looking statements include statements in which words such as "expect,"
"anticipate," "intend," "plan," "believe," estimate," "consider" or similar
expressions are used. These forward-looking statements are not guarantees of
future performance and involve risks, uncertainties and assumptions, including
among others: a general economic downturn, a downturn in the securities markets,
regulations that affect trading in the securities of "penny stocks," and other
risks and uncertainties.

         Our future results and stockholder values may differ materially from
those expressed in these forward-looking statements. Many of the factors that
will determine these results and values are beyond our ability to control or
predict. The forward-looking information is based on present circumstances and
on our predictions respecting events that have not occurred, which may not occur
or which may occur with different consequences from those now assumed or
anticipated. Actual events or results may differ materially from those discussed
in the forward-looking statements as a result of various factors, including the
risk factors detailed in this report. The forward-looking statements included in
this report are made only as of the date of this report. These statements
reflect management's current view of our future events and are subject to
certain risks, uncertainties, assumptions and risks as discussed in "Risk
Factors."

                             _____________________

         As used in this report, the terms "we," "us," "our" and "the Company"
refer to Cyntech Technologies, Inc., a corporation organized under Utah law, and
our wholly-owned subsidiaries, Cyntech Technologies, Inc., a Nevada corporation,
and Cyntech Fuels of Chambers County, LLC, a Texas limited liability company.

         All share and per share amounts for Cyntech Technologies, Inc., a Utah
corporation, in this report have been adjusted to reflect a 16.5523-to-1 reverse
stock split effected December 22, 1998, unless otherwise expressly stated.

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                                     PART I


                         ITEM 1. DESCRIPTION OF BUSINESS

General

         Cyntech Technologies, Inc. proposes to develop and operate plants using
proprietary technologies called the Windstar ThermReTec(tm) process to produce
marketable petrochemical fuel products and scrap steel through recycling
hydrocarbon-based products such as tires or plastics. We have not constructed a
plant to date, but intend to develop and finance an initial plant in Chambers
County, Texas.

Financial Condition and Ability To Continue as a Going Concern

         We are a development-stage company, have had no revenue from
operations, and have no operations from which revenue will be generated in the
near future. For the fiscal years ended July 31, 2002, and July 31, 2001, we
incurred net losses of approximately $2,004,000 and $1,239,000, respectively. We
had an accumulated deficit of approximately $8,199,000 for the period December
31, 1997, date of inception, through July 31, 2002. At July 31, 2002, and July
31, 2001, we had net stockholders' deficits of approximately $2,441,000 and
$785,000, respectively. Accordingly, the independent auditor's report
accompanying our audited financial statements as of July 31, 2002 and 2001,
included in this report, raises substantial doubt about our ability to continue
as a going concern. See Consolidated Financial Statements.

History

         The Company was organized as a Utah corporation on February 5, 1986,
under the name Blythburg, Inc., and in 1987 completed its initial public
offering in reliance on the Regulation A exemption from registration under the
Securities Act. It changed its name to Wasatch Fiber Group, Inc. on March 24,
1988, and to Carbon Fiber Products, Inc. on December 17, 1992. On May 16, 1990,
it acquired Carbon Fiber Products, Inc., which manufactured and marketed a line
of carbon fiber, or graphite, golf club shafts and related products.

         Cyntech Technologies, Inc. was organized as a Nevada corporation in
December 1997 to exploit proprietary technologies to produce marketable
petrochemical fuel products and scrap steel through recycling hydrocarbon-based
products such as tires or plastics. In July 1998, this Nevada corporation
acquired preliminary planning and development concepts for a proposed plant to
use these technologies to be built in Chambers County, Texas.

         In December 1998, the Utah corporation, then named Carbon Fiber
Products, Inc., acquired the Nevada corporation named Cyntech Technologies, Inc.
in a so-called "reverse acquisition" and recapitalization. In this transaction,
Utah Carbon Fiber issued 25.9 million shares of common stock to the former
Nevada Cyntech stockholders, which constituted approximately 89.3% of the 29.0
million shares of Utah Carbon Fiber then outstanding.

         Immediately prior to the above transaction between Utah Carbon Fiber
and Nevada Cyntech, the stockholders of Utah Carbon Fiber effected a
16.5523-to-1 reverse stock split, which reduced the 51,312,152 shares
theretofore issued and outstanding to 3,100,000 shares immediately prior to
consummation of the merger with Nevada Cyntech. All share and per share amounts
in this report have been adjusted to reflect such reverse stock split, unless
stated to the contrary.

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         Also prior to completing the above transaction, Utah Carbon Fiber
issued 1,143,345 shares of common stock (18,925,000 pre reverse split shares) in
consideration of services rendered and the cancellation of $996,254 owed in
principal and accrued interest. In addition, Utah Carbon Fiber also transferred
to an affiliated entity, H&P Investments, substantially all of its assets and
liabilities, excluding trade receivables and payables. In consideration of such
transfer, we cancelled $1,257,521 of indebtedness owed to H&P Investments, and
H&P Investments agreed to assume $1,413,736 of indebtedness owed by us to third
parties or to H&P Investments. See Part III. Item 12. Certain Relationships and
Related Transactions. In addition, the former officers and directors of Nevada
Cyntech became the officers and directors of Utah Carbon Fiber, which then
changed its name to Cyntech Technologies, Inc.

         As a "reverse acquisition," this transaction was accounted for as a
recapitalization of the Utah Carbon Fiber corporation, giving effect to the
acquisition of all of the issued and outstanding stock of the Nevada Cyntech
corporation. The surviving entity reflects the assets and liabilities of the
Utah and the Nevada corporations at their historical book value, and the issued
common stock and additional paid-in capital are that of the Utah Carbon Fiber
corporation. See Part III. Item 12. Certain Relationships and Related
Transactions, and Note 1 to Notes to Consolidated Financial Statements.

Proposed Recycling Business

         Petrochemicals are processed chemicals that originate from petroleum or
natural gas, including synthetic rubber and plastics, consisting chiefly of
compounds of the basic elements hydrogen and carbon. These compounds are also
called hydrocarbons. As the central component of our long-term recycling
strategy, we propose to develop and operate plants using proprietary
technologies known as the Windstar ThermReTec(tm) process to produce marketable
petrochemical fuels, chemicals and gases, as well as scrap steel, through the
recycling of hydrocarbon-based products such as used tires and plastics.

         In developing these plants, we will need to:

         o        select and acquire proposed sites that we believe will enable
                  us to obtain required plant feedstock and a market for our
                  products;

         o        design plants suitable for the feedstock to be processed;

         o        obtain necessary financing for capital costs and initial
                  operating expenses;

         o        secure necessary environmental permits, zoning clearances, and
                  other approvals; and

         o        complete construction.

         We expect that feedstock for Cyntech plants will consist of waste tires
and other rubber products or plastics, synthetic carpet and other hydrocarbon
waste products. Based upon our management's discussions with state officials and
tire-industry professionals, we believe that in the location of our first
intended facility, the Houston metropolitan area, these materials may be
obtained at no cost and that firms that generate or collect such items may pay
us to accept and recycle such materials. Because we believe that the Houston
metropolitan area is representative of similar metropolitan areas nationally, we
anticipate that a supply of feedstock sufficient to operate a Cyntech plant will
likely be most available in industrial and commercial areas at no cost to us or
even with payments to us for accepting certain feedstock. Similarly, our
management's informal discussions with potential purchasers lead us to believe
that markets for the products that we recover may be available in such areas.

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         Preliminarily, we have determined to locate our first Cyntech plant in
Chambers County, Texas, in the vicinity of the petrochemical industries of the
City of Mount Belvieu. We are now seeking the initial equity capital needed to
begin development of a plant in Chambers County. As initial equity is obtained,
it will be necessary to complete the remainder of the development steps outlined
above. We previously signed a nonbinding engagement for project debt financing
for approximately 85% of the estimated $92 million cost of the Chambers County
plant, subject to a number of conditions. This engagement has now expired, and
we are continuing to work to identify potential alternative sources of financing
for the proposed recycling facility. As of the date of this filing, we have no
commitment from any source to provide financing. We intend to design the
Chambers County plant initially to process waste tires and other rubber products
and plan later to add equipment to process plastics and other hydrocarbon
materials.

         As part of developing a Cyntech plant, we will need to enter into
commitments or arrangements to acquire plant feedstock and market products
recovered. We currently have no such commitments or arrangements. Based on the
familiarity of our management and consultants with the nature of the
petrochemical industry in the Chambers County area, we believe that feedstock
may be available and that products recovered may be marketable in the Chambers
County petrochemical and industrial area.

         Based upon several research missions to Europe, we believe that if we
are able to construct our initial plant successfully, we may eventually expand
our operations into Europe. Although we have made no commitments to engage in
any European efforts beyond indicating our interest in participating in the
e-car feasibility study discussed under the heading "The European Market" below,
we have engaged in informal preliminary discussions with a limited number of
local officials in Germany, France, Belgium and England regarding potential
sites and operations. We do not expect we will be able to expand into Europe for
several years, if at all.

         We have an agreement to license the Windstar ThermReTec(tm) process
under an Exclusive Option Agreement with Windstar Research and Engineering,
Ltd., a separate company controlled by certain of our directors, officers and
stockholders. Therefore, this agreement was not the result of arm's-length
negotiations. Under this license agreement, we can license the Windstar
ThermReTec(tm) process for a plant by paying Windstar a one-time,
preconstruction fee of $1.0 million for each Cyntech plant plus an ongoing
royalty equal to 7% of gross operating plant revenues during the life of the
plant. We will pay an additional $500,000 license fee if a plant processing
either rubber or plastic is expanded to process both. We have the right to enter
into these licenses for Cyntech plants until February 1, 2011, with the right of
Windstar to extend the agreement for two successive 10-year periods. Although we
are currently in default under this agreement, Windstar has not provided us with
the notice of default that it would be required to provide in order to terminate
the agreement, and we have not been told that it intends to do so. See Part III.
Item 12. Certain Relationships and Related Transactions: Windstar License of
Windstar ThermReTec(tm) Process.

         The Windstar ThermReTec(tm) process consists of proprietary
petrochemical engineering features designed to integrate selected commercially
available processes. The Windstar ThermReTec(tm) process includes features that
Windstar claims are unique and that are described in a patent application filed
on March 4, 1998, with the U.S. Patent and Trademark Office. No patent has been
issued to Windstar, we cannot assure that one will be issued, and we do not know
when to expect such a determination to be made.

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Recycling Business Strategy

         Our long-term business strategy is to apply petrochemical engineering
technological solutions to producing marketable petrochemical fuel products and
scrap steel through the disposal and recycling of hydrocarbon waste products,
including tires. This involves the following key approaches:

         o        Identify Feedstock Sources. We believe it is crucial in
                  planning a plant to identify sources of feedstock for initial
                  plant operation. We expect that a portion of the feedstock
                  will consist of material that we are paid for removing and
                  recycling, such as rubber tires for which many communities
                  currently pay a disposal fee. We expect that some of the
                  feedstock will consist of material that can be obtained
                  without cost because the informal investigation conducted by
                  our management indicates that there currently is no readily
                  available market for certain materials such as some rubber
                  products and waste plastics. The terms under which we can
                  enter into long-term arrangements to acquire feedstock will
                  affect the possible financial return from a plant.

         o        Recover Marketable Products. We will select feedstock and
                  design plants to maximize the recovery of products for which
                  there appears to be well-established alternative markets with
                  competitive pricing at levels that we forecast will generate a
                  financial return.

         o        Market the Products Recovered. We will attempt to establish
                  long-term marketing relationships with customers that we
                  forecast will have an ongoing need for our products.

The Recycling Opportunity

         Based on management's familiarity with the industry, we believe that
substantial numbers of used tires, other rubber products, and plastics are
placed in aboveground and other dumpsites each year. These plastics typically
include synthetic carpeting and automobile fluff, which is the plastic and
nonmetal residue from automobiles. Management believes these plastics strain the
limited capacity of landfills because these rubber and plastic materials are not
readily biodegradable. Although governmental responses to this disposal problem
have currently been limited to the imposition of recycling fees upon the initial
sale of such products, such as automobile tires, our management believes, based
upon its informal inquiries and discussions with state and industry officials,
that such products may ultimately be barred from landfills and the costs of
disposal imposed upon tire manufacturers and others that manufacture products
containing significant quantities of rubber and plastics.

The Windstar ThermReTec(tm) Process

         The proprietary Windstar ThermReTec(tm) process is based on recognized
general principles of thermal vacuum distillation and thermal cracking processes
that produce gases that are then condensed into oils that are further distilled
to enhance the quality and economic value of the products. The technology
combines several currently available petrochemical processes linked together
with proprietary features. Principal equipment and process components used in
the process are widely used in refineries or chemical plants. The proprietary
features of the Windstar ThermReTec(tm) process relate to the design of the
system to integrate and monitor these components to significantly enhance the
yield when converting feedstock into useable, marketable products. The Windstar
ThermReTec(tm) process has been tested in a pilot plant, as discussed below, but
no full-scale plant has been constructed to date. The pilot-plant test
processing approximately 40 pounds per hour of waste tires shredded to a nominal
one-inch size resulted in the production of oil, gas and carbon black. We cannot
assure that this technology will recycle rubber or plastic feedstock efficiently
or economically in a full-scale plant in actual operation.

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         The plant components and processes used to recycle rubber products and
plastics are different in several details. Therefore, a plant designed to
recycle rubber cannot recycle plastics and vice versa. Accordingly, if we were
to have a single plant process both rubber and plastics, we would be required to
build two separate process systems at such plant.

         Cyntech plants will be designed to produce the following products:

         o        liquefied petroleum gases, including propane, butane and
                  ethylene, among others;

         o        intermediate petrochemical feedstocks, which are gas oils used
                  to produce methanol, naphtha, kerosene, diesel and gasoline;
                  and

         o        residual process gases used for cogeneration of electricity,
                  steam boilers or as a general plant fuel.

         The quantity and proportion of the products actually produced will
depend principally on the feedstock for a particular plant. We expect that a
plant recycling rubber tires would produce the following proportions of
products: methanol 50%, gas oil 35%, and liquefied petroleum gas 10%. The
remaining 5% would be process gas, which remains after the other products are
recovered and is often considered waste and flared off in refineries and similar
operations. We believe that, based upon our testing, we may be able to use this
process gas for cogeneration of electricity or heating steam boilers in our
facility. We will also recover scrap steel from the tires we process.

         We have conducted testing of the Windstar ThermReTec(tm) process over
the last several years. The most recent testing was conducted in October 1999 at
a testing facility owned by the manufacturer of the thermal cracking unit that
we propose to use. The testing was conducted for 16 hours a day for three days
by our management and consultants, at a sustained predetermined rate where the
outflow process gas was measured and condensed to produce the gas oil component.
Both the process gas and the gas oil were collected and analyzed by an
independent and certified A.S.T.M., or American Society of Testing and
Materials, facility. The other end products were collected and transported to
other testing facilities.

         The results of the October 1999 testing were consistent with our more
limited previous testing. The available equipment allowed us to produce gas oils
(naphtha, kerosene and diesel), process gas (wet stream liquid propane, not
fractionated), and carbon black. The testing process did not include a gas
stream fractionating unit, but we had the gas stream analyzed by an independent
laboratory that confirmed the expected results. The proposed facility for
Chambers County has been designed based on the technology and equipment used in
that test.

Proposed Construction of Chambers County Recycling Plant

         We propose to develop and build a Cyntech plant to recycle used tires
and other rubber products in Chambers County, in the Mount Belvieu area,
approximately 15 miles east of Houston, Texas. We project the plant will cost
approximately $92 million to develop, construct and place in operation. The
proposed project will require approximately 25 acres of land in an industrial
area, which we have budgeted at a cost of about $500,000, based upon our
informal survey of recent real estate transactions in the area, although we have
not selected any specific parcel or entered into any land purchase agreement.
The rubber recycling plant will include an approximately 60,000 square-foot
building for the plant and offices at a cost of approximately $4 million. We
have contacted manufacturers to acquire both off-the-shelf equipment and
custom-made Windstar ThermReTec(tm) process components based on the Windstar
ThermReTec(tm) process, with an estimated cost of approximately $74 million to

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$77 million, depending on final design specifications. We estimate we will spend
$10.5 million in addition for planning and design, Windstar licensing fees,
financing costs, start-up expenses, and related items.

         Initially, we are designing the Chambers County plant only with a
design capacity to process approximately 18 million pounds of scrap tires and
other waste rubber per month. We refer to this capacity as Phase I. After this
rubber recycling plant is operational, we may expand the plant by adding
equipment and processes to recycle approximately 20 million pounds of scrap
plastics, used carpeting, and auto fluff per month. This plant expansion, which
we refer to as Phase II, would likely cost an additional approximately $18
million to $22 million and require the payment of an additional $500,000 license
fee to Windstar. See Part III. Item 12. Certain Relationships and Related
Transactions: Windstar License of the Windstar ThermReTec(tm) Process.

         To date, we have reviewed a number of potential sites, identified
potential general contractors, reviewed the qualification of possible contract
plant management for the facility, and commenced the equipment and installation
engineering drawings. We anticipate that the engineering drawings will be
completed in 2005, at which time we will be able to apply for the air quality
permit from the Texas Natural Resources Conservation Commission. Based on our
management's discussions with that Texas agency, we believe that the typical
time for review and approval of an air quality permit is approximately 120 to
180 days. Issuance of a permit is required prior to commencing construction. We
anticipate that construction of Phase I could commence no earlier than late
2005, subject to financing.

         We are dependent on obtaining all of the estimated $92 million in
equity and debt financing required to develop, construct and begin operation of
this plant. Based upon our discussions with potential general contractors and
potential plant management, we believe that Phase I construction would take
approximately one year from the commencement of construction to the time the
facility is ready for operation. If and when we decide to proceed with Phase II,
after initial operation of Phase I, we estimate that Phase II would take
approximately 12 months of construction before it would be ready for operation.
See Part II. Item 6. Management's Discussion and Analysis or Plan of Operation:
Capital Requirements.

         To date, we have not constructed any facility for processing rubber or
plastic feedstocks. All of the physical components we plan to include in Cyntech
plants are proven and in wide use in the petrochemical industry. However,
significant portions of the Windstar ThermReTec(tm) process are based on
specific applications of accepted engineering principles that we have tested
only on a limited basis in the laboratory and in our pilot-plant testing. The
Windstar ThermReTec(tm) process has not been used in full-scale plants and is
commercially unproven. Further, these Windstar ThermReTec(tm) processes, while
successfully tested in our pilot-plant test, have never been integrated with the
existing standard petrochemical refinery and gasification equipment and
processes to be used in any operating Cyntech plant on a large-scale, commercial
basis.

Plant Recycling Feedstock

         Feedstock for Cyntech recycling plants will consist of waste tires and
other rubber products or plastics, synthetic carpet, and other hydrocarbon waste
products. We expect that some of the feedstock will consist of material that can
be obtained without cost because there currently is no readily available market
for such materials, such as some rubber waste products and waste plastics.

         We also expect that a large portion of the feedstock will consist of
material that we are paid for removing and recycling, such as rubber tires for
which many communities currently must pay a disposal fee. Industrial facilities,
municipalities or others that generate, collect or dispose of materials, such as
used tires, that do not readily degrade in landfills frequently pay others to
dispose of such materials. The terms under which we can enter into long-term
arrangements to acquire feedstock will affect the possible financial return from

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a plant. In addition to such feedstock supply commitments, we will seek to
establish relationships and alternative sources of additional feedstock to
diversify our sources of supply. We currently have no commitments or
arrangements for feedstock for the Chambers County or any other proposed plant.

         If we have to pay for plant feedstock, it will have a material and
adverse effect on the financial return we expect; although management projects
that we could still operate profitably, we cannot assure that this would be the
case.

         We expect to obtain feedstock from a variety of sources. For Cyntech
plants processing rubber feedstock, possible sources of feedstock include tire
manufactures, retailers, independent used tire collectors, and landfill
operators. For plants processing plastic feedstock, possible sources of
feedstock include refineries, consumer waste management facilities,
municipalities and counties. Although currently we have no commitment or
arrangement to obtain any feedstock for the plants we may develop, our
management has engaged in informal discussions with officials of the Texas
Natural Resources Conservation Commission and the Houston Tire Dealers'
Association regarding the potentially available feedstock, and based upon those
discussions, we believe that there are adequate potential supplies of feedstock
in the Houston metropolitan area and that we will not be required to pay for
such feedstock.

Recycling Products, Markets and Distribution of Products

         We plan to market the petrochemical fuel products and scrap steel we
produce to manufacturers, retailers and users of:

         o        methanol;

         o        residual gases and liquids;

         o        gas oils for the production of naphtha, kerosene and diesel;

         o        marine diesel;

         o        residual gas for cogeneration of electricity for our facility;
                  and

         o        scrap steel.

         In our first planned plant in Chambers County, Texas, we intend to
market these products to refineries, petrochemical plants and others in the
Houston and Gulf Coast areas. Because our products will be standard
petrochemical commodities, we believe that they can be sold readily in the area.
We will seek to enter into long-term agreements for the sale of products that we
produce at prices that are tied to market indicators or at other prices that may
be negotiated. Within the past two years, we have contacted approximately 15
potential purchasers for products we intend to produce to discuss potential
demand, deliverability and prices. Based upon these initial contacts and their
informal expressions of interest, we expect that we may be able to enter into
agreements to sell some, if not all, of our products, before construction of the
Chambers County facility commences, but we have no agreements in place now and
cannot assure that we will be able to establish any marketing arrangement. We
expect to increase our product marketing efforts as our engineering, financing
and construction efforts increase. We expect that we may not be able to reach
agreements with potential purchasers of the products we produce until
construction and initial operation of a Cyntech plant. Therefore, we may have
invested significant amounts in the construction and initial operation of a
Cyntech plant before knowing whether we will be able to sell the products that

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we produce. Our inability to establish firm price and long-term sales contracts
for the products we produce may adversely affect our ability to obtain required
project financing. Our inability to develop a customer base may adversely affect
our results of operations. We may operate at a loss. Based upon our preliminary
informal discussions with potential purchasers, we believe that we will be able
to sell scrap steel to steel plants in the Gulf Coast market, but again we have
no arrangement to do so.

         We believe, based upon our pilot-plant test results and discussions
with our consulting engineers, that we may be able to use residual gas we
produce as fuel feedstock for a gas turbine unit to generate at least a portion
of the electricity needed for the Chambers County facility.

         While we believe, based upon our initial informal marketing contacts
and inquiries, that most of the products will be able to be sold within 10 to 25
miles of our Chambers County facility, we estimate that the maximum marketing
distance from one of our facilities would generally be approximately 50 miles.
Transportation costs will likely reduce the financial return or make it
uneconomical to deliver most of our products beyond that distance.

Additional Recycling Facility Proposals

         Although we have no commitments to construct any particular additional
recycling facilities, our agreement with Windstar Research and Engineering
requires that we construct 45 recycling facilities over the initial 10-year term
of that agreement. Although we are currently in default under our agreement with
Windstar, Windstar has not provided us with the notice of default it would be
required to provide in order to terminate the agreement, and we are not aware it
has any intent to do so. We are currently investigating preliminarily the
possibilities of constructing additional recycling facilities in Tampa, Florida,
and in the Corpus Christi and Dallas-Fort Worth areas of Texas. We estimate,
even if we are able to meet our anticipated schedule for the Chambers County
recycling facility, construction of any subsequent domestic facility could
commence no earlier than mid-2007.

The European Market

         We propose to participate in mid-2004 as one of a number of sponsors of
e-car Europe, a proposed joint venture to recycle used autos and trucks in the
European Union countries. In order to participate, we will be required to pay an
initial $50,000 sponsorship fee. The e-car Europe initiative, which is currently
scheduled to begin initial operations in late 2004 or 2005, proposes to utilize
a number of methods for recycling automobiles and trucks and their component
parts.

         We have also considered the possibility of locating rubber and
plastics' recycling facilities in Germany, France, Belgium and England. While
our initial inquiries included preliminary discussions with local governmental
officials regarding potential facility locations, we have not entered into any
agreements to locate facilities in any of those countries and do not intend to
do so in the immediate future.

Competition within our Proposed Recycling Industry

         Although there are other entities that recycle automobile tires and
other feedstock similar to that we propose to use, we believe, based upon the
research and discussions with industry members conducted by our management, that
other participants in this industry currently produce crumb rubber products for
playgrounds and rubber mats and fuel for cement kilns. We estimate that the
prices we may receive for the products we produce will likely be higher than the
prices for crumb rubber, which may enhance our competitive position. Other
industry participants, however, are substantially ahead of our current state of
development, are likely to have significantly more resources at their disposal,

                                       9
<PAGE>

and may have entered into agreements to obtain feedstock in certain areas that
would make it difficult or impossible for us to compete successfully.

Short-term Business Strategy

         Our short-term business strategy is to establish initial revenues
through the development of a smaller, lower-cost Cyntech oil and gas facility
that would focus on the processing and storage of crude petroleum and petroleum
related products. On April 11, 2002, we entered into a nonbinding Letter of
Intent with Feighner Investments, LLC, that expired on August 29, 2002,
concerning the purchase of a nonoperating refinery and storage tank farm
property located in Chambers County, Texas. Although that agreement has expired,
we are engaged in continuing discussions with Feighner Investments, LLC, and the
continued nonoperational status of the refinery and the relationship between us
and the principal of Feighner Investments, LLC (J.W. Feighner, Jr., a director
and principal stockholder of Cyntech Technologies, Inc., is also a principal of
Feighner Investments, LLC), leads us to believe that we may still be able to
acquire the refinery. However, we currently have no agreement to do so and
cannot assure that we will be able to do so.

         We will need substantial amounts of additional equity capital and/or
debt, estimated to be approximately $25.0 million, in order to purchase,
renovate and commence operations at the proposed Chambers County refinery and
storage tank farm property. We cannot be certain that we will be able to obtain
the needed equity capital and/or debt needed to meet our short-term business
strategy.

Risk Factors

         This report contains forward-looking statements and information
concerning our business and its future prospects. Those forward-looking
statements should be read together with these risk factors, because these risk
factors could cause actual results to differ materially from those
forward-looking statements.

     Risks Related to our Capital Requirements

         We need additional funds in order to continue.

         We will need additional funds in order to continue. As of July 31,
2002, we had a working capital deficit of approximately $2,272,000 and a
stockholders' deficit of approximately $2,441,000. We have no revenues from any
source and are completely dependent on the receipt of funds from external
sources to be able to continue. Currently, we incur expenses of approximately
$200,000-$250,000 per quarter for general, administrative and other operating
expenses unrelated to the development of our proposed recycling Cyntech plant in
Chambers County, Texas. We expect that our general, administrative and other
operating expenses will increase substantially as we accelerate our efforts to
develop our Chambers County plant, satisfy increased reporting and stockholder
communications obligations under the securities laws, and seek needed additional
capital required for our proposed business. We cannot assure that we will be
able to obtain funds required to continue. We will need substantial amounts of
additional equity capital in order to develop our proposed Chambers County
plant.

         We will require substantial amounts of debt project financing to
         develop our proposed Chambers County plant.

         We estimate that we will require approximately $77 million in project
financing in order to develop our proposed Chambers County recycling facility.
We previously engaged an unrelated firm to provide project financing equal to

                                       10
<PAGE>

85% of permitted plant costs, subject to a number of material conditions that we
were required to satisfy, including to:

         o        design and complete the engineering of the plant;

         o        execute contracts to obtain a site for the plant, construct
                  and manage the plant, obtain a supply of feedstock, sell our
                  products, and accomplish other tasks;

         o        obtain all required licenses and other approvals;

         o        obtain a financial bond to pay the loan balance plus related
                  costs if we default;

         o        provide a report to the lender from an independent engineer to
                  the effect that our financial forecasts relating to the
                  operation of the plant are accurate and will result in
                  adequate cash flow to repay the borrowings; and

         o        satisfy a number of other requirements.

         Our previous engagement with this firm expired before we were able to
obtain the initial equity needed to fund or meet the foregoing obligations.
Although the foregoing financing opportunity has expired, we expect that our
ability to obtain any project financing may be subject to similar conditions. We
cannot assure that we would be able to meet such conditions. If debt financing
cannot be obtained, we might be required to seek additional equity capital,
which may dilute the interest of all stockholders.

         We will need substantial amounts of equity capital, debt financing or
         other sources to implement our short-term business strategy.

         We estimate that we will need approximately $25 million in equity
capital, debt financing, or some other source to purchase, renovate and commence
operation of the currently nonoperating refinery and storage tank farm we
propose to acquire. If we are unable to raise the necessary funds, we will be
unable to acquire the facility and implement our short-term business strategy.
Further, every delay in our raising the necessary funds exposes us to the risk
that the owner of the facility will find another buyer or decide not to sell the
facility.

         We must obtain a substantial amount of equity capital before we
         complete project financing for our proposed Chambers County recycling
         plant.

         We estimate that we will be required to obtain approximately $15 to $20
million or more in additional equity capital in order to qualify for project
financing for our proposed Chambers County recycling plant. We anticipate that
substantially all of the needed equity capital must be raised in order to
satisfy the financial conditions for a minimum debt-to-equity ratio to qualify
for project financing for the Chambers County recycling plant. Delays in
obtaining our required equity capital will correspondingly delay our
satisfaction of the conditions that may be required to arrange project financing
and, in turn, the construction of the Chambers County recycling plant. Even if
we are able to raise the equity that we estimate we will need to qualify for
project financing, we may nevertheless be unable to obtain that financing, which
may force us to seek even more equity and potentially further dilute the
interest of existing stockholders. If we are unable to obtain required funding
from debt and equity sources, we may be unable to construct a plant, commence
operations, or continue in existence.

                                       11
<PAGE>

         We anticipate having substantial future capital needs.

         Even if we are able to fund construction of a Chambers County plant, we
estimate that our future capital needs, particularly for expansion of the
proposed Chambers County plant to process waste plastics, as well as for
developing any additional plants that we may undertake in the future, will be
substantial. The extent of our future capital requirements will depend on many
factors, including our possible desire to develop additional plants, success in
developing additional plants, results of operations, the availability of funding
from third parties through strategic alliances, joint ventures or other
collaborative arrangements, and other factors not within our control. We cannot
estimate the extent of our future capital needs, and it is possible that our
estimates will be inaccurate to a significant degree. Based on our current
estimates, however, we anticipate that we will seek additional required funds
from the sale of securities, new borrowings, or other external sources. If our
capital expenditures differ materially from our estimates, we may require
additional financing sooner than anticipated. We have no commitments for any
such additional capital that we may need. See Part II. Item 6. Management's
Discussion and Analysis or Plan of Operation: Capital Requirements.

         We cannot assure that we will be able to obtain required additional
funds on acceptable terms, if at all. In addition, our cash requirements may
vary materially from those now planned because of the results of process
testing, potential changes in the sources of feedstock and the terms on which it
can be obtained, competitive technologies, future research and development,
issues related to patent or other protection for proprietary technologies,
regulatory approvals, and other factors. If adequate funds are not available, we
may be required to delay, reduce the scope of, or cancel the proposed Chambers
County facility and be unable to commit to any other plant development projects.

         If we finance the Chambers County facility with secured project
         indebtedness, essentially all of our assets will be encumbered and
         subject to foreclosure if we are unable to make the required payments.

         If we construct the Chambers County recycling facility with project
indebtedness secured by encumbrances on all of our facilities, substantially all
of our operations will have been financed and leveraged through such a financing
arrangement. Our investment in the Chambers County facility will only be
profitable if it generates cash flow sufficient to cover the principal and
interest payments due under the financing arrangement, if we are able to obtain
financing. Notwithstanding any results of operations or available cash, we would
be required to make payments of principal and interest on such a loan when due.
Such payments may leave us with insufficient cash to fund operations, which may
materially affect our ability to continue. Because essentially all of our
properties and assets would likely be encumbered to secure such a loan, failure
to make a payment could result in foreclosure on and loss of such properties and
assets. Additionally, because of such encumbrances, it may be difficult or
impossible for us to obtain alternative debt financing.

     Risks Related to the Proposed Development and Operation of Cyntech Plants

         Our beliefs regarding the availability of recycling feedstock have been
         based on limited information and if those beliefs are not well founded,
         we may not be able to operate Cyntech recycling plants profitably.

         Our plan of operation for proposed Cyntech recycling plants is based on
our belief, formed in reliance on our management's general experience in the
industry and informal conversations with operators of state and industry
facilities in the area of our first proposed plant, that the feedstock we need
will be available and that we may even receive a fee for accepting and disposing
of various materials, particularly used tires, that will represent a substantial
portion of the feedstock requirements for our plants. We have no commitment from

                                       12
<PAGE>

any storage, collection or disposal facility, or other source of used tires to
obtain any used tires or other feedstock for the Chambers County or any other
plant. We cannot assure that we will be able to enter into any agreement under
which we will be able to obtain the necessary feedstock or receive a fee for
recycling used tires or other feedstock. A number of firms have previously
attempted to operate various plants to recycle used tires and other feedstock,
but many have been financially unsuccessful and are no longer in operation,
perhaps because they were unable to obtain sufficient feedstock or fees for
accepting and recycling the materials used for feedstock. If we are unable to
obtain sufficient feedstock, if we are not paid to accept and recycle these
materials, or if we are required to pay for feedstock, our financial return from
operation of Cyntech recycling plants would be substantially and adversely
affected. We cannot assure that any Cyntech plant will be profitable.

         The Windstar ThermReTec(tm) process is in its early stages of
         development and we face significant technological uncertainties.

         We are in the development stage and have not yet built a facility, used
the technology we have an exclusive option to license in a full-scale plant, or
produced any products. We expect that we will require significant further
development, testing and process refinement before the first Cyntech recycling
plant will become operational. Our efforts remain subject to all of the risks
inherent in new product and process development, including unanticipated
technical, regulatory or other problems that could result in material delays or
significant cost increases. For the near future, substantially all of our
resources will continue to be dedicated to the implementation and
commercialization of the Windstar ThermReTec(tm) process. The results of this
implementation and commercialization of the Windstar ThermReTec(tm) process may
be inconclusive or may not be indicative of the actual results of its full-scale
commercial use. If we encounter unfavorable development or test results, we may
be forced to abandon the implementation of specific processes or products that
we might otherwise have believed to be promising, in which case we may not be
able to recover costs incurred in related research and development efforts. We
cannot assure that any Cyntech facility will be built, that the technology will
perform as laboratory tests have indicated, or that we will ever produce any
products.

         We are and will continue to be dependent on Windstar for the technology
         that is essential to our development and operations.

         We rely a great deal on the technical expertise of Windstar, a separate
company controlled by certain of our officers and stockholders, and on the
Exclusive Option Agreement we have entered into with Windstar for the right to
use the Windstar ThermReTec(tm) technology. At the same time, however, we have
little or no control over Windstar or how Windstar conducts its business. If
Windstar were to breach its agreement and refuse to license the Windstar
ThermReTec(tm) technology for our use, if Windstar were to breach its agreement
and refuse to provide us with design, engineering and permitting assistance, if
Windstar were to breach its agreement and license the Windstar ThermReTec(tm)
technology to our competitors, or if Windstar were to allow its Windstar
ThermReTec(tm) technology to become obsolete or outdated, it would have a
material adverse effect on our operations.

         Our Exclusive Option Agreement with Windstar imposes a number of
         requirements on us, and if we fail to perform, we may lose access to
         the Windstar ThermReTec(tm) process.

         Under our revised agreement with Windstar, we were required to pay
$100,000 and $900,000 in licensing fees for the Chambers County facility in the
fiscal years ended July 31, 2001 and 2002, respectively. Windstar has agreed to
accept our 12-month notes for the initial $100,000 payment due in 2001 and for
the $900,000 payments due in 2002. Additional requirements imposed upon us by
the agreement include the requirements to commence building of new facilities
according to an aggressive schedule (one facility in 2001, two in 2002, three in
2003, four in 2004, five in 2005, and six in each year thereafter), pay license

                                       13
<PAGE>

fees of $1.0 million per facility, and pay monthly operating fees based on gross
income of any plants that become operational.

         Because we have failed to meet a number of the requirements imposed on
us by the Exclusive Option Agreement, Windstar has the right to deliver to us a
notice of default that provides at least 180 days' notice of termination and
allows us 90 days to cure the default and thereby prevent termination of the
agreement. Windstar has not done so, but would be within its rights to do so at
any time. If Windstar delivers to us a notice of default and we are unable to
cure that default, Windstar may terminate the agreement with 180 days' notice
and we would thereafter lose access to the Windstar ThermReTec(tm) process, in
which case we would be unable to continue as planned.

         Our business is subject to substantial environmental regulation and our
         activities will carry certain inherent risks related to environmental,
         fire and public health issues.

         Our business will be subject to numerous laws and regulations
concerning the storage, use and discharge of materials into the environment, the
remediation of environmental impacts, and other matters relating to
environmental protection. These laws and regulations may impose costs on our
operations that make it impossible to operate in a cost-effective manner.
Initially, we need to obtain an air quality permit before we commence
construction of the Chambers County facility. Because Chambers County has been
designated as a "severe" nonattainment county for ozone and volatile organic
compounds under the Clean Air Act, additional state permits will be required if
it is determined that our facility will result in emissions of those materials
above certain levels. If we are unable to obtain the required air quality permit
and any additional permits that may be required, we will be unable to construct
and operate the Chambers County facility, which would have a material adverse
effect on the implementation of our business plan as we seek an alternate
location and essentially restart much of the development process. Further,
although we intend to comply with all applicable laws and regulations, we may
violate one or more of these laws and regulations, which could result in the
imposition of sanctions including the loss of certain permits or licenses, civil
sanctions or criminal penalties.

         Our operations may require us to stockpile certain feedstock, such as
tires, from time to time. When stockpiled above ground, tires create certain
fire, public health and environmental hazards ranging from fires, which generate
large and dense clouds of black smoke and are extremely difficult to extinguish,
to the creation of vast breeding grounds for mosquitoes and vermin. Finally, the
petrochemical products we intend to produce could create certain environmental
hazards if we fail to handle them properly or if we fail to contain them.

         We will be heavily dependent on our continuing relationships with third
         parties.

         We have acquired the right to use the Windstar ThermReTec(tm)
technology, which will form the basis for our operations, from Windstar, an
affiliated entity. If we were to become unable to utilize that technology, or if
the use of that technology were to prove not to be cost-effective, it would have
a substantial adverse effect on our development and our ability to commence and
continue operations.

         Additionally, our strategy for the development of our plants and
marketing our products requires us to enter into agreements with providers of
feedstock and customers for the products we intend to produce. Our commercial
success will be dependent upon these outside parties performing their respective
contractual responsibilities. Based on publicly available information, we
believe that the inability to obtain feedstock and be paid for accepting that
feedstock at a rate that makes production cost-effective may have substantially
reduced the economic return for other rubber and plastic recycling facilities.
There can be no assurance that we will be able to negotiate these agreements on
favorable terms or at all. Even if we are able to enter into the necessary
agreements, there can be no assurance that such parties will perform their

                                       14
<PAGE>

obligations as expected. Our prospects will be significantly affected by our
ability to successfully obtain agreements with suppliers of feedstock,
principally used tires and plastics, and sales contracts for the sale of
products to customers located within a reasonable distance from our facility.

Risks Related to our General Proposed Business

         We remain at an early stage of development, have not yet tested our
         processes in full-scale plants, and have no operating history, all of
         which makes it difficult for investors to determine whether we will
         accomplish our objectives.

         We are still at an early stage in the development of our proposed
Cyntech recycling plants. We have not tested our processes in a full-scale
plant. Therefore, we have no operating history on which investors can base an
evaluation of our business and prospects. Accordingly, potential investors must
consider the risks and difficulties we face as an early-stage company with no
operating history proposing to enter into an innovative and untested business.
Our business objectives must be considered speculative, and there is no
assurance that we will satisfy those objectives. We cannot be certain that our
business strategy will be successful.

         We are heavily dependent on our executive officers.

         Our success depends on the continued contributions of our executive
officers, particularly R. Frank Meyer, our President, and Isaiah A. Yancy,
Executive Vice President for Operations. Mr. Meyer is central to our vision,
development and growth and has been chiefly responsible for developing all of
our relationships with our other executives, directors and external consulting
entities. Isaiah A. Yancy has played a substantial role in the development of
our business plans and the industry relationships we have developed. We
currently do not have key man life insurance on any of our executives. Even if
we continue to rely on consultants for various engineering, design and other
specialized services, we will need to recruit and retain additional personnel,
including technical advisors and management, and develop additional management
expertise. Our inability to acquire such services or to develop such expertise
could have a material adverse effect on our operations. See Part III. Item 9.
Directors, Executive Officers, Promoters and Control Persons; Compliance with
Section 16(a) of the Exchange Act.

         Our officers and directors are subject to conflicts of interest.

         Our officers and directors and their affiliates have been, are and will
continue to be subject to significant conflicts of interest. Certain officers
and directors will be subject to competing demands for their time as they divide
their attention between our business and their other business and investment
interests. Certain of our directors, officers and stockholders have been or are
affiliated with Windstar, the licensor of the Windstar ThermReTec(tm)
technology. The Exclusive Option Agreement under which we will obtain technology
from Windstar was not the result of arm's-length negotiations. There can be no
assurance that any of the foregoing or other conflicts of interest will be
resolved in favor of our stockholders or us. We have adopted no policies
respecting the resolution of actual or potential conflicts of interest.

         If we are unable to protect our intellectual property, we may lose a
         valuable asset or incur costly litigation to protect our rights.

         Our success will depend, in part, upon our intellectual property
rights. We obtain rights to such intellectual property under our Exclusive
Option Agreement with Windstar. To date, Windstar has not been granted and does

                                       15
<PAGE>

not hold any patents. A patent application was made for certain proprietary
technology on March 4, 1998, and has been assigned to Windstar, a separate
company controlled by certain of our officers and stockholders. That patent
application has not yet been approved, we cannot assure that any patent will be
granted, and we are unsure when such a determination will be made. We also will
rely on unpatented trade secrets and know-how to protect the Windstar
ThermReTec(tm) process. If the patent application assigned to Windstar is
denied, we will be forced to rely to a greater degree on trade secrets and
know-how and our ability to protect our intellectual property will be reduced to
some degree. Our inability to protect these secrets and know-how could have a
material adverse effect on our business and prospects. We intend to protect our
proprietary information by entering into confidentiality agreements with
employees, consultants and potential business partners. These agreements may be
breached or terminated, creating a potential or actual loss of our confidential
trade secrets and know-how. Litigation to enforce intellectual property rights
or to protect trade secrets could result in substantial costs and may not be
successful. Any inability to protect intellectual property rights could
seriously harm our business, operating results and financial condition. In
addition, the laws of certain foreign countries may not protect intellectual
property rights to the same extent as do the laws of the United States. Our
means of protecting our intellectual property rights in the United States or
abroad may not be adequate to fully protect those intellectual property rights.

         Third-party claims that we infringe upon their intellectual property
         rights could be costly to defend or settle.

         Litigation regarding intellectual property rights is common. We may,
from time to time, encounter disputes over rights and obligations concerning
intellectual property. Although we believe, based upon assurances from Windstar,
that our intellectual property rights in the Windstar ThermReTec(tm) technology
will be sufficient to allow us to operate and market our products without
incurring third-party liability, third parties may bring claims of infringement
against us. Windstar is contractually obligated to defend those claims, but we
cannot assure that Windstar will have the financial resources to do so. These
claims may or may not have merit. Any litigation to defend against claims of
infringement or invalidity could result in substantial costs and a diversion of
resources. Furthermore, a party making a claim could secure a judgment that
requires us to pay substantial damages. We may not be able to obtain
indemnification from Windstar, the owner of the Windstar ThermReTec(tm)
technology. Our business, operating results and financial condition could be
harmed if any of these events occurred.

         There are certain rules applicable to our common stock as a "penny
         stock," and those rules may limit the liquidity and the resale of our
         common stock.

         The Securities and Exchange Commission, or the SEC, has promulgated
rules governing over-the-counter trading in penny stocks, defined generally as
securities trading below $5 per share that are not quoted on a securities
exchange or Nasdaq, or which do not meet other substantive criteria. Under these
rules, our common stock is currently classified as a penny stock. As a penny
stock, our common stock is currently subject to rules promulgated by the SEC
that impose additional sales practice requirements on broker-dealers that sell
such securities to persons other than established customers and institutional
accredited investors. For transactions covered by the rule, the broker-dealer
must make a special suitability determination for the purchaser and receive the
purchaser's written consent to the transaction prior to sale. Further, if the
price of the stock is below $5 per share and the issuer does not have $2.0
million or more net tangible assets or is not listed on a registered national
securities exchange or Nasdaq, sales of such stock in the secondary trading
market are subject to certain additional rules promulgated by the SEC. These
rules generally require, among other things, that brokers engaged in secondary
trading of penny stocks provide customers with written disclosure documents,
monthly statements of the market value of penny stocks, disclosure of the bid
and asked prices, and disclosure of the compensation to the broker-dealer and
the salesperson working for the broker-dealer in connection with the

                                       16
<PAGE>

transaction. These rules and regulations may affect the ability of
broker-dealers to sell our common stock, thereby effectively limiting the
liquidity of our common stock. These rules may also adversely affect the ability
of persons that acquire our common stock to resell their securities in any
trading market that may exist at the time of such intended sale.

         There are substantial options outstanding that may limit our ability to
         obtain financing in the future and that may be exercised when the
         effect would be to depress the market price of the common stock.

         We have issued and outstanding options to purchase up to an additional
3,000,000 shares of preferred stock at an exercise price of $0.50 per share and
1,003,160 shares of common stock at exercise prices between $0.25 to $0.50 per
share. The existence of such options may prove to be a hindrance to future
financing, and the exercise of options may further dilute the interests of the
stockholders. The possible future resale of common stock issuable on the
exercise of such options could adversely affect the prevailing market price of
our common stock. Further, the holders of options and warrants may exercise them
at a time when we would otherwise be able to obtain additional equity capital on
terms more favorable to us.

         We may have incurred contingent liabilities in connection with our
         previous sales of common stock, in which we may have issued securities
         without an available exemption from registration under the Securities
         Act of 1933.

         We have issued an aggregate of approximately 2.1 million shares of
common stock since the reorganization between Nevada Cyntech and Utah Carbon
Fiber in December 1998 in reliance on exemptions from registration under the
Securities Act. Unless the sales of the shares qualify for an exemption from
registration, either pursuant to Regulation D promulgated under the Securities
Act or otherwise, the investors would have the right to rescind their purchase
of the common stock if they should desire to do so. Based on management's
understanding of the applicable requirements at the time we issued securities,
we then believed that our sales of common stock qualified for exemption from
registration. However, based on a subsequent further review and awareness of the
applicable technical requirements, we are now concerned that no exemption from
registration may have then been available for the issuance of 300,000 shares in
the Optima transaction, 225,000 shares to Oriental, 400,000 shares in the Oxford
transaction, and 300,000 shares to Messrs. Mallory and Reel in connection with
the Serengeti transaction. No investor has sought rescission or made a claim for
damages. Since compliance with exemptions from registration is highly technical
and quite difficult, it is possible that if an investor should seek rescission,
it would succeed. A similar situation prevails under state law in the states
where the common stock may have been offered without registration in reliance on
specific exemptions from registration that require compliance by us with
stringent filing requirements or other conditions, some of which must be
satisfied prior to making an offer in a specific state. If a number of investors
were successful in seeking rescission, we would face their financial demands,
which could have an adverse effect on the nonrescinding investors and us.
Inasmuch as the basis for relying on exemptions from registration is factual,
depending on our conduct and the conduct of persons contacting prospective
investors and making the offering, we have not received a legal opinion to the
effect that any offer and sale of securities has been exempt from registration
under any federal or state law. Instead, we have relied on the operative facts,
as documented by us, as our basis for such exemptions.

         We may also be subject to civil or other enforcement or remedial
actions by federal and state authorities that, upon review, may conclude that an
exemption from registration was not available for various transactions in which
we offered and sold securities. We have not been advised of any inquiry or
investigation by any federal or state securities agency, but we cannot assure
that such investigation may not be initiated in the future. If such inquiry or
investigation were to result in an agency determination that action should be

                                       17
<PAGE>

brought against us, we may incur costs of investigating and defending our
position. Any finding in an administrative action or court proceeding that we
have violated the law would impose on us the obligation to disclose such
violation and may impair our ability to seek financing in reliance on certain
exemptions from registration under applicable federal and state securities laws.

         If all investors to whom we have offered securities in reliance on
exemptions from March 1, 2001, through March 23, 2004, were to seek rescission,
we would be exposed to claims relating to an aggregate of 10,696,669 shares that
were issued in consideration of $443,041 in cash, $30,200 in services, and
$3,056,999 in notes payable to us, for a total of $3,530,240, or approximately
$0.33 per share. We do not have the financial resources to pay such a claim were
it to be successfully asserted by the investors to whom we have issued such
shares. Further, we cannot ensure that claims older than three years would not
be honored by the courts, leaving open the possibility of additional exposure.
The existence of these contingencies could impair our ability to raise capital
in the future.

         We may have materially breached the terms of our exchange agreement,
         which creates the risk of a stockholder action for injunctive relief,
         damages or both.

         Under the terms of section 5.02(c) of our exchange agreement relating
to the combination of Utah Carbon Fiber and Nevada Cyntech, we agreed to
"immediately undertake efforts" and "in no event raise less than $5 million"
through a private placement of securities. Additionally, section 5.02(c)
provided that "the failure to raise a minimum of equity capital. . . shall
constitute a material breach of this agreement, and that such action shall be
appropriate for injunctive relief. . . (as other remedies will probably be
inadequate)."

         Although we have undertaken efforts to do so, those efforts have, to
date, been unsuccessful and we have not raised the $5 million in equity capital.
Although section 5.02(c) does not impose a specific deadline by which we are
required to raise the $5 million, we may be subject to legal action by the
former stockholders of Carbon Fiber Products, Inc. for injunctive or other
relief. While no such litigation has been initiated or threatened as of the date
of this filing, we face the risk of such litigation until the statute of
limitations operates to bar such a claim or we have successfully raised the
required equity capital, if we are ever successful in doing so.

Governmental Approvals, Regulations and Environmental Laws

     Environmental Regulations and Permits

         Before we can begin construction of the proposed Chambers County
facility, we will need to obtain a New Source Review permit from the Texas
Natural Resources Conservation Commission, or Texas NRCC. Because Chambers
County has been designated as a "severe" nonattainment county for ozone and
volatile organic compounds, additional state permits will be required if the
Texas NRCC determines that our proposed facility will result in emissions of
those materials above certain levels. We cannot assure that the additional state
permits will not be required, or that if they are required, we will be able to
obtain those permits. The costs associated with obtaining the New Source Review
permit have been included in our cost projections for construction of the
Chambers County facility. Although we have budgeted for estimated costs of
compliance with environmental requirements in the operation of our proposed
plant, we cannot assure that actual costs may not be greater than anticipated.
In addition, the failure to meet applicable requirements may result in business
interruptions, suspensions or other actions that can result in expense or
delays.

         In addition to the initial permitting process, our proposed activities
are subject to numerous laws and regulations concerning the storage, use and

                                       18
<PAGE>

discharge of materials into the environment, the remediation of environmental
impacts, and other matters relating to environmental protection, all of which
may adversely affect our operations and the costs of doing business. It is
possible that state and federal environmental laws and regulations will become
more stringent in the future, which might increase our projected construction or
operating costs.

     Safety and Health Regulations

         We must also conduct our operations in accordance with various laws and
regulations concerning occupational safety and health. Currently, we do not
foresee expending material amounts to comply with these occupational safety and
health laws and regulations. However, since such laws and regulations are
frequently changed and amended, we are unable to predict the future effect of
these laws and regulations.

Employees and Consultants

         As of the date of this filing, we had no employees. Our President and
Chief Executive Officer, R. Frank Meyer, and Isaiah A. Yancy, our Executive Vice
President, currently serve on a limited-time basis with compensation negotiated
on a project-by-project basis. See Part III. Item 10. Executive Compensation. We
also engage other consultants from time to time to provide required engineering,
accounting and other professional services.

         We have entered into a consulting agreement with Laska & Associates,
Inc., under which we obtain management, financing and accounting services,
principally through the efforts of John Laska, a certified public accountant and
principal of Laska & Associates. We have agreed to pay Laska & Associates a
monthly fee of $15,000, plus expenses, for the period December 31, 1997, through
September 30, 1999. We have agreed to pay Laska & Associates $150 per hour, with
a minimum of $5,000 per month, plus expenses, from October 1, 1999, through
December 31, 2010. During June of 2002, Laska & Associates exercised options,
granted December 31, 1997, to purchase 1.0 million shares of common stock at
$0.20 per share, to expire December 31, 2007, with a long-term note receivable
in the amount of $200,000, due June 27, 2005, with interest at 3.5% per annum.


                         ITEM 2. DESCRIPTION OF PROPERTY

         Our corporate office at 4305 Derbyshire Trace, SE, Conyers, Georgia
30094, is located in a separate onsite building at the residence of our
President and Chief Executive Officer, R. Frank Meyer. We reimburse Mr. Meyer
$175 per month, plus operating expenses, for this office, on a month-to-month
basis.


                            ITEM 3. LEGAL PROCEEDINGS

         We are not a party to any material legal proceedings, and to our
knowledge, no such legal proceedings have been threatened against us.

                                       19
<PAGE>

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

         At the Annual Meeting of Stockholders held July 31, 2002, the following
individuals were elected as our directors for a one-year term and until their
successors are elected and qualified:
<TABLE>
<CAPTION>
                                                             Vote       Withhold
Name                                          Vote For      Against    Authority
----                                          --------      -------    ---------
<S>                                           <C>            <C>          <C>
R. Frank Meyer............................... 26,118,736      --          --
Michael Dumdie (nephew of R. Frank Meyer).... 26,118,736      --          --
J.W. Feighner, Jr............................ 26,118,736      --          --
William F. Meyer (brother of R. Frank Meyer). 26,118,736      --          --
</TABLE>

         No other matters were submitted for a vote of the stockholders during
the fiscal year ended July 31, 2002, or from that date through March 23, 2004.

                                       20
<PAGE>

                                     PART II


        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our common stock is traded in the Pink Sheets. The trading volume of
the common stock is limited. This limited trading volume creates the potential
for significant changes in the trading price of the common stock as a result of
relatively minor changes in the supply and demand. It is likely that trading
prices and volumes for the common stock will fluctuate in the future, without
regard to our business activities.

         The following table sets forth the high and low closing prices for our
common stock as reported in the Pink Sheets, as appropriate, for the periods
indicated, based on interdealer bid quotations, without markup, markdown,
commissions or adjustments (which may not reflect actual transactions):

                                                              High      Low
                                                            --------- --------
2004 Fiscal Year
----------------
    Quarter Ending April 30, 2004 (through March 23, 2004)..  $0.65    $0.15
    Quarter Ended January 31, 2004..........................   1.01     0.09
    Quarter Ended October 31, 2003..........................   0.20     0.07

2003 Fiscal Year
----------------
    Quarter Ended July 31, 2003.............................   0.15     0.05
    Quarter Ended April 30, 2003............................   0.15     0.05
    Quarter Ended January 31, 2003..........................   0.20     0.08
    Quarter Ended October 31, 2002..........................   0.20     0.08

2002 Fiscal Year
----------------
    Quarter Ended July 31, 2002.............................   0.28     0.13
    Quarter Ended April 30, 2002............................   0.34     0.14
    Quarter Ended January 31, 2002..........................   0.37     0.14
    Quarter Ended October 31, 2001..........................   0.25     0.14

         We estimate that as of the date of this filing, we have approximately
900 stockholders.

Penny Stock Regulations

         Our stock is presently regulated as a penny stock and broker-dealers
will be subject to such regulations that impose additional requirements on us
and on broker-dealers that want to publish quotations or make a market in our
common stock. See Part I. Item 1. Description of Business: Risk Factors: Risks
Related to our General Proposed Business--There are certain rules applicable to
our common stock as a "penny stock" and those rules may limit the liquidity and
the resale of our common stock.

Dividend Policy

         We have never paid cash dividends on our common stock and do not
anticipate that we will pay dividends in the foreseeable future. We intend to
use any future earnings primarily for the expansion of our business.

                                       21
<PAGE>

Transfer Agent

         Our registrar and transfer agent is Atlas Stock Transfer, 5899 South
State Street, Murray, Utah 84107.

Recent Sales of Unregistered Securities

     Year Ended July 31, 2002

         Stock Issued for Services

         In August of 2001, we issued 8,000 shares of our restricted common
stock to a nonaffiliated individual for services received in the amount of
$4,000, or $0.50 per share. On the date of this transaction, the market price
for our common stock was approximately $0.15 per share.

         In June of 2002, we issued 32,000 shares of our restricted common stock
to Charles Tovey, a related party, in exchange for consulting services received
in the amount of $16,000, or $0.50 per share. On the date of this transaction,
the market price for our common stock was approximately $0.29 per share.

         In July of 2002, we issued 36,000 shares of our restricted common stock
to a nonaffiliated individual in exchange for professional and technical
services received in the amount of $9,000, or $0.25 per share. On the date of
this transaction, the market price for our common stock was approximately $0.21
per share.

         Stock Issued for Cash

         In September of 2001, we issued and sold 100,000 shares of restricted
common stock for cash of $35,000, or $0.35 per share, to J.W. Feighner, Jr., a
director and accredited investor, and his affiliate. On the date of this
transaction, the market price for our common stock was approximately $0.20 per
share.

         In December of 2001, we issued and sold 100,000 shares of restricted
common stock for cash of $25,000, or $0.25 per share, to a nonaffiliated,
accredited individual investor. On the date of this transaction, the market
price for our common stock was approximately $0.15 per share.

         In March of 2002, we issued and sold 200,000 shares of restricted
common stock for $40,000 in cash and reduced a related-party note payable in the
amount of $10,000, or $0.25 per share, from J.W. Feighner, Jr., a director and
accredited investor, and his affiliate. On the date of this transaction, the
market price for our common stock was approximately $0.15 per share.

         In March and April of 2002, we issued and sold an aggregate of 180,000
shares of restricted common stock for $45,000 in cash, or $0.25 per share, to a
nonaffiliated, accredited individual investor in two transactions. On the dates
of these transactions, the market price for our common stock was approximately
$0.20 and $0.25 per share, respectively.

         In June of 2002, we issued and sold 130,000 shares of restricted common
stock for cash of $32,500, or $0.25 per share, to one nonaffiliated, accredited
investor. On the date of this transaction, the market price for our common stock
was approximately $0.21 per share.

                                       22
<PAGE>

         In July of 2002, we issued and sold 25,000 shares of restricted common
stock for cash of $5,000, or $0.20 per share, to one nonaffiliated, accredited
investor. On the date of this transaction, the market price for our common stock
was approximately $0.21 per share.

         In June and July, 2002, we issued and sold 125,000 and 100,000 shares
of restricted common stock for cash of $31,250 and $25,000, respectively, or
$0.20 and $0.25 per share, to J.W. Feighner, Jr., a director and accredited
investor, and his affiliate. On the dates of this transaction, the market prices
for our common stock ranged from $0.21 to $0.25 per share. The offering was
limited to our directors or affiliates of our directors.

         Option Exercises for Cash

         In March of 2002, R. Frank Meyer, our President, a director and an
accredited investor, and his affiliate exercised options to purchase 20,000
shares of restricted common stock for $5,000, or $0.25 per share.

         In June of 2002, R. Frank Meyer, our President, a director and an
accredited investor, and his affiliate exercised options to purchase 106,000
shares of restricted common stock for $26,500, or $0.25 per share.

         In July of 2002, J.P. Herrin, then an officer and accredited investor,
exercised options to purchase 225,000 shares for $225, or $0.001 per share.

         Stock Issued for Notes Receivable

         In June of 2002, we issued 3,000,000 shares of common stock to R. Frank
Meyer, our President and a director, and his affiliate in exchange for an
interest-bearing promissory note receivable in the amount of $1,500,000, or
$0.50 per share. The note is due and payable on June 27, 2005. On the date of
this transaction, the market price for our common stock was approximately $0.21
per share.

         In June of 2002, we issued 637,500 shares of restricted common stock to
R. Frank Meyer, our President and a director, and his affiliate in exchange for
an interest-bearing promissory note receivable in the amount of $127,500, or
$0.20 per share. The note is due and payable on June 27, 2005. On the date of
this transaction, the market price for our common stock was approximately $0.21
per share.

         Options Exercised for Notes Receivable

         In June of 2002, R. Frank Meyer, our President, a director and an
accredited investor, and his affiliate exercised options to purchase 1,185,742
shares of restricted common stock in exchange for an interest-bearing promissory
note receivable in the amount of $237,148, or $0.20 per share. The note is due
and payable on June 27, 2005. On the date of this transaction, the market price
for our common stock was approximately $0.21 per share.

         In June of 2002, J.W. Feighner, Jr., a director, and his affiliate
exercised options to purchase 1,000,000 shares of restricted common stock in
exchange for an interest-bearing note promissory receivable in the amount of
$500,000, or $0.50 per share. The note is due and payable on June 27, 2005. On
the date of this transaction, the market price for our common stock was
approximately $0.21 per share.

         In June of 2002, Brian Haas, a former director, exercised options to
purchase 261,512 shares of restricted common stock in exchange for an
interest-bearing note receivable in the amount of $65,378, or $0.25 per share.

                                       23
<PAGE>

The note is due and payable on June 27, 2005. On the date of this transaction,
the market price for our common stock was approximately $0.21 per share.

         In June of 2002, William F. Meyer, a director, exercised options to
purchase 292,334 shares of restricted common stock in exchange for an
interest-bearing note receivable in the amount of $73,084, or $0.25 per share.
The note is due and payable on June 27, 2005. On the date of this transaction,
the market price for our common stock was approximately $0.21 per share.

         In June of 2002, Michael Dumdie, a director, exercised options to
purchase 115,395 shares of restricted common stock in exchange for an
interest-bearing note receivable in the amount of $28,849, or $0.25 per share.
The note is due and payable on June 27, 2005. On the date of this transaction,
the market price for our common stock was approximately $0.21 per share.

         In June of 2002, a nonaffiliated consultant exercised options to
purchase 100,000 shares of restricted common stock in exchange for an
interest-bearing note receivable in the amount of $50,000, or $0.50 per share.
The note is due and payable on June 27, 2005. On the date of this transaction,
the market price for our common stock was approximately $0.21 per share.

         In June of 2002, a nonaffiliated consultant, accredited, exercised
options to purchase 1,000,000 shares of restricted common stock in exchange for
an interest-bearing note receivable in the amount of $200,000, or $0.20 per
share. The note is due and payable on June 27, 2005. On the date of this
transaction, the market price for our common stock was approximately $0.21 per
share.

         In June of 2002, Charles Tovey, a former officer, exercised officer
options to purchase 250,000 and 250,000 shares of restricted common stock, at
$0.25 and $0.35 per share, respectively, in exchange for an interest-bearing
note receivable in the amount of $150,000. The note is due and payable on June
27, 2005. On the date of this transaction, the market price for our common stock
was approximately $0.21 per share.

         In June of 2002, Isaiah A. Yancy, an officer, exercised officer options
to purchase 200,000 shares of restricted common stock, at $0.50 per share, in
exchange for an interest-bearing note receivable in the amount of $100,000. The
note is due and payable on June 27, 2005. On the date of this transaction, the
market price for our common stock was approximately $0.21 per share.

         The foregoing transactions were negotiated in face-to-face discussions
with our executive officers. The purchasers had the opportunity to ask questions
of and receive answers from our executive officers and were provided with access
to our documents and records in order to verify the information provided. Such
shares were restricted securities taken for investment. The certificates for
such shares bear a restrictive legend. The securities issued in the transaction
described above were issued in reliance on the exemption from the registration
and prospectus delivery requirements of the Securities Act provided in ss. 4(2)
thereof.

Year Ended July 31, 2003

         Stock Issued for Cash

         In August of 2002, we issued and sold 27,500 shares of restricted
common stock for cash of $3,800, or $0.14 per share, to one nonaffiliated,
accredited investor. On the date of this transaction, the market price for our
common stock was approximately $0.20 per share.

                                       24
<PAGE>

         In September of 2002, we issued and sold 10,000 shares and 5,714 shares
of restricted common stock for cash of $3,500 and $2,000, respectively, or $0.35
per share, to two nonaffiliated, accredited investors. On the dates of these
transactions, the market price for our common stock was approximately $0.20 per
share.

         In October and December of 2002, we issued and sold an aggregate of
200,000 shares of restricted common stock, 100,000 shares per transaction for
cash of $25,000 per transaction, or $0.25 per share, to J.W. Feighner, Jr., a
director and accredited investor, and his affiliate. On the dates of these
transactions, the market price for our common stock was approximately $0.18 per
share and $0.16 per share, respectively.

         In December of 2002, we issued and sold 10,000 shares and 9,600 shares
of restricted common stock for cash of $2,000 and $2,500, respectively, or $0.20
per share and $0.26 per share, respectively, to two nonaffiliated, accredited
investors. On the date of these transaction, the market price for our common
stock was approximately $0.16 per share.

         In February of 2003, we issued and sold 20,800 shares and 20,000 shares
of restricted common stock for cash of $5,216 and $3,000, respectively, or $0.25
per share and $0.15 per share, respectively, to two nonaffiliated, accredited
investors. On the date of this transaction, the market price for our common
stock was approximately $0.11 per share.

         Stock Issued for Notes Receivable

         In June of 2003, we issued 36,000 shares of restricted common stock to
a nonaffiliated, accredited investor in exchange for an interest-bearing
promissory note receivable in the amount of $25,000, or $0.69 per share. The
note is due and payable on demand. On the date of this transaction, the market
price for our common stock was approximately $0.09 per share.

         The foregoing transactions were negotiated in face-to-face discussions
with our executive officers. The purchasers had the opportunity to ask questions
of and receive answers from our executive officers and were provided with access
to our documents and records in order to verify the information provided. Such
shares were restricted securities taken for investment. The certificates for
such shares bear a restrictive legend. The securities issued in the transaction
described above were issued in reliance on the exemption from the registration
and prospectus delivery requirements of the Securities Act provided in ss. 4(2)
thereof.

For the Period August 1, 2003-March 23, 2004

         Stock Issued for Services

         In November of 2003, we issued 6,000 shares of our restricted common
stock to a nonaffiliated individual in exchange for professional and technical
services received in the amount of $1,200, or $0.20 per share. On the date of
this transaction, the market price for our common stock was approximately $0.15
per share.

         Stock Issued for Cash

         In September of 2003, we issued and sold 25,000 shares and 2,000 shares
of restricted common stock for cash of $25,000 and $500, respectively, or $1.00
per share and $0.25 per share, respectively, to one nonaffiliated, accredited
investor. On the dates of these transactions, the market price for our common
stock was approximately $0.14 per share.

                                       25
<PAGE>

         In October of 2003, we issued and sold 625,000 shares of restricted
common stock for cash of $62,500, or $0.10 per share, to one nonaffiliated,
accredited investor. On the date of this transaction, the market price for our
common stock was approximately $0.14 per share.

         In December of 2003, we issued and sold 10,000 shares, 8,000 shares and
2,666 shares of restricted common stock for cash of $6,000, $800 and $2,000,
respectively, or $0.60 per share, $0.10 per share and $0.75 per share,
respectively, to two nonaffiliated, accredited investors. On the dates of these
transactions, the market price for our common stock ranged from approximately
$0.22 per share to $0.55 per share.

         The foregoing transactions were negotiated in face-to-face discussions
with our executive officers. The purchasers had the opportunity to ask questions
of and receive answers from our executive officers and were provided with access
to our documents and records in order to verify the information provided. Such
shares were restricted securities taken for investment. The certificates for
such shares bear a restrictive legend. The securities issued in the transaction
described above were issued in reliance on the exemption from the registration
and prospectus delivery requirements of the Securities Act provided in ss. 4(2)
thereof.


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

         You should read the following discussion and analysis in conjunction
with our consolidated financial statements included in this filing. The
following information contains forward-looking statements. See Special Note
about Forward-Looking Information. Our activities are subject to significant
risks. See Part I. Item 1. Description of Business: Risk Factors.

Overview

         We propose to develop and operate plants using the Windstar
ThermReTec(tm) process to produce marketable petrochemical fuel products and
scrap steel through recycling waste tires, plastics, carpet and rubber products.

         We are a development-stage company and have had no revenue from
operations through the date of this report. For the years ended July 31, 2002
and 2001, we incurred net losses of approximately $2,004,000 and $1,239,000,
respectively. At July 31, 2002, and July 31, 2001, we had net stockholders'
deficits of approximately $2,441,000 and $785,000, respectively. Accordingly,
the independent auditor's report accompanying our audited financial statements
as of July 31, 2002 and 2001, included in this filing, raises substantial doubt
about our ability to continue as a going concern.

         During the development period, we have experienced and continue to
experience severe shortages of cash. We have met our cash requirements
principally through borrowings from affiliates and others and the issuance of
common stock. Although we intend to continue to rely on borrowings from
affiliates in the future to meet ongoing general, administrative and other
operating costs, we have no agreements with any of our affiliates or any other
persons or entities to provide us funds to enable us to meet those costs. We
will also require substantial amounts of capital from other sources in order to
develop our proposed Chambers County plant. We cannot assure that we will be
able to obtain required funds.

         In December 1998, the Utah corporation, then named Carbon Fiber
Products, Inc., acquired the Nevada corporation named Cyntech Technologies, Inc.
in a so-called "reverse acquisition." In this transaction, Utah Carbon Fiber

                                       26
<PAGE>

issued 25.9 million shares of common stock to the former Nevada Cyntech
stockholders, which constituted approximately 89.3% of the 29.0 million shares
of Utah Carbon Fiber then outstanding. Immediately prior to completing the above
transaction, Utah Carbon Fiber transferred substantially all of its assets and
liabilities, excluding trade receivables and payables, to certain of its
stockholders for 1,094,712 shares. In addition, the former officers and
directors of Nevada Cyntech became officers and directors of Utah Carbon Fiber,
which then changed its name to Cyntech Technologies, Inc. As a "reverse
acquisition," this transaction was accounted for as a recapitalization of the
Utah Carbon Fiber corporation, giving effect to the acquisition of all of the
issued and outstanding stock of the Nevada Cyntech corporation. The surviving
entity reflects the assets and liabilities of the Utah and the Nevada
corporations at their historical book value, and the issued common stock and
additional paid-in capital are that of the Utah Carbon Fiber corporation. See
Part III. Item 12. Certain Relationships and Related Transactions, and Note 1 to
Notes to Consolidated Financial Statements.

         As a result of the reverse acquisition, our business activity has
changed. Our discontinued operations while we operated under the name of Carbon
Fiber Products, before the reverse acquisition with the Nevada Cyntech
corporation as discussed above, resulted in a net loss of $1,139,000 and
$1,000,112 for the year ended July 31, 1998, and for the period from August 1,
1998, to December 22, 1998, respectively.

Liquidity and Capital Resources

         As noted above, since inception we have relied principally on proceeds
from borrowings from affiliates and others and from the issuance of securities
to satisfy our cash requirements for operating activities. For the six months
ended January 31, 2004, and the years ended July 31, 2003, 2002, and 2001, we
incurred net losses of approximately $750,000 (unaudited), $1,400,000
(unaudited), $2,004,000, and 1,239,000, respectively. From inception of December
31, 1997, through July 31, 2002, we used net cash of $1,121,000 for operating
activities and $47,000 for investing activities to purchase property and
equipment. We funded these items with $773,000 received from the issuance of
common stock, $420,000 in net proceeds from borrowings, including $383,000 from
affiliates, and $32,000 from nonaffiliates. During the year ended July 31, 2000,
in order to conserve cash, $1,230,000 in consulting fees, related-party notes
and advances payable, and related accrued interest were converted into long-term
convertible notes due after May 1, 2002, on 30 days' demand and convertible into
common stock at $1.00 per share. During the year ended July 31, 2001, we paid
related-party, long-term convertible debt of $281,000, including interest,
through the issuance of 561,239 shares of common stock, and we transferred
long-term convertible debt, including interest of $1,155,000 ($599,000 of which
was owed to related parties) to Windstar Research & Engineering, Ltd., an
affiliated entity controlled by certain of our stockholders, officers and
directors, for 2,310,853 shares of common stock.

Plan of Operation

         Our long-term strategy is to establish revenues through the development
of Cyntech plants, beginning with an initial plant in Chambers County, Texas.
Until our first Cyntech plant is constructed and placed in operation, we plan to
continue to obtain required funds through borrowings from affiliates and others
and from the issuance of common stock or other securities. To fund development
of the Chambers County facility, we will need both to obtain significant amounts
of additional equity through the issuance of common stock or other securities
and to obtain project financing in the form of long-term borrowings secured by
plant assets.

         We estimate that it will take approximately two to three months after
the receipt of at least $2.5 million in equity financing to complete the
preconstruction development of our first plant. Thereafter, we estimate that it

                                       27
<PAGE>

will take an additional 15 to 18 months for actual construction. We are not
likely to receive any revenues, other than possible immaterial amounts of tire
stocking fees we may collect for tires we accept and store on site during
construction, until 30 to 90 days after actual operations commence. Accordingly,
we do not anticipate revenues from our first Cyntech plant to be received any
earlier than the end of 2005. Delays in obtaining required financing or
completing any other development component would correspondingly delay the
receipt of first revenues from this project.

Capital Requirements

         As of July 31, 2002, we had deficit working capital of approximately
$2,272,000 and a stockholders' deficit of approximately $2,441,000. We require
capital for general and administrative expenses and other corporate purposes, as
well as costs associated with the development, construction and initial
operation of our first Cyntech plant in Chambers County, Texas.

         In connection with our sponsorship of the e-car Europe feasibility
study, we have made a nonbinding commitment to make a initial payment of
$50,000, during mid-2004. If we are selected and we agree to become a joint
venture partner, we will be required to make additional payments during 2004 and
2005, of approximately $1,500,000 to $2,500,000, for general corporate purposes,
including general and administrative expenses, consulting fees and costs
associated with meeting our legal reporting and filing requirements. We expect
to meet these needs with funds provided principally by borrowing from our
affiliates, to the extent available, and our sale of common stock. No one has
agreed to loan us any money or buy any of our common stock.

         Under our Exclusive Option Agreement with Windstar, we have recorded
licensing-fee payments of $900,000 and $100,000 during the year ended July 31,
2002 and 2001, respectively, which we were unable to pay. We have signed
12-month notes for the $900,000 and $100,000 payments due in 2002 and 2001,
respectively, that will come due on or after May 1, 2004. If we are unable to
meet our payments to Windstar, we will seek to negotiate extended payment terms,
although we cannot assure we will be able to do so. If we are unable to do so,
Windstar would have an additional basis upon which to terminate the license
after giving us notice and an opportunity to cure our default.

         Our total liabilities of approximately $2,297,000 as of July 31, 2002,
include past due accounts payable and accrued liabilities and consulting fees
payable of approximately $1,199,000, notes payable of approximately $72,000, and
related-party payables of approximately $1,206,000, including long-term,
related-party debt of approximately $180,000. We will continue to seek the
forbearance of our creditors while we seek additional capital through the sale
of securities. In the interim, we will rely on the continuing forbearance from
collection of our creditors and on loans from affiliates to meet our pressing
cash requirements. We cannot assure that either our creditors will continue to
forbear or that we can borrow any required funds from affiliates for these
purposes. We will attempt to negotiate extended due dates on the notes payable,
particularly those due related parties. No one has agreed to renegotiate the
terms of any loan or to buy any of our common stock. If we are unable to
renegotiate the terms of the loans or make the required repayments, we may be
unable to continue.

         In addition to general operating funds, we will require significant
amounts of capital in connection with the development of our first Cyntech
plant, which we estimate will cost a total of approximately $92 million. We
anticipate that we will require an additional $25.0 million to purchase,
renovate and commence operations of the refinery and storage tank farm we
propose to acquire in Chambers County, Texas. Again, we intend to raise these
funds through the sale of equity or debt financing. We may also seek out other
entities or individual with the intent of forming a joint venture or
partnership. However, there is no guarantee that we will be successful in
obtaining such funds.

                                       28
<PAGE>

                          ITEM 7. FINANCIAL STATEMENTS

         Our financial statements, including the auditors' report, are included
beginning at page F-1 immediately following the signature pages of this report.


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

         None.


                        ITEM 8A. CONTROLS AND PROCEDURES

         We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed by us in the reports that we
file or submit to the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified by the Securities and Exchange
Commission's rules and forms, and that information is accumulated and
communicated to our management, including our principal executive and financial
officer as appropriate to allow timely decisions regarding required disclosure.
Our Chief Executive and Financial Officer evaluated, with the participation of
our management, the effectiveness of our disclosure controls and procedures as
of March 23, 2004, pursuant to Rule 13a-15(b) under the Securities Exchange Act.
Based upon that evaluation, our Chief Executive and Financial Officer concluded
that, as of March 23, 2004, our disclosure controls and procedures were
effective.

                                       29
<PAGE>

                                    PART III


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

Executive Officers and Directors

         Our articles of incorporation provide for the election of the entire
board of directors at each annual meeting of stockholders, with each director to
serve until the next annual meeting and until such director's successor is
elected and qualified. Officers are elected and serve at the pleasure of the
board of directors.

         The following table sets forth the name, age and position of each of
our current directors and executive officers:

     Name                Age                  Title
---------------------  -------  ------------------------------------------------

R. Frank Meyer           60     Director, President, and Chief Executive Officer
Michael Dumdie           32     Director
J.W. Feighner, Jr.       54     Director
William F. Meyer         56     Director and Treasurer
Isaiah A. Yancy          57     Executive Vice President--Operations

         The principal occupation, title and business experience of our
executive officers and directors during the last five years, including the names
and locations of employers, are indicated below.

         R. Frank Meyer has been a Director, President and Chief Executive
Officer of our Company since December 22, 1998. He became a consultant to Nevada
Cyntech on its organization in December 1997 and a director in May 1998. From
1996, Frank Meyer was a consultant providing services to 12 different waste
management and recycling companies. While associated with these solid waste and
recycling companies, he cooperated with other chemical, electrical and power
engineers and scientists, primarily in the development of hydrocarbon recovery
technologies. Mr. Meyer holds a BA degree in industrial management and a minor
in accounting from the University of South Florida. R. Frank Meyer is the
brother of William F. Meyer.

         William F. Meyer has been Treasurer and a Director since June 1998. He
has been a high school basketball coach and instructor, employed by the South
Forsyth County Board of Education and DeKalb County Board of Education, for the
past 30 years and five years, respectively. Mr. Meyer has also been a part-time
realtor and real estate developer in Georgia for more than 25 years with
Suwannee Realty Residential. Mr. Meyer has a BA degree in education and pre-law
from the University of South Florida. William F. Meyer is the brother of R.
Frank Meyer.

         Michael Dumdie joined our Board of Directors in March 2001. Mr. Dumdie
is currently a Dealer Financial Services Analyst for Mercedes Benz Credit
Corporation, a position he has held since 1998. Mr. Dumdie earned an MBA from
Georgia State University in 1998, and a Bachelor's degree in Business
Administration from the University of Georgia in 1993. Mr. Dumdie is the nephew
of R. Frank Meyer.

                                       30
<PAGE>

         J.W. Feighner, Jr. has been a Director since May 2001. For the past 20
years, Mr. Feighner has served as President of Vista Craft, Inc., a Columbus,
Georgia, screen printing firm, and as Chairman and 15% stockholder of Victory
Developers, Inc., a real estate development company that owns 32 shopping
centers in the southeastern United States. Mr. Feighner holds a BS degree in
Industrial Management from Georgia Tech and an MBA degree from Tulane
University.

         Isaiah A. Yancy joined the Company in April 1999, and serves as the
Executive Vice President-Operations of the Company. Mr. Yancy has owned his own
consulting practice specializing in efforts to return failing or troubled
companies to profitability since October 1993. He holds a BA degree in English
and Math from the University of Alabama.

Compliance with Section 16(a) of the Exchange Act

         Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to us during or respecting our last fiscal year ended July 31, 2002,
and any written representation referred to in paragraph (b)(2)(i) of Item 405 of
Regulation S-B, no person who, at any time during the most recent fiscal year,
was a director, officer, beneficial owner of more than 10% of any class of our
equity securities, or any other person known to be subject to Section 16 of the
Securities Exchange Act of 1934 failed to file, on a timely basis, reports
required by Section 16(a) of the Exchange Act during the most
recently-completed, full fiscal year or prior fiscal year, with the following
exceptions:

         In September 2001, J.W. Feighner, Jr., a director, failed to file a
report on Form 4 to report the purchase of 100,000 shares of common stock. In
March 2002, Mr. Feighner failed to file a report on Form 4 to report the
purchase of 200,000 shares of common stock. In June 2002, Mr. Feighner failed to
file a report on Form 4 to report the purchase of 125,000 shares of common
stock. In June 2002, Mr. Feighner failed to file a report on Form 4 to report
the exercise of options to purchase 1,000,000 shares of common stock. In July
2002, Mr. Feighner failed to file a report on Form 4 to report the purchase of
100,000 shares of common stock. In October 2002, Mr. Feighner failed to file a
report on Form 4 to report the purchase of 100,000 shares of common stock. In
December 2002, Mr. Feighner failed to file a report on Form 4 to report the
purchase of 100,000 shares of common stock. In each of July 2002 and July 2003,
Mr. Feighner failed to file a report on Form 4 to report the grant of options to
purchase 92,316 shares of common stock for his service as a director.

         In March 2002, R. Frank Meyer, our President and a director, failed to
file a report on Form 4 to report the exercise of options to purchase 20,000
shares of common stock. In June 2002, Mr. Meyer failed to file a report on Form
4 to report the exercise of options to purchase 106,000 shares of common stock.
In June 2002, Mr. Meyer failed to file a report on Form 4 to report the purchase
of 3,000,000 shares of preferred stock. In June 2002, Mr. Meyer failed to file a
report on Form 4 to report the purchase of 637,500 shares of common stock. In
June 2002, Mr. Meyer failed to file a report on Form 4 to report the exercise of
options to purchase 1,185,148 shares of common stock. In each of July 2002 and
July 2003, Mr. Meyer failed to file a report on Form 4 to report the grant of
options to purchase 92,316 shares of common stock for his service as a director.

         In June 2002, William F. Meyer, a director, failed to file a report on
Form 4 to report the exercise of options to purchase 292,334 shares of common
stock. In each of July 2002 and July 2003, Mr. Meyer failed to file a report on
Form 4 to report the grant of options to purchase 92,316 shares of common stock
for his service as a director.

                                       31
<PAGE>

         In June 2002, Michael Dumdie, a director, failed to file a report on
Form 4 to report the exercise of options to purchase 115,395 shares of common
stock. In each of July 2002 and July 2003, Mr. Dumdie failed to file a report on
Form 4 to report the grant of options to purchase 92316 shares of common stock
for his service as a director.

         In June 2002, Isaiah A. Yancy, an executive officer, failed to file a
report on Form 4 to report the exercise of options to purchase 200,000 shares of
common stock.

         In June 2002, Charles Tovey, then an executive officer, failed to file
a report on Form 4 to report receiving 32,000 shares of common stock for
consulting services. In June 2002, Mr. Tovey failed to file a report on Form 4
to report the exercise of options to purchase 500,000 shares of common stock.

         In June 2002, Brian Haas, then a director, failed to file a report on
Form 4 to report the exercise of options to purchase 261,512 shares of common
stock.

         In July 2002, J.P. Herrin, then an executive officer, failed to file a
report on Form 4 to report the exercise of options to purchase 225,000 shares of
common stock.


                         ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation

         The following table sets forth for each of the last three fiscal years
the annual and long-term compensation earned by, awarded to or paid to each
person who served as a chief executive officer of the Company during the fiscal
year ended July 31, 2002:
<TABLE>
<CAPTION>
                                                                               Long Term Compensation
                                                                          ----------------------------------
                                           Annual Compensation                    Awards           Payouts
                                   -------------------------------------  -----------------------  ---------
                                                               Other      Restricted  Securities              All Other
                          Year                                Annual        Stock     Underlying     LTIP      Compen-
       Name and          Ended                    Bonus       Compen-     Award(s)     Options/    Payouts     sation
  Principal Position    July 31    Salary ($)      ($)      sation ($)       ($)       SARs (#)      ($)         ($)
----------------------- ---------  -----------  ----------- ------------  ----------  ------------ ---------  ----------
<S>                       <C>        <C>          <C>        <C>           <C>           <C>         <C>        <C>
R. Frank Meyer......      2002       300,000                                             92,316                 19,639
  President (CEO)         2001       190,500(1)                                          92,316(2)              34,034
                          2000       197,000(1)                              --          92,316(2)              13,109
---------------------
</TABLE>
(1)  The amount reflected as salary is paid under a consulting agreement, as
     discussed below. Mr. Meyer has agreed to defer payment of consulting fees
     due him until we have received sufficient funds to pay current operating
     expenses due others. We issued a promissory note for the $508,908 due R.
     Frank Meyer under his consulting arrangement, payable at any time after May
     1, 2002, upon 30 days' demand. The principal and accrued interest on this
     note is convertible by Mr. Meyer to our common stock at $1.00 per share.
     Our obligations under this note were subsequently transferred to Windstar
     Research & Engineering, Ltd., an affiliated entity controlled by certain of
     our stockholders, officers and directors, as a portion of the transaction
     that resulted in the transfer of $1,155,000 in obligations for the issuance
     of 2,310,853 shares of common stock.
(2)  Mr. Meyer receives three-year options to purchase 92,316 shares at $0.25
     per share for fiscal year of service as a director, beginning with January
     1999.

No other executive officer earned more than $100,000 during the fiscal year
ended July 31, 2002.

                                       32
<PAGE>

Option/SAR Grants in Last Fiscal Year

         The following table sets forth information respecting all individual
grants of options and stock appreciation rights ("SARs") made during the fiscal
year ended July 31, 2002, to the executive officer named in the summary
compensation table above:
<TABLE>
<CAPTION>
                                                Individual Grants
---------------------------------------------------------------------------------------------------
       (a)                           (b)                 (c)              (d)           (e)
                                   Number of         % of Total
                                  Securities        Options/SARs
                                  Underlying         Granted to        Exercise or
                                 Options/SARs      Employees During    Base Price     Expiration
      Name                        Granted (#)        Fiscal Year        ($/share)        Date
------------------------------ ------------------ ------------------- -------------- --------------
<S>                                  <C>                 <C>              <C>          <C>
R. Frank Meyer (CEO)                 92,316              33%              $0.25        07/31/05
</TABLE>

Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Option/SAR Values

         The following table sets forth information respecting the exercise of
options and SARs during the fiscal year ended July 31, 2002, by the executive
officer named in the summary compensation table above and the fiscal year-end
values of unexercised options and SARs:
<TABLE>
<CAPTION>
              (a)                       (b)                 (c)                  (d)                   (e)
                                                                                Number
                                                                                  of
                                                                               Securities            Value of
                                                                               Underlying           Unexercised
                                                                               Unexercised         In-the-Money
                                                                           Options/SARs at FY   Options/SARs at FY
                                                                                 End (#)              End ($)
                                 Shares Acquired on                          Exercisable/         Exercisable/
             Name                   Exercise (#)      Value Realized ($)     Unexercisable        Unexercisable
-------------------------------- -------------------- -------------------- -------------------- --------------------
<S>                                   <C>               <C>                     <C>                    <C>
R. Frank Meyer (CEO)                  1,321,742                                 3,194,799              $-0-
</TABLE>

R. Frank Meyer Consulting Agreement

         We obtain the services of our President and Chief Executive Officer, R.
Frank Meyer, under a consulting agreement. This consulting agreement provides
for a minimum fee of $12,000 per month, with Mr. Meyer to be paid an additional
$200 per hour for each hour worked over 60 hours per month and for reimbursement
of medical expenses and business costs incurred by him on our behalf. This
consulting arrangement with Mr. Meyer remains in effect until December 31, 2007,
or until we hire Mr. Meyer as a full-time employee, whichever occurs first. If
Mr. Meyer's consulting agreement is terminated for reasons other than gross
negligence, willful misconduct or illegal acts, the consulting agreement
provides for Mr. Meyer to be paid at the rate of $150,000 per year for the full
term of the agreement.

Compensation to Directors

         We grant each director three-year options to purchase 92,316 shares of
common stock at $0.25 per share for each fiscal year of service.


          ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                   MANAGEMENT AND RELATED STOCKHOLDER MATTERS

         The following table sets forth, as of March 23, 2004, the name, address
and stockholdings of each person that owns of record, or was known by us to own
beneficially, 5% or more of the common stock currently issued and outstanding;

                                       33
<PAGE>

the name and stockholdings of each director; and the stockholdings of all
executive officers and directors as a group. Unless otherwise indicated, all
shares consist of common stock, and all such shares are owned beneficially and
of record by the named person or group:
<TABLE>
<CAPTION>
    Name of Person or Group                         Nature of Ownership(1)                Amount      Percent(2)
    -----------------------                         ----------------------                ------      ----------
<S>                                                       <C>                           <C>              <C>
Principal Stockholders:
-----------------------
  Tex-Oil Chemical Limited Partnership, L.P.(3).........  Common Stock                  23,068,298       48.9%
  4305 Derbyshire Trace, SE
  Conyers, GA  30094

  Christopher Bromley(4)................................  Common Stock                   3,900,000        8.3
  25876 The Old Road, Suite 240
  Valencia, CA  91381

Directors:
----------
  R. Frank Meyer(5).....................................  Common Stock                  27,891,540       59.2
                                                          Options                        3,403,115        6.7
                                                          Total                         31,294,655       61.9

  Michael Dumdie(6).....................................  Common Stock                     120,395        0.3
                                                          Options                          100,009        0.2
                                                          Total                            220,404        0.5

  William F. Meyer......................................  Common Stock                     343,734        0.7
                                                          Options                          192,325        0.4
                                                          Total                            536,059        1.1

  J.W. Feighner, Jr.(7) ................................  Common Stock                   7,309,540       15.5
                                                          Options                          207,711        0.4
                                                          Total                          7,517,251       15.9

  Isaiah A. Yancy..........................               Common Stock                     204,306        0.4

  All Executive Officers and
  Directors as a Group (5 persons):.....................  Common Stock                  35,869,515       76.1
                                                          Options                        3,903,160        7.6
                                                                                    ------------------
                                                          Total:                        39,772,675       77.9%
-------------------
</TABLE>
(1)  Includes shares held by entities in which the individual or entity shares
     voting, investment, and dispositive power. Except as otherwise noted,
     however, shares are owned beneficially and of record, and such record
     stockholder has sole voting, investment, and dispositive power.
(2)  Calculations of total percentages of share ownership for each individual
     assumes the exercise of all options held by that individual to which the
     percentage relates, including options subject to vesting provisions, if
     any. Percentages calculated for totals of all executive officers and
     directors as a group assume the exercise of all options held by the
     indicated group.
(3)  Consists of 19,510,758 shares owned of record by Tex-Oil Chemical Limited
     Partnership, L.P. and 3,557,540 shares owned of record by Windstar Research
     and Engineering, Ltd. Tex-Oil Chemical Limited Partnership, L.P., a Nevada
     limited partnership, is wholly owned by the immediate family members of R.
     Frank Meyer, including his wife, two adult daughters, and trusts in the
     name of his two minor sons, for which Mrs. Meyer serves as the trustee. R.
     Frank Meyer holds no direct ownership of Tex-Oil Chemical Limited
     Partnership, L.P. and disclaims beneficial ownership. Tex-Oil Chemical
     Limited Partnership, L.P. owns more than 10% of the issued and outstanding
     voting equity of Windstar Research and Engineering, Ltd.

                                       34
<PAGE>

(4)  Although his right to retain these shares is disputed by us and the shares
     are subject to a stop transfer order, we believe that Christopher Bromley
     remains the beneficial owner of the following shares:
         Kit Bromley & Company............................2,400,000 shares
         The Challenge, Ltd...............................1,500,000 shares
(5)  Under the rules of the SEC, R. Frank Meyer is deemed to be the beneficial
     owner of 23,068,298 shares held by Tex-Oil Chemical Partnership, L.P. and
     3,557,540 shares held by Windstar Research and Engineering, Ltd. Mr. Meyer
     disclaims ownership and asserts that he exercises no control over Tex-Oil
     Chemical Limited Partnership, L.P. or the shares it holds.
(6)  Michael Dumdie is a nephew of R. Frank Meyer and son-in-law of William F.
     Meyer.
(7)  Mr. Feighner holds 1,320,000 shares personally, 30,000 shares owned by his
     wife, and is the beneficial owner of 3,557,540 shares held by Windstar
     Research and Engineering, Ltd., and 1,402,000 shares held by Vistacraft,
     Inc. Under the rules of the SEC, Mr. Feighner is deemed to be the
     beneficial owner of shares owned of record by each of the aforementioned.


             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Unless otherwise indicated, the terms of the following transactions
between related parties were not determined as a result of arm's-length
negotiations.

Agreements with Tex-Oil

         We have entered into agreements and arrangements with Tex-Oil, our
largest single stockholder and an affiliate of R. Frank Meyer, President and
Chief Executive Officer. Tex-Oil Chemical Limited Partnership, L.P., a Nevada
limited partnership, is wholly owned by the immediate family members of R. Frank
Meyer, including his wife, two adult daughters, and trusts in the name of his
two minor sons, for which Mrs. Meyer serves as the trustee. R. Frank Meyer holds
no direct ownership of Tex-Oil Chemical Limited Partnership, L.P. and disclaims
beneficial ownership. See Part III. Item 11. Security Ownership of Certain
Beneficial Owners and Management. Because of these relationships, the
transactions between Tex-Oil and us were subject to significant conflicts of
interest and were not the result of arm's-length negotiations.

         Tex-Oil's Guarantee Related to Certain Consulting and Financing
         Arrangements

         During March and April 1999, we engaged three companies to provide
financial, strategic planning, investor relations and related services. Each of
these companies was either owned by Christopher (a/k/a Kit) Bromley or
introduced to us by him. Mr. Bromley may have controlled or had previous
business relationships with the companies that he introduced to us. Accordingly,
Mr. Bromley may be deemed to have had or shared voting investment or dispositive
control over the 4,800,000 shares, or about 15.9% of our shares then
outstanding, pledged to three entities by our affiliate Tex-Oil as an
accommodation to us. Under each of these consulting relationships, we were
obligated to pay a specified fee for defined services. As an accommodation to us
and at our request, Tex-Oil guaranteed the obligation to pay the fees to the
consultants under these agreements. Each of these guarantees was secured by a
block of our common stock owned by Tex-Oil. These shares pledged as collateral
were delivered to a custodian acting on behalf of the consultants, which had the
contractual right to sell the shares upon our failure to pay timely the
consulting fee. Although the agreements only require the delivery of a total of
4,800,000 shares as collateral, Tex-Oil actually delivered 5,000,000 shares. We
understood that we would be obligated to reimburse Tex-Oil for any stock or cash
loss that it suffered as a result of its guarantee of our obligation.

                                       35
<PAGE>

         The following table sets forth details respecting these consulting
arrangements:
<TABLE>
<CAPTION>
                                                                                                            Shares
                                                                         Agreement                        Pledged as
     Name of Consultant           Services to be Provided                  Date       Consulting Fee      Collateral
     ------------------           -----------------------                ---------    --------------      ----------
<S>                           <C>                                         <C>            <C>              <C>
Kit Bromley & Co., Inc.       Business development services and
                              activities, including creation of an
                              advanced business plan and necessary
                              studies
                                                                          04/03/99       $  600,000(1)    2,500,000
California Business           Corporate investigations, background
Intelligence                  checks, due diligence investigations and
                              security analysis                           04/17/99          200,000         800,000
                              Marketing, distribution, strategic
The Challenge, Ltd., Inc.     development, and agency and
                              representation services within Latin
                              America                                     03/09/99          350,000       1,500,000
                                                                                         ----------       ---------
Total                                                                                    $1,150,000       4,800,000(2)
                                                                                         ==========       =========
</TABLE>
--------------------
(1)  The promissory note evidencing our obligation for this consulting fee has
     an incorrect principal amount of $625,000.
(2)  Although the agreements provide for a total pledge of 4,800,000 shares,
     Tex-Oil actually delivered a total of 5,000,000 shares as collateral.

         We have concluded that the consulting services were not provided to our
satisfaction, but the consultants asserted that the services had been provided
and that the fee was due and payable. In any event, the custodian delivered to
the consultants all 5,000,000 shares that had been pledged as collateral by
Tex-Oil. Tex-Oil contested the validity of the delivery of the collateral shares
to the consultants. In June 2000, we reviewed the above agreements and
determined to terminate all of such relationships on the basis that each of the
consultants had materially breached its agreement. We advised each of the
consultants named above that (a) such consultant had not provided the services
as required under its consulting agreement; (b) we believed we owed no fees
whatsoever to the consultant; (c) the consultants were to return to Tex-Oil, the
pledgor, all of the shares of common stock pledged as collateral and retained by
the consultant's custodian; (d) stop-transfer instructions were being lodged
against the certificates representing all shares pledged as collateral; and (e)
if all pledged shares could not be returned, a full accounting of the shares
sold and the application of the proceeds must be provided, both to Tex-Oil and
to us. In addition, we joined with Tex-Oil in placing stop-transfer instructions
with our registrar and transfer agent against registration of transfer of
certificates representing the shares pledged as collateral.

         Each of the pledge agreements in the above relationships provided that
the consultant was required to pay to Tex-Oil, the guarantor, all proceeds from
the sale of the shares pledged as collateral in excess of the amount due and
owing under the related consultant agreement. Notwithstanding our requests, the
consultants have failed and refused to account for the proceeds from any of
their sales of securities pledged by Tex-Oil or to specify the number of shares
sold. Of the total 5,000,000 shares delivered as collateral, 4,400,000 shares
were tendered for registration of transfer. In the face of the stop-transfer
instructions that had been placed against such stock, in January 2001, our stock
transfer agent, Atlas Stock Transfer Company, deposited 1,500,000 of such shares
with the Third Judicial District Court, Salt Lake County, Utah, in an
interpleader action naming us, the Challenge, Ltd., and John Does 1 through 20,
as defendants, for determination of rights to the stock by the respective
parties. The case was subsequently dismissed without a determination of the

                                       36
<PAGE>

rights of the parties. Of the remaining shares, 600,000 shares were transferred
to third parties prior to the stop transfer notice and apparently sold. A
portion of such proceeds may have been used to pay third-party costs on our
behalf. On April 12, 2001, Tex-Oil was able to obtain the return of the 500,000
shares of common stock held by one of the consultants, California Business
Intelligence, Inc. The certificate representing those 500,000 shares was
canceled and the shares were transferred to Tex-Oil.

         We believe we suffered substantial but unliquidated damages as a result
of the consultants' breach of their consulting arrangements. Under our
obligation to reimburse Tex-Oil for any stock or cash loss that it suffered as a
result of its guarantee of our obligation, we believe that we may have been
obligated to replace the 600,000 shares that the consultants have not accounted
for, and to reimburse the value of any consulting services actually provided and
reasonable, authorized costs actually paid to third parties on our behalf,
although we dispute that any such services were provided or costs paid. In an
effort to concentrate our limited resources on our core business, we have
reached an agreement with Tex-Oil under which we assigned to Tex-Oil all of our
rights to any and all damages for the consultants' breach of our consulting
arrangements in consideration of our agreement to reimburse Tex-Oil for actual
losses, net of any recoveries of damages from the consultants, not to exceed
$300,000, payable at our election in either cash or 600,000 shares of our common
stock valued at the greater of $0.50 per share or the market price of our stock
at the time of payment. In turn, Tex-Oil has released us from any further
liability under our obligation to reimburse Tex-Oil for any stock or cash loss
that it suffered as a result of its guarantee of our obligation. Accordingly, we
have recorded a note payable to Tex-Oil in the amount of $300,000.

Loans

         From time to time since our inception, we have received loans or
advances from affiliates and others to fund our ongoing activities, and have
converted past due consulting fees into long-term debt. The following table sets
forth the balance of principal and accrued interest due to each such affiliated
person or group as of the dates indicated for such open account advances:
<TABLE>
<CAPTION>
                                                                                                      J.W.
                                      R. Frank Meyer(1)  Century Caribbean   Tex-Oil Chemical    Feighner, Jr.(2)
                                      -----------------  -----------------   ----------------    ----------------
<S>                                         <C>                 <C>         <C>                       <C>
Balance at July 31, 2001...........         $--                 $--            $      --              $10,000
Advances(repayments), net                    --                  --               16,475                   --
Balance at July 31, 2002...........         $--                 $--            $  16,475              $10,000
</TABLE>
-------------------
(1) R. Frank Meyer owns and controls Century Caribbean.
(2) J.W. Feighner, Jr. became an affiliate when elected as a director in May
    2001.

Windstar License of Windstar Process

         On November 30, 1998, we entered into an agreement with Cyntech
Research & Engineering, Inc. to obtain an exclusive license to use the Cyntech
process, including all modifications and improvements, which had been invented
and/or acquired by Cyntech. Cyntech Research & Engineering was owned and
controlled by R. Frank Meyer and Charles Tovey. In June 2000, we were advised
that Cyntech Research & Engineering had transferred, in consideration of
$300,000 and the assumption of its obligations under its agreement with us, all
of its rights under its agreement with us and its rights in the Cyntech process
to Windstar Research and Engineering, Ltd. Windstar may be deemed an affiliate
of our Company because Windstar is owned by Tex-Oil, 20%, J.W. Feighner, Jr.,
57.5%, and two other Cyntech stockholders 22.5%. In connection with that
transfer and the preparation of this filing, we entered into new agreements with
Windstar that replaced our previous agreement with Cyntech Research &
Engineering.

                                       37
<PAGE>

         Our agreement with Windstar grants us the right for a period of 10
years, renewable at Windstar's option for two successive 10-year periods, to
enter into licenses to use the Windstar ThermReTec(tm) technology in recycling
plants developed by us. The Exclusive Option Agreement provides that each new
plant using the Windstar ThermReTec(tm) process will require a separate license
agreement to be entered into with the separate entity owning and operating the
individual project. When a new license for a new plant is granted, we are
required to pay an initial fee of $1.0 million for each plant processing either
rubber or plastic feedstock as compensation for Windstar's assistance in site
selection, permitting and engineering. We are also obligated to pay Windstar an
ongoing license fee of 7% of the gross income from each plant during the life of
the plant. We would owe an additional $500,000 license fee if a plant processing
either rubber or plastic feedstock were expanded to process both. Under our
agreement with Windstar, we were required to commence the construction of our
first plant during 2001, and to commence construction of two plants in 2002,
three plants in 2003, four plants in 2004, five plants in 2005, and six plants
per year thereafter.

         Because we have failed to meet several of the requirements imposed on
us by the Exclusive Option Agreement, Windstar has the right to deliver to us a
notice of default that provides at least 180 days' notice of termination and
allows us 90 days to cure the default and thereby prevent termination of the
agreement. If Windstar delivers to us a notice of default and we are unable to
cure that default, Windstar may terminate the agreement with 180 days' notice
and we would thereafter lose access to the Windstar ThermReTec(tm) process. If
Windstar were to deliver us a notice of default, we would currently be unlikely
to be able to cure our default.

         Windstar is required to provide engineering, technical and related
support for plant planning, construction and operation. We are required to
protect the confidentiality of technical data on behalf of Windstar. Windstar is
required to assist us in identifying site locations where Cyntech recovery
plants can be located, based on economic criteria established from time to time
by Windstar and us, subject to the right of Windstar to disapprove any plant
location.


                    ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits. The following exhibits are included as part of this
report at the location indicated:
<TABLE>
<CAPTION>
   Exhibit
   Number*                        Title of Document                                       Location
------------- ----------------------------------------------------------- ------------------------------------------
<S>           <C>                                                          <C>
              Plan of Acquisition, Reorganization, Arrangement,
  Item 2.     Liquidation or Succession
------------- ----------------------------------------------------------- ------------------------------------------
    2.01      Exchange Agreement between Carbon Fiber Products, Inc.,     Incorporated by reference from the
              Cyntech Technologies, Inc., and the Shareholders of         registration statement on Form 10-SB
              Cyntech Technologies, Inc. dated effective November 30,     filed on March 16, 2001.
              1998

  Item 3.     Articles of Incorporation and Bylaws
------------- ----------------------------------------------------------- ------------------------------------------
    3.01      Articles of Incorporation, as amended to date               Incorporated by reference from the
                                                                          registration statement on Form 10-SB
                                                                          filed on March 16, 2001.

    3.02      Bylaws                                                      Incorporated by reference from the
                                                                          registration statement on Form 10-SB
                                                                          filed on March 16, 2001.

                                       38
<PAGE>
<CAPTION>
   Exhibit
   Number*                        Title of Document                                       Location
------------- ----------------------------------------------------------- ------------------------------------------
<S>           <C>                                                          <C>
  Item 4.     Instruments Defining the Rights of Security Holders
------------- ----------------------------------------------------------- ------------------------------------------
    4.01      Specimen stock certificate                                  Incorporated by reference from Amendment
                                                                          No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.
  Item 10.    Material Contracts
------------- ----------------------------------------------------------- ------------------------------------------
   10.01      Settlement Agreement and Release between Cyntech            Incorporated by reference from the
              Technologies, Inc. and Optima Investments, Inc. dated       registration statement on Form 10-SB
              effective May 1, 1999                                       filed on March 16, 2001.

   10.02      Consulting Agreement dated January 5, 1998, by and          Incorporated by reference from the
              between Cyntech Technologies, Inc. and R. Frank Meyer       registration statement on Form 10-SB
                                                                          filed on March 16, 2001.

   10.03      Consulting Agreement dated January 5, 1998, by and          Incorporated by reference from the
              between Cyntech Technologies, Inc. and Charles Tovey        registration statement on Form 10-SB
                                                                          filed on March 16, 2001.

   10.04      Consulting Agreement dated October 1, 2000, by and          Incorporated by reference from the
              between Cyntech Technologies, Inc. and Laska &              registration statement on Form 10-SB
              Associates, Inc.                                            filed on March 16, 2001.

   10.05      Exclusive Option Agreement and Form of License Agreement    Incorporated by reference from the
              dated February 1, 2001, by and between Cyntech              registration statement on Form 10-SB
              Technologies, Inc. and Windstar Research and Engineering,   filed on March 16, 2001.
              Ltd.

   10.06      Nonbinding Engagement Letter for Financing from             Incorporated by reference from the
              Corpfinance International, Limited to Cyntech               registration statement on Form 10-SB
              Technologies, Inc. dated June 11, 1999                      filed on March 16, 2001.

   10.07      Convertible Promissory Note Due After May 1, 2002, to       Incorporated by reference from Amendment
              Laska & Associates                                          No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

   10.08      Convertible Promissory Note Due After May 1, 2002, to       Incorporated by reference from Amendment
              R.F. Meyer                                                  No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

   10.09      Convertible Promissory Note Due After May 1, 2002, to       Incorporated by reference from Amendment
              Century Caribbean, Ltd.                                     No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

                                       39
<PAGE>
<CAPTION>
   Exhibit
   Number*                        Title of Document                                       Location
------------- ----------------------------------------------------------- ------------------------------------------
<S>           <C>                                                          <C>
   10.10      Convertible Promissory Note Due After May 1, 2002, to       Incorporated by reference from Amendment
              Tex-Oil Chemical Limited Partnership, L.P.                  No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

   10.11      Form of Option Agreement with Related Schedule              Incorporated by reference from Amendment
                                                                          No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

   10.12      Assignment Agreement and Covenant Not to Sue dated March    Incorporated by reference from Amendment
              16, 2001                                                    No. 2 to the registration statement on
                                                                          Form 10-SB filed June 5, 2001.

   10.13      Forebearance Agreement and Covenant Not To Sue dated        Incorporated by reference from the
              March 16, 2001                                              annual report on Form 10-KSB filed on
                                                                          November 29, 2001.

   10.14      Assumption Agreement                                        Incorporated by reference from the
                                                                          annual report on Form 10-KSB filed on
                                                                          November 29, 2001.

   10.15      Promissory Note to Windstar Research and Engineering, Ltd.  Incorporated by reference from the
                                                                          annual report on Form 10-KSB filed on
                                                                          November 29, 2001.

   10.16      Promissory Note for $1,500,000 from R. Frank Meyer dated    Attached
              June 27, 2002

   10.17      Promissory Note for $500,000 from J. W. Feighner, Jr.       Attached
              dated June 27, 2002

   10.18      Promissory Note for $364,648 from R. Frank Meyer dated      Attached
              June 27, 2002

   10.19      Promissory Note for $200,000 from John Laska dated June     Attached
              27, 2002

   10.20      Promissory Note for $150,000 from Charles Tovey dated       Attached
              June 27, 2002

   10.21      Promissory Note for $100,000 from Isaiah Yancy dated June   Attached
              27, 2002

   10.22      Promissory Note for $73,084 from William F. Meyer dated     Attached
              June 27, 2002

   10.23      Promissory Note for $50,000 from Allen Esthay dated June    Attached
              27, 2002

   10.24      Promissory Note for $28,849 from Michael Dumdie dated       Attached
              June 27, 2002

                                       40
<PAGE>
<CAPTION>
   Exhibit
   Number*                        Title of Document                                       Location
------------- ----------------------------------------------------------- ------------------------------------------
<S>           <C>                                                          <C>
  Item 21.    Subsidiaries of the Registrant
------------- ----------------------------------------------------------- ------------------------------------------
   21.01      Schedule of Subsidiaries                                    Incorporated by reference from the
                                                                          annual report on Form 10-KSB filed on
                                                                          November 29, 2001.
  Item 31.    Rule 13a-14(a)/15d-14(a) Certifications
------------- ----------------------------------------------------------- ------------------------------------------
   31.01      Certification of Principal Executive Officer and            Attached
              Principal Financial Officer Pursuant to Rule 13a-14

  Item 32.    Section 1350 Certifications
------------- ----------------------------------------------------------- ------------------------------------------
   32.01      Certification of Chief Executive Officer and Chief          Attached
              Financial Officer Pursuant to 18 U.S.C. Section 1350, as
              Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
              of 2002
</TABLE>
--------------------
*    All exhibits are numbered with the number preceding the decimal indicating
     the applicable SEC reference number in Item 601 and the number following
     the decimal indicating the sequence of the particular document. Omitted
     numbers in the sequence refer to documents previously filed as an exhibit,
     but no longer required.

         (b) Reports on Form 8-K. During the quarter ended July 31, 2002, we
filed the following report on Form 8-K:

               Date of Event Reported            Item(s) Reported
         --------------------------------  -------------------------------------

                   June 28, 2002             Item 7.  Exhibits
                                             Item 9.  Regulation FD Disclosure


                 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

         The aggregate fees billed by Tanner + Co. for professional services
rendered for the audit of the our annual financial statements for the fiscal
year ended July 31, 2002, and for the reviews of the financial statements
included in the our quarterly reports on Form 10-QSB for that fiscal year were
approximately $19,000. The aggregate fees billed by Tanner + Co. for
professional services rendered for the audit of the our annual financial
statements for the fiscal year ended July 31, 2001, and for the reviews of the
financial statements included in the Company's quarterly reports on Form 10-QSB
for that fiscal year were approximately $15,000.

Audit Related Fees

         Tanner + Co. did not bill us for any professional services that were
reasonably related to the performance of the audit or review of financial
statements for either the fiscal year ended July 31, 2002, or the fiscal year
ended July 31, 2001, that are not included under Audit Fees above.

Tax Fees

         Tanner + Co. did not bill us for any professional services for tax
compliance, tax advice, or tax planning for either the fiscal year ended July
31, 2002, or the fiscal year ended July 31, 2001.

                                       41
<PAGE>

All Other Fees

         Tanner + Co. did not perform any services for us or charge any fees
other than the services described above under "Audit Fees" for either the fiscal
year ended July 31, 2002, or the fiscal year ended July 31, 2001.

                                       42
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                                   CYNTECH TECHNOLOGIES, INC.


Date: March 30, 2004               By /s/ R. Frank Meyer
                                     -------------------------------------------
                                     R. Frank Meyer
                                     Its President and Chief Executive Officer



         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the date indicated.

Dated: March 30, 2004


                                      /s/ R. Frank Meyer
                                      ------------------------------------------
                                      R. Frank Meyer, Director and President
                                      (Chief Executive Officer and Chief
                                      Financial Officer)


                                      /s/ Michael Dumdie
                                      ------------------------------------------
                                      Michael Dumdie, Director



                                      /s/ J.W. Feighner, Jr.
                                      ------------------------------------------
                                      J.W. Feighner, Jr., Director


                                      /s/ William F. Meyer
                                      ------------------------------------------
                                      William F. Meyer, Director and Treasurer

                                       43
<PAGE>

CYNTECH TECHNOLOGIES, INC.
Financial Statements
July 31, 2002 and 2001


                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Index to Consolidated Financial Statements
--------------------------------------------------------------------------------


                                                                         Page

Independent Auditors' Report                                              F-2

Consolidated balance sheet                                                F-4

Consolidated statement of operations                                      F-5

Consolidated statement of stockholders' deficit                           F-6

Consolidated statement of cash flows                                      F-9

Notes to consolidated financial statements                               F-10


--------------------------------------------------------------------------------
                                                                             F-1
<PAGE>

                                                    INDEPENDENT AUDITORS' REPORT




To the Board of Directors and Stockholders
of Cyntech Technologies, Inc.



We have audited the accompanying consolidated balance sheet of Cyntech
Technologies, Inc. and subsidiaries, (a developmental stage company), as of July
31, 2002 and 2001 and the related consolidated statements of operations,
stockholders' deficit and cash flows for the years then ended and cumulative
amounts from December 31, 1997 (date of inception) through July 31, 2002. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cyntech
Technologies, Inc. and subsidiaries, as of July 31, 2002 and 2001 and the
results of their operations and their cash flows for the years then ended and
cumulative amounts from December 31, 1997 (date of inception) through July 31,
2002, in conformity with accounting principles generally accepted in the United
States of America.


--------------------------------------------------------------------------------
                                                                             F-2
<PAGE>

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has a deficit in working capital,
a stockholders' deficit, and has incurred significant losses since inception. In
addition, the Company is in default with its licensing agreement. These
conditions raise substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters also are described in Note
3. The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.


TANNER + CO.

/s/ TANNER + CO.

Salt Lake City, Utah
October 12, 2003

--------------------------------------------------------------------------------
                                                                             F-3
<PAGE>
<TABLE>
<CAPTION>
                                                                                  CYNTECH TECHNOLOGIES, INC.
                                                                             (A Developmental Stage Company)
                                                                                  Consolidated Balance Sheet

                                                                                                    July 31,
------------------------------------------------------------------------------------------------------------

                                                                                2002            2001
                                                                           --------------------------------
<S>                                                                        <C>             <C>
         Assets

Current assets:
     Cash                                                                  $        25,000 $        26,000
                                                                           --------------------------------

                  Total current assets                                              25,000          26,000

Property and equipment, net                                                         11,000          21,000
                                                                           --------------------------------

                  Total assets                                             $        36,000 $        47,000
                                                                           ================================

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

         Liabilities and Stockholders' Deficit

Current liabilities
     Accounts payables                                                     $       468,000 $       360,000
     Accrued liabilities                                                           189,000         102,000
     Related party consulting fees payable                                         333,000               -
     Consulting fees payable                                                       209,000           8,000
     Notes payable                                                                  72,000          72,000
     Current portion of related party notes payable                              1,026,000         110,000
                                                                           --------------------------------

                  Total current liabilities                                      2,297,000         652,000

Related party notes payable                                                        180,000         180,000
                                                                           --------------------------------

                  Total liabilities                                              2,477,000         832,000
                                                                           --------------------------------

Commitments and contingencies                                                            -               -

Stockholders' deficit:
     Preferred stock, $.001 par value, 5,000,000 shares authorized,
        no shares issued and outstanding                                                 -               -
     Common stock, $.001 par value 100,000,000 shares authorized,
        46,236,263 shares and 36,606,780 shares issued and outstanding
        at July 31, 2002 and 2001, respectively                                     46,000          37,000
     Additional paid-in capital                                                  8,744,000       5,373,000
     Subscription notes receivable                                              (3,032,000)              -
     Deficit accumulated during the development stage                           (8,199,000)     (6,195,000)
                                                                           --------------------------------

                  Total stockholders' deficit                                   (2,441,000)       (785,000)
                                                                           --------------------------------

                  Total liabilities and stockholders' deficit              $        36,000 $        47,000
                                                                           ================================

--------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                               F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                         CYNTECH TECHNOLOGIES, INC.
                                                                                    (A Developmental Stage Company)
                                                                               Consolidated Statement of Operations
-------------------------------------------------------------------------------------------------------------------

                                                                                              Cumulative
                                                                                             Amounts from
                                                                                              December 31,
                                                            Years Ended July 31,             1997 (Date of
                                                      ----------------------------------     Inception) to
                                                            2002             2001            July 31, 2002
                                                      -----------------------------------------------------
<S>                                                   <C>                <C>             <C>
Sales                                                 $               -  $            -  $               -
                                                      -----------------------------------------------------

Consulting expense                                              242,000         122,000          1,296,000

Related party consulting expense                                406,000         322,000          1,457,000

License fee - related party                                     900,000         100,000          1,000,000

General and administrative expenses                             293,000         476,000          3,799,000

Impairment of deposit for potential acquisition                       -               -             76,000
                                                      -----------------------------------------------------

                  Loss from operations                       (1,841,000)     (1,020,000)        (7,628,000)

Other income                                                          -               -             30,000
Interest expense                                               (163,000)       (219,000)          (601,000)
                                                      -----------------------------------------------------

                  Loss before income taxes                   (2,004,000)     (1,239,000)        (8,199,000)

Income tax benefit                                                    -               -                  -
                                                      -----------------------------------------------------

                  Net loss                            $      (2,004,000) $   (1,239,000) $      (8,199,000)
                                                      =====================================================

Loss per share - basic and diluted                    $            (.05) $         (.04)
                                                      ==================================

Weighted average shares - basic and diluted                  37,769,000      30,844,000
                                                      ==================================

----------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                 F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                                         CYNTECH TECHNOLOGIES, INC.
                                                                                                    (A Developmental Stage Company)
                                                                                    Consolidated Statement of Stockholders' Deficit

                                                                                              December 31, 1997 (Date of Inception)
                                                                                                    to January 31, 2002 (unaudited)
------------------------------------------------------------------------------------------------------------------------------------

                                                                                         Deficit
                                                                                       Accumulated
                                Preferred Stock      Common Stock        Additional     During the
                                ------------------------------------      Paid-In      Development    Subscription
                                Shares  Amount     Shares     Amount      Capital         Stage         Receivable       Total
                                ---------------------------------------------------------------------------------------------------
<S>                              <C>   <C>       <C>         <C>      <C>             <C>            <C>             <C>
Balance at December 31, 1997
 (date of inception)                 - $      -           - $      -  $            - $            - $             -  $           -

Issuance of common stock for:
 Cash ($.005 per share)              -        -  25,204,575   25,000          92,000              -               -        117,000
 Services ($2.38 per share)          -        -     692,830    1,000       1,649,000              -               -      1,650,000

Net loss                             -        -           -        -               -     (1,982,000)              -     (1,982,000)

Balance at July 31, 1998             -        -  25,897,405   26,000       1,741,000     (1,982,000)              -       (215,000)

Issuance of common stock for:
 Cash ($.97 per share)               -        -      66,224        -          64,000              -               -         64,000
 Services ($.71 per share)           -        -     864,188    1,000         611,000              -               -        612,000
 Deposit ($1.17 per share)           -        -     300,000        -         350,000              -               -        350,000

Acquisition of Carbon Fiber
 Products, Inc. (see note 1)         -        -   3,100,000    3,000       (247,000)              -               -       (244,000)

Issuance of common stock
 options                             -        -           -        -          27,000              -               -         27,000

Net loss                             -        -           -        -               -     (1,671,000)              -     (1,671,000)

Balance at July 31, 1999             -        -  30,227,817   30,000       2,546,000     (3,653,000)              -     (1,077,000)

Issuance of common stock for:
 Services ($.34 per share)           -        -      26,666        -           9,000              -               -          9,000
 Exercise of stock options
  (.10 per share)                    -        -     100,000        -          10,000              -               -         10,000

Net loss                             -        -           -        -               -     (1,303,000)              -     (1,303,000)
                                ---------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                                     F-6
<PAGE>
<CAPTION>
                                                                                                          CYNTECH TECHNOLOGIES, INC.
                                                                                                     (A Developmental Stage Company)
                                                                                     Consolidated Statement of Stockholders' Deficit
                                                                                                                           Continued

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

                                                                                         Deficit
                                                                                       Accumulated
                                Preferred Stock      Common Stock        Additional     During the
                                ------------------------------------      Paid-In      Development    Subscription
                                Shares  Amount     Shares     Amount      Capital         Stage         Receivable       Total
                                ---------------------------------------------------------------------------------------------------
<S>                              <C>   <C>       <C>         <C>      <C>             <C>            <C>             <C>
Balance at July 31, 2000             -        -  30,354,483   30,000       2,565,000     (4,956,000)              -     (2,361,000)

Issuance of common stock for:
 Cash ($.25 per share)               -        -     200,000        -          50,000              -               -         50,000
 Cash ($.35 per share)               -        -     300,000    1,000         104,000              -               -        105,000

Exercise of stock options:
 ($.20 per share)                    -        -     637,500    1,000         137,000              -               -        138,000
 ($.25 per share)                    -        -      61,543        -          15,000              -               -         15,000

Services ($.50 per share)            -        -      10,000        -           5,000              -               -          5,000

Payment of related party notes
 payable:
  ($.50 per share)                   -        -     774,477    1,000         387,000              -               -        388,000
  ($.30 per share)                   -        -     100,000        -          30,000              -               -         30,000

Payment of related party
 consulting fees payable
 ($.50 per share)                    -        -      50,000        -          25,000              -               -         25,000

Payment of related party
 convertible debt
 ($.50 per share)                    -        -     561,239    1,000         280,000              -               -        281,000

Transfer of related party
 convertible debt
 ($.50 per share)                    -        -   1,197,982    1,000         598,000              -               -        599,000

Transfer of convertible debt
 ($.50 per share)                    -        -   1,112,871    1,000         555,000              -               -        556,000

Transfer of related party
 consulting fees payable
 ($.50 per share)                    -        -     853,939    1,000         426,000              -               -        427,000

Transfer of consulting fees
 payable ($.50 per share)            -        -     392,746        -         196,000              -               -        196,000



------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                                     F-7
<PAGE>
<CAPTION>
                                                                                                          CYNTECH TECHNOLOGIES, INC.
                                                                                                     (A Developmental Stage Company)
                                                                                     Consolidated Statement of Stockholders' Deficit
                                                                                                                           Continued

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

                                                                                         Deficit
                                                                                       Accumulated
                                Preferred Stock      Common Stock        Additional     During the
                                ------------------------------------      Paid-In      Development    Subscription
                                Shares  Amount     Shares     Amount      Capital         Stage         Receivable       Total
                                ---------------------------------------------------------------------------------------------------
<S>                              <C>   <C>       <C>         <C>      <C>             <C>            <C>             <C>
Net loss                             -        -           -        -               -     (1,239,000)              -     (1,239,000)
                                ---------------------------------------------------------------------------------------------------

Balance at July 31, 2001             -        -  36,606,780   37,000       5,373,000     (6,195,000)              -       (785,000)

Issuance of common stock for:
 Cash ($.35 per share)               -        -     100,000        -          35,000              -               -         35,000
 Cash ($.20 per share)               -        -      25,000        -           5,000              -               -          5,000
 Cash ($.25 per share)               -        -     961,000    1,000         233,000              -               -        234,000
 Cash ($.001 per share)              -              225,000        -               -              -               -              -

Issuance of common stock for
 Notes receivable ($.20 per
  share)                             -        -   2,823,242    3,000         562,000              -        (565,000)             -
 Notes receivable ($.50 per
  share)                             -        -   4,300,000    4,000       2,146,000              -      (2,150,000)             -
 Notes receivable ($.25 per
  share)                             -        -     919,241    1,000         229,000              -        (230,000)             -
 Notes receivable ($.35 per
  share)                             -        -     250,000        -          87,000              -         (87,000)             -

Issuance of stock for
 Services ($.25 per share)           -        -      36,000        -           9,000              -               -          9,000
 Services ($.50 per share)           -        -      40,000        -          20,000              -               -         20,000

Extension of stock options           -        -           -        -          31,000              -               -         31,000

Cancellation of stock issued
 in prior year                       -        -    (50,000)        -               -              -               -              -

Adjustment to payables assumed
 in reverse merger                   -        -           -        -          14,000              -               -         14,000

Net loss                             -        -           -        -               -     (2,004,000)              -     (2,004,000)
                                ---------------------------------------------------------------------------------------------------

Balance at July 31, 2002             - $      -  46,236,263  $46,000  $    8,744,000  $  (8,199,000) $   (3,032,000) $  (2,441,000)
                                ===================================================================================================

------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                                     F-8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                    CYNTECH TECHNOLOGIES, INC.
                                                                               (A Developmental Stage Company)
                                                                          Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------------------------------------


                                                                     Year Ended             Cumulative
                                                                      July 31,                Amounts
                                                             --------------------------- Through July 31,
                                                                 2002          2001            2002
                                                             ----------------------------------------------
<S>                                                           <C>           <C>               <C>
Cash flows from operating activities:
     Net loss                                                 $ (2,004,000) $ (1,239,000)     $ (8,199,000)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation                                               10,000         8,000            36,000
         Bad debt expense                                                -             -             9,000
         Write-off of deposits                                           -             -            76,000
         Stock issued for services                                  29,000         5,000         2,578,000
         Related party note payable issued for services                  -       180,000           180,000
         Related party note payable issued for license
           fee expense                                             900,000       100,000         1,000,000
         Stock option expense                                       31,000             -            58,000
         (Increase) decrease in receivables                              -             -            (2,000)
         Increase (decrease) in:
              Accounts payable                                     122,000        59,000           300,000
              Consulting fees payable                              534,000       218,000         1,010,000
              Accrued liabilities                                   87,000       364,000         1,833,000
                                                             ----------------------------------------------

                  Net cash used in
                  operating activities                            (291,000)     (305,000)       (1,121,000)
                                                             ----------------------------------------------

Cash flows from investing activities-
     purchase of property and equipment                                  -        (4,000)          (47,000)
                                                             ----------------------------------------------

Cash flows from financing activities:
     Increase in related party note payable                         24,000        42,000           412,000
     Payment on related party note payable                          (8,000)      (16,000)          (24,000)
     Increase in notes payable                                           -             -            47,000
     Payment on notes payable                                            -       (15,000)          (15,000)
     Issuance of common stock                                      274,000       308,000           773,000
                                                             ----------------------------------------------

                  Net cash provided by
                  financing activities                             290,000       319,000         1,193,000
                                                             ----------------------------------------------

Net increase (decrease) in cash                                     (1,000)       10,000            25,000

Cash, beginning of period                                           26,000        16,000                 -
                                                             ----------------------------------------------

Cash, end of period                                           $     25,000  $     26,000      $     25,000
                                                             ----------------------------------------------

------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                            F-9
</TABLE>
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements

                                                          July 31, 2002 and 2001
--------------------------------------------------------------------------------

1.  Organization  On December 22, 1998, Cyntech Technologies, Inc. (formerly
    and           Carbon Fiber Products, Inc.) (CTI) purchased Cyntech
    Presentation  Technologies - Nevada (CTI-Nev) and Cyntech of Chambers County
                  (the Acquirees) (collectively the Company). The terms of the
                  agreement provide that the Acquirees will be wholly-owned
                  subsidiaries of CTI, and the stockholders of the Acquirees
                  received 25,900,000 shares of CTI common stock.

                  The consolidated financial statements at July 31, 2002 and
                  2001 assumes the acquisition of CTI by the Acquirees occurred
                  December 31, 1997 (date of inception). Because the shares
                  issued in the acquisition of the Acquirees represent control
                  of the total shares of CTI's common stock issued and
                  outstanding immediately following the acquisition, the
                  Acquirees are deemed for financial reporting purposes to have
                  acquired CTI in a reverse acquisition. The business
                  combination has been accounted for as a recapitalization of
                  CTI giving effect to the acquisition of 100% of the
                  outstanding common shares of the Acquirees. The surviving
                  entity reflects the assets and liabilities of CTI and the
                  Acquirees at their historical book value. The issued common
                  stock is that of CTI and the historical results of operations
                  are those of the Acquirees from December 31, 1997 (date of
                  inception) through December 22, 1998 (date of acquisition) and
                  those of the combined entities subsequent to December 22,
                  1998.

                  The Company has acquired the rights to certain technology (see
                  "Licensing Agreement" in Note 14) that it intends to use to
                  develop and operate plants to produce marketable petrochemical
                  fuel products and scrap steel through recycling
                  hydrocarbon-based products such as tires or plastics.

2.  Summary of    Principles of Consolidation
    Significant   ---------------------------
    Accounting    The consolidated financial statements include the accounts of
    Policies      the Company, and its consolidated subsidiaries. All
                  significant intercompany balances and transactions have been
                  eliminated.

--------------------------------------------------------------------------------
                                                                            F-10
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

2.  Summary of    Development Stage Company
    Significant   -------------------------
    Accounting    The Company is considered a development stage Company as
    Policies      defined in SFAS No. 7. The Company has, at the present time,
    Continued     not paid any dividends and any dividends that may be paid in
                  the future will depend upon the financial requirements of the
                  Company and other relevant factors.

                  Concentration of Credit Risk
                  ----------------------------
                  The Company maintains its cash in bank deposit accounts which,
                  at times, may exceed federally insured limits. The Company has
                  not experienced any losses in such accounts and believes it is
                  not exposed to any significant credit risk on cash and cash
                  equivalents.

                  Cash and Cash Equivalents
                  -------------------------
                  For purposes of the statement of cash flows, cash includes all
                  cash and investments with original maturities to the Company
                  of three months or less.

                  Property and Equipment
                  ----------------------
                  Property and equipment are recorded at cost less accumulated
                  depreciation. Depreciation on property and equipment are
                  determined using the straight-line method over the estimated
                  useful lives of the assets. Expenditures for maintenance and
                  repairs are expensed when incurred and betterments are
                  capitalized. Gains and losses on sale of property and
                  equipment are reflected in operations.

                  Revenue Recognition
                  -------------------
                  Since the Company has not reported any revenues, the revenue
                  recognition policy is prospective in nature. The Company
                  intends to recognize revenue through the sale of recycled
                  petrochemical fuel products and disposal fees for such
                  materials such as tires or plastics.

                  Revenue will be recognized upon shipment of product or
                  performance of services.

                  Income Taxes
                  ------------
                  Deferred income taxes are provided in amounts sufficient to
                  give effect to temporary differences between financial and tax
                  reporting.

--------------------------------------------------------------------------------
                                                                            F-11
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

2.  Summary of    Loss Per Share
    Significant   --------------
    Accounting    The computation of basic loss per common share is based on the
    Policies      weighted average number of shares outstanding during the
    Continued     period.

                  The computation of diluted loss per common share is based on
                  the weighted average number of shares outstanding during the
                  period plus the common stock equivalents which would arise
                  from the exercise of stock options and warrants outstanding
                  using the treasury stock method and the average market price
                  per share during the period. Options to purchase 595,440
                  shares and 3,510,838 shares of common stock at prices ranging
                  from $.001 to $.50 per share and options to purchase 3,000,000
                  shares and 3,000,000 shares of convertible preferred stock at
                  $.50 per share were outstanding at July 31, 2002 and 2001,
                  respectively, but were not included in the diluted loss per
                  share calculation because the effect would have been
                  antidilutive.

                  Use of Estimates in Financial Statements
                  ----------------------------------------
                  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. Actual results could differ from those estimates.


3.  Going         As of July 31, 2002, the Company's revenue generating
    Concern       activities were not in place, and the Company has incurred
                  significant losses in all periods since inception and current
                  liabilities exceed current assets. In addition, the Company is
                  in default on its licensing agreement (see Note 14). These
                  factors raise substantial doubt about the Company's ability to
                  continue as a going concern.

                  Management intends to convert certain current obligations into
                  equity or long-term notes, however no formal agreements have
                  been reached and there is no assurance that the Company will
                  be successful in such efforts. In addition, management is
                  seeking additional equity and debt financing, however there
                  can be no assurance that the Company will be successful in
                  obtaining such financing.

--------------------------------------------------------------------------------
                                                                            F-12
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

3.  Going         The Company's continuation as a going concern is dependent
    Concern       upon its ability to satisfactorily meet its debt obligations,
    Continued     secure adequate new financing and generate sufficient cash
                  flows from operations to meet its obligations. If the Company
                  is unable to secure additional equity or debt financing, it
                  will not be able to continue development of its technology or
                  begin operations. The financial statements do not include any
                  adjustments that might result from the outcome of these
                  uncertainties.

4.  Subscription  During the year ended July 31, 2002, the Company recorded
    Notes         notes receivable as follows:
    Receivable
                      o    $1,865,000 from the President and Chief Executive
                           Officer as consideration for stock issued upon the
                           exercise of stock options (1,185,742 shares at an
                           exercise price of $.20) and the purchase of common
                           stock (3,000,000 shares at $.50 per share and 637,500
                           at $.20 per share).

                      o    $852,000 from members of the board of directors and
                           officers of the Company as consideration for stock
                           issued upon the exercise of stock options (1,150,000
                           shares at $.50 per share and 407,729 shares at $.25
                           per share) and the purchase of common stock (250,000
                           shares at $.25 per share, 250,000 shares at $.35 per
                           share, and 50,000 shares at $.50 per share).

                      o    $65,000 from a former member of the board of
                           directors as consideration for stock issued upon the
                           exercise of stock options to purchase 261,512 shares
                           at $.25 per share.

                      o    $250,000 from shareholders / consultants as
                           consideration for stock issued upon the exercise of
                           stock options to purchase 1,000,000 shares at $.20
                           per share; and 100,000 shares at $.50 per share.

--------------------------------------------------------------------------------
                                                                            F-13
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

5.  Property      Property and equipment consists of the following:
    and
    Equipment
                                                     July 31,
                                         ----------------------------------
                                               2002            2001
                                         ----------------------------------
Computer equipment                        $        17,000 $         17,000
Job site trailer                                   30,000           30,000
                                         ----------------------------------
                                                   47,000           47,000
Less accumulated depreciation
  and amortization                                (36,000)         (26,000)
                                         ----------------------------------
                                          $        11,000 $         21,000
                                         ==================================

6.  Notes         Notes payable consist of the following:
    Payable

                                                        July 31,
                                            ----------------------------------
                                                  2002             2001
                                            ----------------------------------
Unsecured note payable to a minor
shareholder of the Company bearing interest
at 12%, due on demand                        $         40,000  $       40,000

Unsecured interest bearing note payable to
an individual bearing interest at 10%, due
on demand                                              25,000          25,000

Unsecured interest bearing note payable to
a Company bearing interest at 10%, due on
demand                                                  7,000           7,000
                                            ----------------------------------
                                             $         72,000  $       72,000
                                            ==================================

--------------------------------------------------------------------------------
                                                                            F-14
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

7.  Related       Related party notes payable consist of the following:
    Party Notes
    Payable
<TABLE>
<CAPTION>
                                                                                        July 31,
                                                                         ---------------------------------
                                                                               2002                2001
                                                                         ---------------------------------
                     <S>                                                  <C>                  <C>
                     Unsecured notes payable to Windstar Research
                     and Engineering, Ltd. (Windstar), an
                     affiliated company controlled by a number of
                     shareholders, officers, and directors of the
                     Company (see notes 13 and 14) bearing
                     interest at 12%, due on demand after May 2, 2002     $  1,000,000         $   100,000

                     Unsecured note payable to Windstar, bearing
                     interest at 12%, due on demand after August
                     1, 2003                                                   180,000             180,000

                     Unsecured notes payable to an entity
                     controlled by the spouse of an
                     officer/majority shareholder, bearing
                     interest at 9%, due on demand                              16,000                   -

                     Unsecured note payable to a director/ minor
                     shareholder bearing interest at 9%, due on
                     demand                                                     10,000              10,000
                                                                          ----------------------------------
                                                                             1,206,000             290,000

                     Less current portion                                   (1,026,000)           (110,000)
                                                                          ----------------------------------
                                                                          $    180,000         $   180,000
                                                                          ==================================
</TABLE>

                  During the year ended July 31, 2001, the Company paid related
                  party notes payable of $418,000, including interest, through
                  the issuance of 874,477 shares of common stock.

--------------------------------------------------------------------------------
                                                                            F-15
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

8.  Income        The benefit for income taxes is different from amounts which
    Taxes         would be provided by applying the statutory federal income tax
                  rate to loss before benefit for income taxes for the following
                  reasons:
<TABLE>
<CAPTION>
                                                                                 Cumulative
                                                                                Amounts from
                                                                                December 31,
                                                                               1997 (date of
                                                      Year Ended July 31,      inception) to
                                                 ------------------------------
                                                      2002          2001       July 31, 2002
                                                 ----------------------------------------------
                  <S>                             <C>            <C>            <C>
                  Income tax benefit at
                    statutory rate                $     681,000  $     387,000  $    2,788,000
                  Expense due to extension
                    of stock options                    (10,000)             -         (10,000)
                  Other                                       -              -         (35,000)
                  Change in valuation allowance        (671,000)      (387,000)     (2,743,000)
                                                 ----------------------------------------------
                                                  $          -   $           -  $            -
                                                 ==============================================
<CAPTION>
                  Deferred tax assets (liabilities) consist of the following:

                                                                        July 31,
                                                           ----------------------------------
                                                                 2002            2001
                                                           ----------------------------------
                  <S>                                       <C>              <C>
                  Net operating loss carryforward           $     2,559,000  $     2,069,000
                  Consulting fees accrued but
                    not paid                                        184,000            3,000
                  Valuation allowance                            (2,743,000)      (2,072,000)
                                                           ----------------------------------
                                                            $             -  $             -
                                                           ==================================
</TABLE>

                  At July 31, 2002, the Company has net operating loss
                  carryforwards available to offset future taxable income of
                  approximately $7,500,000, which will begin to expire in 2018.
                  The utilization of the net operating loss carryforward is
                  dependent upon the tax laws in effect at the time the net
                  operating loss carryforwards can be utilized. The Tax Reform
                  Act of 1986 significantly limits the annual amount that can be
                  utilized for certain of these carryforwards as a result of a
                  change in ownership.

--------------------------------------------------------------------------------
                                                                            F-16
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

9.  Preferred     The Company has authorized 5,000,000 shares of preferred stock
    Stock         with a par value of $.001, for issuance. Each share of
                  preferred stock is convertible into one share of common stock.
                  As of July 31, 2002, there were no preferred shares issued or
                  outstanding. During the year ended July 31, 2001, the Company
                  granted options to purchase 3,000,000 shares of preferred
                  stock at $.50 per share to an officer/director of the Company.

10. Supplemental  Actual amounts paid for interest and income taxes are as
    Cash Flow     follows:
    Disclosure
<TABLE>
<CAPTION>
                                                                            Cumulative
                                                                           Amounts from
                                                                            December 31,
                                              Year Ended July 31,          1997 (date of
                                       -------------------------------     inception) to
                                              2002             2001         July 31, 2002
                                       ---------------------------------------------------
                  <S>                   <C>            <C>             <C>
                  Interest              $        1,000 $        2,000  $            6,000
                                       ===================================================

                  Income taxes          $            - $            -  $                -
                                       ===================================================
</TABLE>

                  During the year ended July 31, 2002:

                       o   The Company issued 8,292,483 restricted shares of
                           common stock (4,823,242 to the President and Chief
                           Executive Officer and 2,107,729 to board members or
                           officers) in exchange for long-term notes receivable
                           in the amount of $3,032,000 ($1,865,000 from the
                           President and Chief Executive Officer and $852,000
                           from board members or officers), due on or before
                           June 27, 2005, with interest at 3.5%.

                       o   The Company reduced accounts payable and increased
                           additional paid-in capital for $14,000 due to an
                           adjustment to the payable balances assumed in the
                           reverse merger transaction.

--------------------------------------------------------------------------------
                                                                            F-17
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

10. Supplemental  During the year ended July 31, 2001:
    Cash Flow
    Disclosure         o   The Company paid related party notes of $418,000,
    Continued              including interest, through the issuance of 874,477
                           shares of common stock.

                       o   The Company paid related party consulting fees
                           payable of $25,000 through the issuance of 50,000
                           shares of common stock.

                       o   The Company paid related party long-term convertible
                           debt of $281,000, including interest, through the
                           issuance of 561,239 shares of common stock.

                       o   The Company converted accrued interest of $259,000
                           into related party notes payable and long-term debt.

                       o   The Company transferred long-term convertible debt
                           and consulting fees payable, including accrued
                           interest, in the amount of $1,155,000 ($599,000
                           related party) and $623,000 ($427,000 related party),
                           respectively, to Windstar Research & Engineering,
                           Ltd., an affiliated company controlled by a number of
                           shareholders, officers, and directors of the Company,
                           and issued, as consideration for Windstar's
                           assumption of such liabilities, 3,557,538 shares of
                           common stock.

--------------------------------------------------------------------------------
                                                                            F-18
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

11. Stock         Information regarding common stock options is summarized
    Options       below:
<TABLE>
<CAPTION>
                                                                                      Range of
                                                                    Number of         Exercise
                                                                     Options           Prices
                                                              ----------------------------------
                     <S>                                           <C>          <C>
                     Outstanding at July 31, 2000                      698,320  $    .001 - .25
                          Granted                                    3,561,562       .25  - .50
                          Exercised                                   (749,044)      .20  - .50
                          Expired                                            -                -
                                                              ----------------------------------

                     Outstanding at July 31, 2001                    3,510,838       .001 - .50
                          Granted                                    1,473,091       .25  - .50
                          Exercised                                 (4,350,033)      .001 - .50
                          Expired                                            -                -
                                                              ----------------------------------

                     Outstanding at July 31, 2002                      633,896  $           .25
                                                              ==================================
</TABLE>

                  In addition, there were options to purchase 3 million shares
                  of preferred stock at $.50 per share outstanding at July 31,
                  2002 and 2001 (see Note 9).

12. Stock-Based   The Company has adopted the disclosure only provisions of
    Compensation  Statement of Financial Accounting Standards (SFAS) No. 123,
                  Accounting for Stock-Based Compensation. Accordingly, no
                  compensation cost has been recognized in the financial
                  statements for common stock equivalents issued to employees at
                  or above the market price of the stock on the date of the
                  grant. Had compensation cost for the Company's stock options
                  been determined based on the fair value at the grant date for
                  awards, consistent with the provisions of SFAS No. 123, the
                  Company's loss and loss per share would be as follows:
<TABLE>
<CAPTION>
                                                            Year Ended        Year Ended
                                                           July 31, 2002    July 31, 2001
                                                         ------------------------------------
                  <S>                                     <C>               <C>
                  Net loss - as reported                  $    (2,004,000)  $    (1,139,000)
                  Net loss - pro forma                    $    (2,146,000)  $    (1,744,000)
                  Loss per share - as reported            $          (.05)  $          (.04)
                  Loss per share - pro forma              $          (.06)  $          (.06)
                                                         ------------------------------------
</TABLE>
--------------------------------------------------------------------------------
                                                                            F-19
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

12. Stock-Based   The fair value of each option grant is estimated on the date
    Compensation  of grant using the Black-Scholes option pricing model with the
    Continued     following assumptions:

                  Expected dividend yield                    $         -
                  Expected stock price volatility                    189%
                  Risk-free interest rate                           3.36%
                  Expected life of options                   3 to 5 years

                  The weighted average fair value of options granted during 2002
                  and 2001 was $.12 and $.19, respectively.

                  The following table summarizes information about common stock
                  options outstanding at July 31, 2002:
<TABLE>
<CAPTION>
                                        Options and Warrants             Options and Warrants
                                            Outstanding                       Exercisable
                              --------------------------------------------------------------------
                                              Weighted
                                               Average
                                  Number      Remaining    Weighted      Number       Weighted
                    Range of   Outstanding   Contractual    Average    Exercisable    Average
                    Exercise        at          Life       Exercise        at         Exercise
                     Prices      7/31/02       (Years)       Price       7/31/02       Price
                  --------------------------------------------------------------------------------
                  <S>            <C>            <C>           <C>        <C>            <C>
                  $     .25      633,896        2.75          .25        633,896        .25
                  ================================================================================
</TABLE>

13. Related       During the year ended July 31, 2002:
    Party
    Transactions      o    The Company recorded related party notes payable in
                           the amount of $900,000 to Windsor Research &
                           Engineering, Ltd., an affiliated company controlled
                           by a number of shareholders, officers and directors
                           of the Company, to record the license fee, required
                           under the Licensing Agreement, for the exclusive
                           right to certain technologies as described in Note
                           14.

--------------------------------------------------------------------------------
                                                                            F-20
<PAGE>
                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

13. Related       o    The Company issued 4,823,242 shares of restricted
    Party              common stock to its President and Director in
    Transactions       exchange for related party notes receivable in the
    Continued          amount of $1,865,000, due on or after June 27, 2005.
                       The Company also issued 2,107,729 shares of
                       restricted common stock to four officers and/or
                       directors for vested stock options in exchange for
                       related party notes receivable, in the amount of
                       $852,000, due on or after June 27, 2005.

                  o    The Company received cash of $167,000 from the
                       President and Director, and other officers and/or
                       directors, in exchange for 651,000 shares of
                       restricted common stock of the Company.

                  o    The Company paid for related party consulting
                       services in the amount of $16,000 rendered by an
                       officer through the issuance of 32,000 shares of
                       restricted common stock of the Company.

                  During the year ended July 31, 2001:

                  o    The Company recorded related party notes payable in
                       the amount of $100,000 to Windsor Research &
                       Engineering, Ltd., an affiliated company controlled
                       by a number of shareholders, officers and directors
                       of the Company, to record the license fee, required
                       under the Licensing Agreement, for the exclusive
                       right to certain technologies as described in Note
                       14.

                  o    The Company received cash of $16,000 from an entity
                       controlled by the spouse of an officer/majority
                       shareholder in exchange for a note payable. These
                       advances were paid by the issuance of common stock.

                  o    The Company received cash of $10,000 from a director
                       and minor shareholder in exchange for a note payable.

--------------------------------------------------------------------------------
                                                                            F-21
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

13. Related           o    The Company accrued $305,000 of consulting fees
    Party                  liabilities to officers of the Company. These
    Transactions           payables were transferred to Windstar Research &
    Continued              Engineering, Ltd., an affiliated company controlled
                           by a number of shareholders, officers, and directors
                           of the Company.

                      o    The Company accrued interest of $105,000 on the
                           balances for related party long-term convertible
                           debt, related party consulting fees payable and
                           related party notes payable.

                      o    The Company paid related party notes and long-term
                           debt of $418,000 and $281,000, including interest,
                           through the issuance of 874,477 shares and 561,239
                           shares, respectively, of common stock.

                      o    The Company transferred related party long-term
                           convertible debt and related party consulting fees
                           payable, including accrued interest, in the amount of
                           $599,000 and $427,000, respectively, to Windstar
                           Research & Engineering, Ltd., an affiliated company
                           controlled by a number of shareholders, officers, and
                           directors of the Company, through the issuance of
                           2,051,921 shares of common stock.

                      o    The Company recorded related party long-term debt in
                           the amount of $180,000 to Windstar Research &
                           Engineering, Ltd., an affiliated company controlled
                           by a number of shareholders, officers, and directors
                           of the Company, for payments made to a non-related
                           vendor for research and development activities
                           relating to the design and engineering for the
                           proposed facility in Mount Belevue, Texas.

                      o    The Company paid for related party consulting
                           services in the amount of $25,000 rendered by an
                           officer of the Company through the issuance of 50,000
                           shares of common stock.

                      o    The Company had related party notes payable of
                           $10,000.

--------------------------------------------------------------------------------
                                                                            F-22
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

14. Commitments   Licensing Agreement
    and           -------------------
    Contingencies The Company has entered into a license agreement with Windstar
                  Research and Engineering, Ltd. (Windstar), an affiliated
                  company controlled by a number of shareholders, officers, and
                  directors of the Company, which grants the Company the
                  exclusive right to certain technologies developed by another
                  company relating to the design, manufacture, and operation of
                  facilities to recover petrochemical feedstock from waste
                  rubber and plastics. Under the agreement, the Company is
                  obligated to pay $1,000,000 for Phase I for each plant or
                  facility constructed to use the licensed technology. An
                  additional $500,000 shall be required for each additional
                  development phase constructed. In addition the Company shall
                  pay a monthly license fee of 7% of gross income to the
                  licensor for each plant.

                  The Company is required to commence building the following
                  numbers of new plants within the first five years as follows:

                  Year 2001 - One plant.
                  Year 2002 - Two plants.
                  Year 2003 - Three plants.
                  Year 2004 - Four plants.
                  Year 2005 - Five plants.
                  Year 2006 and thereafter - Six plants per year.

                  During the year ended July 31, 2001, the Company was required
                  to pay an initial $100,000 of the total license fee for the
                  plant scheduled to commence in 2001. The Company issued a note
                  payable in the amount of $100,000 as consideration for this
                  obligation. Subsequent to July 31, 2001, the Company failed to
                  make required payments under the licensing agreement in the
                  amounts of $250,000 and $500,000, and is therefore in default
                  under the licensing agreement. As of October 12, 2003, the
                  Company has not commenced construction of the first plant as
                  required by the agreement nor the plants required in 2002 and
                  2003.

--------------------------------------------------------------------------------
                                                                            F-23
<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
--------------------------------------------------------------------------------

14. Commitments   Licensing Agreement - Continued
    and           -------------------------------
    Contingencies On November 19, 2001, the Company and Windstar entered into a
    Continued     forbearance agreement in which Windstar agreed that until
                  August 1, 2003 it will not terminate the license agreement or
                  exercise any of its rights or remedies provided in the
                  agreement related to the Company's defaults in failing to
                  commence construction of new facilities in 2001 and 2002, and
                  failing to make payments of $250,000, $500,000, and $100,000
                  due on August 1, 2001, August 31, 2001, and May 2, 2002,
                  respectively.

                  During the year ended July 31, 2002, the Company recorded
                  notes payable to Windstar in the amount of $900,000 due on
                  demand after May 2, 2002.

                  The Company expensed the purchase of the license agreement
                  $900,000 in 2002 and $100,000 in 2001.

                  Consulting Agreements
                  ---------------------
                  The Company has a consulting agreement with an
                  officer/shareholder, which requires minimum annual payments of
                  $144,000 and reimbursable costs of $18,000 a year for office
                  and vehicle lease. The agreement expires on December 31, 2007.

                  The Company has a consulting agreement with a firm, which
                  requires minimum annual payments of $63,000. The firm was also
                  granted 1,000,000 stock options which expire December 31,
                  2004. The agreement expired on September 30, 2002.

                  The Company has a consulting agreement with an
                  officer/shareholder, which requires minimum annual payments of
                  $12,000 and reimbursable costs of $8,600 a year for office and
                  vehicle lease. The agreement expires on December 31, 2007.

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<PAGE>

                                                      CYNTECH TECHNOLOGIES, INC.
                                                 (A Developmental Stage Company)
                                      Notes to Consolidated Financial Statements
                                                                       Continued
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14. Commitments   Contingencies
    and           -------------
    Contingencies During the year ended July 31, 2001, the Company entered into
    Continued     an agreement wherein related party long-term convertible debt
                  of $599,000, including interest, non-related party long-term
                  convertible debt of $556,000, including interest, related
                  party consulting fees payable of $427,000, including interest,
                  and non-related party consulting fees of $196,000, including
                  interest, were transferred to Windstar Research & Engineering,
                  Ltd. (Windstar). As consideration for this transaction, the
                  Company issued 3,557,538 shares of common stock to Windstar.
                  Windstar is controlled by certain officers, directors, and
                  shareholders of the Company.

                  The Company may be contingently liable for these amounts due
                  to the related party nature of the transaction and because the
                  individual debt holders have not released the Company from
                  liability.

                  The Company may become or is subject to investigations, claims
                  or lawsuits ensuing out of the conduct of its business. The
                  Company is currently not aware of any such item which it
                  believes could have a material affect on its financial
                  position.

15. Fair Value    The Company's financial instruments consist of cash, payables,
    of            and notes payable. The carrying amount of cash and payables
    Financial     approximates fair value because of the short-term nature of
    Instruments   these items. The carrying amount of notes payable approximates
                  fair value as the individual borrowings bear interest at
                  market interest rates.

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