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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

[X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
    1934, for the fiscal year ended April 30, 1999

[   ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
    of 1934, for the transition period from _____ to ______

                            Commission File #0-27832

                      COMPOST AMERICA HOLDING COMPANY, INC.
 ..............................................................................
                 (Name of small business issuer in its charter)

          New Jersey                                        22-2603175
----------------------------                      --------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)

One Gateway Center, 25th floor, Newark, New Jersey   07102
----------------------------------------------       ----------
(Address of Principal Executive Office)              (Zip Code)

Issuer's telephone number: (973) 297-5400

Securities registered under Section 12(b) of the Exchange Act: None

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

1.   Common Shares, no par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES [ ]  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 [X].

State the issuer's revenues for its most recent fiscal year:

                                  $ 22,249,982


State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days - $ 9,573,500 (approximate as of May 1,
2000).

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

1. Common Stock - 58,715,228 shares outstanding as at April 30, 2000

Documents Incorporated By Reference - None



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PLEASE ADDRESS ALL CORRESPONDENCE TO:   Mark Gasarch, Esq.
                                        40 West 57th Street
                                        33rd Floor
                                        New York, New York 10019




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                                     PART I

ITEM 1.
DESCRIPTION OF BUSINESS

                                   BACKGROUND

     Compost America Holding Company, Inc., (the "Company" or "Compost America"
or "CAHC") was incorporated on August 20, 1981 in the State of New Jersey under
the name Alcor Energy and Recycling Systems, Inc. ("Alcor") for the purpose of
designing, constructing, managing and operating resource recovery facilities. On
January 23, 1995, Alcor acquired all of the outstanding shares of Compost
America Company of New Jersey, Ltd. ("CANJ"), which had been incorporated on
December 17, 1993 in the State of Delaware for similar purposes, and
subsequently changed its name to Compost America Holding Company, Inc. The
Company conducts its business through various development subsidiaries and
through the following operating subsidiaries; American Soil, Inc., a New York
corporation, incorporated on August 6, 1986; Environmental Protection &
Improvement Company, Inc. ("EPIC"), formerly know as R.J. Longo Construction
Company, Inc., a New Jersey corporation incorporated on February 17, 1971;
Garden Life Sales Company, Inc., incorporated in Delaware on March 1, 1996; and
Gardenlife Sale Company of Florida, Inc., incorporated in Delaware on April 20,
1998. The Company has two other wholly-owned subsidiaries, both presently
inactive; Compost America Technologies, Inc., incorporated in Delaware on June
15, 1995 and Philadelphia Recycling and Composting Company, Inc., incorporated
in Pennsylvania on March 8, 1995. The development subsidiaries include, Newark
Recycling and Composting Company, Inc. ("NRCC"), incorporated in Delaware on May
10, 1994, owned 75% by the Company and 25% by Prince Georges Contractors, Inc.,
d.b.a. Potomac Technologies, Inc. ("PTI"), an unaffiliated company, with NRCC
itself owning 100% of American Bio-Ag; and three wholly-owned subsidiaries,
Monmouth Recycling and Composting Co., Inc., incorporated in Delaware on May 10,
1994 ("MRCINC"); Chicago Recycling and Composting Company, Inc. ("CRCC"),
incorporated in Delaware on August 4, 1995; and Gloucester Recycling and
Composting Company, Inc., incorporated in Delaware on August 15, 1994. The
Company also owns 80.1% of Miami Recycling and Composting Company, Inc.
("MRCC"), incorporated in Delaware on November 17, 1995, which itself owns all
of the outstanding common stock of Bedminster Seacor Services Miami Corporation
("Bedminster"), a Florida corporation which is developing a composting project
in southern Florida (the "Florida Composting Project"). Unless otherwise
indicated, references to the Company, or Compost America, or CAHC, include the
Company and all of its subsidiaries.

     The Company's two current development projects are expected to be a solid
waste transfer station in Newark, New Jersey ("Newark Solid Waste Project"), and
a fully enclosed composting facility located in Miami/Dade County, Florida and
serving either or both Dade County and the City of Miami, Florida ("Florida



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Composting Project"). Each of these projects is in the planning stage and
neither project has received final governmental permits and approvals. Permits
previously obtained by the Company for a composting facility in Newark, New
Jersey will, for the most part, not be applicable to the proposed solid waste
transfer station.

     The Company's executive offices are located at One Gateway Center, 25th
floor, Newark, New Jersey 07102. The Company's telephone number is (973)
297-5400; fax (973) 297-5454.

                             OPERATING SUBSIDIARIES

ENVIRONMENTAL PROTECTION & IMPROVEMENT COMPANY, INC.

     EPIC is in the business of transporting waste materials by intermodal
truck/rail hauling to land application sites for beneficial use and to landfill
sites. Its fleet of equipment consists of 150 articulated intermodal railcars
which are capable of handling up to six fully loaded containers, 1,300
containers designed to carry biosolids and other bulk materials, a fleet of
trucks for road transportation, and toploaders to load and unload containers
on/off railcars. With unit train capability and full railroad interchange
approval and authority, EPIC's railcars can freely move from line to line
throughout the United States.

     EPIC's main loading facility is at Brills Yard in Newark, New Jersey. It
includes some 3,600 feet of rail siding (4,000 feet of staging track available)
and is a New Jersey Department of Environmental Protection ("NJDEP") 3,400
tons/day, 24-hour day, seven-day week permitted site. The site is used to load
and unload containerized waste material to be shipped to land application sites
for beneficial use and landfills for disposal throughout the country. Unlike the
method of using trucks or gondolas where material must be handled several times,
EPIC's containers are loaded, sealed, transported, and placed onto rail cars
whereby the material does not have to be handled again until the rail cars reach
their ultimate destination. Brills Yard is one of a kind in the New York
metropolitan area with two rail providers (Norfolk Southern and CSX) and located
within ten miles of the major bridges and tunnels from New Jersey and Staten
Island to New York City. Permitted beneficial use land application sites are
located in Virginia and Colorado.

     EPIC's customers include New York City and Joint Meeting of Essex and Union
Counties, NJ, along with other clients who dispose of incinerator ash,
contaminated soils and municipal solid waste.

     Subsequent to its April 30, 1999 fiscal year end, the Company entered
negotiations for the sale of EPIC.


                                       2
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AMERICAN SOIL INC.

     American Soil, Inc. ("ASI"), an outdoor composting facility located in
Freehold Township, Monmouth County, New Jersey, has been in operation since
September 7, 1988. Compost America purchased ASI in October 1996, and leases
property from Freehold Township for the operation of the composting facility.
The Company has acquired additional property adjacent to ASI which is expected
to be used for expansion. ASI currently is permitted to compost leaves, grass
and source separated organic waste ("SSOW") including processed food and soiled
paper/coated cardboard waste from supermarkets and produce terminals.

     Subsequent to its April 30, 1999 fiscal year end, the Company entered into
negotiations for the sale of American Soil Inc.


                            DEVELOPMENT SUBSIDIARIES

NEWARK RECYCLING AND COMPOSTING FACILITY

     NRCC is a 75% owned subsidiary of the Company. NRCC anticipates developing
a municipal solid waste transfer station capable of processing approximately
3,500 tons of waste per day on a portion of its 12-acre parcel in Newark, New
Jersey (the "Newark Property"). This site previously was intended for use as a
municipal composting facility (the "Newark Composting Project"). However, it now
appears more likely that a waste transfer station will be developed in lieu of
the composting facility. The current development schedule, subject to change, is
for the completion of permitting, solid waste procurement, construction,
start-up and performance testing leading to commercial operation no earlier than
2001. The balance of the Newark Property will be available for sale or other
use, such as warehousing or co-generation facilities.

MIAMI RECYCLING AND COMPOSTING FACILITY

     MRCC is an 80.1% owned subsidiary of the Company. MRCC's wholly owned
subsidiary Bedminster is developing a composting facility on a 40.1 acre parcel
in Miami/Dade County (the "Florida Composting Project"). However, this
development has been interrupted by a lawsuit (the "Miami Lawsuit") brought by
the Company and Bedminster against the City of Miami to enforce the performance
by the City of Miami of its obligations under a Restated Compost Recycling
Agreement (see "Legal Proceedings" herein).

     A number of applications for requisite environmental permits have been
filed with the Miami/Dade County Department of Environmental Resource Management
("DERM"), the Florida Department of Environmental Protection ("FDEP") and the
United States Army Corps of Engineers ("ACOE"). Additional submittals and
subsequent approvals are in abeyance pending the resolution of the Miami
Lawsuit.

                                        3

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     The Amendment to the Restated Compost Recycling Agreement signed by
Bedminster, but not by the City, calls for the City to deliver a minimum 150,000
tons per year of municipal solid waste at 2,885 tons per week (i.e., a daily
average equal to 411 tons) to the Florida Composting Project. An initial
disposal fee of $52 per ton is specified, subject to an escalation that is a
function of the Consumer Price Index (CPI) for Miami-Ft. Lauderdale.

AMERICAN MARINE RAIL FACILITY

     American Marine Rail, LLC ("AMR") is developing a solid waste transfer
station in Bronx, New York. When and if constructed, AMR's facility will be
capable of receiving waste by barge from New York City's existing marine
transfer station system, compacting the waste and transporting it out of the
City by rail. AMR has responded to a Request for Proposals ("RFP") issued by the
New York City Department of Sanitation ("NYCDOS") for a 20-year contract to
transport and dispose of up to 11,700 tons per day of the Department's
residential solid waste. The RFP was a result of New York City's intent to close
the Fresh Kills Landfill in Staten Island on December 31, 2000.

     AMR submitted its permit application to the State of New York in the Fall
of 1997, and expects final permits to be issued during the first half of 2000.
Drafts of a Negative Declaration of Environmental Impact and a permit were
issued to AMR in December 1999.

     Notwithstanding the foregoing, as a result of plans  recently announced by
the administration of New York City Mayor Rudy Guliani to revise substantially
the waste disposal plan of New York City, there is now considerable doubt
concerning not only the schedule but also the ultimate completion of AMR's
project in Bronx, New York, at least as initially envisioned. In light of this
uncertainty, the Company cannot predict the ultimate outcome of this situation.
However, the Company does believe that, in light of New York City's demonstrable
need for trash removal and AMR's progress to date in its permitting process, the
AMR property does have significant value.

     Originally, the Company had purchased a 33% interest in AMR and had held an
option to acquire an additional approximately 30% interest (the "Additional
Membership Interest"). However, in July, 1999 the Company transferred its
interest in AMR to AW Compost Partners, LLC ("AW Compost") in exchange for (1)
the payment of $225,000 to AMR by an affiliate of AW Compost to cure certain
funding defaults by the Company, (2) the return to the Company of $872,886 of
its Series D Redeemable Preferred Shares, which AW Compost had purchased for
$305,515 and (3) the cancellation of the "AMR Option" held by AW Compost
Partners (as described in Section 9 of the Company's Series D Certificate of
Designation) In the same transaction, however, AW Compost granted the Company
the option to re-purchase up to a 28.72% interest in AMR, at any time prior to
March 31, 2000, for a cash payment of $1,750,000, plus interest, less any
interim funds advanced by the Company to AMR, up to a maximum of $400,000. The
repurchase percentage is to be reduced pro-rata should the Company fail to fund
required advances and the funding is advanced by third parties. The Company
presently owns approximately 8% of AMR and, as a result of extensions and
further renegotiations of terms, currently has the right to purchase from AW
Compost, no later than June 30, 2000, an additional 16.72% membership interest
for a purchase price of $1,700,000 plus interest thereon from May 31, 2000. The
Company retains its right to purchase the Additional Membership Interest at fair
market value at a date in the future after the second anniversary of the
commencement of commercial operations of AMR's facility.

                                       4
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                                PROJECT FINANCING

     In December 1997, the Company closed a $90 million New Jersey Economic
Development Authority ("NJEDA") Revenue Bond issue (1-year term) for its
proposed Newark Composting Project, underwritten by PaineWebber Incorporated.
Bond proceeds were held in escrow and invested as security for debt service
pending satisfaction of certain conditions (the "Escrow Release Conditions"). In
September 1998, CAHC terminated its relationship with PaineWebber Incorporated
and on December 1, 1998 CAHC signed a financial advisory agreement with Goldman,
Sachs & Co. Thereafter on December 15, 1998, the $90 million NJEDA Revenue Bond
issue was remarketed by Goldman, Sachs & Co. However, the Escrow Release
Conditions were not met and in June 1999 the escrowed Bond proceeds were applied
to redeem the Bonds in whole. Accordingly, there is no existing project
financing for any project in Newark, New Jersey. In August, 1999 Goldman, Sachs
& Co. resigned as the Company's financial adviser.

     If and to the extent that the Miami Lawsuit is successfully completed, the
Company anticipates that it will obtain funding for the Miami Project. However,
no financing commitment is available at the present time.

EMPLOYEES

     Compost America and its subsidiaries consists of 88 full-time employees.


ITEM 2.
DESCRIPTION OF PROPERTY

     The Company leases its 1,430 square feet of executive, finance and
accounting offices at One Gateway Center, 25th floor, Newark, New Jersey 07102,
from an unaffiliated retail agent for $ 2,800.42 per month (excluding utilities
and parking). The lease expires on June 15, 2000.

     In December 1995 NRCC purchased the Newark Property, located in the East
Ward of Newark, New Jersey at the convergence of Routes 78, 1, 9 and the New
Jersey Turnpike on which the Company hopes to locate its Newark Solid Waste
Project.

     On March 29, 1996 the Company purchased 40.1 acres in northwest Miami/Dade
County, Florida, where it plans to commence construction of its Florida
Composting Facility.

     Both the Newark site and the Florida site are encumbered by mortgages,
which are in default. Foreclosure proceedings have been commenced with regard to
the Newark site (see Legal Proceedings, below).


                                       5
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     On October 2, 1996 the Company was assigned a lease commitment with the
Township of Freehold, New Jersey for two parcels of land located in the Township
of Freehold, County of Monmouth, State of New Jersey. One parcel consists of
10.462 acres and the second parcel consists of 8.296 acres. The lease is for 5
years with a 5 year option.

     In January 1998 MRCINC purchased approximately 15 acres of real property in
Freehold Township, Monmouth County, New Jersey on which the Company intended to
construct an invessel composting facility. This property currently is the
subject of a foreclosure proceeding.


EPIC Properties
---------------

     EPIC's corporate headquarters are located in Denville, New Jersey in a
three-story building which is rented on a month-to-month basis for $6,250 per
month from a trust, the beneficiaries of which are the children of Robert J.
Longo, President of EPIC and a Director of the Company. The Company believes
that this rental is comparable to that which would be charged by a
non-affiliated landlord.

     EPIC has a 15-year lease with Conrail for Brills Yard. The site is located
on Avenue P, Newark, New Jersey off the New Jersey Turnpike Exit 15E. EPIC's
state of the art terminal is a fully licensed NJDEP intermodal container
facility. The Brills Yard facility is permitted for 3,400 TPD with 24-hour
service.

     EPIC owns two properties; an intermodal rail siding located in Carlton,
Colorado on approximately 13.5 acres and an intermodal rail yard and maintenance
facility located in Tyler, Texas on approximately 39 acres. EPIC also has the
right to operate, by lease or other agreement, out of three facilities in the
State of Virginia.


ITEM 3.
LEGAL PROCEEDINGS

     The Company is involved in one material legal proceeding as a plaintiff, as
follows. In November 1996, the Company made a payment of $1,000,000 to secure
performance of its obligations under the Restated Compost Recycling Agreement of
November 30, 1995 (the "Restated Agreement") with the City of Miami. Under the
terms of that Restated Agreement the commencement date of operations for its
Florida Composting Project was extended to November 1998. On February 24, 1998 a
resolution was proposed and adopted by the City of Miami Commission granting
Bedminster an additional extension through October 20, 2000 if the Company, (1)
agreed to pay the City an amount equal to the City's recycling costs for each of
the two years that the extension was granted; (2) agreed that the

                                        6

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$1,000,000 previously deposited with the City by Bedminster to guarantee
Bedminster's performance of its obligations be released into the City's general
fund for the City to use as it deemed necessary; and (3) agreed to post a new
performance bond or letter of credit to guarantee the performance of its
obligations under the Contract. While an amendment agreement memorializing the
extension approved by the City in its February 24th resolution was signed by the
Company, the City has refused to sign the agreement. Bedminster has filed the
Miami Lawsuit against the City seeking a judgment: (1) declaring that the
Restated Agreement, as amended by the City's Resolution 98-224 of February 24,
1998 (collectively the "Contract") constitutes a valid and binding contract
between the City and Bedminster; (2) setting the correct amount of the City's
recycling costs during the term of the two year extension or establishing a fair
and equitable procedure by which that amount shall be calculated; and (3) fixing
the completion date for the composting facility, adjusted to take into account
the period of time that the City has frustrated Bedminster's performance under
the Contract. Depositions have been scheduled in this matter, and this
proceeding is expected to be resolved during the year 2000.

     The material legal proceedings in which the Company is involved as a
defendant are as set forth below.


1.   Equity Investments of Delaware, Inc., Plaintiff v. Compost America Holding
     Company, Inc. and Newark Recycling and Composting Company, Inc.,
     Defendants, filed in May, 1999 in the Superior Court of New Jersey for
     Essex County. On May 15, 1999, the Company, as Borrower, defaulted in the
     payment of a $1,000,000 Acquisition Refinancing Promissory Note, plus an
     additional $150,000 in accrued interest and penalties, payable to Equity
     Investments of Delaware, Inc., as Lender. The Lender also is the holder of
     a $2,000,000 Convertible Term Loan Promissory Note of the Borrower, due
     November 1, 2000, now in default as a result of cross-default provisions in
     the $1,000,000 Note. Both Notes are secured by a first mortgage on the
     Newark Property, owned by NRCC, which the Company intends to develop. The
     Lender obtained a default judgment against the Company in September 1999
     and has commenced foreclosure proceedings even as settlement discussions
     are taking place. These settlement discussions themselves are dependent
     upon the Company obtaining additional funding. These foreclosure
     proceedings, if successful, would prevent the Company from developing the
     Newark Property.


2.   Bio-Services, Inc., Plaintiff, v. Compost America Holding Company, Inc.
     Monmouth Recycling and Composting Company, Inc., Defendants, filed on
     September 4, 1998 in the Superior Court of New Jersey, Chancery Division,
     Monmouth County, Docket No. MONC 224-28.


                                        7

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     This is a claim for alleged breach of contractual obligations, seeking
     damages of approximately $333,125, plus 12,500 shares of the Company's
     common stock, plus interest and expenses. The Company has filed an answer
     denying all liability as asserted in the Complaint. A motion by the
     Plaintiff for summary judgment was granted by the Court in October 1999.
     The Company has made a settlement offer, and has filed a motion for
     reconsideration if the settlement efforts, presently underway, are not
     successful.

3.   Brownfield Partners, Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed on March 12, 1999 in the Superior Court, Law Division,
     Monmouth County, State of New Jersey, Docket No. MON-L-1248-89.

     This is an action to collect a $200,000 mortgage note, secured by a first
     lien on the Company's 15 acre property in Freehold, New Jersey (the
     "Freehold Property"). The Company is attempting to renegotiate the terms of
     the note, including an extension of the due date, at the same time that
     discovery proceedings have commenced. A parallel action by the plaintiffs
     seeks to foreclose on the Freehold Property. The Company has filed an
     answer to this action and a motion to join Michael Marchese as an
     additional defendant while trying to negotiate a settlement with Mr.
     Marchese on both matters. In February, 2000 this action was dismissed
     without prejudice for Plaintiff's failure to respond to Defendant's
     discovery requests.

4.   Kaplan Gottbetter & Levenson, LLP and Adam S. Gottbetter, Plaintiffs v.
     Compost America Holding Company, Inc., Defendant, filed on December 14,
     1998 in the United States District Court, Southern District of New York.

     This is an action alleging breach of a consulting agreement and seeking
     compensatory damages of approximately $872,000, plus interest, costs and
     expenses. This matter was settled in September 1999 for $350,000, and the
     Company is making settlement payments.

5.   Capital Active Funding, Inc., Plaintiff, v. Compost America Holding
     Company, Inc., et. al., Defendant, filed on October 16, 1998 in the
     Superior Court of the State of Arizona, County of Maricopa, Docket # CV
     98-18623.

     Plaintiff obtained a judgment against the Company, amongst others, in the
     amount of $145,029.50. The Company negotiated a settlement of this action
     for this amount in October 1999 and is making settlement payments.

6.   NuCentury Auto, Inc., Plaintiff, v. Compost America Holding Company, Inc.
     and Chicago Recycling and Compost Company, Inc.,

                                        8

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     Defendants, filed on February 28, 1998 in the Circuit Court of the Twelfth
     Judicial Circuit, Will County, State of Illinois, Docket # 99 L 129.


     This is a claim against the Company for $266,256 for site development work
     performed on behalf of the Company in Riverside, Illinois. The Company has
     filed an answer in this matter.


7.   Center Capital Corp., Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed in March 1999 in the Superior Court of New Jersey for
     Bergen County. Plaintiff obtained a default judgment against the Company
     for $37,000. By agreement between the Plaintiff and the Defendant, the
     Plaintiff sold the equipment on which it held a chattel mortgage and
     satisfied this judgment.


8.   Devro-Teepak, Inc., Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed in August, 1999 in the U.S. District Court for the
     Northern District of Illinois. In 1995, Devro-Teepak, Inc. ("Teepak") made
     loans to the Company aggregating approximately $265,000, to be repaid out
     of the funding for the Company's Chicago, Illinois, composting facility.
     Teepak now claims that this composting facility project has been abandoned
     by the Company, and therefore approximately $310,000 (the $265,000 plus
     interest) is now due. The Company has filed an answer in this matter.


9.   David J. Egarian, P.E. and D.J. Egarian & Associates, Plaintiffs, v.
     Compost America Holding Company, Inc. and Newark Recycling and Composting
     Company, Inc., Defendants, filed in September, 1999 in the Superior Court
     of New Jersey for Morris County. Plaintiffs obtained a default judgment
     based upon a contract for $35,000. The Company has reached a settlement
     with Plaintiffs to pay the amount of the judgment plus an additional $5,000
     unpaid invoice in eight monthly payments of $5,000 each, commencing in
     November, 1999.


10.  R.W. Jones & Associates, Inc. and R.W. Jones III, Plaintiffs, v. Compost
     America Holding Company, Inc., R.J. Longo Construction Company, Inc., R.J.
     Longo Construction Company d/b/a EPIC, EPIC and Roger E. Tuttle,
     Defendants, filed in September, 1999 in the Superior Court of New Jersey
     for Essex, County. This is an action for various consulting and success
     fees. The Company has settled this action for $853,000 to be made in a lump
     sum payment on or before April 15, 2000. If the Company supplies a signed
     contract for the sale of EPIC, the time to make the payment will be
     extended to June 15, 2000. Should these conditions not be met the matter
     proceeds to litigation.


11.  Dughi & Hewitt, Plaintiff, v. Compost America Holding Company, Inc. and
     Newark Recycling and Composting Company, Inc.,

                                        9

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     Defendants, filed in October, 1999 in the Superior Court of New Jersey for
     Union County. This is an action for $27,000 for legal fees and interest.
     Plaintiffs have proposed a settlement, accepted by the Defendants, for
     $20,000 calling for an initial payment of $7,500, which has been made,
     followed by monthly payments of $2,500 until the settlement has been paid
     in full.

12.  Roger Tuttle, Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed in November, 1999 in the Superior Court of New Jersey for
     Essex County. This is an action by the former President and Chairman of the
     Company, who remains a Director of the Company, for 930,000 "replacement"
     shares of the Company's common stock, $265,000 plus interest in repayment
     of loans and $1,475,000 in accrued salary. The Company believes it has
     meritorious defenses against this action, and has filed an answer,
     affirmative defenses and counterclaims. The parties are currently
     negotiating for the settlement of these claims.

13.  Kaysons International Corp., Plaintiff, v. Compost America Holding Company,
     Inc., Defendant, filed in November, 1999 in the Supreme Court of New York,
     County of Westchester. This is an action for payment of a note presently in
     default in the amount of $150,000 plus interest at 10%. Summary Judgment in
     the amount of $150,000 plus interest and costs was entered for the
     plaintiff on March 3, 2000.

14.  Kenny Nachwalter Seymour Arnold Critchlow & Spector, Plaintiff, v. Compost
     America Holding Company, Inc., Miami Recycling and Composting Company, Inc.
     and Bedminster Seacor Services Company, Inc., Defendants, filed in August
     1999 with the American Arbitration Association in Miami, Florida. This is
     an arbitration action for approximately $154,000 in unpaid legal fees. This
     matter was settled through mediation in the amount of $100,000. Payments
     commence on May 1, 2000 with the final payment to be made August 1, 2000.

15.  B. Michael Pisani, Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed January, 2000 in the Superior Court of New Jersey, Essex
     County. This is a claim by B. Michael Pisani for $175,000 plus interest,
     costs and legal fees based upon an alleged breach by the Company of his
     consulting agreement. The Company intends to defend this matter vigorously.

16.  Biological and Environmental Services, Plaintiff, v. Compost America
     Holding Company, Inc. and Miami Recycling and Composting Company, Inc.,
     Defendants, filed February, 2000 in the County Court of Broward County,
     Florida. This is a claim for an account payable in the amount of $8,568.14
     plus interest and costs. The Company's settlement proposal of $9,368 to be
     paid on or before June 15, 2000 has been accepted by the Plaintiff.


                                       10

<PAGE>


17.  Mehr & LeFrance, Plaintiff, v. Compost America Holding Company, Inc.,
     Defendant, filed January, 2000 in the Superior Court of New Jersey, Essex
     County. This is a claim for legal fees in the amount of $5,000 plus
     interest and costs. The Company's offer to pay $3,500 by May 15, 2000 has
     been accepted by the plaintiff.


18.  Resource Reclamation Services, Inc., Plaintiff, v. Compost America Holding
     Company, Inc., Defendant, filed February, 2000 in the Circuit Court for the
     11th Judicial Circuit, Miami-Dade County, Florida. This is a claim for
     $350,000 plus interest and costs for a breach of a Settlement Agreement.
     The $350,000 has been paid down to $250,000, and the balance is being paid
     in five monthly installments of $50,000 each.


19.  Wragg & Casas Public Relations, Inc., Plaintiff, v. Compost America Holding
     Company, Inc., Defendant, filed March, 2000 in the Circuit Court for the
     11th Judicial Circuit, Miami-Dade County, Florida. This is a claim for
     public relations services rendered in the amount of $47,717.18 plus
     interests, costs and attorneys' fees. The Company will seek to settle this
     matter.

     The status of other material claims involving the Company is as follows:

20.  Internal Revenue Service. The Internal Revenue Service ("IRS") has noticed
     the Company of its claim for $61,000 in penalties and interest and $20,000
     in back taxes. The Company contends that it already has paid the $20,000 in
     back taxes. The IRS is demanding payment and the Company is seeking to
     appeal this demand.

21.  Loans from VRH Construction Corp. On May 15, 1999, the Company also
     defaulted on the payment of approximately $5,700,000 of promissory notes
     payable to VRH Construction Corp., which notes are secured by a second
     mortgage on the Newark Property. The Company disputes the propriety of this
     second mortgage. The Company has entered into discussions with VRH
     Construction Corp. seeking an extension of the maturity dates of these
     notes. There can be no assurance that such an extension will be granted.
     Should the Newark Property be foreclosed, the Company would not be able to
     develop the Newark Property.

22.  Loan From Vauxhall "98, L.L.C. On December 30, 1998 the Company borrowed
     $500,000 from Vauxhall '98, L.L.C. This loan provided for a maturity date
     of November 30, 2000, or earlier if the Company received a series of loans
     totalling at least $1,500,000. The Company has received loans totalling in
     excess of $1,500,000, and therefore this loan is now due. The Company has
     not repaid this loan. To date, the lender has not taken any steps to
     declare an event of default or to collect the loan. A similar situation
     exists regarding an additional $50,000 in loans made to the Company by two
     other parties.

23.  Claim by Pasquale J. Dileo In response to a confirmation request from the
     Company's auditors related to the Company's financial statements for its
     fiscal year ended April 30, 1999, Pasquale J. Dileo, Secretary and a
     Director of the Company, asserted that he was owned by the Company
     $1,680,000 plus 1,000,000 of the Company's registered common shares plus

                                       11

<PAGE>

     options to purchase an additional 300,000 common shares and that Select
     Acquisitions, Inc., a company controlled by Mr. Dileo, was owed $308,073,
     plus accrued interest, and 408,640 of the Company's common shares. Other
     than loans from Select in an amount less than $100,000, the Company refutes
     all of these claims and will defend its position vigorously should Mr.
     Dileo commence litigation in this matter.

24.  Credit, Capitalization and Financing Agreement between Compost America
     Holding Company, Inc., and two of its subsidiaries, Miami Recycling and
     Composting Company, Inc. and Bedminster Seacor Services Miami Corporation
     and Lionhart Global Appreciation Fund, and its affiliates, dated October
     30, 1998 ("Agreement").

     The various judgments set forth above, and the Company's failure to deliver
     agreed upon collateral, appear to constitute an "Event of Default" under
     this Agreement, such that Lionhart Global Appreciation Fund ("Lionhart")
     could accelerate the collection of its $10,500,000 (face amount) promissory
     note, secured by a first mortgage lien on the real property constituting
     the site of the proposed Florida Composting Project (the "Florida Site")
     and by the Company's stock ownership interest in MRCC and Bedminster. The
     Company and Lionhart are in discussions to resolve this matter, with no
     assurance that any such agreement can be reached.


ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE


                                     PART II

ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's shares of Common Stock presently are being traded on the
"pink sheets" of the National Association of Securities Dealers, Inc. ("NASD")
under the symbol "CAHC". Until October 7, 1999 the shares had traded on the
Electronic Bulletin Board of the NASD, but this trading was transferred to the
"pink sheets" when the Company was significantly delinquent in its filings with
the Securities and Exchange Commission ("SEC"). During the period September 14,
1999 through October 7, 1999 inclusive, the shares traded under the symbol
"CAHCE" as a notice that the trading of the shares was being moved from the
Electronic Bulletin Board to the "pink sheets". The Company believes that when
it is again timely in its filings with the SEC, the trading of its shares will
resume on the Electronic Bulletin Board.

     The following table shows, for the calendar periods indicated,

                                       12

<PAGE>



the range of reported high and low bid quotations for these shares. Such prices
necessarily reflect inter dealer prices, without retail mark up, mark down or
commission and may not necessarily represent actual transactions.

                       Quarterly Common Stock Price Range


                                 HIGH BID    LOW BID
                                 --------    -------

1997/1998:
Quarter ended 7/31..............  $2.50       $1.13
Quarter ended 10/31.............  $4.25       $1.00
Quarter ended 1/31..............  $3.69       $1.63
Quarter ended 4/30..............  $2.31       $1.31


1998/1999:
Quarter ended 7/31............    $1.94       $1.25
Quarter ended 10/31...........    $1.69       $0.88
Quarter ended 1/31............    $1.56       $0.63
Quarter ended 4/30............    $1.44       $0.60


     As of April 28, 2000 there were approximately 350 holders of record of
the shares of the Company's Common Stock.

     To date, the Company has not paid any cash or other dividends on its Common
Stock and does not anticipate paying dividends in the foreseeable future.
Moreover, the Company's ability to pay dividends on its Common Stock in the
future will be limited by preferred stock issuances and may be limited by future
preferred stock issuances or by lenders.

     During the fiscal quarter ended April 30, 1999, the Company issued
3,047,137 shares of its common stock (and cancelled 858,022 shares of its common
stock previously issued), without registering the securities under the
Securities Act of 1933, as amended, to 14 individuals for services rendered
valued at prices ranging from $0.25 to $0.90 per share. There were no
underwriters involved in the transaction, and no underwriting discounts or
commissions. In light of the small number of purchasers and that all securities
issued were restricted against subsequent transfer, the Company believes that
this issuance of securities was effected under an exemption provided by Section
4(2) of the Securities Act of 1933, as amended, being sales by an issuer not
involving a public offering.


                                       13

<PAGE>

ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

     The Company continues to incur significant losses from its operations and
development activities. Net loss available to common shareholders was
$30,850,967 for the fiscal year ended April 30, 1999, as compared to a loss of
$14,665,304 for the fiscal year ended April 30, 1998. The Company has incurred
losses since its inception, with an accumulated deficit of $54,271,919 as at
April 30, 1999 and is subject to those risks associated with companies in the
early stages of development. These matters raise substantial doubt about the
Company's ability to continue as a going concern.

     As a result of the acquisition of EPIC, a wholly-owned subsidiary, the
Company is no longer considered a development stage company. For the year ended
April 30, 1999 the Company's consolidated revenues were $22,249,982, compared to
$9,259,698 for the prior fiscal year. The Company's operating loss for the
fiscal year ended April 30, 1999 was $21,985,261, including $10,721,161 as a
provision for impairment, as compared to an operating loss of $11,276,666 for
the prior fiscal year. EPIC's revenues for the fiscal year ended April 30, 1999
were $22,032,853 and it had a net loss of $3,094,463, as compared to EPIC's
revenues for the period from the acquisition date (November 3, 1997) to April
30, 1998 of $8,853,266 and a net loss of $2,780,021 for that period. However,
EPIC's income before interest, income taxes, compensation for stock options,
depreciation and amortization was $2,607,378 as compared to $1,035,221 for the
prior fiscal year. The Company's net loss before income tax benefit for the year
ended April 30, 1999 increased by $20,501,875 to $34,196,672 from $13,694,797
for the prior year due primarily to the aforementioned provision for impairment
of $10,721,161, an increase in net interest expense of $8,276,107 as the Company
increased its debt to finance its ongoing activities during the current year
while carrying the interest cost of the majority of the prior year's loans as
well and an increase in depreciation and amortization expense of $4,061,353
representing the inclusion of EPIC's equipment and contract costs for a full
fiscal year.


Liquidity and Capital Resources

     Since its inception, the Company has continuously met its liquidity needs
primarily from the proceeds of the sale of its Common and Redeemable Preferred
Stock, loans made by affiliates, including directors and principal shareholders,
and loans made by unaffiliated individuals and institutions. For the period May
1, 1998 through April 30, 1999 the Company secured funding through

                                       14

<PAGE>



various private placements and loans from related and unrelated parties,
specifically, $902,001 from the sale of common stock, as compared to $13,306,144
for the prior fiscal year, none from the sale of Redeemable Preferred Stock, as
compared to $10,016,224 for the prior fiscal year and $23,126,563 from loans, as
compared to $5,861,606 for the prior fiscal year. The Company for the fiscal
year ending April 30, 2000 will be faced with significant cash needs to meet
current obligations, and to provide additional development capital including
ongoing corporate overhead and to refinance existing loans. The Company hopes to
meet its liquidity needs through the sale of EPIC and American Soil, Inc.
("ASI"), project financing and additional loans and/or the sale of common and
preferred shares. For the period May 1, 1999 through January 20, 2000 the
Company secured additional funding in the form of $3,700,000 from loans from
both related and unrelated parties.

     The Company's strategy to reduce and eventually eliminate these deficits
entails (1) the sale of its two operating subsidiaries, EPIC and ASI, (2) the
generation of revenues from its Florida Property by the construction and
operation of the Florida Composting Project, (3) the generation of revenues from
its Newark Property, either by the construction and operation of the Newark
Solid Waste Project and/or the development and lease of the property, (4) the
acquisition of additional operating companies and (5) the implementation of
stringent controls on development expenses, which already have been initiated by
the Company's Office of the President. This strategy is dependent upon (1)
finding buyers for EPIC and ASI at prices favorable to the Company, (2) securing
the approvals of certain permits for the Company's Newark and Florida Projects
from various regulatory authorities, (3) receiving substantial financing for
acquisitions and for the construction and development of these Projects and (4)
obtaining loan extensions and/or standstills from the Company's major creditors.

     There can be no assurance that the Company will be able to obtain
sufficient debt or equity financing on favorable terms if at all, or that the
EPIC sale will be completed in a timely manner, if at all, or on terms
acceptable to the Company or that the Company will reach an agreement with its
Series A Redeemable Preferred and Series C Redeemable Preferred stockholders. If
the Company is unable to secure additional financing, attain future profitable
operations, complete the EPIC sale and reach an agreement with its Series A
Redeemable Preferred and Series C Redeemable Preferred stockholders, its ability
to implement its growth strategy will be impaired and its financial condition,
results of operations and cash flows are likely to be materially adversely
affected. These matters, among others, raise substantial doubt about the
Company's ability to continue as a going concern.

     Should the Company be able to secure financing for the Newark and/or
Florida Projects, then it is anticipated that a portion of

                                       15

<PAGE>

the previously financed project costs will be repaid to the Company. However,
such financings, if secured, would not be closed until the end of calendar year
2000 at the earliest, and future revenues generated from these Projects would
not be anticipated until the fiscal year ended April 30, 2002.

     The Company does not incur any significant product research and development
expenses, and the Company does not expect significant changes in its number of
employees unless there is a sale of EPIC, in which case the number of employees
of the Company will be reduced from 88 down to approximately 7. There are no
seasonal aspects that have a material effect on the financial condition or
results of operations of the Company.

               YEAR 2000 COMPLIANCE

     The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. In other words,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations
causing disruptions of operations, including, among others, a temporary
inability to process transactions, send invoices, or engage in similar normal
business activities.

     The Company does not believe that it has material exposure to the Year 2000
issue with respect to its own information systems since its existing systems
correctly define the year 2000. For this reason the Company does not anticipate
that it will incur any significant expense in effecting year 2000 compliance
with regard to its own information system. The Company at present is unable to
predict the extent to which the Year 2000 issue will affect its suppliers, or
the extent to which the Company would be vulnerable to the failure by any of its
suppliers to remediate any Year 2000 issues on a timely basis. The failure of
any major supplier to convert its systems on a timely basis or a conversion that
is incompatible with the Company's systems could have a material adverse effect
on the Company.

        SPECIAL NOTE CONCERNING FORWARD LOOKING STATEMENTS

   This Report on Form 10-KSB including, without limitation, Plan of Operations,
contains forward-looking statements which involve risks and uncertainties. Such
statements can be identified by the use of forward-looking language such as
"will likely result", "may", "are expected to", "is anticipated", "estimate",
"believes", "projected" or other similar words. The Company's actual results
could differ materially from those anticipated in any such forward-looking
statements as a result of various risks, including, without limitation, the
dependence on a single line of business; the failure to close proposed
financings; rapid technological change; change in permitting and environmental
regulations;

                                       16

<PAGE>

inability to attract and retain key personnel; Year 2000 compliance issues; the
potential for significant fluctuations in operating results; and the potential
volatility of the Company's common stock.


ITEM 7.
FINANCIAL STATEMENTS

(a)  Consolidated Balance Sheet as of April 30, 1999

(b)  Consolidated Statements of Operations for the fiscal years ended April 30,
     1999 and April 30, 1998

(c)  Consolidated Statements of Redeemable Preferred and Common Stocks and
     Stockholders' Deficiency for the fiscal years ended April 30, 1999 and
     April 30, 1998

(d)  Consolidated Statements of Cash Flows for the fiscal years ended April 30,
     1999 and April 30, 1998

(e)  Notes to Consolidated Financial Statements

     The Company filed its annual report for its fiscal year ended April 30,
1999 on March 20, 2000. In that filing, the Company's financial statements
contained therein for its fiscal year ended April 30, 1999 were audited by
Rothstein, Kass & Company, PC, Certified Public Accountants. Rothstein, Kass &
Company, PC did express an opinion on the Company's Consolidated Balance Sheet
but was unable to and did not express an opinion on the Company's Consolidated
Statement of Operations, Consolidated Statement of Redeemable Preferred and
Common Stocks and Stockholders' Equity (Deficiency) and Consolidated Statement
of Cash Flows for the year ended April 30, 1999, primarily due to the
information set forth in Note 4 of the Notes to Consolidated Financial
Statements in that filing regarding certain members of present management being
unable to determine the proper year for recording the impairment of capitalized
project costs. The Company's financial statements contained therein for its
fiscal year ended April 30, 1998 were unaudited. The Company's Form 10-KSB for
its fiscal year ended April 30, 1998, filed January 28, 1999, did contain
financial statements for its fiscal year ended April 30, 1998 audited by Arthur
Andersen LLP, Certified Public Accountants. Arthur Andersen LLP had not
consented to the inclusion in that Form 10-KSB of its report on the consolidated
financial statements for the Company's fiscal year ended April 30, 1998,
primarily for the reason set forth in Note 4 of the Notes to Consolidated
Financial Statements in the March 20, 2000 filing. Having been made aware of the
matters described in Note 4 of the Notes to Consolidated Financial Statements in
that filing, Arthur Andersen LLP, by letter dated February 29, 2000, stated to
the Company, ". . . we therefore request that you advise us of your planned
actions to prevent future reliance on the Company's Fiscal 1998 Financial
Statements and the Auditor's Report thereon." In addition, on March 28, 2000 the
Company was advised by Arthur Andersen LLP that Arthur Andersen LLP had
withdrawn its Auditors' Report dated January 12, 1999 on the Company's financial
statements for the fiscal year ended April 30, 1998. This withdrawal was based
primarily on the information disclosed in Note 4 of the Notes to Consolidated
Financial Statements in the March 20, 2000 filing (the "Withdrawal Issues")

     The Company's management has performed additional analysis regarding the
impairment loss recorded for certain project costs and has determined that this
loss is properly recorded in the Company's financial statements for the year
ended April 30, 1999. As a result, the Company's management now agrees that the
April 30, 1998 financial statements previously filed in the Form 10-KSB on
January 28, 1999 present fairly, in all material respects, the financial
position, results of operations and cash flows of the Company, in conformity
with generally accepted accounting principles. As a result, the Company and
Arthur Andersen LLP now have reached agreement regarding the Withdrawal Issues
such that Arthur Andersen LLP has agreed to reissue its Auditor's Report on the
Company's financial statements for the fiscal year ended April 30, 1998. This
Auditor's Report, as well as a revised Auditor's Report from Rothstein, Kass &
Company, PC, is included in this First Amendment to the Company's Form 10-KSB
filed on Form 10-KSB/A for the fiscal year ended April 30, 1999.

                                       17
<PAGE>

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

     The Company's financial statements for its fiscal year ended April 30, 1998
were audited by Arthur Andersen LLP, Certified Public Accountants.

(i) On September 8, 1999 Arthur Andersen LLP resigned as the Company's
independent public accountants.

(ii) The report of Arthur Andersen LLP on the Company's financial statements for
the fiscal year ended April 30, 1998 contained no adverse opinion or disclaimer
of opinion, nor was it modified as to uncertainty, audit scope, or auditing
principles, except that the final paragraph of that report stated:

     "The accompanying financial statements have been prepared assuming that the
     Company will continue as a going concern. The Company has a significant
     working capital deficit and an accumulated deficit, has incurred losses
     since its inception and was in default of certain loan and Redeemable
     Preferred stock covenants and payments on debt that give the lenders and
     Redeemable Preferred stockholders certain rights. These matters raise
     substantial doubt about the Company's ability to continue as a going
     concern. Further, the Company's growth strategy will require substantial
     additional funds. Management plans in regard to these matters are described
     in Note 2. The accompanying financial statements do not include any
     adjustments relating to the recoverability and classification of
     liabilities that might result should the Company be unable to continue as a
     going concern."

(iii) The decision by the Company to change accountants was approved by the
Company's audit committee of the board of directors and by the board of
directors itself.

(iv)(A) There were no disagreements between the Company and Arthur Andersen LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which, if not resolved to the
satisfaction of Arthur Andersen LLP, would have caused them to make reference to
the subject matter of the disagreement in connection with their report.

(iv)(B) At the time of their resignation, Arthur Andersen LLP had not advised
the Company that:

     (1) internal controls necessary to develop reliable financial statements
did not exist; or

     (2) information has come to their attention which made them unwilling to
rely upon management's representations, or made them unwilling to be associated
with the financial statements prepared by management; or

                                       18

<PAGE>
     (3) the scope of the audit should be expanded significantly, or information
has come to their attention that they have concluded will, or if further
investigated might, materially impact the fairness or reliability of a
previously issued audit report or the underlying financial statements, or the
financial statements issued or to be issued covering the fiscal year ended April
30, 1998.

     On September 9, 1999 the Company engaged Rothstein, Kass & Company, P.C. as
its accountants to render its report on the Company's financial statements for
the fiscal year ended April 30, 1999.


     On July 20, 1998 Arthur Andersen LLP, Certified Public Accountants replaced
Zeller Weiss & Kahn, LLP Certified Public Accountants as accountants for the
Company by mutual agreement between the Company's Board of Directors and the
resigning accountants. No report on the Company's financial statements issued by
the resigning accountants contained an adverse opinion or disclaimer of opinion
or was qualified or modified as to uncertainty, audit scope or accounting
principles, nor were their any disagreements on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure.

                                    PART III

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

            Directors and Executive Officers

     The following persons were directors, executive officers and consultants
acting as members of the Office of the President of the Company as at January
31, 2000.



   NAME             AGE      POSITION(S)
----------------    ---    ---------------------------------

Christopher Daggett  49     Office of the President

Marvin Roseman       70     Office of the President; President
                            of all Subsidiaries (except EPIC,
                            Inc.), Principal Financial Officer

Richard L. Franks    56     Vice President and General
                            Counsel, Assistant Secretary


                                       19

<PAGE>



Anthony P. Cipollone 36     Treasurer, Controller;
                            Principal Accounting Officer

G. Chris Andersen    60     Director

Charles R. Carson    52     Director

Pasquale J. DiLeo    47     Secretary; Director

Robert J. Longo      56     Director; President of EPIC, Inc.

Peter Petrillo       39     Director

John T. Shea         49     Director

Christopher Smith    35     Director

Roger E. Tuttle      58     Director

     The Company's by-laws provide that the Directors of the Company shall serve
until the next annual meeting of shareholders and until their successors are
duly appointed and qualified. All officers serve at the pleasure of the Board of
Directors. A Stockholders Agreement and a Director Appointment Agreement among
the Company and certain principal stockholders of the Company requires support
of the election of certain nominees of Wasteco Ventures Limited (currently Peter
Petrillo, John T. Shea and Christopher Smith), of Robert J. Longo (currently
Robert J. Longo) and of Lionhart Global Appreciation Fund, Ltd., (currently
vacant) to the Company's Board of Directors. The board of directors has an audit
committee consisting of Charles R. Carson (Chairman),Pasquale J. DiLeo
(Secretary) and Peter Petrillo.

     Since April 1999, the Company has been managed by an Office of the
President, which positions, since August 1999, have been held solely by two
consultants, Christopher Daggett and Marvin Roseman. Each serve on a
month-to-month basis, and each is paid $20,000 per month, plus expenses.

               OFFICERS AND DIRECTORS

CHRISTOPHER DAGGETT - OFFICE OF THE PRESIDENT

     Christopher Daggett joined the Company's Office of the President in April,
1999. Since 1996, Mr. Daggett has been the President of Chadwick Partners, a
firm seeking to acquire, remediate and redevelop or sell environmentally
impaired real estate and environmentally impaired companies. From 1990 through
1996, prior to forming Chadwick Partners, Mr. Daggett was Managing Director of
William E. Simon & Sons, a New Jersey based investment firm.


                                       20

<PAGE>

MARVIN ROSEMAN - OFFICE OF THE PRESIDENT; PRINCIPAL FINANCIAL OFFICER; PRESIDENT
                 OF ALL SUBSIDIARIES (except EPIC, INC.)

     Marvin Roseman joined the Company's Office of the President in April 1999.
From 1994 through the present, Mr. Roseman has been the President of Bentley,
King Associates, a business consulting firm located in Las Vegas, Nevada.

RICHARD L. FRANKS - VICE PRESIDENT AND GENERAL COUNSEL, ASSISTANT
                    SECRETARY

     Richard L. Franks joined the Company in February, 1999. From 1997 through
the present, Mr. Franks has been the Managing Director of Aegis Green Ltd., Isle
of Jersey, U.K., a waste-to-energy company. From 1994 through 1997 he served as
the General Counsel of Waste Solutions, Inc. a Houston, Texas based composting
company, and as the Director of Legal Affairs of L.A. Water Treatment
Corporation, a Los Angeles, California based construction company. Both L.A.
Water Treatment Corporation and Waste Solutions, Inc. are owned by Thames Water
PLC of London, England.

ANTHONY P. CIPOLLONE, CPA - TREASURER; CONTROLLER; PRINCIPAL ACCOUNTING OFFICER

     Anthony P. Cipollone has extensive accounting experience in the
construction industry and for three years, from 1994 through 1997, as controller
of VRH Construction Corp., worked very closely with the Company and its
management before joining the Company in January 1998.

G. CHRIS ANDERSEN - DIRECTOR

     G. Chris Andersen has been a general partner of Andersen, Weinroth & Co.,
L.P., a private merchant bank, since 1995. From 1990-1995, Mr. Andersen was Vice
Chairman and head of International Banking at PaineWebber Incorporated. He has
been a Director of the Company since November, 1997.

     Mr. Andersen currently serves on the board of directors of several public
and private companies, including Terex Corporation and the Sunshine Mining
Company both of which are listed on the New York Stock Exchange.

CHARLES R. CARSON - DIRECTOR

     Charles R. Carson became a Director of the Company in November, 1997. He
has been a principal of Churchill Capital, Inc. since February 1999. From 1985
through 1999, Mr. Carson was a Partner at Quirk, Carson, Peppet, Inc. ("QCP").
QCP was established in 1985 to serve as investment bankers and management
consultants to small and mid-sized companies (those with annual revenues of
approximately $10 million to $200 million) in the

                                       21

<PAGE>

environmental/waste management industry.

PASQUALE ("PAT") J. DILEO - SECRETARY; DIRECTOR

     Pasquale ("Pat") J. DiLeo, Secretary and a Director of the Company, has
been the President of Select Acquisitions, Inc., a holding company, since 1993.
He has been a Director of the Company since 1995.

ROBERT J. LONGO - DIRECTOR, PRESIDENT OF EPIC, INC.

     Robert J. Longo, President and founder of EPIC, Inc. since 1971 became a
Director of the Company when it acquired EPIC in November 1997.

PETER PETRILLO - DIRECTOR

     Peter Petrillo has been a Vice President in the merchant banking and direct
equity investments group at Wafra Investment Advisory Group, Inc. since January
1995. From January 1991 to December 1994, Mr. Petrillo was a partner at Claymore
Partners Ltd., a strategic and turnaround consulting firm. He became a Director
of the Company in 1997.

JOHN T. SHEA - DIRECTOR

     John T. Shea has been responsible for merchant banking and direct equity
investments at Wafra Investment Advisory Group, Inc. since 1991. Mr. Shea became
a Director of the Company in 1997.

CHRISTOPHER R. SMITH - DIRECTOR

     Christopher R. Smith has been an independent consultant in the
telecommunications industry since August 1999. From 1992 through August 1999 he
was a Vice President in the merchant banking and direct equity investments group
at Wafra Investment Advisory Group, Inc. Mr. Smith became a Director of the
Company in 1997.

ROGER E. TUTTLE -  DIRECTOR

   Roger E. Tuttle, the Company's founder in 1993, was, through April 1999, the
Company's President and Chairman, Chief Executive and Chief Financial Officer.
He remains a Director of the Company.



                                       22

<PAGE>



ITEM 10.
EXECUTIVE COMPENSATION

   (b)  SUMMARY COMPENSATION TABLE

Name            Annual Compensation                  All
and          Fiscal                 Other    Long-   Other
Principal     Year                 Annual    Term    Compen-
Position     Ended   Salary    Bonus Comp.   Comp.   sation
----------   ------- -------   ----- ------  -------  -------
Roger E.    4/30/99  $225,000   none   none  none    $ 9,210
Tuttle,     4/30/98  $350,000   none   none  none    $12,488
President,  4/30/97  $225,000   none   none  none    none
CEO
Robert J.   4/30/99  $325,000   none   none  none    $17,200 (1)
Longo,      4/30/98  $162,500(2)none   none  none    $3,600
President   4/30/97    n/a      none   none  none    none
of EPIC

(1)  In addition, Mr. Longo earned a fee of $700,000 for providing a personal
     indemnification for a surety bond issued to the Company. $214,508 of this
     fee was paid during the fiscal year.

(2)  Commencing November 3, 1997

   (c)  OPTIONS/SAR GRANTS TABLE

          Number of    %age of
          Shares       Total
          Under-       Options
          lying        Granted
          Options      in Fiscal  Exercise or Base  Expiration
Name      Granted      Year       Price Per Share   Date
-------   ---------   ---------  ----------------  ----------

R. Tuttle    none       n/a            n/a           n/a
R. Longo     none       n/a            n/a           n/a

   (d)  Aggregated Option/SAR Exercises in Last Fiscal Year and
        Fiscal Year-End Option/SAR Value Table


                                Number of       Value of
                                Shares Under    Unexercised
                                Unexercised     In-the-Money
          Shares                Options at      Options at
          Acquired   Value      FY-End; Exer/   FY-End; Exer/
Name      On Exerc.  Realized   non-Exer'able   Non-Exer'able (2)
-------   ---------  --------   ------------    ------------

R. Tuttle    none     none      1,209,875       n/a
R. Longo     none     none      1,500,000 (1)   n/a


                                       23

<PAGE>

(1)  700,000 shares exercisable, 800,000 shares non-exercisable

(2)  The market price of the Company's common stock as at its April 30, 1999
     fiscal year end was $0.6875 per share, thus no options were "in-the-money".

   (e) LONG-TERM INCENTIVE PLAN ("LTIP") AWARDS TABLE

    None of the persons included in (b) above were covered by any plans.

   (f) COMPENSATION OF DIRECTORS

    No Director of the Company is compensated for serving as a director.

   (g) EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
       CHANGE-IN-CONTROL ARRANGEMENTS.

     None of the persons included in (b) above were covered by any employment
contracts, termination of employment or change-in-control arrangements other
than as set forth in the employment agreement set forth herein.

     On May 1, 1997 the Company entered into an amended employment agreement
with its then President, Roger E. Tuttle. His agreement provided for employment
as the Company's President through August 1, 2004 at an initial annual salary of
$350,000 (of which $125,000 is not paid until the Company's cash resources allow
payment thereof) with annual increases commensurate with the growth of the
Company, plus a bonus of 5% of the Company's Consolidated Net Income After Taxes
on the first $25,000,000 thereof and 2% thereafter. In addition, Mr. Tuttle also
received options to purchase 1,000,000 shares of the Company's common stock at
$2.50 per share exercisable through August 1, 2004. In addition, he receives a
one-time bonus of $500,000 when the Company's common shares are accepted for
listing on The NASDAQ Small Cap Stock Market or National Market System.

     This agreement was further amended effective May 1, 1999 and was terminated
by the Company for cause in August 1999. Mr. Tuttle disputes this termination
for cause.

     On November 3, 1997 the Company's wholly owned subsidiary, EPIC, entered
into an employment agreement with Robert J. Longo. His agreement provides for
employment as the President of EPIC, Inc. through September 15, 2002 at an
initial annual salary of $325,000 and a bonus formula, plus options to purchase
1,500,000 shares of the Company's common stock at $1.00 per share exercisable
through September 16, 2002, which options vested 500,000 initially, and 200,000
annually commencing September 15, 1998.

     The Company entered into an employment agreement with Richard

                                       24

<PAGE>

L. Franks, the Company's Vice President, Secretary and General Counsel, for a
five year term effective February 1, 1999. The agreement calls for an annual
salary of $192,000, a bonus of $100,000 upon the financial closing of each of
the Miami and Newark Projects and options to purchase 50,000 shares of the
Company's common stock for a period of five years.

   (h) REPORT ON REPRICING OF OPTIONS/SARS

   None


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The Company's only class of voting securities is its Common Stock.

     The following table sets forth, as of January 31, 2000, all persons known
by the Company to be a beneficial owner of more than five percent of the
Company's Common Stock and the Common Stock ownership in the Company, directly
or indirectly, by each of its directors and executive officers and by all
directors and executive officers of the Company as a group.

                            Amount and
                            Nature of
Name and Address            Beneficial        Percent of
of Beneficial Owners (1)    Ownership         Class
------------------------    ---------         -----

G. Chris Andersen          1,783,934 (2)       3.2%
 821 West Shore Drive
 Kinnelon, NJ 07405
 (Director)

Charles R. Carson            238,334 (3)       *
 70 Mendota Avenue
 Rye, NY 10580
 (Director)

Anthony P. Cipollone         390,000 (4)       *
 7 Halley Drive
 Pomona, NY 10970
 (Treasurer, Controller)

Christopher Daggett                0           0%
 96 Deer Ridge Road
 Basking Ridge, NJ 07927
 (Office of the President)



                                       25

<PAGE>



Pasquale J. DiLeo            151,000 (5)       *
 832 Bay Avenue
 Toms River, NJ 08753
 (Secretary; Director)

Richard Franks                50,000 (6)       *
 8821 South Blue Mountain Pl.
 Highlands Ranch, CO 80126
 (Vice President, General
  Counsel, Assistant Secretary)

Robert J. Longo            7,063,248 (7)      12.4%
 71 Roxitichus Road
 Mendham, NJ 07945
 (Director)

Peter Petrillo                   0             0%
 243 Peachtree Drive
 East Norwich, NY 11732
 (Director)

Marvin Roseman                   0             0%
 7960 Castle Pines Avenue
 Las Vegas, NV 8913
 (Office of the President)

 John T. Shea                   (8)            0%
 94 Emily Road
 Far Hills, NJ 07931
 (Director)

Christopher Smith                0             0%
 21 Middlesex Road
 Darien, CT 06820
 (Director)

Roger E. Tuttle             2,233,884 (9)      3.9%
 3105 Gibson Lane
 Doylestown, PA 18901
 (Director)

Wasteco Ventures Limited   18,210,826 (8)     32.8%
 Citco Building, Wickham's Cay
 P.O. Box 662
 Roadtown, Tortola, BVI

Officers and Directors     30,121,226 (10)    51.0%
As A Group (12 Persons)

-------------------
* Less than 1%


                                       26

<PAGE>



(1) Unless otherwise indicated, each person named in the table exercises sole
voting and investment power with respect to all shares beneficially owned.

(2) Includes 301,532 shares owned by G. Chris Andersen directly, 1,082,402
shares owned by Andersen Weinroth LP, of which G. Chris Andersen is a general
partner and 100,000 shares owned by AW Compost Partners, of which Andersen
Weinroth LP is a general partner. Also includes 300,000 shares which may be
acquired by Mr. G. Chris Andersen within sixty (60) days upon the exercise of
options.

(3) Includes 238,334 shares which may be acquired by Mr. Carson within sixty
(60) days upon the exercise of options.

(4) Includes 40,000 shares owned directly by Mr. Cipollone and 350,000 shares
which may be acquired by Mr. Cipollone within sixty (60) days upon the exercise
of options.

(5) Includes 1,000 shares owned directly by Mr. DiLeo and 150,000
shares owned by Select Acquisitions, Inc., of which Mr. DiLeo is
President.

(6) Includes 50,000 shares which may be acquired by Mr. Franks within sixty (60)
days upon the exercise of options.

(7) Includes 5,563,248 shares owned by Mr. Longo directly. Also includes
1,500,000 shares which may be acquired by Mr. Longo within sixty (60) days upon
the exercise of options.

(8) When authorized, on an item-by-item basis, John T. Shea acts as
attorney-in-fact for Wasteco Ventures Limited.

(9) Includes 1,024,009 shares owned by Roger E. Tuttle directly. Also includes
1,209,875 shares which may be acquired by Mr. Tuttle within sixty (60) days upon
the exercise of options.

(10) Includes 3,648,209 shares which may be acquired within sixty (60) days upon
the exercise of options and warrants. As at January 31, 2000, the Company had
55,452,489 shares outstanding. An additional 14,697,586 shares were subject to
acquisition within sixty (60) days upon the exercise of options and warrants and
the conversion of notes, for a total of 70,150,075.


ITEM 12.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On November 3, 1997 the Company acquired all of the issued and outstanding
shares of R. J. Longo Construction Co., Inc. of Denville, New Jersey from its
President and sole shareholder, Robert J. Longo, and from the Andrea Longo
Charitable Trust, for

                                       27

<PAGE>

approximately $33 million, including the assumption of approximately $ 8 million
of debt. R. J. Longo Construction Co., Inc. then changed its name to
Environmental Protection & Improvement Company, Inc. At the same time, the
Company sold to Wasteco Ventures Limited, a British Virgin Islands company
affiliated with Wafra Investment Advisory Group, Inc., 11,490,609 shares of its
common stock, no par value, 130,000 shares of its then newly created Series A
Redeemable Preferred Stock and 70,000 shares of its then newly created Series C
Redeemable Preferred Stock for gross proceeds of approximately $20 million. The
$26 million purchase price paid to Robert J. Longo and the Andrea Longo
Charitable Trust consisted of the $20 million in cash, plus the issuance to
Robert J. Longo of 3,447,182 shares of the Company's common stock, 39,000 shares
of its Series A Redeemable Preferred Stock and 21,000 shares of its Series C
Redeemable Preferred Stock, collectively valued at $6 million. As a result of
these transactions, Robert J. Longo and three designees and affiliates of Wafra
Investment Advisory Group, Inc., Peter Petrillo, John T. Shea and Christopher
Smith, were appointed to the Company's Board of Directors.

     On April 27, 1998 the Company sold to AW Compost Partners, LLC, a Delaware
limited liability company, 1,627,980 shares of its common stock and 17,500
shares of its then newly created Series D Redeemable Preferred Stock for cash of
$416,334, settlement of liabilities due to entities related to AW Compost
Partners, LLC totaling $888,079, a note receivable of $445,587 from American
Marine Rail, LLC and a one-third ownership in American Marine Rail, LLC. G.
Chris Andersen, a Director of the Company, is the Manager and a voting member of
AW Compost Partners, LLC. In consideration of their consenting to the creation
of the Series D Redeemable Preferred Stock, and in consideration of the November
3, transactions, Wasteco Ventures Limited was issued 602,955 shares of the
Company's common stock and Robert J. Longo was issued 180,887 shares of the
Company's common stock.

     Employment agreements of Roger E. Tuttle, Robert J. Longo and Richard L.
Franks are set forth in Item 10 above.

     Loans to the Company from VRH Construction Corp. and/or its principals
Victor Wortmann, Sr. and Robert E. Wortmann, are set forth in the Notes to
Consolidated Financial Statements, Note 14. Victor Wortmann, Sr. resigned as
Chairman and a Director of the Company on November 3, 1997. Robert E. Wortmann
resigned as Secretary and a Director of the Company on June 15, 1998.

     During the fiscal year ended April 30, 1999, Robert J. Longo earned a fee
of $700,000 from the Company for providing a personal indemnification for a
surety bond acquired by the Company. $214,508 of this fee was paid in the fiscal
year ended April 30, 1999.



                                       28

<PAGE>



ITEM 13.
EXHIBITS AND REPORTS ON FORM 8-K

     a.    Exhibits required by Item 601 of Regulation S-B

         2.  Plan of Acquisition,
             Reorganization, etc.         (1)

         3.  Articles of Incorporation    (1), (2), (3), (4), (7)
             and By-Laws


         4.  Instruments defining the     (1), (2), (3), (4), (5)
             Rights of Security Holders

         9.  Voting Trust Agreement       (2), (3)

         10. Material Contracts           (2)

         11. Statement re Computation of Per Share Earnings - See Consolidated
             Statement of Operations and  Note 4 to Consolidated Financial
             Statements

         13. Annual or Quarterly Reports   none

         16. Letter on Change in          (6), (8)
             Certifying Accountant

         18. Letter on Change in           none
             Accounting Principles

         21. Subsidiaries of the       see Part I, Item 1,
             Registrant                Background, herein

         22. Published Report Regarding   none
             Matters Submitted to Vote


         23. Consents of Experts and     not applicable
             Counsel

         24. Power of Attorney            none

         27. Financial Data Schedule     filed electronically

         99. Additional Exhibits         None

(1) Incorporated by Reference to Registration Statement on Form
    S-1; File No. 333-1592; effective June 7, 1996

(2) Incorporated by Reference to Report on Form 8-K dated November 3, 1997 and
    filed November 17, 1997


                                       29

<PAGE>

(3) Incorporated by Reference to Report on Form 8-K dated December 12, 1997 and
    filed December 24, 1997

(4) Incorporated by Reference to Report on Form 8-K dated April 27, 1998 and
    filed May 4, 1998

(5) Incorporated by Reference to Report on Form 8-K dated June 15, 1998 and
    filed June 19, 1998

(6) Incorporated by Reference to Report on Form 8-K dated July 20, 1998 and
    filed July 22, 1998

(7) Incorporated by Reference to Report on Form 8-K dated July 30, 1998 and
    filed August 11, 1998

(8) Incorporated  by Reference to Report on Form 8-K dated  September 8, 1999
    and filed September 14, 1999

   (b) Reports on Form 8-K during the last quarter

1.   A report on Form 8-K was filed on April 27, 1999 to report events on April
     21, 1999; the creation of the Office of the President consisting of Roger
     E. Tuttle, Christopher Daggett and Marvin Roseman, Mr. Tuttle's resignation
     as the Company's President and Chief Executive Officer and the execution of
     a second amended employment agreement with Mr. Tuttle. No financial
     statements were included in this filing.


                                       30

<PAGE>


                      COMPOST AMERICA HOLDING COMPANY, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS
                                       AND
                          INDEPENDENT AUDITORS' REPORT

                                 APRIL 30, 1999


<PAGE>


             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES




                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS




                                                                         Page
                                                                         ----


Independent Auditors' Report                                              1-2

Report of Independent Public Accountants                                    3

Consolidated Balance Sheet                                                4-5

Consolidated Statements of Operations                                       6

Consolidated Statements of Redeemable Preferred and Common                  7
 Stocks and Stockholders' Equity (Deficiency)

Consolidated Statements of Cash Flows                                     8-9

Notes to Consolidated Financial Statements                              10-34



<PAGE>


                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and shareholders of
Compost America Holding Company, Inc.


We have audited the accompanying consolidated balance sheet of Compost America
Holding Company, Inc. and Subsidiaries as of April 30, 1999, and the related
consolidated statements of operations, redeemable preferred and common stocks
and stockholders' equity (deficiency), and cash flows for the year then ended.
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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Compost America
Holding Company, Inc. and Subsidiaries as of April 30, 1999, and the results of
their operations and their cash flows for then year the ended, in conformity
with generally accepted accounting principles.

As discussed in Note 14 to the consolidated financial statements, the Company
has been named as a defendant in the Superior Court of New Jersey, Law Division,
Essex Vicinage in an action brought against it by its former President. Also as
discussed in Note 14 to the consolidated financial statements, the Company is
involved in a dispute with a member of its Board of Directors and Audit
Committee. The ultimate outcomes of the litigation and dispute cannot presently
be determined. The Company has provided for certain amounts relating to these
matters, but such amounts are significantly less than the amounts claimed.
Unfavorable outcomes of either of these matters could have a material adverse
effect on the Company's consolidated financial position, results of operations
and cash flows.




                                       1

<PAGE>

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has a significant working capital
deficit, an accumulated deficit and a stockholders' deficiency, and has incurred
losses since its inception and is in default of certain loan and Preferred stock
covenants and payments on debt that give the lenders and Preferred stockholders
certain rights. These matters raise substantial doubt about the Company's
ability to continue as a going concern. Further, the Company's growth strategy
will require substantial additional funds. Management's plans in regard to these
matters are also described in Note 2. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



                                            /s/ Rothstein, Kass & Company, P.C.



Roseland, New Jersey
November 17, 1999, except for paragraph seven
of Note 20 which is as of December 16, 1999,
paragraph eight of Note 20 which is as of
December 31, 1999, paragraph nine of Note 20
which is as of December 9, 1999, and paragraphs five
and ten of Note 20 which is as of March 31, 2000












                                       2
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To Compost America Holding Company, Inc.


We have audited the accompanying consolidated statements of operations,
redeemable preferred and common stocks and stockholders' equity (deficiency) and
cash flows of Compost America Holding Company, Inc. (a New Jersey corporation)
and Subsidiaries for the year ended April 30, 1998. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Compost
America Holding Company, Inc. and Subsidiaries for the year ended April 30,
1998, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has a significant working
capital deficit and an accumulated deficit, has incurred losses since its
inception and was in default of certain loan and Preferred stock covenants and
payments on debt that give the lenders and Preferred stockholders certain
rights. These matters raise substantial doubt about the Company's ability to
continue as a going concern. Further, the Company's growth strategy will require
substantial additional funds. Management plans in regard to these matters are
described in Note 2. The accompanying financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or amounts and classifications of liabilities that might result should
the Company be unable to continue as a going concern.




                                                      /s/ Arthur Andersen LLP



Philadelphia, Pa.,
   January 12, 1999











                                       3
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                 April 30, 1999

<TABLE>
<CAPTION>
                                                  ASSETS
<S>                                                                                    <C>
Current assets

 Cash and cash equivalents                                                           $    299,010
 Restricted project fund trust account                                                 91,370,763
 Accounts receivable, net of allowance for doubtful accounts of $117,422                5,440,140
 Prepaid expenses and other current assets                                                512,865
                                                                                     ------------

   Total current assets                                                                97,622,778
                                                                                     ------------

Property, plant and equipment, net                                                     22,523,429
                                                                                     ------------

Other assets

 Customer contract rights, net                                                         26,567,001
 Other intangible assets, net                                                           1,322,546
 Investment in joint venture                                                              872,886
 Other assets                                                                             254,409
                                                                                     ------------

   Total other assets                                                                  29,016,842
                                                                                     ------------

                                                                                     $149,163,049
                                                                                     ============



                                LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities

 Short-term debt                                                                     $    522,816
 Bond payable                                                                          91,370,763
 Long-term debt, current portion                                                       18,814,808
 Due to related parties                                                                 8,403,637
 Accounts payable                                                                       5,052,282
 Accrued expenses                                                                       5,084,156
                                                                                     ------------

   Total current liabilities                                                          129,248,462
                                                                                     ------------


Long-term debt                                                                          7,087,062
                                                                                     ------------
</TABLE>


          See accompanying notes to consolidated financial statements

                                       4

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEET (CONTINUED)
                                 April 30, 1999


<TABLE>
<CAPTION>

                               LIABILITIES AND STOCKHOLDERS' DEFICIENCY (CONTINUED)

<S>                                                                                       <C>
Redeemable Preferred and Common stock, no par value
 Series A, 169,000 shares authorized, issued,
 and outstanding (liquidation value of $17,350,668)                                        6,747,654

 Series B, 400,000 shares authorized, issued,
 and outstanding (liquidation value of $1,264,000)                                         1,240,000

 Series C, 91,000 shares authorized, issued,
 and outstanding (liquidation value of $11,807,562)                                        3,829,917

 Series D, 17,500 shares authorized, 17,500 issued,
 and outstanding (liquidation value of $1,866,646)                                         1,229,542

 Redeemable common stock, no par value; 553,386 shares issued
 and outstanding (liquidation value of $1,770,836)                                         1,770,836
                                                                                       -------------
   Total Redeemable Preferred and Common stock                                            14,817,949
                                                                                       -------------

Stockholders' deficiency
 Preferred stock, no par value; 25,000,000 shares authorized, none issued
 Preferred stock Series B, Convertible, 5,000,000 shares authorized; 1,000
 shares issued and outstanding                                                                 2,500
 Common stock no par value; 100,000,000 shares authorized;
 47,402,011 shares issued and outstanding                                                 41,060,146
 Additional paid-in capital                                                               14,127,222
 Common stock to be issued, no par value; 858,564 shares                                     599,127
 Accumulated deficit                                                                     (54,271,919)
 Deferred compensation                                                                    (2,082,500)
 Treasury stock, 1,150,000 common shares, at cost                                         (1,425,000)
                                                                                       -------------
   Total stockholders' deficiency                                                         (1,990,424)
                                                                                       -------------

                                                                                       $ 149,163,049
                                                                                       =============
</TABLE>

          See accompanying notes to consolidated financial statements

                                       5


<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                  Year Ended April 30,
                                                            1999                     1998
                                                       ------------              ------------
<S>                                                    <C>                       <C>
Revenues                                               $ 22,249,982              $  9,259,698
                                                       ------------              ------------

Costs and expenses
  Operating                                              15,830,073                 6,205,099
  Selling, general and administrative                    10,455,584                 9,438,693
  Depreciation and amortization                           6,633,425                 2,572,072
  Compensation for stock options                            595,000                 2,320,500
  Provision for impairment                               10,721,161
                                                       ------------              ------------

                                                         44,235,243                20,536,364
                                                       ------------              ------------

Operating loss                                          (21,985,261)              (11,276,666)
                                                       ------------              ------------


Other income (expense)
  Interest expense                                      (14,162,511)               (3,627,735)
  Interest income                                         3,468,273                 1,209,604
  Loss on investment                                       (819,129)
  Other, net                                               (698,044)
                                                       ------------              ------------
Loss before income tax benefit                          (34,196,672)              (13,694,797)

Income tax benefit                                        7,906,420                 2,076,671
                                                       ------------              ------------

Net loss                                                (26,290,252)              (11,618,126)

Preferred stock dividends                                (1,519,761)               (1,829,742)

Accretion on preferred stock                             (3,040,954)               (1,217,436)
                                                       ------------              ------------

Net loss applicable to common stockholders             $(30,850,967)             $(14,665,304)

                                                       ============              ============

Net loss per common share
  Basic and diluted                                    $      (0.75)             $      (0.55)
                                                       ============              ============
</TABLE>


          See accompanying notes to consolidated financial statements

                                       6
<PAGE>

<TABLE>
<CAPTION>



                                       COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

              CONSOLIDATED STATEMENTS OF REDEEMABLE PREFERRED AND COMMON STOCKS AND STOCKHOLDERS' EQUITY (DEFICIENCY)


                                                                               Redeemable Preferred Stock
                                                  --------------------------------------------------------------------------------
                                                          Series A                 Series B              Series C       Series D
                                                  ------------------------  -----------------------------------  -----------------
                                                     Shares      Amount       Shares     Amount     Shares     Amount    Shares
                                                  ----------- ----------- -----------  ---------  ---------   ---------  ---------
<S>                                                <C>         <C>            <C>      <C>         <C>         <C>        <C>
 Balances, April 30, 1997                                     $       -               $       -               $       -
 Proceeds for acquisition from sale of
  Preferred and Common stock, net of
  transaction costs                                  130,000  3,829,077                             70,000    1,217,146
 Preferred and Common stock issued
  for acquisition                                     39,000  1,365,000                             21,000      525,000
 Preferred and Common stock issued for
  investment transaction                                                                                                 17,500
 Proceeds from sales of Common stock,
  net of transaction costs
 Common stock issued for property
 Common stock issued for services
 Common stock issued for debt repayment
 Proceeds from sale of Common stock and
 Preferred stock, net of transaction costs
 Deferred compensation on stock options granted
 Amortization of deferred compensation
 Common stock options granted to consultants
 Settlement of stock subscription receivable
 Conversion of Preferred stock to note payable
 Accretion of Preferred stock                                   516,444                                         699,781
 Exercise of Common stock options,
  including tax benefit
 Preferred stock dividends
 Net loss
                                                  ----------- ---------- --------  -------------  --------- ------------ -------

 Balances, April 30, 1998                            169,000  5,710,521        -              -     91,000    2,441,927  17,500
 Proceed from sales of Common stock,
  net of transaction costs
 Common stock issued for project costs
 Common stock issued for services
 Common stock issued in connection with debt
 Common stock issued for interest
 Reimbursement shares
 Antidilution shares
 Amortization of deferred compensation
 Revaluation of Common stock to redemption value
 Conversion of Preferred stock to Redeemable                             400,000      1,240,000
  Preferred stock
 Conversion of Common stock to Redeemable
  Common stock
 Accretion of Preferred stock                                 1,037,133                                       1,387,990
 Options and warrants issued for services
 Options and warrants issued in connection with
  debt financing
 Debt conversion preference
 Shares to be issued for services
 Purchase of 1,150,000 shares of treasury stock
 Preferred stock dividends
 Net loss
                                                  ----------- ---------- --------  -------------  --------- ------------ -------

 Balances, April 30,1999                             169,000  $6,747,654  400,000    $ 1,240,000     91,000   $3,829,917  17,500
                                                  =========== ========== ========  =============  ========= ============ =======
</TABLE>


<PAGE>
                               [RESTUBBED TABLE]

<TABLE>
<CAPTION>
                                                Redeemable                                      Stockholders' Equity (Deficiency
                                                 Preferred                                      --------------------------------
                                                  Stock                                                      Series B
                                                 Series D     Redeemable Common Stock                    Preferred Stock
                                                 --------     ----------------------------         --------------------------
                                                   Amount      Shares          Amount                Shares            Amount
                                                 ----------   ----------   ---------------         -----------   -------------
<S>             <C> <C>                          <C>                       <C>                                   <C>
Balances, April 30, 1997                         $        -                $              -                      $         -
Proceeds for acquisition from sale of
 Preferred and Common stock, net of
 transaction costs
Preferred and Common stock issued
 for acquisition
Preferred and Common stock issued for
 investment transaction                             612,500
Proceeds from sales of Common stock,
 net of transaction costs
Common stock issued for property
Common stock issued for services
Common stock issued for debt repayment
Proceeds from sale of Common stock and
Preferred stock, net of transaction costs                                                            801,000        908,153
Deferred compensation on stock options granted
Amortization of deferred compensation
Common stock options granted to consultants
Settlement of stock subscription receivable
Conversion of Preferred stock to note payable                                                       (400,000)      (626,190)
Accretion of Preferred stock                          1,211
Exercise of Common stock options,
 including tax benefit
Preferred stock dividends
Net loss
                                                ------------  --------    -----------------  ----------------  -------------

Balances, April 30, 1998                            613,711         -                     -          401,000        281,963
Proceed from sales of Common stock,
 net of transaction costs
Common stock issued for project costs
Common stock issued for services
Common stock issued in connection with debt
Common stock issued for interest
Reimbursement shares
Antidilution shares
Amortization of deferred compensation
Revaluation of Common stock to redemption value
Conversion of Preferred stock to Redeemable                                                         (400,000)      (279,463)
 Preferred stock
Conversion of Common stock to Redeemable                       53,386             1,770,836
 Common stock
Accretion of Preferred stock                        615,831
Options and warrants issued for services
Options and warrants issued in connection with
 debt financing
Debt conversion preference
Shares to be issued for services
Purchase of 1,150,000 shares of treasury stock
Preferred stock dividends
Net loss
                                                ------------  --------    -----------------  ----------------  -------------
Balances, April 30,1999                          $1,229,542   553,386          $  1,770,836            1,000   $      2,500
                                                ============  ========    =================  ================  =============
</TABLE>


<PAGE>


                               [RESTUBBED TABLE]
<TABLE>
<CAPTION>


                                                                           Stockholders' Equity (Deficiency)
                                                     -------------------------------------------------------------------------
                                                              Common Stock             Additional    Common Stock to be Issued
                                                     -----------------------------       Paid in     -------------------------
                                                      Shares            Amount           Capital          Shares     Amount
                                                     ---------      ---------------    -----------     ---------- ----------
<S>             <C> <C>                              <C>            <C>                <C>                        <C>
Balances, April 30, 1997                             17,707,841     $    10,611,169    $         -                $        -
Proceeds for acquisition from sale of
 Preferred and Common stock, net of
 transaction costs                                   11,490,609          10,069,335      1,750,000
Preferred and Common stock issued
 for acquisition                                      3,447,182           3,705,000        525,000
Preferred and Common stock issued for
 investment transaction                               1,627,980           1,953,576
Proceeds from sales of Common stock,
 net of transaction costs                               955,000           1,907,559
Common stock issued for property                        200,000             200,000
Common stock issued for services                      2,026,575           1,985,463
Common stock issued for debt repayment                  541,478           1,261,338
Proceeds from sale of Common stock and
Preferred stock, net of transaction costs                                   744,822
Deferred compensation on stock options granted                                           4,998,000
Amortization of deferred compensation
Common stock options granted to consultants                                              2,881,931
Settlement of stock subscription receivable
Conversion of Preferred stock to note payable
Accretion of Preferred stock
Exercise of Common stock options,
 including tax benefit
Preferred stock dividends                               419,080             488,774
Net loss                                                900,833           1,321,417                    320,552       508,325
                                                   ------------   -----------------  -------------  ----------   -----------
Balances, April 30, 1998                             39,316,578          34,248,453     10,154,931     320,552       508,325
Proceed from sales of Common stock,
 net of transaction costs                             1,397,000             902,001
Common stock issued for project costs                   171,000             139,200
Common stock issued for services                      2,643,138           1,933,083
Common stock issued in connection with debt           1,364,528           1,699,873
Common stock issued for interest                        285,000             137,168
Reimbursement shares                                    800,000             871,375
Antidilution shares                                     447,376             290,794
Amortization of deferred compensation
Revaluation of Common stock to redemption value                           1,148,276
Conversion of Preferred stock to Redeemable
 Preferred stock
Conversion of Common stock to Redeemable               (553,386)         (1,770,836)
 Common stock
Accretion of Preferred stock
Options and warrants issued for services                                                 1,437,253
Options and warrants issued in connection with                                           2,368,163
 debt financing
Debt conversion preference                                                                 166,875
Shares to be issued for services                                                                        57,000        31,800
Purchase of 1,150,000 shares of treasury stock
Preferred stock dividends                             1,530,777           1,460,759                    481,012        59,002
Net loss
                                                    -----------   -----------------  -------------  ----------   -----------
Balances, April 30,1999                              47,402,011    $     41,060,146   $ 14,127,222     858,564    $  599,127
                                                    ===========   =================  =============  ==========   ===========

</TABLE>


<PAGE>


                               [RESTUBBED TABLE]
<TABLE>
<CAPTION>

                                                                             Stockholders' Equity (Deficiency)
                                                      -------------------------------------------------------------------------
                                                      Accumulated      Deferred      Subscriptions     Treasury
                                                        DefIcit      Compensation      Receivable        Stock         Total
                                                      ------------   ------------    -------------     ----------  ------------

<S>             <C> <C>                                <C>           <C>                <C>           <C>          <C>
Balances, April 30, 1997                               (8,755,648)   $          -       $  (28,692)   $         -  $  1,826,829
Proceeds for acquisition from sale of
 Preferred and Common stock, net of
 transaction costs                                                                                                   11,819,335
Preferred and Common stock issued
 for acquisition                                                                                                      4,230,000
Preferred and Common stock issued for
 investment transaction                                                                                               1,953,576
Proceeds from sales of Common stock,
 net of transaction costs                                                                                             1,907,559
Common stock issued for property                                                                                        200,000
Common stock issued for services                                                                                      1,985,463
Common stock issued for debt repayment                                                                                1,261,338
Proceeds from sale of Common stock and
Preferred stock, net of transaction costs                                                                             1,652,975
Deferred compensation on stock options granted                         (4,998,000)
Amortization of deferred compensation                                   2,320,500                                     2,320,500
Common stock options granted to consultants                                                                           2,881,931
Settlement of stock subscription receivable                                                 28,692                       28,692
Conversion of Preferred stock to note payable                                                                          (626,190)
Accretion of Preferred stock                           (1,217,436)                                                   (1,217,436)
Exercise of Common stock options,                                                                                             -
 including tax benefit                                                                                                  488,774
Preferred stock dividends                              (1,829,742)
Net loss                                              (11,618,126)                                                  (11,618,126)
                                               -------------------  --------------    ------------  -------------  -------------
Balances, April 30, 1998                              (23,420,952)     (2,677,500)               -              -    19,095,220
Proceed from sales of Common stock,                                                                                           -
 net of transaction costs                                                                                               902,001
Common stock issued for project costs                                                                                   139,200
Common stock issued for services                                                                                      1,933,083
Common stock issued in connection with debt                                                                           1,699,873
Common stock issued for interest                                                                                        137,168
Reimbursement shares                                                                                                    871,375
Antidilution shares                                                                                                     290,794
Amortization of deferred compensation                                     595,000                                       595,000
Revaluation of Common stock to redemption valu                                                                        1,148,276
Conversion of Preferred stock to Redeemable                                                                            (279,463)
 Preferred stock
Conversion of Common stock to Redeemable                                                                             (1,770,836)
 Common stock
Accretion of Preferred stock                           (3,040,954)                                                   (3,040,954)
Options and warrants issued for services                                                                              1,437,253
Options and warrants issued in connection with                                                                        2,368,163
 debt financing
Debt conversion preference                                                                                              166,875
Shares to be issued for services                                                                                         31,800
Purchase of 1,150,000 shares of treasury stock                                                         (1,425,000)   (1,425,000)
Preferred stock dividends                              (1,519,761)                                                            -
Net loss                                              (26,290,252)                                                  (26,290,252)
                                               -------------------  --------------    ------------  -------------  -------------
Balances, April 30,1999                         $     (54,271,919)   $ (2,082,500)      $        -    $(1,425,000) $ (1,990,424)
                                               ===================  ==============    ============  =============  =============

</TABLE>

          See accompanying notes to consolidated financial statements


                                       7

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                  Year Ended April 30,
                                                                                            1999                      1998
                                                                                        ------------              ------------
<S>                                                                                     <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                                $(26,290,252)             $(11,618,126)
Adjustments to reconcile net loss to net cash used in operating activities-
Depreciation and amortization                                                              6,633,425                 2,802,072
Provision for impairment                                                                  10,721,161
Loss on investment                                                                           819,129
Deferred compensation                                                                        595,000                 2,320,500
Deferred income taxes                                                                     (8,114,420)               (2,076,671)
Provision for conversion preference of debt                                                  782,417
Common stock issued for interest                                                             137,168
Stock issued and to be issued for professional services                                    3,127,052                 1,677,249
Stock options issued for cashless transactions                                                                         203,824
Stock options issued for services                                                          1,437,253                   175,050
Noncash interest and financing costs                                                       6,518,851
Settlement of note payable                                                                                           1,035,148
Increase (decrease) in cash and cash equivalents
 attributable to changes in operating assets and liabilities:
 Restricted cash                                                                           1,588,125                (1,588,125)
 Accounts receivable                                                                      (2,512,113)                 (215,355)
 Prepaid expenses and other current assets                                                    54,173                  (256,718)
 Accounts payable                                                                          2,182,103                (1,173,493)
 Accrued expenses                                                                            375,685                 5,539,381
 Due to related parties                                                                      916,337
                                                                                        ------------              ------------
NET CASH USED IN OPERATING ACTIVITIES                                                     (1,028,906)               (3,175,264)
                                                                                        ------------              ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property, plant and equipment                                          (3,160,495)               (1,258,142)
      Purchase of investment in soil                                                      (1,034,261)
      Acquisition of EPIC, net of cash acquired                                                                    (19,758,640)
      Purchase of customer contract rights                                                                            (246,266)
      Investment in joint venture                                                           (315,000)                  (94,130)
                                                                                        ------------              ------------
NET CASH USED IN INVESTING ACTIVITIES                                                     (4,509,756)              (21,357,178)
                                                                                        ------------              ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from short-term debt                                                          522,816
      Repayments of short-term debt                                                       (1,487,305)               (2,447,879)
      Proceeds from long-term debt                                                        22,454,398                 2,833,712
      Repayments of long-term debt                                                       (12,128,648)               (1,043,756)
      Advances from related parties                                                          149,349                 3,027,894
      Repayments of related party obligations                                             (1,663,895)
      Deferred financing costs                                                                                        (781,203)
      Purchase of treasury stock and payment for debt discount                            (3,300,000)
      Proceeds from sale of Common stock                                                     902,001                13,306,144
      Proceeds from sale of Series A Preferred stock, net                                                            4,338,624
      Proceeds from sale of Series B Preferred stock, net                                                            1,917,500
      Proceeds from sale of Series C Preferred stock, net                                                            3,343,766
      Proceeds from sale of Series D Preferred stock, net                                                              416,334
      Proceeds from the exercise of Common stock options                                                                 2,250
                                                                                        ------------              ------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                                  5,448,716                24,913,386
                                                                                        ------------              ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                         (89,946)                  380,944

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                 388,956                     8,012
                                                                                        ------------              ------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                  $    299,010              $    388,956
                                                                                        ============              ============
</TABLE>


          See accompanying notes to consolidated financial statements


                                       8
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>

                                                                                        Year Ended April 30,
                                                                                    1999                     1998
                                                                                 ============             ==========
<S>                                                                              <C>                      <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
      Cash paid for interest                                                     $  5,280,393             $1,410,253
                                                                                 ============             ==========

      Cash paid for income taxes                                                 $     51,000             $     --
                                                                                 ============             ==========

SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
      Common stock issued for purchase of property, plant
      and equipment                                                              $       --               $  200,000
                                                                                 ============             ==========

      Common stock issued for compost project costs                              $    139,200             $  420,914
                                                                                 ============             ==========

      Common stock issued for investment in joint venture                        $       --               $1,953,576
                                                                                 ============             ==========

      Conversion of notes payable into Common stock                              $       --               $1,261,338
                                                                                 ============             ==========

      Common stock options granted for compost project costs                     $       --               $  226,939
                                                                                 ============             ==========

      Common stock options granted on sale of preferred and
      Common stock                                                               $       --               $2,479,942
                                                                                 ============             ==========

      Common stock issued for deferred financing costs                           $       --               $  170,000
                                                                                 ============             ==========

      Conversion of Preferred stock to note payable                              $       --               $1,000,000
                                                                                 ============             ==========

      Preferred stock issued for investment in joint venture                     $       --               $  612,500
                                                                                 ============             ==========

      Accretion of preferred stock                                               $  3,040,954             $1,217,436
                                                                                 ============             ==========

      Common stock issued for preferred stock dividends                          $  1,460,759             $1,321,417
                                                                                 ============             ==========


      Common stock to be issued for preferred stock dividends                    $     59,002             $  508,325
                                                                                 ============             ==========

      Mortgage payable for land acquisition                                      $       --               $  794,000
                                                                                 ============             ==========

      Property, plant and equipment recorded pursuant to obligations
      under financing agreements                                                 $    377,392             $     --
                                                                                 ============             ==========
</TABLE>


          See accompanying notes to consolidated financial statements


                                       9
<PAGE>


             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 -      Nature of Operations

              Compost America Holding Company, Inc. (the "Company"), formerly
              known as Alcor Energy and Recycling Systems, Inc. was incorporated
              in New Jersey. The Company's initial business plan was to
              construct or acquire, manage and own indoor compost manufacturing
              plants. Composting is a method of converting the organic portion
              of municipal solid waste and sewage into a peat moss like product
              with agronomic benefits. The Company's first two development
              projects were to be fully-enclosed composting facilities in
              Newark, New Jersey and Dade County, Florida. These development
              projects have been altered or delayed due to certain situations.
              The Newark, New Jersey composting facility project had to be
              altered due to the Company's inability to remarket New Jersey
              Economic Development Authority municipal bonds (See Note 8) and
              lack of necessary capital. The Company is currently pursuing
              alternative uses which would involve using part of the land for a
              waste transfer station and leasing the remainder of the land. The
              Dade County, Florida composting facility project has been delayed
              due to the pending lawsuit between one of the Company's
              subsidiaries and the City of Miami (See Note 19). Management
              believes that the litigation will prove successful for the Company
              which would allow for the continuance of the development of a
              composting facility. If the pending litigation does not force
              adherence to the Company's contract with the City of Miami, other
              solid waste contracts will be sought after by the Company.

              The Company was previously considered a development stage company;
              however, in November 1997, the Company acquired an operating
              business, Environmental Protection & Improvement Company, Inc.
              ("EPIC"). EPIC is in the business of transporting biosolids to
              approved land application sites and transporting ash, municipal
              solid waste and contaminated soils to approved landfills by
              intermodal truck and/or rail hauling. Substantially all of the
              Company's revenues for the years ended April 30, 1999 and 1998
              were generated by EPIC.


NOTE 2 -      Liquidity

              The accompanying consolidated financial statements have been
              prepared assuming that the Company will continue as a going
              concern. As of April 30, 1999, the Company had a working capital
              deficit of $31,625,684, an accumulated deficit of $54,271,919 and
              a stockholders' deficiency of $1,990,424. In addition, as of April
              30, 1999, the Company was not in compliance with the vast majority
              of its long-term debt agreements. In addition, the Series A and
              Series C Preferred stockholders have certain rights which allow
              them to exchange their shares of the Company's Preferred and
              Common stock for the Common stock of EPIC. If these rights are
              exercised, the Company would record a charge to operations in
              excess of $7.5 million. In connection with the financing needed
              for the project costs incurred and the funding of operating
              expenses, the Company has incurred indebtedness with relatively
              short repayment schedules. In addition, the Company has incurred
              losses since its inception and is subject to those risks
              associated with companies in the early stages of development. The
              Company's growth and development strategy will also require the
              approval of certain permits from regulatory authorities and
              substantial financing will be required to finance construction and
              development of compost projects, for working capital and for other
              capital expenditures. In addition, the Newark, New Jersey
              composting project has been altered due to the inability to secure
              the necessary permits and approvals, the inability to re-market
              tax free municipal bonds which were issued by the New Jersey
              Economic Development Authority and due to the Company's inability
              to secure the necessary capital to proceed. The Company is
              presently pursuing alternative uses for the Newark site, primarily
              a waste transfer station.

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2 -      Liquidity (Continued)

              The Company has executed a letter of intent to sell its
              wholly-owned subsidiary, EPIC. This sale, if completed, is
              expected to provide the Company with capital to meet its current
              obligations and to provide partial funding for pending projects.
              The Company will still require additional sources of capital to
              complete its pending projects. Additionally, management of the
              Company and the Series A Preferred and Series C Preferred
              stockholders have agreed that in the event of a sale of EPIC,
              under the terms presently contemplated, no portion of the Series A
              and Series C Preferred stock will be redeemed and that the Series
              A and Series C Preferred shareholders will waive their right to
              exchange various securities for the stock of EPIC.

              There can be no assurance that the Company will be able to obtain
              sufficient debt or equity financing on favorable terms if at all,
              or that the EPIC sale will be completed in a timely manner, if at
              all, or on terms acceptable to the Company or that the Company
              will reach an agreement with its Series A Preferred and Series C
              Preferred stockholders. If the Company is unable to secure
              additional financing, attain future profitable operations,
              complete the EPIC sale and reach an agreement with its Series A
              Preferred and Series C Preferred stockholders, its ability to
              implement its growth strategy will be impaired and its financial
              condition, results of operations and cash flows are likely to be
              materially adversely affected. In addition, unfavorable outcomes
              of any of the various pending litigation and disputes (see Notes
              14, 19 and 20) could have a material adverse effect on the
              Company's consolidated financial position, results of operations
              and cash flows. These matters raise substantial doubt about the
              Company's ability to continue as a going concern. The accompanying
              consolidated financial statements do not include any adjustments
              relating to the recoverability of recorded asset amounts or
              amounts and classifications of liabilities that might result
              should the Company be unable to continue as a going concern.


NOTE 3 -      Risk and Uncertainties

              The Company has elements of both a development company and an
              operating company. The planned composting facilities are subject
              to all of the risks inherent in the establishment of a new
              business enterprise, including the absence of an operating
              history, lack of market recognition for products and the need to
              develop new banking and financial relationships. The Company has
              not yet demonstrated an ability to profitably operate any
              in-vessel compost facilities, or a transfer station, including
              those of the type proposed to be built by the Company.

              The waste management industry in which the Company operates as a
              processor of municipal solid waste, sewage sludge and commercial
              organic waste, is highly competitive and has been traditionally
              dominated by several large and well recognized national and
              multinational companies with substantially greater financial
              resources than those available to the Company. The Company will be
              competing with such other companies for a share of the available
              market and no assurance can be given that in the future it will be
              able to obtain an adequate commercial customer base to implement
              its operating plan.

              The Company's planned operations are subject to substantial
              regulation by federal, state and local regulatory authorities.
              Specific regulations vary by state and locality. Local siting
              approvals require differing levels of design documentation and
              process definition, usually requiring public approvals in one or
              more public hearings. Following local approval, the Company must
              apply for and receive air, water, and solid waste and sewage
              sludge processing permits from state environmental protection
              agencies. These permits will generally include specific limits
              within which the facilities must operate. In the case of air and
              water permits, these include limits on offsite emission and
              discharge releases. Compost product composition may also be
              regulated, requiring continual monitoring to assure compost
              product quality. Continued compliance with this broad federal,
              state and local regulatory network is essential and costly.
              Additionally, there can be no assurance that additional, more
              restrictive regulations will not be enacted in the future or that
              the Company will be in a position to comply with such new
              regulations. Consequently, management is unable to predict the
              effect upon its future operations of such regulations except that
              the failure to comply with such regulations might have a material
              adverse effect on the Company and its operations in the future.



                                       11
<PAGE>


             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3 -      Risk and Uncertainties (Continued)

              The Company plans to contract for and to process, municipal solid
              waste and sewage sludge that meets the Company's specifications.
              It is possible that some of the wastes accepted at a Company
              facility may contain contaminants which could cause environmental
              damage and result in liabilities. The receipt and disposal of
              contaminated wastes could have a material adverse effect on the
              Company and its operations in the future.


NOTE 4 -      Summary of Significant Accounting Policies

              Principles of Consolidation - The consolidated financial
              statements include the accounts of the Company and its
              wholly-owned and majority-owned subsidiaries (See Note 9). All
              significant intercompany balances and transactions have been
              eliminated. Investment in joint venture is accounted for on the
              equity method (See Note 18).

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

              Cash and Cash Equivalents - The Company considers all
              highly-liquid debt instruments purchased with an original maturity
              of three months or less to be cash equivalents.

              Impairment of Long-Lived Assets - The Company complies with
              Statement of Financial Accounting Standards ("SFAS") 121,
              "Accounting for the Impairment of Long-Lived Assets and for
              Long-Lived Assets to be Disposed of," which requires impairment
              losses to be recorded on long-lived assets used in operations when
              indicators of impairment are present and undiscounted cash flows
              estimated to be generated by those assets are less than the
              assets' carrying amount. The Company continually evaluates whether
              events and circumstances have occurred that indicated the
              remaining estimated useful life of long-lived assets may warrant
              revision, or the remaining balance may not be recoverable.

              Property, Plant and Equipment - Property, plant and equipment are
              recorded at cost less accumulated depreciation and amortization.

              The Company provides for depreciation and amortization using the
              straight-line method based over the following estimated useful
              lives:
<TABLE>
<CAPTION>

<S>                                                                                 <C>
                    Building                                                        25 years
                    Machinery and equipment                                         5 - 7 years
                    Leasehold improvements                                          Term of lease

              At April 30, 1999, property, plant and equipment consists of the
              following:

                    Land                                                            $   8,600,571
                    Building                                                              247,250
                    Machinery and equipment                                            13,360,981
                    Leasehold improvements                                                749,405
                    Project costs                                                       2,873,407
                                                                                    -------------
                                                                                       25,831,614
                    Less:  Accumulated depreciation and amortization                  ( 3,308,185)
                                                                                    -------------
                                                                                      $22,523,429
                                                                                    =============
</TABLE>

                                       12
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 -      Summary of Significant Accounting Policies (Continued)

              Depreciation and amortization expense relative to the above was
              $2,130,451 and $1,130,124 for the years ended April 30, 1999 and
              1998, respectively.

              Construction in progress costs consist of costs incurred for the
              development of the Company's composting facilities. These costs
              include the architectural, legal, structural and consulting
              engineering, artist rendering, planning board approvals and other
              permitting costs. Upon commencement of operations of a facility,
              the costs associated with such project will be depreciated over
              the estimated useful life of the facility.

              At April 30 1999, project costs aggregated $10,978,957 less a
              reserve of $8,105,550. A substantial portion of net project costs
              are comprised of Miami project costs. Such costs are anticipated
              to be recovered through litigation (See Note 19). In the event the
              Company is unsuccessful in its litigation, all or a portion of
              these costs will be written off to operations at this point.


              The allowance for project costs was recorded during the year ended
              April 30, 1999 due to impairments from uncertainties surrounding
              the Miami and Newark projects (See Note 1) and abandonment of the
              remaining projects.


              Customer Contract Rights - Customer contract rights of $29,777,812
              net of accumulated amortization of $3,210,820, are being amortized
              using the straight-line method over the life of the respective
              contract which is 15 years. Amortization expense for customer
              contract rights was $2,231,454 and $979,366 for the years ended
              April 30, 1999 and 1998, respectively.

              Other Intangible Assets - Intangible assets are being amortized
              using the straight-line method over the estimated lives indicated
              below. Other contract rights, deferred financing costs and lease
              incentive are being amortized using the straight-line method over
              the lives of the respective contracts or agreements.

                    At April 30, 1999, other intangible assets consist of the
              following:
<TABLE>
<CAPTION>
                                                                      Estimated
                                                                        Life

<S>                                                                                    <C>
                    Deferred financing costs                        1 to 3 years        $   2,122,143
                    Lease incentive                                      7 years              150,000
                    Other contract costs                                                    1,000,000
                    Bonding costs and other                                                   301,149
                                                                                         ------------
                                                                                            3,573,292
                    Less:  Accumulated amortization                                        (2,250,746)
                                                                                         ------------

                                                                                         $  1,322,546
                                                                                         ============
</TABLE>
              Amortization expense for other intangible assets was $2,207,910
              and $692,582 for the years ended April 30, 1999 and 1998,
              respectively.

                                       13

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 -      Summary of Significant Accounting Policies (Continued)


              Revenue Recognition - Transportation and disposal fees, the
              Company's principal source of revenue in the years ended April 30,
              1999 and 1998, are recognized upon the receipt of the organic
              waste at the Company's transfer site. Costs to transport and
              dispose of the waste are accrued upon receipt of the waste.

              Income Taxes - The Company compiles with SFAS 109, "Accounting for
              Income Taxes", which requires an asset and liability approach to
              financial accounting and reporting for income taxes. Deferred
              income tax assets and liabilities are computed for differences
              between the financial statement and tax bases of assets and
              liabilities that will result in future taxable or deductible
              amounts, based on enacted tax laws and rates applicable to the
              periods in which the differences are expected to affect taxable
              income. Valuation allowances are established, when necessary, to
              reduce deferred tax assets to the amount expected to be realized.

              Fair Value of Financial Instruments - The fair values of the
              Company's assets and liabilities which qualify as financial
              instruments under SFAS 107, "Disclosures about Fair Value of
              Financial Instruments," approximate their carrying amounts
              presented in the consolidated balance sheet at April 30, 1999.

              Net Loss Per Common Share -Net loss per common share is based on
              the weighted average number of common shares outstanding.

              The Company complies with SFAS 128, "Earnings Per Share", which
              requires dual presentation of basic and diluted earnings per
              share. Basic earnings per share excludes dilution and is computed
              by dividing net loss applicable to common stockholders by the
              weighted-average number of common shares outstanding for the year.
              Diluted earnings per share reflects the potential dilution that
              could occur if securities or other contracts to issue common stock
              were exercised or converted into common stock or resulted in the
              issuance of common stock that then shared in the loss of the
              entity.





                                       14

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4 -      Summary of Significant Accounting Policies (Continued)

              The net loss and weighted average Common and Common equivalent
              shares used in determining the net loss per share are as follows:
<TABLE>
<CAPTION>

                                                                                                   Year Ended April 30,
                                                                                             1999                      1998
                                                                                         ------------              ------------
<S>       <C>                                                                         <C>                        <C>
                 Net loss applicable to Common stockholders per statements
                  of operations                                                          $(30,850,967)             $(14,665,304)

                 Preferred stock dividends not declared                                     1,820,000                   887,562
                                                                                         ------------              ------------

                 Net loss applicable to Common stockholders used for
                  basic and diluted net loss per Common share                            $(32,670,967)             $(15,552,866)
                                                                                         ============              ============

                 Weighted average Common shares outstanding during year                    43,421,719                28,135,231

                 Dilutive effect of Common stock to be issued for cumulative
                  preferred stock dividends not declared                                      429,282                   151,720
                                                                                         ------------              ------------

                 Weighted average Common and Common equivalent shares
                  used for basic and diluted net loss per Common share                     43,851,001                28,286,951
                                                                                         ============              ============

</TABLE>

NOTE 5 -      Business Acquisition

              On November 3, 1997, the Company acquired all of the outstanding
              Common Stock of EPIC for $26,120,000. The purchase price was paid
              in cash of $20,000,000, the issuance of 39,000 shares of the
              Company's Series A Preferred Stock valued at $1,365,000, 21,000
              shares of the Company's Series C Preferred Stock valued at
              $1,050,000 and 3,447,182 shares of the Company's unregistered
              Common stock valued at $3,585,000. In addition, in May 1997, the
              Company's President transferred 100,000 shares of his personal
              holdings of the Company's unregistered Common stock valued at
              $120,000, on behalf of the Company, as part of the negotiations of
              the original letter of intent for the EPIC acquisition. This
              transfer of the President's shares was recorded as a capital
              contribution as of the date of the transaction based on the
              closing bid price per share. The purchase price of $26,706,525,
              including the related transaction expenses of $586,525 was
              allocated to the fair value of the net liabilities assumed, with
              $29,531,555 allocated to customer contract rights under the
              purchase method of accounting. In addition, the Stock Purchase
              Agreement contains a provision for additional payments based on
              the future operating results, as defined, if two specific customer
              contracts are entered into by EPIC within a specified period.

              The cash portion of the purchase price was funded primarily from
              proceeds from the sale to one investor of 130,000 shares of the
              Company's Series A Preferred stock valued at $3,829,077 (net of
              expenses of $720,923), 70,000 shares of the Company's Series C
              Preferred stock valued at $1,217,146 (net of expenses of $532,854
              and a conversion preference of $1,750,000 (see Note 11)) and
              11,490,609 shares of the Company's unregistered Common stock
              valued at $10,069,335 (net of expenses of $1,880,665). The Series
              A Preferred stock, Series C Preferred stock and unregistered
              Common stock amounts were determined by an appraisal by an
              independent party.

              As of November 3, 1997, the Company had approximately $5,000,000
              of deferred income tax assets for which a valuation allowance had
              been established. Based upon the application of purchase
              accounting for the EPIC transaction, a significant deferred income
              tax liability was recorded and, as a result, the valuation
              allowance on the deferred income tax asset was no longer required.
              Under the provisions of SFAS 109, the impact of the reversal of
              the valuation allowance is recorded as part of the EPIC purchase
              accounting resulting in a reduction in customer contract rights.


                                       15
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 -      Business Acquisition  (Continued)

              See Note 10 regarding certain exchange rights for the Series A and
              Series C Preferred stock issued as part of the EPIC acquisition.

              If the EPIC acquisition had occurred on May 1, 1997, unaudited pro
              forma revenues, net loss available to common stockholders and net
              loss per share would have been approximately $17,900,000,
              $16,500,000 and $0.44, respectively, for the year ended April 30,
              1998. The pro forma financial information does not purport to
              represent what the Company's results of operations would have been
              had the acquisition in fact occurred on May 1, 1997, or to project
              the Company's results of operations for any future period.

              Noncash assets and liabilities that were consolidated as a result
              of the business acquisition were as follows:

                         Noncash assets (liabilities):
                         Accounts receivable, net                  $ 2,657,891
                         Prepaid expenses and other                    168,519
                         Property and equipment                     12,072,753
                         Intangibles                                29,531,555
                         Other assets                                  219,250
                         Accounts payable and accrued expenses      (1,516,363)
                         Deferred income taxes                     (10,231,091)
                         Long-term debt                             (7,023,874)
                                                                   -----------
                         Net noncash assets acquired                25,878,640
                         Less-Common and Preferred stock issued     (6,120,000)
                                                                   -----------

                         Cash Paid, net of cash acquired           $19,758,640
                                                                   ===========
NOTE 6 - Long-Term Debt
<TABLE>
<CAPTION>
<S>           <C>                                                                                        <C>
              At April 30, 1999, long-term debt consists of the following:

              Note payable (see below)                                                                    $10,500,000

              Promissory note payable, due on May 15, 1999 with interest payable
              monthly at 15% per year, collateralized by certain of the
              Company's assets.  This note is currently in default (see Note 20).                           1,000,000

              Convertible promissory note due on November 1, 2000, interest at
              10% per year, convertible to the Company's Common stock at $2.50
              per share.  This note is currently in default (see Note 20).                                  2,000,000

              Note payable in monthly installments of $215,539 including interest at
              10.0% per annum, through June 2001 and monthly installments of $95,811 including
              interest at 10%, from July 2001 to June 2006, collateralized by substantially
              all of the assets of EPIC and subject to certain covenants.  At April 30, 1999,
              the Company was not in compliance with a certain covenant but
              subsequently received  a waiver (see Note 20).                                                8,634,567

              Other secured notes payable bearing interest at rates between 4.9%
              and 12% per annum, maturing at various dates through April 2004.
              approximately $429,000 of these notes are convertible into shares
              of the Company's Common stock at per share prices ranging from
              $0.40 to $3.00. A majority of these notes are currently in default.                           1,440,037

              Other unsecured notes payable bearing interest at rates between 6%
              and 12% per annum, maturing at various dates through November
              2000.

              A majority of these notes are currently in default                                       $    2,327,266
                                                                                                        -------------
                                                                                                           25,901,870
              Less:  Current portion                                                                      (18,814,808)
                                                                                                        -------------
                                                                                                       $    7,087,062
                                                                                                        =============
</TABLE>



                                       16
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 -      Long-Term Debt (Continued)

              On November 5, 1998, the Company issued a $10,500,000 note to a
              company affiliated with one of the Company's current shareholders
              and debt holders. The note bears interest at 10.5% and interest is
              payable upon the maturity date of the note which is the earlier of
              October 30, 2000 or financial closing for the Miami project, as
              defined. The note agreement includes provisions which restrict the
              proceeds for specific uses as follows: $4,612,000 for repayment of
              a mortgage note in default, $3,000,000 for the redemption of the
              Company's common stock owned by an affiliate of the lender,
              $440,000 for fees associated with the note payable and the
              remainder for general working capital and Miami project expenses.
              In connection with this transaction, the conversion of a $200,000
              debenture payable into 159,670 shares of the Company's common
              stock in September of 1997 was rescinded. As part of this note
              agreement, the convertible debenture payable in the amount of
              $800,000, including the $200,000 rescinded amount, which is held
              by an affiliate of the noteholder was converted into 1,406,593
              shares of the Company's Common stock (665,000 shares were
              transferred from the proprietary holdings of a related party on
              behalf of the Company - see Notes 11 and 14). The difference
              between the fair value of the Common stock and the convertible
              debenture payable of $782,417 has been recorded as an expense
              (included in other expense in the accompanying 1999 consolidated
              statement of operations) for the conversion preference on the
              debt. As noted above, as part of this note agreement the Company
              is required to utilize $3,000,000 for the redemption of 1,000,000
              shares of the Company's common stock from an affiliate of the
              noteholder. Since the redemption of the Company's Common stock was
              completed as part of the $10,500,000 note payable transaction, the
              difference between the buyback price and the fair value of the
              Company's Common stock of $1,875,000 has been recorded as a debt
              discount. The fair value of the Company's Common stock repurchased
              has been recorded as treasury stock. In addition, as part of the
              note agreement the company affiliated with the noteholder has
              certain rights to convert the 400,000 shares of the Company's
              Series B Preferred stock which it currently owns to Common stock
              on a one- for-one basis and then the right to put the Common stock
              back to the Company at a per share price of $3.10 as of the
              maturity date of the note payable. Since the redemption premium
              was included as part of the $10,500,000 note payable transaction,
              the difference between the redemption price and the carrying value
              of the Series B Preferred stock of $960,537 has been recorded as a
              debt discount. Since these shares of Series B Preferred stock are
              now subject to this redemption feature they have been classified
              outside of stockholders' equity in the accompanying consolidated
              balance sheet. The company affiliated with the noteholder also has
              the right to put up to 50% of the shares of Common stock held as
              of the note closing date (553,386 shares) back to the Company at a
              per share price of $3.20 as of the first anniversary of the
              maturity date of the note payable. Since the redemption premium
              was included as part of the $10,500,000 note payable transaction,
              the difference between the redemption price and the carrying value
              of the Common stock of $1,148,276 has been recorded as a debt
              discount. In addition, given that the 553,386 shares of Common
              stock are now subject to this redemption feature they have been
              classified outside of the stockholders equity in the accompanying
              consolidated balance sheet. The Company issued warrants to
              purchase 1,500,000 shares of the Company's common stock at
              exercise prices ranging from $1.00 to $2.25 as part of the note
              agreement. The fair value of these warrants totaling $1,187,000
              has been recorded as a debt discount. As part of the various
              transactions and provisions included in this $10,500,000 note
              payable, a debt discount of $5,170,813 has been recorded. This
              amount has been charged to interest expense in its entirety during
              the year ended April 30, 1999 based upon the respective note being
              in default and thus callable at April 30, 1999.

              As a result of the various judgements against the Company and
              certain other events of default, as defined under the note
              agreement, the lenders could accelerate the collection of the
              $10,500,000 note, which is collateralized by a first mortgage lien
              on the real property constituting the site of the Florida



                                       17
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 -      Long-Term Debt (Continued)

              composting facility project and by the Company's 80.1% stock
              ownership interest in Miami Recycling and Composting Company, Inc.
              The parties are in discussions to resolve this matter.

                  Maturities of long-term debt as of April 30, 1999 are as
              follows:

                    Yer Ending April 30,
                         2000                               $ 18,814,808
                         2001                                  2,474,894
                         2002                                  1,233,121
                         2003                                    856,393
                         2004                                    886,274
                         Thereafter                            1,636,380
                                                            ------------
                                                            $ 25,901,870
                                                            ============

NOTE 7-       Short-Term Debt

              At April 30, 1999, short-term debt consists of borrowing of
              $522,816 under a revolving credit line agreement up to $2,000,000.
              The credit line bears interest at 2.65% plus the current 30-day
              commercial paper rate as defined (7.45% at April 30, 1999) and
              expires June 30, 1999. Amounts due under the line of credit are
              guaranteed by an officer of EPIC. During June 1999, the line of
              credit was extended through June 30, 2000.


NOTE 8-       Restricted Project Bonds Payable

              On December 30, 1997, the New Jersey Economic Development
              Authority (the Authority), issued $90,000,000 of Solid Waste
              Disposal Facility Revenue Bonds (the Bonds) to finance the costs
              of constructing the Company's Newark, New Jersey composting
              project. The Bonds were issued with an initial term ending on the
              earlier of December 15, 1998 or such earlier date as permitted
              under the Bond Agreement and bore interest at a rate of 3.95% per
              annum during the initial term.

              On December 15, 1998, the Bonds were remarketed with an initial
              term ending on the earlier of June 15, 1999 or such earlier date
              as permitted under the Bond Agreement and bore interest at a rate
              of 3.0% per annum during the initial term. During the initial
              terms, a trustee held the $90,000,000 plus the interest earned.

              On June 15, 1999, the Company elected not to remarket the bonds.
              Accordingly, the escrowed funds were repaid to the bondholders.
              The bonds, including accrued earned interest, have been classified
              in the accompanying consolidated balance sheet as a current
              liability with an offsetting amount as a current asset.


NOTE 9-       Minority Interest In Consolidated Subsidiaries

              Newark Recycling and Composting Company, Inc. (Newark Recycling)
              was incorporated in 1994 with Compost America Company of New
              Jersey, Ltd. (a wholly-owned subsidiary of the Company) owning 75%
              and Prince George's Contractors, Inc., d/b/a Potomac Technologies,
              Inc., owning 25%. Newark Recycling is in the business of
              development, construction and operation of a sewer sludge
              composting facility in Newark, New Jersey. The Company has
              consolidated the financial statements of Newark Recycling. In
              addition, Newark Recycling owns 100% of American BIO-AG
              Corporation. The minority


                                       18
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9-       Minority Interest In Consolidated Subsidiaries (Continued)

              shareholder's equity in Newark Recycling has been reduced to zero
              as a result of prior years' loss allocations.

              Miami Recycling and Composting Company, Inc. (Miami Recycling) was
              incorporated in 1995 with the Company owning 80.1% and an outside
              consultant owning 19.9%. Miami Recycling is in the business of
              development, construction and operation of a composting facility
              in Miami, Florida. The Company has consolidated the financial
              statements of Miami Recycling. The minority shareholder's equity
              in Miami Recycling has been reduced to zero as a result of prior
              years' loss allocations.


NOTE 10-      Redeemable Preferred Stock

              The Company has authorized 25,000,000 shares of Preferred stock of
              which 668,771 have been designated as Redeemable Preferred stock.

              The Company has authorized 169,000, 400,000, 91,000 and 17,500
              shares of Series A Redeemable Preferred Stock (Series A
              Preferred), Series B Redeemable Preferred Stock (Series B
              Preferred), Series C Redeemable Preferred Stock (Series C
              Preferred) and Series D Redeemable Preferred Stock (Series D
              Preferred), respectively (collectively Redeemable Preferred
              Stock). The Series A, C and D Preferred is senior to all other
              equity securities in terms of dividends and liquidation
              preferences.

              The holders of Series A Preferred are entitled to receive
              cumulative dividends of 8% per share per year, which are payable
              semi-annually on June 30 and December 31. Through November 3,
              1999, dividends on the Series A Preferred were payable at the
              Company's option in cash or shares of the Company's Common stock
              at a per share price equal to 90% of the average trading price on
              the dividend payment date, as defined. After November 3, 1999,
              dividends on the Series A Preferred are payable only in cash. The
              holders of Series C Preferred are entitled to a non-cumulative
              dividend of 20% per share per year through May 3, 1999 and of 8%
              per share per year thereafter. Through May 3, 1999, dividends on
              the Series C Preferred were payable at the Company's option in
              cash or shares of the Company's Common stock at a per share price
              equal to 90% of the average trading price on the dividend payment
              date, as defined. After May 3, 1999, dividends of 8% per share per
              year, which are payable semi-annually on June 30 and December 31,
              are payable only in cash. Through November 3, 1999, dividends on
              the Series D Preferred were payable at the Company's option in
              cash or shares of the Company's Common stock at a per share price
              equal to 90% of the average trading price on the dividend payment
              date, as defined. After November 3, 1999, dividends on the Series
              D Preferred are payable only in cash.

              The liquidation value on the Series A Preferred, Series C
              Preferred and Series D Preferred is $100 per share plus accrued
              dividends. The Series A, C and D Preferred have no voting rights,
              however, the consent of 66 2/3% of the holders' approval is
              required for certain transactions. One of the limitations included
              in the Series A and Series C Preferred agreement requires consent
              for the issuance of any new series of Preferred stock. The Company
              issued 783,842 shares of the Company's Common stock in order to
              obtain the approval from the Series A and Series C Preferred
              holders for the issuance of the Series D Preferred stock in April
              1998.

              During the year ended April 30, 1999, shares of the Company's
              Common stock valued at $1,519,761 have been recorded as a dividend
              to the Series A and Series C Preferred holders. On November 3,
              2004, the Company is required to redeem all of the outstanding
              shares of Series A Preferred, Series C Preferred and Series D
              Preferred at a redemption price per share of $100 plus accrued
              dividends. The Series A, C and D Preferred are valued in the
              accompanying consolidated balance sheet at the original
              investment, less transaction expenses, plus the calculated
              accretion and accrued dividends. The accretion is being recognized
              in order to record the Preferred stock at the per share redemption
              value as of the redemption date. In addition, each share of Series
              A, C and D Preferred stock is redeemable upon a change in control,
              as defined.



                                       19
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10-      Redeemable Preferred Stock  (Continued)

              In addition, the Series A and Series C Preferred agreement
              contains certain covenants and restrictions which apply to EPIC
              including, but not limited to, restrictions on dividends or
              intercompany advances to other parties including the Company,
              limitations on additional indebtedness and limitations on capital
              expenditures.

              Accumulated dividends payable as of April 30, 1999 were $450,667
              on the Series A Preferred, and $116,660 on the Series D Preferred
              based on the Company's determination that the dividends would be
              paid in Common stock utilizing the applicable trading price during
              the period. In the aggregate 801,564 of the Company's Common stock
              is issuable to these Preferred stockholders. Since the Series A
              dividends and the Series D dividends are cumulative and management
              indicated that they will be paid in Common stock, these dividends
              are recorded as Common Stock to be Issued in the accompanying
              consolidated balance sheet. The Series C dividends are
              non-cumulative, thus not recorded as common stock to be issued.
              However, the imputed amount of the Series C dividends are recorded
              in the net loss per share calculation.

              The Company had the right to redeem the outstanding shares of
              Series C Preferred through May 3, 1999 and the shares of Series A
              and D Preferred at any time for a redemption price per share of
              $100 plus accrued dividends. The Series C Preferred is convertible
              into Common stock after May 3, 1999 at the holders' option. Each
              share of Series C Preferred would be valued at $100 per share and
              would be convertible into Common stock on the conversion date, as
              defined. The Company has recorded a conversion preference of
              $1,750,000 in additional paid-in capital which was accreted
              through May 3, 1999. At any time after November 3, 2000, the
              Series A, C and D Preferred is exchangeable, at the holders'
              option, for 9% Senior Subordinated Notes of the Company due on
              November 3, 2004, at the rate of $100 principal amount of such
              notes for each share of Preferred stock.

              If at any time shares of both the Series A Preferred and Series C
              Preferred remain issued and outstanding and the Company is in
              default of any covenant or in default of payment on any debt in
              excess of $100,000, then at their option, the holders of Series A
              Preferred and Series C Preferred have the right to exchange all of
              their shares of Series A Preferred, Series C Preferred and
              15,721,633 Common shares issued to the Series A Preferred holders
              for all the outstanding shares of Common stock of EPIC. In
              addition, even if not in default, the holders of the Series A
              Preferred have the right to exchange shares of Series A Preferred
              for all shares of Common stock of EPIC outstanding during the
              period from November 1, 1999 through October 31, 2000, but only if
              all or part of the Series C Preferred is outstanding. If such
              exchange is made, all shares of Series A Preferred, Series C
              Preferred and the 15,721,633 Common stock shares issued to the
              Series A Preferred holders will be returned to the Company. If
              these rights are exercised, the Company would record a charge to
              operations likely to be in excess of $7.5 million. This option
              shall be void upon payment in full of the Series C Preferred.

              As of April 30, 1999, the Company was not in compliance with
              certain of its debt obligations, which would result in the holders
              of the Series A Preferred and Series C Preferred having the right
              to exchange their shares of the Company's Preferred and Common
              stock for the outstanding shares of EPIC. The Series A Preferred
              and Series C Preferred holders have signed an agreement which
              states that they will not exercise their EPIC option to the extent
              that such exercise would result in, or increase, a stockholders'
              deficiency after giving effect to the transaction.

              In July 1999, the holders of Series D Preferred stock exchanged
              8,729 shares of the Series D Preferred for the Company's interest
              in American Marine Rail, LLC (see Note 18) pursuant to an
              agreement. In addition, the Company has an option to repurchase
              its interest in American Marine Rail, LLC for designated amounts.
              The remaining Series D preferred shares can be converted to common
              shares at $.40 per share through June 30, 2002, also pursuant to
              the agreement. The loss on this transaction aggregating $819,129
              was reflected in the accompanying consolidated financial
              statements as of April 30, 1999.



                                       20
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 10-      Redeemable Preferred Stock  (Continued)

              During 1999, in connection with a certain financing arrangement,
              400,000 shares of Preferred B stocks were given a redemption
              feature in which the shares can be redeemed at $3.10 per share
              upon the maturity of the note payable, which is October 30, 2000.
              The difference between the carrying value of the Series B shares
              prior to this feature and the redemption value has been recorded
              as debt discount.

NOTE 11-      Stockholders' Equity (Deficiency)

              Common Stock - In June 1998, the Company's Board of Directors
              approved an increase to the total number of shares of Common stock
              that the Company shall have the authority to issue from 50,000,000
              to 100,000,000.

              During the year ended April 30, 1998 the Company issued 11,490,609
              shares of Common stock as part of a combined transaction with the
              Series A Preferred and Series C Preferred which were valued at
              $11,950,000 or approximately $1.04 per share. The Company incurred
              transaction expenses of $1,880,665 related to the sale of Common
              stock. These shares were valued by an independent appraiser. The
              Company also sold 955,000 shares of Common stock for cash proceeds
              of $1,907,559 at per share prices ranging from $0.50 to $2.50.
              Included in the 955,000 shares of Common stock sold for cash
              proceeds were two sale transactions with the same investor, one in
              August 1997 and one in September 1997, for the sale of 250,000
              shares of Common stock from the Company for cash proceeds of
              $500,000. As part of these sale transactions, four of the
              Company's current stockholders (one of which is the Company's
              former President, one of which is the Company's attorney, one of
              which is a Director of the Company, and one of which is an entity
              whose President is a Director of the Company) transferred 150,000
              and 300,000 shares, respectively, from their personal holdings of
              the Company's Common stock to the new investor on behalf of the
              Company. These transfers of the existing stockholders shares were
              recorded as capital contributions as of the date of these
              transactions.

              In addition, the Company issued 3,447,182 shares of Common stock
              for a business acquisition which was valued at $3,585,000 or
              approximately $1.04 per share based on an independent appraisal.
              In addition, the Company issued 1,627,980 shares of Common stock
              in connection with an acquisition of a joint venture which were
              valued at $1,953,576, or $1.20 per share. The Company also issued
              200,000 shares of Common stock for the acquisition of certain
              property which were valued at $200,000. The Company also issued
              541,478 shares of Common stock which were valued at $1,261,338 for
              the repayment of outstanding liabilities of $600,000. The Company
              issued 116,991 shares of Common stock for payment of dividends on
              Preferred stock which were valued at $263,230. The Company issued
              783,842 shares of Common stock valued at $1,058,187 to obtain the
              approval from the Series A and Series C Preferred holders for a
              new series of Preferred stock which was recorded as an additional
              dividend to the Series A and Series C Preferred holders. The
              Company also issued 2,026,575 shares of Common stock for services
              rendered which were valued at $1,985,463, at per share prices
              ranging from $0.50 to $3.06. These shares were valued based upon
              the fair value of the services rendered, if reliably determinable,
              since that value was more reliably determinable than the fair
              value of the Common stock issued. If the fair value of the
              services rendered was not reliably determinable these shares were
              valued based upon the fair value of the Common stock issued.

              During the year ended April 30, 1999, the Company issued 8,638,819
              shares of Common Stock. The Company sold 1,397,000 shares of
              Common Stock for cash proceeds of $902,001 at per share prices
              ranging from $0.25 to $1.00. Included in the 1,397,000 shares of
              common Stock sold for cash proceeds were transactions with one
              investor totaling 700,000 shares of Common Stock from the Company
              for cash proceeds of $550,000. The Company issued 1,530,777 shares
              of Common Stock for payment of dividends on Preferred stock, which
              were valued at $1,460,759. The Company issued 1,364,528 shares of
              Common stock in connection with debt, which were valued at
              $1,699,873. The Company issued

                                       21

<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11-      Stockholders' Equity (Deficiency) (Continued)

              285,000 shares of Common stock for interest expense valued at
              $137,168. The Company issued 800,000 shares of Common stock to
              Select Acquisitions, Inc. ("Select") ( a related party - see Note
              14) as reimbursement for Select's transfer of 800,000 shares of
              its proprietary holdings of common stock on behalf of the Company
              to new investors (including 665,000 shares to an affiliate of the
              $10.5 million noteholder - see Notes 6 and 14). These shares were
              valued at $871,375.

              The Company issued 447,376 shares of Common Stock to the Series A
              and C Preferred holders under antidilusion provisions as a result
              of additional shares of common stock issued this period. These
              additional shares, had they been issued prior to the closing of
              the sale of the Preferred stock, would have been included in the
              calculation in accordance with the preferred Series A and C
              agreement. These shares were valued at $290,794. The Company also
              issued 2,643,138 shares of Common stock for services rendered
              which were valued at $1,933,083. Additionally, the Company issued
              171,000 shares of Common stock for services relating to project
              costs which were valued at $139,200. These shares were valued
              based upon the fair value of the services rendered, since the
              value of the services was more reliably determinable that the fair
              value of the Common stock issued. If the fair value of the
              services rendered was not reliably determinable these shares were
              valued based upon the fair value of the Common stock issued.

              The Company affiliated with the $10.5 million noteholder also has
              the right to put up to 50% of the shares of Common stock it holds
              as of the note closing date (553,386 shares) back to the Company
              at a per share price of $3.20 as of the first anniversary of the
              maturity date of the note payable. Given that the 553,386 shares
              of Common stock are now subject to this redemption feature, they
              have been classified outside of stockholders' equity (deficiency)
              in the accompanying consolidated balance sheet.

              Preferred Stock - The Company has authorized 25,000,000 shares of
              Preferred stock, of which 5,000,000 shares have been designated as
              Series B Convertible Preferred stock (Series B Preferred) and
              277,500 shares have been designated as Series A, C and D Preferred
              Stock. The Series B Preferred is senior to the Common stock, but
              junior to the Series A, C and D Preferred Stock, in terms of
              dividends and liquidation preferences.

              The holders of Series B Preferred are entitled to receive
              cumulative dividends at the rate of one share of Common stock for
              every ten shares of Series B Preferred, payable on April 30 of
              each year. Each share of Series B Preferred is convertible into
              one share of Common stock at any time after September 15, 1997, at
              the holders' option. During 1999, 400,000 shares of the Series B
              Preferred were given a redemption feature, at the holder's option,
              upon maturity of a certain debt obligation of the holders at $3.10
              per share. The Series B Preferred has no voting rights.

              In July 1997, the Company sold 400,000 shares of Series B
              Preferred for proceeds of $867,737, net of transaction expenses of
              $132,263. As part of this sale transaction, one of the Company's
              current stockholders, an entity whose President is also a Director
              of the Company, transferred 700,000 shares of the Company's Common
              stock from its personal holdings of the Company's Common stock to
              this new Series B Preferred stockholder on behalf of the Company.
              In September 1997, the Company sold 400,000 shares of Series B
              Preferred for proceeds of $782,738, net of transaction expenses of
              $217,262. As part of this sale transaction, one of the Company's
              current stockholders, an entity whose President is also a Director
              of the Company, transferred 100,000 shares of the Company's Common
              stock from its personal holdings of the Company's Common stock to
              this new Series B Preferred stockholder on behalf of the Company.
              These transfers of the existing stockholders shares were recorded
              as capital contributions as of the dates of the transactions with
              the total proceeds from the two sale transactions of $1,650,475,
              allocated between the Series B Preferred for $905,653 and Common
              stock for $744,822, based on the relative fair values as of the
              date of the transactions.


                                       22
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 11-      Stockholders' Equity (Deficiency) (Continued)


              In addition, in August 1997, the Company sold 1,000 shares of
              Series B Preferred for proceeds of $2,500, or $2.50 per share. On
              November 3, 1997, 400,000 shares of the Class B Preferred were
              converted into a $1,000,000 promissory note. As part of this
              conversion the Company recorded an expense of $373,810 for the
              difference between the net value in the Series B Preferred account
              and the promissory note balance.

NOTE 12-      Common Stock Warrants and Options

              The following table summarizes common stock warrant activity:

<TABLE>
<CAPTION>
                                                                                         Weighted Average
                                                      Number of           Range of           Exercise
                                                    Excercisable          Exercise             Price
                                                       Shares              Prices            Per Share
                                                  ----------------    ----------------   ----------------
<S>             <C>                               <C>                 <C>                 <C>
                 Warrants outstanding at April 30,
                  1997 and 1998                          1,168,995        $0.83 - $6.00            $ 2.58

                 Granted                                 1,500,000        $1.00 - $2.25              1.50
                                                   ---------------     ----------------   ---------------

                 Warrants outstanding at
                  April 30, 1999                         2,668,995        $0.83 - $6.00            $ 1.98
                                                   ===============     =================  ===============
</TABLE>

              As of April 30, 1999, all of the outstanding Common stock warrants
              were vested.

              The Company has issued stock options to various employees and
              consultants with vesting terms and exercise prices determined by
              management or the Board of Directors.






                                       23
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 12-      Common Stock Warrants and Options (Continued)

              The following table summarizes common stock option activity:


                                                                      Weighted
                                                                      Average
                                                        Range of      Exercise
                                          Number of     Exercise     Price Per
                                           Shares        Prices        Share
                                        -----------   -------------  ----------

                Options outstanding at
                 April 30, 1997           4,505,709   $ 2.00 - 9.00    $ 2.62
                Granted                   5,406,049     0.01 - 6.00      1.89
                Exercised                  (524,960)    0.01 - 6.00      2.86
                Cancelled                  (750,000)           3.00      3.00
                                        -----------   -------------    ------

                Options outstanding at
                 April 30, 1998           8,636,798     1.00 - 9.00      2.05
                Granted                   4,978,730     0.01 - 7.00     1.07
                Exercised                    (7,500)    0.50 - 0.75     0.63
                Cancelled                  (782,500)    1.50 - 5.00      2.78
                                        -----------   -------------    ------

                Options outstanding at
                 April 30, 1999          12,825,528   $ 0.01 - 9.00    $ 1.62
                                        ===========   =============    ======


              The following table summarizes information regarding stock options
              outstanding at April 30, 1999:
<TABLE>
<CAPTION>
                                    Options Outstanding                          Options Exercisable
                    ----------------------------------------------------  -----------------------------------
                                         Weighted          Weighted
                        Number            Average           Average            Number           Weighted
    Range of           Outstanding      Remaining           Exercise        Exercisable          Average
    Exercise              at             Contractual       Price Per             at             Exercise
     Prices          April 30, 1999     Life in Years        Share          April 30, 1999        Price
-----------------   ----------------------------------------------------  -----------------------------------
<S>    <C>          <C>                <C>               <C>                <C>               <C>
      $.01-$2.50        12,090,528         3.61              1.38               10,890,528        1.43
       3.00-5.00           465,000         3.44              3.35                  465,000        3.35
       6.00-9.00           270,000         2.92              6.63                  270,000        6.63
</TABLE>




                                       24

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12-      Common Stock Warrants and Options  (Continued)

              The Company applies Accounting Principles Board Opinion 25,
              "Accounting for Stock Issued to Employees" and the related
              interpretations in accounting for its stock option grants. The
              disclosure requirements of SFAS 123, "Accounting for Stock Based
              Compensation" were adopted by the Company in the year ended April
              30, 1997. Had compensation cost for options granted after December
              15, 1995 been determined based upon the fair value of the options
              at the date of grant, as prescribed by SFAS 123, the Company's pro
              forma net loss and pro forma net loss per share would have been as
              follows:
                                                      Year Ended April 30,
                                                     1999            1998
                                               -------------   ----------------
                  Net loss, as reported        $ (32,670,967)  $ (15,552,866)
                  Net loss, pro forma            (33,750,443)    (15,943,733)
                  Loss per share, as reported          (0.75)          (0.55)
                  Loss per share, pro forma            (0.77)          (0.56)

              The fair value of each option grant is estimated on the date of
              grant using the Black-Scholes option pricing model with the
              following weighted average assumptions:

                                                        Year Ended April 30,
                                                      1999              1998
                                                   ------------    ------------

                  Risk-free interest rate               5%               5.87%
                  Expected dividend yield               -                -
                  Expected life                      4 years           4 years
                  Expected volatility                  82%                 50%


              During the year ended April 30, 1998, the Company granted
              2,100,000 Common stock options to employees of EPIC for which the
              Company has recorded deferred compensation based upon the
              difference between the fair market value of the Company's Common
              stock and the exercise price at the grant date. The deferred
              compensation balance is being amortized as compensation expense
              over the option vesting periods which range upon grant to five
              years.

              During the year ended April 30, 1998, one consultant who had
              options to purchase 300,000 shares of the Company's Common stock
              completed a cashless exercise transaction which resulted in the
              issuance of 194,120 shares of Common stock. The Company recorded
              an expense of $203,824 as a result of this transaction, which is
              included in selling, general and administrative expenses in the
              accompanying 1998 statement of operations.

              In addition, during the years ended April 30, 1999 and 1998, the
              Company issued stock options to various outside consultants for
              services rendered most of which had exercise prices in excess of
              the trading prices on the date of grant. These stock option grants
              have been accounted for under the provisions of SFAS 123 using the
              Black-Scholes option pricing model with the value of the options
              recorded as expense, deferred financing costs, project
              capitalizable costs or equity related costs, as appropriate.


                                       25

<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 13 -     Employee Benefit Plans

              Certain employees of EPIC are covered by union-sponsored,
              collectively bargained, multi-employer pension plans.
              Contributions are determined in accordance with the provisions of
              negotiated labor contracts. Pension expense for these plans was
              $47,765 and $21,008 for the years ended April 30, 1999 and 1998,
              respectively. In the event that the Company decided to withdraw
              from its participation in the multi-employer pension plans, which
              is not the Company's intent, the Company would be required to
              contribute its share of the Plan's unfunded benefit obligation.


NOTE 14 -     Related Party Balances, Transactions and Contingencies

              At April 30, 1999, due to related parties consists of the
following:
<TABLE>
<CAPTION>

<S>             <C>                                                                           <C>
                  Promissory notes payable, including accrued interest and
                  accounts payable of approximately $2,025,000, to VRH Construction
                  Corp.; interest accrues at 10% per year and is payable upon the date
                  of maturity for the principal; collateralized by certain of the
                  Company's assets (c) (f)                                                       6,112,727

                  Amount due to former owner of EPIC (current member of the
                  Company's Board of Directors), non-interest bearing; no
                  specific repayment terms (e)                                                     485,491

                  Payable to Resource Reclamation Services, Inc. (d)                               300,000

                  Advances from Select Acquisitions, Inc.; interest
                  accrues at 10% per year and is payable upon the date of
                  maturity for the principal; unsecured (b) (f)                                    176,534

                  Advances, including accrued interest of $19,233 and accrued
                  salary deferrals of $938,500, from the Company's former
                  President; interest accrues on cash advance at 10% per year
                  and is payable upon the date of maturity for the principal;
                  unsecured. (a) (f)                                                             1,036,402

                  Deferred salary due to officers and other (f)                                    292,483
                                                                                             -------------
                                                                                                $8,403,637
                                                                                             =============
</TABLE>
              (a) The Company has been named as a defendant in the Superior
                  Court of New Jersey, Law Division, Essex Vicinage in an action
                  brought against it by its former President. The former
                  President seeks (i) damages for alleged accrued salary of $1.5
                  million under an employment agreement with interest and loans
                  claimed due from the Company of approximately $265,000 with
                  interest, (ii) the award of 930,000 "replacement shares" of
                  the Company's stock, (iii) an accounting for the disbursement
                  of Company funds during the period January 1, 1999 to present,
                  (iv) damages resulting from the Company's alleged bad faith in
                  dealing with the former President and (v) related relief. At
                  April 30, 1999, the Company has recorded approximately
                  $1,036,000 in connection with item (i), which consists
                  primarily of his compensation through April 30, 1999.

                  The Company has filed an answer, affirmative defenses and
                  counterclaims against the former President.


                                       26

<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 -    Related Party Balances, Transactions and Contingencies  (Continued)

                  The Company's legal counsel has indicated that the ultimate
                  outcome of this litigation cannot presently be determined.
                  Accordingly, no further provision for liability to the Company
                  that may result upon adjudication has been made in the
                  accompanying consolidated financial statements. The parties
                  are currently negotiating for the settlement of these claims.
                  An unfavorable outcome of this matter could have a material
                  adverse effect on the Company's consolidated financial
                  position, results of operations and cash flows and its ability
                  to continue as a going concern.

              (b) The Company is in dispute with a member of its Board of
                  Directors and Audit Committee (hereinafter referred to as the
                  "Board Member"). The Board Member claims that the Company owes
                  him and Select Acquisitions, Inc. ("Select"), a company of
                  which the Board Member is President, amounts substantially in
                  excess of amounts recorded in the accompanying consolidated
                  financial statements. Specifically, the Board Member claims
                  the Company owes Select 408,640 shares of the Company's
                  registered common stock and $308,073 in cash plus accrued
                  interest and that the Company owes the Board Member 1,000,000
                  shares of the Company's registered common stock, options to
                  purchase 300,000 shares of the Company's registered common
                  stock and $1,680,000 in cash. Of the $308,073 which the Board
                  Member asserts is owed to Select, $210,000 is claimed as
                  consulting fees for the period between January 1994 and June
                  1996, while the remaining $98,073 relates to loans made to the
                  Company in 1995 and 1996. The Board Member claims for himself
                  $870,000 in consulting fees for the period between July 1996
                  and July 1999 and $810,000 in closing fees, related to certain
                  Company transactions which closed between November 1997 and
                  November 1998. The Board Member indicates that the 408,640
                  shares of the Company's registered common stock claimed on
                  behalf of Select allegedly were transferred by Select in order
                  to facilitate a November 1997 Company transaction closing. The
                  Board Member also claims that the options to purchase 300,000
                  shares of the Company's registered common stock at $.01 per
                  share were due him as a board member in connection with the
                  closing of a November 1997 Company transaction. Finally, the
                  Board Member claims the 1,000,000 shares of the Company's
                  registered common stock as an equity bonus. These claims are
                  based upon alleged agreements entered into between the Board
                  Member and the former President of the Company.

                  April 30, 1999, the Company has recorded $176,534 in notes
                  and accrued interest to Select.

                  The Company's legal counsel has indicated and the Company's
                  management believes that (i) the Company's records do not
                  reflect any approval (or even discussion) by the Company's
                  Board of Directors of any consulting, employment or other
                  agreement which would support the Board Member's claims
                  (except for loans payable to Select in an amount less than
                  $150,000); (ii) there is no documentation in the closing
                  binders and official transcripts of the Company transactions
                  referenced by the Board Member that would support the Board
                  Member's and/or Select's claims for closing fees, stock
                  options or shares of the Company's registered Common stock in
                  connection with any of the transactions for which the Board
                  Member is claiming consideration is owed and (iii) the absence
                  of notice by the Board Member as well as lack of any
                  performance standards by which to judge his work for the
                  Company as an employee or a consultant would appear to
                  seriously undermine any quantum meruit claim by the Board
                  Member. Accordingly, based upon the assessment of the claims
                  by the Company's legal counsel and management, no further
                  provision for liability of the Company that may result upon
                  adjudication has been made in the accompanying consolidated
                  financial statements. An unfavorable outcome to this matter
                  could have a material adverse effect on the Company's
                  consolidated financial position, results of operations, cash
                  flows and its ability to continue as a going concern.


                                       27
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 -     Related Party Balances, Transactions and Contingencies
              (Continued)

                  During the year ended April 30, 1999, Select transferred
                  800,000 shares of its proprietary holdings of Common stock on
                  behalf of the Company to certain parties (including 665,000
                  shares to an affiliate of the $10.5 million noteholder - see
                  Notes 6 and 11). These shares were reimbursed to Select during
                  the year ended April 30, 1999.

              (c) The shareholders of VRH Construction Corporation (VRH) are
                  also shareholders of the Company. The Company has engaged in
                  various transactions with VRH including advances, notes
                  payable and office leasing. VRH is the construction manager
                  for the Newark, New Jersey composting facility. In May 1999,
                  the Company defaulted on the payment of approximately
                  $5,700,000 of promissory notes, including interest (see Note
                  20).

                  In addition, the Company repriced options held by VRH to
                  purchase 600,000 shares of the Company's Common Stock from an
                  exercise price of $1 to $.01. The Company also issued VRH
                  options to purchase 800,000 shares of the Company's Common
                  Stock of which 200,000 shares could be purchased at an
                  exercise price of $.01 and 600,000 shares at an exercise price
                  of $1.00.

                  Interest expense for the years ended April 30, 1999 and 1998
                  was approximately $521,000 and $321,000, respectively.

              (d) The Company has purchased recycled soils from Resource
                  Reclamation Services, Inc. ("RRS"), an entity owned by the
                  individual who owns 19.9% of Miami Recycling (see Notes 9, 19
                  and 20). In light of the Company's recognition that there is
                  no readily-available market for 100,000 tons of impure soil
                  and in accordance with its policy on impairment on long-lived
                  assets, the Company has adjusted the carrying amount
                  ($1,929,261) of its asset to zero.

              (e) The amount arose from fees charged to the Company from the
                  former owner of EPIC for personally guaranteeing a performance
                  bond.

              (f) These amounts are past due, hence, they are in default for
                  non-payment.

              In addition, the Company has various transactions with several
              consultants and service providers who are also minority
              shareholders or acting executives of the Company. None of these
              transactions is individually considered material.

              In addition to the transfers of personal holdings of Common stock
              on behalf of the Company by certain current shareholders discussed
              in Notes 5, 11 and 19, the Company's President transferred 100,000
              shares of his personal holdings of the Company's Common stock
              valued at $275,000 as part of a settlement agreement related to a
              mortgage note. This transfer of the President's shares was
              recorded as a capital contribution as of the date of the
              transaction based on the closing bid price per share. As part of
              the settlement agreement the Company recorded an expense of
              $275,000 related to the value of the shares transferred to the
              mortgage note holder.


                                       28

<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15-      Income Taxes

               The provision (benefit) for income taxes consists of the
               following:

                                            Year Ended April 30,
                                         1999                 1998
                                     ---------------   ---------------
                      Current:
                      Federal        $            -    $            -
                      State                 208,000
                                     ---------------   ---------------

                                            208,000                 -
                                     ---------------   ---------------

                      Deferred:
                      Federal            (6,897,257)       (1,741,559)
                      State              (1,217,163)         (335,112)
                                     ---------------   ---------------

                                         (8,114,420)       (2,076,671)
                                     ---------------   ---------------

                                     $   (7,906,420)   $   (2,076,671)
                                     ===============   ===============

              At April 30, 1999, the Company has net operating loss
              carryforwards of approximately $46 million which expire between
              2008 and 2019. The Tax Reform Act of 1986 contains provisions that
              may severely limit the net operating loss carryforwards available
              to be used in any given year in the event of significant changes
              in ownership.

              The statutory federal income tax rate is reconciled to effective
              tax rate, as follows:
<TABLE>
<CAPTION>
                                                                           Year Ended April 30,
                                                                        1999                  1998
                                                                   ----------------    ------------------
<S>                                                                     <C>                   <C>
                      Statutory federal rate                            (35.0)%               (35.0)%
                      State income taxes, net of federal
                       income taxes                                      (5.0)                 (4.0)
                      Income tax benefit recorded as part of
                       purchase accounting for EPIC                                            12.6
                      Deferred compensation not deductible                2.0                   6.9
                      Increase in valuation allowance                    14.9
                      Other                                                                     4.3
                                                                   -----------------    ------------------
                                                                        (23.1)%               (15.2)%
                                                                   =================    ==================
</TABLE>
              At April 30, 1999, the Company's deferred income tax asset is
              comprised of the tax benefit associated with the following items
              based on the statutory tax rates in effect:


                      Differences between financial and
                       tax bases of assets and liabilities   $ 3,440,000
                      Accrued compensation                       568,000
                      Net operating losses                    18,400,000
                      Other                                      186,000
                                                             -----------

                      Deferred tax asset, gross               22,594,000
                      Valuation allowance                    (22,594,000)
                                                             -----------

                      Deferred tax asset, net                $         -
                                                             ===========



                                       29
<PAGE>

             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16-      Customer Information

              The Company's operations are conducted in one business segment
              with its customers located primarily in New York and New Jersey.
              The following table summarizes those customers whose revenues are
              in excess of 10% of total revenues.

                                        Year Ended April 30,
                    Customer        1999                  1998
                               -----------------    ------------------

                    A                33%                   - %
                    B                20%                   26%
                    C                16%                   13%
                    D                13%                   24%
                    E                                      16%
                               -----------------    ------------------

                                     82%                   79%
                               =================    ==================



              In September 1997, EPIC was awarded a 15-year take or pay contract
              from New York City for biosolids disposal. The contract requires a
              minimum volume of 225 tons per day at an initial rate of $98 per
              ton, subject to escalation as defined. The contract became
              effective on June 22, 1998. The Company was required to obtain a
              surety bond as part of the terms of this contract.

NOTE 17-      Supplier Concentration

              The operations at EPIC are currently dependent upon the use of
              railroad facilities and rail transportation from a sole source.
              The operations of EPIC have historically not been impacted by this
              dependence, however, this dependence involves several risks,
              including a potential inability to obtain an adequate alternative
              supply and reduced control over pricing, timely performance and
              quality.

              A significant number of employees at EPIC are covered by
              collective bargaining agreements with two separate unions. The
              agreement with one of these unions expired in March 1997 and the
              union members are currently working on a month-to-month basis as
              the two parties are negotiating a new multi-year agreement. The
              other agreement expires in March 2001.


NOTE 18-      Joint Venture

              On April 27, 1998, the Company issued 17,500 shares of Series D
              Preferred (valued at $612,500) and 1,627,980 shares of Common
              stock (valued at $1,953,576) in exchange for cash of $416,334,
              repayment of loans due to this investor of $350,000, consulting
              fees due to this investor of $538,079, a note receivable of
              $445,587 from American Marine Rail, LLC ("AMR") and a one-third
              ownership interest in AMR (valued at $816,076, net of transaction
              expenses of $138,079). The Preferred stock was valued based on an
              independent valuation. As part of this agreement, the Company
              assigned 2.5% of its 33 1/3% net cash flows in equity and net
              proceeds from the sale, as defined, to the investor which sold the
              interest to the Company. Subsequently, the Company transferred an
              additional 1% and 1.11% of its ownership interest to the investor
              and an unrelated party, respectively, leaving the Company's
              ownership interest in AMR at 28.72%. In addition, the Company
              committed to fund the future expenditures to be incurred for the
              final approval and development of the AMR operations. The value
              assigned to the ownership interest of $1,493,872 (including the
              note receivable of $445,587, the transaction expenses of $138,079
              and additional expenses previously incurred related to this joint
              venture of $94,130) was included in the investment in joint
              venture account as of April 30, 1998.


                                       30
<PAGE>
             COMPOST AMERICA HOLDING COMPANY, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18-      Joint Venture  (Continued)

              In July 1999, the holders of Series D Preferred stock exchanged
              8,729 shares of the Series D Preferred for the Company's interest
              in AMR (see Notes 10 and 20). The loss on this transaction
              aggregating $819,129 was reflected in the accompanying
              consolidated financial statements as of April 30, 1999.


NOTE 19-      Commitments and Other Contingencies

              Operating Leases - The Company leases office space, land and
              certain equipment under noncancellable operating leases. Rent
              expense under these leases for the years ended April 30, 1999 and
              1998 was approximately $235,000 and $270,000, respectively.
              Approximate future minimum rental payments as of April 30, 1999 on
              these leases are as follows:

                 Year Ending April 30,
                       2000                              $ 338,000
                       2001                                318,000
                       2002                                176,000
                       2003                                 77,000



              Employment Agreements - The Company has employment agreements with
              certain of its key executives and employees. The agreements
              provide for minimum levels of compensation during current and
              future years and are subject to adjustment, as defined. In
              addition, certain of these agreements provide for a lump sum
              payment, as defined, upon termination without cause or upon a
              change in control.

              Approximate future minimum annual compensation under these
              employment agreements is as follows:

                 Year Ending April 30,
                       2000                            $ 1,407,000
                       2001                              1,407,000
                       2002                                932,000
                       2003                                417,000
                       2004                                144,000
                                                     -------------

                                                       $ 4,307,000
                                                     =============

              Consulting Agreements - The Company has a consulting agreement
              with an individual who owns 19.9% of Miami Recycling (see Notes 9
              and 14). This consultant will be paid a management fee equal to
              30% of the distributable net income, as defined, from all
              facilities developed in Florida. In February 1997, the Company
              entered into a ten-year consulting agreement with this individual
              to provide consulting services in the management of solid waste
              and sewer sludge and in business development in Florida. As part
              of the consulting agreement, the individual was paid cash of
              $250,000, issued 200,000 shares of the Company's Common stock
              valued at $300,000 and issued options to purchase 500,000 shares
              of the Company's Common stock at an exercise price of $2.00 per
              share. The total cost of this agreement has been capitalized as
              part of the construction in progress account for the Miami
              Recycling project. In addition, as part of the negotiation process
              for this consulting agreement in February 1997 the Company's
              President transferred 200,000 shares of his personal holdings of
              the Company's unregistered Common stock on behalf of the Company.
              In addition, upon the closing of


                                       31
<PAGE>

NOTE 19-      Commitments and Other Contingencies  (Continued)

              financing and commencement of operations for composting facilities
              in Florida, the consultant will be paid a cash fee and options to
              purchase shares of the Company's Common stock at $2.00 per share
              based on the terms outlined in the agreement. In addition, the
              Company has agreed to contract exclusively with the consultant for
              trucking services in Florida at negotiated competitive rates.

              The Company has entered into various consulting agreements for
              investment banking services, development of land application
              business, financial consulting services and project development
              services for which the consultants receive cash payments, Common
              stock or Common stock options in exchange for services provided.
              Certain of these consultants will receive future consideration
              based upon the completion of certain future events (financings,
              project approvals, etc.).

              Miami Contract Commitment - In November 1996, the Company made a
              payment of $1,000,000 to secure performance of its obligations
              under the Restated Compost Recycling Agreement dated November 30,
              1995 with the City of Miami (the Restated Agreement). Under the
              terms of Restated Agreement the commencement date of operations
              for its Miami Composting facility was extended to October 1998. On
              February 24, 1998, a resolution was proposed and adopted by the
              City of Miami Commission granting the Company an additional
              extension through October 20, 2000 if the Company agreed to the
              additional provisions noted below. The resolution included
              provisions that the Company would agree to pay the City an amount
              equal to the City's recycling costs for each of the two years of
              the extension period, agree that the $1,000,000 previously
              deposited with the City to guarantee the Company's performance
              under the Restated Agreement be released into the City's general
              fund for the City's use and posting of a new performance bond or
              letter of credit in the amount of $1,000,000 to guarantee the
              performance of its obligations under the Restated Agreement. The
              $1,000,000 previously deposited has been capitalized in other
              intangible assets as of April 30, 1999.

              An amended agreement including these provisions has been signed by
              the Company. The Company was notified by the City of Miami
              Administration that they refuse to acknowledge the extension
              agreement. As a result, the Company has filed suit against the
              City of Miami in order to protect its rights under the Miami
              contract and to secure the extension of the contract pursuant to
              the resolution adopted by the Miami City Commission in February
              1998.

              A substantial portion of net project costs (see Note 4) pertain to
              the Miami contract. Management anticipated the recovery of these
              costs through the above mentioned litigation. However, in the
              event the Company is unsuccessful in its litigation, all or a
              portion of these costs will be written off to operations.

              Government Regulations - In the normal course of business and, as
              a result of the extensive governmental regulation of the solid
              waste industry, the Company periodically may become subject to
              various judicial and administrative proceedings involving federal,
              state or local agencies. Certain federal and state environmental
              laws impose strict liability on the Company for such matters as
              contamination of water supplies or the improper disposal of
              hazardous waste.

              Litigation (also see Notes 14 and 20) - The Company, along with
              the Company's wholly-owned subsidiary, EPIC and the Company's
              former President, have been named as defendants in the Superior
              Court of New Jersey, Law Division, Essex Vicinage in an action
              brought against it by unrelated parties (the "Plaintiffs"). In the
              action, the Plaintiffs seek recovery of approximately $3 million
              claimed due under a consulting agreement and amendments thereto
              (the "Agreement"), together with interest, attorneys' fees and
              costs of suit and related relief. The Plaintiffs' claims are based
              upon breach of contract, fraud, misrepresentation and quantum
              meruit. The Plaintiffs claim that the Agreement, executed on the
              Company's behalf by its former President, entitles the Plaintiffs
              to a "success fee" in the amount claimed due, arising from the
              performance by EPIC of a 15 year municipal waste disposal contract
              with the City of New York. In December 1999 the Company has
              reached a tentative settlement (see Note 20).



                                       32
<PAGE>

NOTE 19-      Commitments and Other Contingencies  (Continued)

              The holder of a $200,000 mortgage note, collateralized by a first
              lien on the Company's 15 acre property in Freehold, New Jersey
              (the "Freehold Property") has commenced litigation to collect its
              mortgage note. A parallel action by the same holder of the
              $200,000 mortgage note seeks to foreclose on the Freehold
              Property. The ultimate outcome of these litigations cannot
              presently be determined. Although the Company has initiated
              settlement discussions, there can be no assurance that settlements
              can be reached.

              As a result of the Company's deteriorated financial condition, the
              Company is the subject of several threatened, and certain actual,
              legal actions for nonpayment of obligations (in addition to those
              described in Notes 14 and 20). The ultimate liabilities in these
              matters are not known and the vendors, in some cases, may seek
              damages in excess of amounts recorded in the accompanying
              consolidated financial statements. The Company believes, but no
              assurance can be made, that its liability will not exceed amounts
              recorded in the accompanying consolidated financial statements.


NOTE 20-      Subsequent Events

              In May 1999, the Company defaulted in the payment of a $1,000,000
              promissory note, plus accrued interest and penalties. The Lender
              also is the holder of a $2,000,000 convertible promissory note,
              due November 1, 2000, now in default as a result of cross-default
              provisions in the $1,000,000 note. As a result, the Lender filed
              suit in May 1999. Both notes are collateralized by a first
              mortgage on the Company's Newark property, upon which the Company
              intends to construct its waste transfer station. The Lender
              obtained a default judgment against the Company in September 1999
              but has not yet foreclosed upon the Company's Newark property
              pending settlement discussions. These settlement discussions are
              dependent upon the Company obtaining additional funding. At any
              time, the Lender could proceed to foreclose against the Company's
              Newark property which proceeding, if successful, would prevent the
              Company from developing the Newark property.

              In May 1999, the Company also defaulted on the payment of
              approximately $5,700,000 of promissory notes, including interest,
              to VRH (see Note 14), which notes are collateralized by a second
              mortgage on the Company's Newark property. The Company disputes
              the propriety of this second mortgage. The Company has entered
              into discussions with VRH seeking an extension of the maturity
              dates of these notes. There can be no assurance that such an
              extension will be granted.

              In July 1999, the holders of Series D Preferred (i) exchanged
              8,729 shares of their Series D Preferred Stock in the Company for
              the Company's 28.72% equity interest in American Marine Rail, LLC
              (AMR); (ii) gave up their AMR Option as discussed in Section 9 of
              the Series D Certificates of Designation and (iii) provided the
              payment of $225,000 to AMR to cure certain funding defaults by the
              Company. The holders of Series D Preferred then granted an option
              to the Company, which option expires on March 31, 2000, to
              repurchase the 28.72% equity interest in AMR for a cash payment of
              $1,750,000, less any future payments made to AMR by the Company,
              up to $400,000.

              In August 1999, the Company's former President was terminated for
              cause from all duties pursuant to his May 1, 1999 Second Amendment
              to Employment Contract. In November 1999, the former President
              filed suit in the Superior Court of New Jersey, Law Division,
              Essex Vicinage seeking damages and notifying the Company that
              there is a dispute as to his termination for cause. (See Note 14).

              In March 2000, the Company executed an agreement to sell EPIC
              provided certain conditions are met.

              In November 1999, the Company received a waiver on all current
              defaults of the debt obligation of EPIC (See Note 6).



                                       33

<PAGE>


NOTE 20-      Subsequent Events (Continued)

              In December 1999, the Series A Preferred shareholders signed an
              agreement stating that prior to May 1, 2000 they will not exercise
              their EIPC option to the extent that such exercise would result
              in, or increase, a stockholders' deficiency after giving effect to
              the transaction (see Note 10).

              In December 1999, the Company settled an action brought against it
              by unrelated parties for $853,000 to be made in a lump sum payment
              upon the earlier of the sale of EPIC or March 31, 2000. At April
              30, 1999, the Company has accrued approximately $109,000 relative
              to this suit which represents services through April 30, 1999.

              In December 1999, the Company entered into a Modification of
              Contract and Settlement Agreement with RRS whereby the Company
              will pay RRS $425,000 to terminate certain provisions made in the
              previous contract which relates to future services RRS was to
              provide to the Company.

              Since April 30, 1999, the Company has received loans aggregating
              approximately $3.9 million from shareholders and existing
              creditors. Additionally, since April 30, 1999, the Company has
              issued approximately 10.8 million shares of its Common stock in
              connection primarily with payment of dividends on Preferred stock.





                                       34

<PAGE>

                                   SIGNATURES

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

Date:           COMPOST AMERICA HOLDING COMPANY, INC.
May 12, 2000          (Registrant)

               By: /s/ CHRISTOPHER DAGGETT
                        Christopher Daggett, Co-Principal Executive
                                                Officer

               By: /s/ MARVIN ROSEMAN
                     Marvin Roseman, Co-Principal Executive
                                         Officer, Principal
                                         Financial Officer


               By: /s/   ANTHONY P. CIPOLLONE
                     Anthony P. Cipollone, Principal Accounting
                                             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
dates indicated.

CHRISTOPHER DAGGETT              May 12, 2000      By: /s/CHRISTOPHER DAGGETT
Office of the President                                   Christopher Daggett

MARVIN ROSEMAN                   May 12, 2000      By: /s/MARVIN ROSEMAN
Office of the President,                                  Marvin Roseman
Principal Financial Officer

RICHARD L. FRANKS                May 12, 2000      By: /s/RICHARD L. FRANKS
Vice President,                                           Richard L. Franks
General Counsel,
Assistant Secretary,


ANTHONY P. CIPOLLONE             May 12, 2000      By: /s/ANTHONY P.CIPOLLONE
Treasurer, Controller,                                    Anthony P.Cipollone
Principal Accounting Officer

G. CHRIS ANDERSEN                May 12, 2000      By: /s/G. CHRIS ANDERSEN
Director                                                  G. Chris Andersen

CHARLES R. CARSON                May 12, 2000      By: /s/CHARLES R. CARSON
Director                                                  Charles R. Carson

ROBERT J. LONGO                  May 12, 2000      By: /s/ROBERT J. LONGO
Director                                                  Robert J. Longo




<PAGE>


PETER PETRILLO                   May 12, 2000      By: /s/PETER PETRILLO
Director                                                  Peter Petrillo

JOHN T. SHEA                     May 12, 2000      By: /s/JOHN T. SHEA
Director                                                  John T. Shea

CHRISTOPHER SMITH                May 12, 2000      By: /s/CHRISTOPHER SMITH
Director                                                  Christopher Smith



G. Chris Andersen, Charles R. Carson, Robert J. Longo, Peter
Petrillo, John T. Shea and Christopher Smith  constitute a
majority of the members of the Registrant's Board of Directors.