SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934


                   For the fiscal year ended December 31, 1999
                         Commission file number 33-28188

                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
             (Exact name of registrant as specified in its charter)

        Colorado                                       84-1116458
        ------------------------                       -------------------
        (State of incorporation)                       (I.R.S. Employer
                                                       Identification No.)

        650 W. Georgia Street, Suite 450, Vancouver, B.C., Canada V6B-4N8
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (604) 684-8662

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

                            Title of each class: None

                 Name of each exchange on which registered: N/A

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

                            Title of each class: None

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                      Yes  X    No

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

State issuer's revenues for its most recent fiscal year. $0

Transitional Small Business Disclosure Format:
______ Yes __x__ No

<PAGE>

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant as of December 31, 1999: $135,836.87 (at $.125/share).

Number of outstanding  shares of the  registrant's no par value common stock, as
of December 31, 1999: 9,736,695.

<PAGE>


                                     PART 1

Item 1.  Business

         Jefferson  Capital  Corporation  (the  Company),  a  development  stage
         company,  was  organized  under  the laws of the State of  Colorado  on
         February 28, 1989. The Company is in the  development  stage as defined
         in Financial Standards Board Statement No. 7.

         On January 4, 1990, the Company sold  10,000,000  units of no par value
         common stock in a "Blind Pool" public offering.  The offering price for
         each unit was $.01.  Each unit  consisted of one share of the Company's
         no par  value  common  stock  and 25  Class A Common  Stock  Redeemable
         Purchase  Warrants  (Class  A  Warrants).  The  Class  A  Warrants  are
         exercisable  for 24 months from the effective date of the  registration
         statement  (October  30,  1989) and  entitled  the  holder  thereof  to
         purchase 25 shares of common  stock at a price of $.014 per share.  The
         Company  received  $72,730,  net of  offering  costs,  from the sale of
         common stock in the public offering.

         Effective  June 13, 1990, the Company  entered into a merger  agreement
         with Ohio &  Southwestern  Energy  Company  (OSEC).  The Company issued
         80,000,000  shares  of its  common  stock  in  exchange  for all of the
         outstanding  shares of OSEC. After the exchange of shares,  OSEC's sole
         shareholder,  Members  Service  Corporation  (MSC),  owned  80%  of the
         Company's  issued  and  outstanding  common  stock.  The  name  of  the
         corporation was changed to Ohio & Southwestern Energy Company (OSEC).

         While the company commenced 1990 with a successful public offering, the
         subsequent  merger  agreement  with Ohio &  Southwestern  Energy  Corp.
         (OSEC) became an abortive transaction. The new management of OSEC never
         completed the merger with assets represented, and without authorization
         distributed the corporate  funds to unauthorized  parties or uses which
         resulted in a total write off of the capital of the Company.

         The  majority  stockholder,  MSC,  failed to disclose  to the  minority
         stockholders  the distribution of corporate funds during the year ended
         1990.  The  Company  recorded  an  extraordinary  loss in the amount of
         $69,116 as a result of the unauthorized distribution of corporate funds
         in 1990.

         The minority shareholders filed a complaint in Arapahoe County Colorado
         District Court, Civil Division, during April, 1991 alleging among other
         things that the  majority  shareholder,  MSC,  failed to  disclose  the
         distribution of corporate  funds,  failed to account for the operations
         of the corporation and  transferred  assets of the corporation  without

<PAGE>

         stockholder  or board  meetings.  The  supposed  assets of OSEC did not
         exist and the Company (OSEC) was a sham.

         On August 28, 1991, a Receiver was  appointed and the court ordered the
         80,000,000  shares of common  stock  issued to MSC to be  canceled.  On
         January  12,  1995,  the  minority  shareholders  filed  a  motion  for
         supplemental  orders  requesting  that  the  merger  between  Jefferson
         Capital  Corporation  and  Ohio  and  Southwestern  Energy  Company  be
         declared  null and void and a bar date of April 15, 1995, be set within
         which any and all creditors must file a claim.

         On May 23, 1995,  the Receiver  issued his final report stating that no
         claims  of  creditors  had been  filed by the bar  date.  The  Receiver
         incurred $36,395 in costs during receivership. Certain of the costs had
         been advanced by the Receiver in the anticipation of issuance of shares
         of common  stock by the Board of Directors  after the  dismissal of the
         Receivership.

         On June 21, 1995, the Court ordered the merger null and void,  approved
         the Receiver's  final report and authorized the restoration of the name
         of the Company to Jefferson Capital Corporation.  The Board has elected
         to retain the existing name for consistency.  The Company engaged in no
         foreign  operations or export sales to date,  has no product and has no
         full-time employees at year end.

         On August 30, 1995 the  shareholders  of the company voted to approve a
         reverse  split of up to one new share for 300  shares  outstanding.  On
         September 25, 1995, the directors  effectuated a reverse split on a one
         for 300 shares basis.

         The Company was inactive in 1997.

         On June 25, 1998,  shareholders  of Registrant  entered into a Purchase
         Agreement  with  CanArab   Acquisitions  Corp.  under  which  Can  Arab
         purchased  8,650,000  common shares of The Ohio &  Southwestern  Energy
         Company for $160,000, from GeoTech Management Services, Inc.

         The following  shareholders of CanArab Acquisition Corp. own or control
         more than 5% of the total issued capital of CanArab:

Cankaz Technology Systems Corp.     10,000,000 shares         44%
Arab-German Fisheries, Inc.                 9,500,000 shares           41%
Gerab Investments Corp.                     1,175,000 shares           5%

         Gerab  Investments is owned 80% by Abbas Salih and 20% is held by three
         German citizens.  Cankaz Technology is owned 100% by Gerab Investments.
         Arab German-Fisheries is owned 80% by Gerab Investments Corp and 20% by
         the Arab Group  International  for  Investment and  Acquisition.  Abbas

<PAGE>

         Salih  would be  considered  as the  control  person of the  aggregated
         entities and he therefore controls 94.8% of the Registrant.

         Registrant  entered  into a  Plan  and  Agreement  to  acquire  CanArab
         Technology  Limited from  shareholders in consideration of the issuance
         of Fourteen Million Six Hundred Fifty Thousand  (14,650,000)  shares of
         common stock of Registrant.  CanArab has developed  marine  aquaculture
         designs for shrimp farming.  Concurrent with the  acquisition.  CanArab
         Acquisitions Corp. was to surrender  8,650,000 shares to Registrant for
         cancellation.  The  acquisition  was  closed but  rescinded  thereafter
         because funding  sufficient to implement the plan of business was never
         achieved.

         The Company entered into an Agreement in October 1998 to acquire Canbau
         Construction  GMBH of Germany for one million shares of common stock of
         the   Registrant.   The  Agreement   required   certain  due  diligence
         investigation  and is based upon the  representation  of Canbau that it
         will have audited  financial  statements  showing a four million dollar
         asset base.  Canbau has been retained to construct a shrimp  processing
         plant in Germany  with an  estimated  cost of $42  million,  subject to
         arrangement of financing which is not yet assured as of the date of the
         Agreement.  The  Agreement  has never been  consummated  due to lack of
         funding and lack of audited financial statements, and has been
         cancelled

         The Company is actively seeking acquisition candidates.

         The  Company's  Articles of  Incorporation,  as amended,  entitle it to
         transact any lawful business or businesses for which  corporations  may
         be incorporated  pursuant to the Colorado Corporation Code. The Company
         can be defined as a "shell" company, whose sole purpose at this time is
         to locate and consummate a merger or acquisition with a private entity.
         Any  business  combination  or  transaction  will  likely  result  in a
         significant  issuance  of shares and  substantial  dilution  to present
         stockholders of the Company.

         The  proposed  business  activities  described  herein may classify the
         Company as a "blank check" company.  Many states have enacted statutes,
         rules and regulations  limiting the sale of securities of "blank check"
         companies in their  respective  jurisdictions.  In order to comply with
         these various limitations,  management does not intend to undertake any
         efforts to sell any additional  securities of the Company,  either debt
         or equity,  or cause a market to develop  in the  Company's  securities
         until  such  time  as the  Company  has  successfully  implemented  its
         business plan described herein.


<PAGE>


         General Business Plan

         The   Company's   purpose  is  to  seek,   investigate   and,  if  such
         investigation  warrants,  acquire an interest in business opportunities
         presented  to it by  persons  or firms who or which  desire to seek the
         perceived  advantages of a  corporation  which reports under Section 13
         and 15 of the Securities Exchange Act of 1934 (the "Exchange Act"). The
         Company will not restrict its search to any specific business, industry
         or geographical  location and the Company may participate in a business
         venture  of  virtually  any  kind or  nature.  This  discussion  of the
         proposed  business  is  purposefully  general  and is not  meant  to be
         restrictive of the Company's virtually  unlimited  discretion to search
         for  and  enter  into  potential  business  opportunities.   Management
         anticipates  that it may be able to  participate  in only one potential
         business  venture  because the  Company has nominal  assets and limited
         financial   resources.   See  "Financial   Statements."  This  lack  of
         diversification should be considered a substantial risk to shareholders
         of the  Company  because  it will not  permit  the  Company  to  offset
         potential losses from one venture against gains from another.

         The Company may seek a business  opportunity  with entities  which have
         recently  commenced  operations,  or which wish to  utilize  the public
         marketplace  in order to raise  additional  capital  in order to expand
         into new  products or  markets,  to develop a new product or service or
         for other  corporate  purposes.  The  Company  may  acquire  assets and
         establish  wholly-owned  subsidiaries in various  businesses or acquire
         existing businesses as subsidiaries.

         The Company anticipates that the selection of a business opportunity in
         which to  participate  will be  complex  and  extremely  risky.  Due to
         general economic conditions, rapid technological advances being made in
         some industries and shortages of available capital, management believes
         that there are  numerous  firms  seeking  the  perceived  benefits of a
         publicly  registered  corporation.  Such perceived benefits may include
         facilitating  or  improving  the  terms  on  which  additional   equity
         financing  may be  sought,  providing  liquidity  for  incentive  stock
         options or  similar  benefits  to key  employees,  providing  liquidity
         (subject to restrictions of applicable  statutes) for all  shareholders
         and other factors.  Potentially,  available business  opportunities may
         occur  in  many   different   industries   and  at  various  stages  of
         development,   all  of  which   will  make  the  task  of   comparative
         investigation  and analysis of such  business  opportunities  extremely
         difficult and complex.

         The Company  has, and will  continue to have,  no capital with which to
         provide the owners of business  opportunities with any significant cash
         or other assets. However,  management believes that the Company will be


<PAGE>

         able to offer  owners of  acquisition  candidates  the  opportunity  to
         acquire a  controlling  ownership  interest  in a  publicly  registered
         company  without  incurring  the cost and time  required  to conduct an
         initial public offering. The owners of the business opportunities will,
         however,  incur  significant  legal and accounting  costs in connection
         with the acquisition of a business  opportunity  including the costs of
         preparing  forms 8-K,  10Q,  or  agreements  and  related  reports  and
         documents.  The Exchange Act  specifically  requires that any merger or
         acquisition    candidate   comply   with   all   applicable   reporting
         requirements,  which include providing audited financial  statements to
         be included within the numerous  filings relevant to complying with the
         Exchange Act.  Nevertheless,  the officers and directors of the Company
         have not  conducted  market  research and are not aware of  statistical
         data  which  would  support  the  perceived  benefits  of a  merger  or
         acquisition  transaction for the owners of a business opportunity.  The
         analysis of new business  opportunities will be undertaken by, or under
         the  supervision of, the officers and directors of the Company have not
         conducted  market research and are not aware of statistical  data which
         would  support  the  perceived  benefits  of a  merger  or  acquisition
         transaction for the owners of a business opportunity.

         The analysis of new business  opportunities  will be undertaken  by, or
         under the  supervision  of, the officers and  directors of the Company,
         none of whom is a professional business analyst.  Management intends to
         concentrate   on   identifying    preliminary    prospective   business
         opportunities  which may be brought to its  attention  through  present
         associations  of  the  Company's  officers  and  directors,  or by  the
         Company's    shareholders.    In   analyzing    prospective    business
         opportunities,  management  will consider such matters as the available
         technical,  financial and  managerial  resources;  working  capital and
         other financial requirements;  history of operations, if any; prospects
         for the future; nature of present and expected competition; the quality
         and  experience of management  services  which may be available and the
         depth  of  that  management;   the  potential  for  further   research,
         development or  exploration;  specific risk factors not now foreseeable
         but which then may be anticipated to impact the proposed  activities of
         the Company;  the potential for growth or expansion;  the potential for
         profit;  the perceived  public  recognition  or acceptance of products,
         services or trades;  name  identification;  and other relevant factors.
         Officers  and  directors  of the  Company  will  meet  personally  with
         management  and key  personnel of the business  opportunity  as part of
         their  investigation.  To the extent  possible,  the Company intends to
         utilize  written  reports and  personal  investigation  to evaluate the
         above  factors.  The Company will not acquire or merge with any company
         for which  audited  financial  statements  cannot be obtained  within a
         reasonable period of time after closing of the proposed transaction.

<PAGE>

         Management of the Company,  while not especially experienced in matters
         relating to the new business of the Company,  shall rely upon their own
         efforts  and, to a much  lesser  extent,  the efforts of the  Company's
         shareholders, in accomplishing the business purposes of the Company. It
         is not anticipated that any outside consultants or advisors, other than
         the Company's  legal counsel and  accountants,  will be utilized by the
         Company to effectuate its business purposes described herein.  However,
         if the Company does retain such an outside  consultant or advisor,  any
         cash fee earned by such  party will need to be paid by the  prospective
         merger/acquisition  candidate,  as the  Company has no cash assets with
         which  to  pay  such  obligation.  There  have  been  no  contracts  or
         agreements with any outside consultants and none are anticipated in the
         future.

         The Company will not restrict its search to any specific kind of firms,
         but may acquire a venture which is in its  preliminary  or  development
         stage,  which is already in  operation or which is in  essentially  any
         stage of its  corporate  life. It is impossible to predict at this time
         the status of any business in which the Company may become engaged,  in
         that such business may need to seek additional  capital,  may desire to
         have its shares publicly traded or may seek other perceived  advantages
         which the Company may offer.

         It is anticipated  that the Company will incur nominal  expenses in the
         implementation  of its  business  plan  described  herein.  Because the
         Company has no capital  with which to pay these  anticipated  expenses,
         present  management  of the Company  will pay these  charges with their
         personal  funds,  as interest free loans to the Company.  However,  the
         only  opportunity  which management has to have these loans repaid will
         be from a prospective merger or acquisition  candidate.  Management has
         agreed among  themselves that the repayment of any loans made on behalf
         of the Company will not impede,  or be made  conditional in any manner,
         on consummation of a proposed transaction.

         Acquisition of Opportunities

         In implementing a structure for a particular business acquisition,  the
         Company may become a party to a merger, consolidation,  reorganization,
         joint  venture or  licensing  agreement  with  another  corporation  or
         entity. It may also acquire stock or assets of an existing business. On
         the  consummation  of a  transaction,  it is probable  that the present
         management and shareholders of the Company will no longer be in control
         of the Company.  In addition,  the Company's  directors may, as part of

<PAGE>

         the terms of the acquisition transaction, resign and be replaced by new
         directors  without  a vote of the  Company's  shareholders  or may sell
         their stock in the Company. Any and all such sales will only be made in
         compliance  with  the  securities  laws of the  United  States  and any
         applicable state.

         It is anticipated that any securities issued in any such reorganization
         would be issued in reliance  upon  exemption  from  registration  under
         applicable  federal and state securities  laws. In some  circumstances,
         however,  as a negotiated  element of its transaction,  the Company may
         agree to register all or a part of such  securities  immediately  after
         the  transaction is consummated or at specified  times  thereafter.  If
         such registration  occurs, of which there can be no assurance,  it will
         be  undertaken   by  the   surviving   entity  after  the  Company  has
         successfully  consummated a merger or acquisition and the Company is no
         longer  considered a "shell"  company.  Until such time as this occurs,
         the Company will not attempt to register any additional securities. The
         issuance of substantial  additional securities and their potential sale
         into any trading  market which may develop in the Company's  securities
         may have a depressive  effect on the value of the Company's  securities
         in the  future,  if  such a  market  develops,  of  which  there  is no
         assurance.

         While the actual terms of a  transaction  to which the Company may be a
         party cannot be  predicted,  it may be expected that the parties to the
         business  transaction will find it desirable to avoid the creation of a
         taxable  event and thereby  structure  the  acquisition  in a so-called
         "tax-free"  reorganization  under  Sections  368(a)(1)  or  351  of the
         Internal  Revenue  Code  (the  "Code").  In  order to  obtain  tax-free
         treatment  under the Code,  it may be  necessary  for the owners of the
         acquired  business  to own  80% or  more  of the  voting  stock  of the
         surviving  entity. In such event, the shareholders of the Company would
         retain  less  than 20% of the  issued  and  outstanding  shares  of the
         surviving  entity,  which would result in  significant  dilution in the
         equity of such shareholders.

         As part of the Company's  investigation,  officers and directors of the
         Company will meet  personally  with  management and key personnel,  may
         visit and inspect material  facilities,  obtain independent analysis or
         verification  of certain  information  provided,  check  references  of
         management  and key personnel and take other  reasonable  investigative
         measures,  to the extent of the Company's limited  financial  resources
         and management expertise.  The manner in which the Company participates
         in an  opportunity  will depend on the nature of the  opportunity,  the
         respective  needs and  desires of the Company  and other  parties,  the
         management of the opportunity and the relative  negotiation strength of
         the Company and such other management.

<PAGE>

         With  respect to any merger or  acquisition,  negotiations  with target
         company  management  are  expected  to focus on the  percentage  of the
         Company which target company shareholders would acquire in exchange for
         all of their shareholdings in the target company. Depending upon, among
         other  things,  the  target  company's  assets  and  liabilities,   the
         Company's  shareholders  will in all  likelihood  hold a  substantially
         lesser  percentage  ownership  interest  in the Company  following  any
         merger or  acquisition.  The  percentage  ownership  may be  subject to
         significant  reduction  in the  event  the  Company  acquires  a target
         company with substantial assets. Any merger or acquisition  effected by
         the Company can be expected to have a  significant  dilutive  effect on
         the  percentage of shares held by the Company's  then-shareholders.  If
         required to so do under  relevant  law,  management of the Company will
         seek  shareholder  approval of a proposed  merger or acquisition  via a
         Proxy  Statement.   However,  such  approval  would  be  assured  where
         management  supports  such a business  transaction  because  management
         presently  controls  sufficient  shares of the Company to  effectuate a
         positive  vote on the  proposed  transaction.  Further,  a  prospective
         transaction  may be  structured  so that  shareholder  approval  is not
         required,  and such a transaction  may be  effectuated  by the Board of
         Directors without shareholder approval.

         The Company will  participate in a business  opportunity only after the
         negotiation and execution of appropriate written  agreements.  Although
         the  terms of such  agreements  cannot  be  predicted,  generally  such
         agreements will require some specific representations and warranties by
         all of the parties  thereto,  will specify  certain  events of default,
         will  detail  the terms of  closing  and the  conditions  which must be
         satisfied by each of the parties prior to and after such closing,  will
         outline the manner of bearing costs,  including  costs  associated with
         the Company's  attorneys and  accountants,  will set forth  remedies on
         default and will include miscellaneous other terms.

         As stated  hereinabove,  the Company will not acquire or merge with any
         entity which cannot provide  independent  audited financial  statements
         within a  reasonable  period  of time  after  closing  of the  proposed
         transaction.   The   Company  is  subject  to  all  of  the   reporting
         requirements   included  in  the  Exchange   Act.   Included  in  these
         requirements is the affirmative duty of the Company to file independent
         audited  financial  statements as part of its Form 8-K to be filed with
         the Securities and Exchange Commission upon consummation of a merger or
         acquisition,  as well as the  Company's  audited  financial  statements
         included in its annual report on Form 10-KSB (or 10-K, as  applicable).
         If such audited financial  statements are not available at closing,  or
         within time  parameters  necessary to insure the  Company's  compliance

<PAGE>

         with the requirements of the Exchange Act, or if the audited  financial
         statements provided do not conform to the  representations  made by the
         candidate  to  be  acquired  in  the  closing  documents,  the  closing
         documents will provide that the proposed  transaction will be voidable,
         at the  discretion of the present  management  of the Company.  If such
         transaction  is voided,  the  agreement  will also  contain a provision
         providing for the  acquisition  entity to reimburse the Company for all
         costs associated with the proposed transaction.

         Competition

         The Company will remain an  insignificant  participant  among the firms
         which engage in the  acquisition of business  opportunities.  There are
         many  established  venture  capital and financial  concerns  which have
         significantly  greater financial and personnel  resources and technical
         expertise than the Company. In view of the Company's combined extremely
         limited financial  resources and limited management  availability,  the
         Company will continue to be at a significant  competitive  disadvantage
         compared to the Company's competitors.

         Employees

         The  Company  has no full  time  employees.  The  Company's  president,
         treasurer and secretary have agreed to allocate a portion of their time
         to the activities of the Company, without compensation.  These officers
         anticipate  that the business plan of the Company can be implemented by
         their devoting approximately 20 hours per month to the business affairs
         of the Company and, consequently,  conflicts of interest may arise with
         respect to the limited time  commitment by such  officers.  See Item 9,
         "Directors,   Executive   Officers,   Promoters  and  Control  Persons;
         Compliance with Section 16(a) of the Exchange Act."

         Investment Company Act of 1940

         The Company may participate in a business or opportunity by purchasing,
         trading  or selling  the  securities  of such  business.  However,  the
         Company  does  not  intend  to  engage  primarily  in such  activities.
         Specifically,  the Company  intends to conduct its  activities so as to
         avoid being classified as an "investment  company" under the Investment
         Company  Act of  1940  (the  "Investment  Act"),  and  therefore  avoid
         application  of the  costly  and  restrictive  registration  and  other
         provisions  of the  Investment  Act  and  the  regulations  promulgated
         thereunder.

         Section  3(a) of the  Investment  Act  provides  the  definition  of an
         "investment  company"  which  includes an entity that  engages or holds

<PAGE>

         itself out as being  engaged  primarily in the  business of  investing,
         reinvesting  or trading in  securities,  or that engages or proposes to
         engage in the business of investing,  reinvesting,  owning,  holding or
         trading "investment  securities"  (defined as all securities other than
         government  securities,  securities of majority-owned  subsidiaries and
         certain other  securities)  the value of which exceeds 40% of the value
         of its total  assets  (excluding  government  securities,  cash or cash
         items).  The Company intends to implement its business plan in a manner
         that  will  result  in the  availability  of this  exception  from  the
         definition  of  "investment  company."   Consequently,   the  Company's
         participation  in a business or  opportunity  through the  purchase and
         sale of  investment  securities  will be  limited.  In  order  to avoid
         classification as an investment  company,  the Company will search for,
         analyze and acquire or participate in a business  opportunity by use of
         a method that does not involve the acquisition, ownership or holding of
         investment securities.

         The  Company's  plan of  business  may  involve  changes in its capital
         structure,   management,   control  and  business,   especially  if  it
         consummates a reorganization as discussed above. Each of these areas is
         regulated by the  Investment  Act,  which  regulation has the purported
         purpose of  protecting  purchasers of  investment  company  securities.
         Since the Company  will not  register  as an  investment  company,  its
         shareholders will not be afforded these purported protections.

         The  Company  intends  to  vigorously   resist   classification  as  an
         investment   company  and  to  take  advantage  of  any  exemptions  or
         exceptions  from  application  of the  Investment  Act, which allows an
         entity a  one-time  option  during  any  three-year  period to claim an
         exemption  as  a  "transient"  investment  company.  The  necessity  of
         asserting any such resistance, or making any claim of exemption,  could
         be time-consuming and costly, or even prohibitive,  given the Company's
         limited resources.

         Certain Risks

         The Company's  business is subject to numerous risk factors,  including
         the following:

         No Operating History or Revenue and Minimal Assets. The Company has had
         no operating history nor any revenues or earnings from operations.  The
         Company has no significant assets or financial  resources.  The Company
         will,  in  all   likelihood,   sustain   operating   expenses   without
         corresponding  revenues,  at least until the consummation of a business
         combination.  This may result in the Company  incurring a net operating
         loss which will increase  continuously until the Company can consummate

<PAGE>

         a business combination with a profitable business opportunity. There is
         no assurance that the Company can identify such a business  opportunity
         and consummate such a business combination.

         Speculative Nature of Company's Proposed Operations. The success of the
         Company's  proposed plan of operation  will depend to a great extent on
         the  operations,  financial  condition and management of the identified
         business  opportunity.   While  management  intends  to  seek  business
         combination(s)  with entities having established  operating  histories,
         there  can be no  assurance  that the  Company  will be  successful  in
         locating  candidates  meeting such  criteria.  In the event the Company
         completes a business  combination,  of which there can be no assurance,
         the  success  of  the  Company's   operations  may  be  dependent  upon
         management of the successor  firm or venture  partner firm and numerous
         other factors beyond the Company's control.

         Scarcity   of  and   Competition   for   Business   Opportunities   and
         Combinations.  The Company is and will continue to be an  insignificant
         participant  in the business of seeking  mergers with,  joint  ventures
         with and  acquisitions  of small private and public  entities.  A large
         number of established and  well-financed  entities,  including  venture
         capital  firms,  are active in mergers and  acquisitions  of  companies
         which may be desirable  target  candidates for the Company.  Nearly all
         such entities have significantly greater financial resources, technical
         expertise   and   managerial   capabilities   than  the  Company   and,
         consequently,  the Company  will be at a  competitive  disadvantage  in
         identifying possible business opportunities and successfully completing
         a business  combination.  Moreover,  the Company  will also  compete in
         seeking  merger or  acquisition  candidates  with numerous  other small
         public companies.

         No  Agreement  for  Business  Combination  or  Other  Transaction;   No
         Standards  for Business  Combination.  The Company has no  arrangement,
         agreement or  understanding  with respect to engaging in a merger with,
         joint venture with or acquisition of, a private or public entity. There
         can be no assurance  that the Company will be successful in identifying
         and  evaluating  suitable  business  opportunities  or in  concluding a
         business  combination.  Management  has not  identified  any particular
         industry or specific  business within an industry for evaluation by the
         Company.  There  is no  assurance  that  the  Company  will  be able to
         negotiate a business combination on terms favorable to the Company. The
         Company has not established a specific length of operating history or a
         specified level of earnings,  assets, net worth or other criteria which
         it will require a target  business  opportunity to have  achieved,  and
         without which the Company would not consider a business  combination in
         any form with such business opportunity.  Accordingly,  the Company may
         enter into a business combination with a business opportunity having no

<PAGE>

         significant  operating  history,  losses,  limited or no potential  for
         earnings,   limited  assets,  negative  net  worth  or  other  negative
         characteristics.

         Continued Management Control; Limited Time Availability.  While seeking
         a business combination,  management anticipates devoting up to 20 hours
         per  month  to the  business  of the  Company.  None  of the  Company's
         officers  has  entered  into a written  employment  agreement  with the
         Company and none is expected to do so in the  foreseeable  future.  The
         Company has not obtained key man life  insurance on any of its officers
         or directors.  Notwithstanding the combined limited experience and time
         commitment  of  management,  loss  of the  services  of  any  of  these
         individuals  would  adversely  affect   development  of  the  Company's
         business  and its  likelihood  of  continuing  operations.  See Item 9,
         "Directors,   Executive   Officers,   Promoters  and  Control  Persons;
         Compliance with Section 16(a) of the Exchange Act."

         Conflicts of Interest - General.  Certain of the officers and directors
         of the Company are directors  and/or  principal  shareholders  of other
         blank check companies and, therefore,  could face conflicts of interest
         with  respect to  potential  acquisitions.  In  addition,  officers and
         directors  of the  Company  may in the future  participate  in business
         ventures  which could be deemed to compete  directly  with the Company.
         Additional  conflicts of interest and non-arms length  transactions may
         also  arise in the  future  in the  event  the  Company's  officers  or
         directors  are  involved in the  management  of any firm with which the
         Company  transacts  business.  The  Company's  Board of  Directors  has
         adopted  a policy  that the  Company  will not seek a merger  with,  or
         acquisition  of, any entity in which  management  serve as  officers or
         directors,  or in which  they or  their  family  members  own or hold a
         controlling  ownership interest.  Although the Board of Directors could
         elect to change  this  policy,  the Board of  Directors  has no present
         intention to do so. In  addition,  if the Company and other blank check
         companies   with  which  the  Company's   officers  and  directors  are
         affiliated  both  desire  to take  advantage  of a  potential  business
         opportunity,   then  the  Board  of  Directors  has  agreed  that  said
         opportunity  should be  available  to each such company in the order in
         which  such  companies  registered  or became  current in the filing of
         annual  reports  under the Exchange Act  subsequent to January 1, 1997.
         See Item 9,  "Directors,  Executive  Officers,  Promoters  and  Control
         Persons;  Compliance with Section 16(a) of the Exchange Act - Conflicts
         of Interest."

         Reporting  Requirements May Delay or Preclude Acquisition.  Sections 13
         and 15(d) of the  Exchange  Act require  companies  subject  thereto to
         provide certain information about significant  acquisitions,  including
         certified financial statements for the company acquired,  covering one,

<PAGE>

         two or three years,  depending on the relative size of the acquisition.
         The time and  additional  costs  that may be  incurred  by some  target
         entities  to  prepare  such  statements  may  significantly   delay  or
         essentially preclude consummation of an otherwise desirable acquisition
         by the Company. Acquisition prospects that do not have or are unable to
         obtain the  required  audited  statements  may not be  appropriate  for
         acquisition so long as the reporting  requirements  of the Exchange Act
         are applicable.

         Lack of Market  Research  or  Marketing  Organization.  The Company has
         neither  conducted,  nor have others made  available to it,  results of
         market   research   indicating   that  market  demand  exists  for  the
         transactions  contemplated by the Company.  Moreover,  the Company does
         not have,  and does not plan to  establish,  a marketing  organization.
         Even in the event  demand  is  identified  for a merger or  acquisition
         contemplated by the Company,  there is no assurance the Company will be
         successful in completing any such business combination.

         Lack of  Diversification.  The Company's proposed  operations,  even if
         successful,  will in all likelihood result in the Company engaging in a
         business  combination with a business  opportunity.  Consequently,  the
         Company's activities may be limited to those engaged in by the business
         opportunity or opportunities which the Company merges with or acquires.
         The Company's  inability to diversify its  activities  into a number of
         areas  may  subject  the  Company  to  economic  fluctuations  within a
         particular  business  or  industry  and  therefore  increase  the risks
         associated with the Company's operations.

         Regulation.  Although the Company will be subject to  regulation  under
         the Exchange Act,  management  believes the Company will not be subject
         to regulation under the Investment  Company Act of 1940, insofar as the
         Company  will not be engaged in the business of investing or trading in
         securities.  In the event the Company engages in business  combinations
         which result in the Company holding passive  investment  interests in a
         number of entities,  the Company could be subject to  regulation  under
         the Investment Company Act of 1940. In such event, the Company would be
         required to register as an investment  company and could be expected to
         incur  significant  registration and compliance  costs. The Company has
         obtained  no formal  determination  from the  Securities  and  Exchange
         Commission as to the status of the Company under the Investment Company
         Act of 1940 and, consequently,  any violation of such Act would subject
         the Company to material adverse consequences.

         Probable  Change in Control  and  Management.  A  business  combination
         involving  the  issuance of the  Company's  Common  Stock will,  in all
         likelihood,  result in shareholders  of a private  company  obtaining a
         controlling  interest in the Company. Any such business combination may

<PAGE>

         require  management of the Company to sell or transfer all or a portion
         of the Company's Common Stock held by them, or resign as members of the
         Board of Directors of the Company.  The resulting  change in control of
         the Company could result in removal of one or more present officers and
         directors  of  the  Company  and  a   corresponding   reduction  in  or
         elimination  of  their  participation  in  the  future  affairs  of the
         Company.

         Reduction of Percentage Share Ownership Following Business Combination.
         The  Company's  primary  plan of  operation  is based  upon a  business
         combination  with a private  concern which,  in all  likelihood,  would
         result in the Company  issuing  securities to  shareholders of any such
         private  company.  The issuance of previously  authorized  and unissued
         shares of Common  Stock of the Company  would  result in a reduction in
         the percentage of shares owned by present and prospective  shareholders
         of the Company and may result in a change in control or  management  of
         the Company.

         Disadvantages  of Blank  Check  Offering.  The Company may enter into a
         business  combination with an entity that desires to establish a public
         trading market for its shares.  A business  opportunity  may attempt to
         avoid what it deems to be adverse  consequences  of undertaking its own
         public  offering by seeking a business  combination  with the  Company.
         Such  consequences may include,  but are not limited to, time delays of
         the registration  process,  significant expenses to be incurred in such
         an  offering,  loss of voting  control to public  shareholders  and the
         inability or  unwillingness  to comply with  various  federal and state
         laws enacted for the protection of investors.

         Taxation.  Federal and state tax consequences  will, in all likelihood,
         be major  considerations  in any business  combination  the Company may
         undertake.  Currently,  such  transactions  may be  structured so as to
         result in tax-free  treatment  to both  companies,  pursuant to various
         federal and state tax provisions.  The Company intends to structure any
         business  combination  so as to  minimize  the  federal  and  state tax
         consequences to both the Company and the target entity;  however, there
         can be no  assurance  that  such  business  combination  will  meet the
         statutory requirements of a tax-free reorganization or that the parties
         will obtain the intended tax-free treatment upon a transfer of stock or
         assets. A non-qualifying  reorganization could result in the imposition
         of both  federal and state  taxes  which may have an adverse  effect on
         both parties to the transaction.

         Requirement of Audited  Financial  Statements  May Disqualify  Business
         Opportunities.  Management  of the Company  believes that any potential
         business  opportunity  must provide  audited  financial  statements for
         review, for the protection of all parties to the business  combination.

<PAGE>

         One or more attractive business  opportunities may choose to forego the
         possibility  of a business  combination  with the Company,  rather than
         incur  the  expenses   associated  with  preparing   audited  financial
         statements.

Item 2.  Property

         The  Company  maintains a corporate  office at P.O.  Box 11569,  650 W.
         Georgia Street,  Suite 450, Vancouver,  BC, Canada V6B 4N8. The company
         owns no real property.

Item 3.  Legal Proceedings

         The  Company is a party to no  pending  legal  proceedings,  nor is its
         property subject to such proceedings, at year end 1999.

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

         No matters were submitted during the fiscal year covered by this report
         to a vote of security holders of the Company,  through the solicitation
         of proxies or otherwise.


<PAGE>


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         As of the  date of this  report,  management  knows  of no  trading  or
         quotation of the Company's  common stock. The range of high and low bid
         quotations for each fiscal  quarter since the last report,  as reported
         by the National Quotation Bureau Incorporated, was as follows:

                               1999                   High     Low

                           First quarter             .37               0
                           Second quarter            .125              0
                           Third quarter             .125               .125
                           Fourth quarter            .125               .125

                               1998                   High      Low

                           First quarter             *                 *
                           Second quarter            *                 *
                           Third quarter             .82               .37
                           Fourth quarter            .87               .37


          * No quotations reported

         The  above  quotations  reflect  inter-dealer  prices,  without  retail
         mark-up,  mark-down,  or commission and may not  necessarily  represent
         actual transactions.

         As of December 31, 1999 there were  approximately  60 record holders of
         the Company's common Stock.

         The Company has not  declared or paid any cash  dividends on its common
         stock and does not  anticipate  paying  dividends  for the  foreseeable
         future.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

                  Financial Condition and Changes in Financial Condition

         No operations  were  conducted  and no revenues  were  generated in the
         fiscal  year.  The Company at year end had no capital and only  minimal
         cash,  and no other  assets  whatsoever.  The  Company  at year end was
         totally illiquid and would have needed cash infusions from shareholders
         to provide capital.

                  Liquidity and Capital Resources

         The Company had no cash at December 31, 1999.

<PAGE>

         The Company ceased active operations in 1991 and has no business at the
         present time. It anticipates  seeking  acquisition or merger candidates
         in the future.

         During the  course of the fiscal  year ended  December  31,  1999,  the
         Company's  outstanding  debt level increased to $85,960 from $49,965 in
         fiscal year ended  December  31, 1998.  This  increase was due to costs
         relating to company's public status, and legal and accounting.

         Stockholders  deficit  increased  to  ($85,960)  at  December  31, 1999
         compared to ($49,965) at December 31, 1998.

         The Company currently has no capital resources.

         The  Company  has no  other  known  material  commitments  for  capital
         expenditures.

                  Results of Operations

         During the fiscal year ended  December 31, 1999,  the Company  incurred
         general and  administrative  expenses and consulting  fees. At present,
         the Company  has no business  income or  operations.  Accordingly,  the
         reported  financial  information herein may not be indicative of future
         operating results.

         Results of Operations for Year Ended December 31, 1999 Compared to Year
         Ended December 31, 1998.

         The Company had no  operating  business and no revenues in 1999 nor any
         in 1997.  The Company  incurred  general and  administrative  expenses,
         including  legal and  accounting,  of  $35,995 in 1999 as  compared  to
         $67,772  in  1998.   The  increased   expenses   resulted  from  legal,
         accounting,  and  management  fees  related  to change of  control  and
         attempts to contract for a new business. The Company had a gain in 1998
         on settlement of debt of $15,464. The net loss for the year in 1998 was
         ($35,995) as compared to a ($52,308) loss for 1998.

         The trend of losses on operations  (or lack thereof) can be expected to
         continue  until and unless the Company ever achieves  substantial  cash
         flow from any  business  operations.  The  Company  has no  business or
         operations as of the date hereof.


<PAGE>



        Loss per share for year ended  December  31, 1999 was ($.003) per share,
         compared to approximately  ($.01) per share for year ended December 31,
         1996.

         The  management of the Company does not believe that  inflation has had
         any material  effect on the Company  during the year ended December 31,
         1998.

         Year  2000  issues  "Year  2000  problems)  result  primarily  from the
         inability of some computer  software to properly  store,  recall or use
         data after  December  31,  1999.  The Company is engaged  primarily  in
         organizational  and fund raising  activities and accordingly,  does not
         rely on information technology ("IT") systems. Accordingly, the Company
         does not  believe  that it will be  materially  affected  by Year  2000
         problems.  The Company  relies on non-IT  systems  that may suffer from
         Year 2000 problems  including  telephone  systems,  facsimile and other
         office machines. Moreover, the Company relies on third-parties that may
         suffer from Year 2000 problems that could affect the Company's  minimal
         operations,  the Company does not believe  that such non-IT  systems or
         third-party Year 2000 problems will affect the Company in a manner that
         is  different  or more  substantial  than such  problems  affect  other
         similarly  situated  companies.  Consequently,  the  Company  does  not
         currently  intend  to  conduct  a  readiness  assessment  of Year  2000
         problems or develop a detained  contingency  plan with  respect to Year
         2000 problems that may affect the Company or third-parties.

         The foregoing is a "Year 2000 Readiness  Disclosure" within the meaning
         of the Year 2000 Information and Readiness Disclosure Act of 1998.

Item 7.  Financial Statements and Supplementary Data

                  Please refer to pages F-1 through F-10.


<PAGE>


Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure

Amisano & Hanson, CPA's of Vancouver, B.C. were retained in 1998 as auditors for
the Company for fiscal year  1998and  1999 Prior  auditors  for the Company were
A.J.  Robbins,  & Co.,  CPA, PC of Denver,  Colorado  for the fiscal  years 1991
through 1997.

In connection with audits of two most recent fiscal years and any interim period
preceding resignation,  no disagreements exist with any former accountant on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope  of  procedure,  which  disagreements  if  not  resolved  to the
satisfaction of the former accountant would have caused him to make reference in
connection with his report to the subject matter of the disagreement(s).

The decision to change accountants was approved by the Board of Directors as the
registrant had no audit committee.

The principal  accountant's  report on the financial  statements  for any of the
past two years  contained no adverse  opinion or a disclaimer of opinion nor was
qualified as to uncertainty,  audit scope, or accounting  principles  except for
the "going concern" qualification.


                                    PART III

Item 9. Directors and Executive  Officers of the Registrant and Compliance  with
Section 16(a)

         The directors and executive  officers of the Company as of December 31,
1998 are as follows:

          Name               Age         Position

Ralph Shearing                      43               President, Director

Ron Ginetz                          53               Secretary/Treasurer

Abbas Salih                         52               Director, Chairman

         The term of office of each director and  executive  officer ends at, or
immediately  after,  the next annual  meeting of  shareholders  of the  Company.
Except as otherwise indicated,  no organization by which any director or officer
has been  previously  employed  is an  affiliate,  parent or  subsidiary  of the
Company.

         Ralph Shearing resigned as a Director and President on October 7, 1998.

<PAGE>

         Ronald  Ginetz was  appointed as a Director and as President on October
7, 1998. Abbas Salih was appointed as Chairman of the Board on October 7, 1998.

         Subsequently,  Ronald Ginetz  resigned as President  and Director,  and
Ralph Shearing was reappointed President and Director in December 1998.

         Ralph E. Shearing, B.Sc., P.Geol., age 43 President and Director

         Mr. Shearing  has been  President and  Director of  CanArab Acquisition
Corp. since 1997 and is President and a Director of CanArab Technology Limited.

         Mr. Shearing  graduated from the University of British Columbia in 1981
with a  B.Sc.  in  Geology  and  immediately  began  practicing  his  profession
throughout  Canada on mining projects.  In 1985 he and a colleague founded Quest
Canada  Drilling,  Ltd.,  a  diamond  drilling  company  and in 1986 he  founded
Consolidated  Samarkand  Resources,   Inc.,  a  junior  mining  exploration  and
development company listed on the Vancouver Stock Exchange. As its President and
Chief  Executive  Officer for over 10 years,  Mr.  Shearing  has  experience  in
managing a public  company.  He is a director of Intertech  Minerals  Corp.  and
principal owner and director of CMB Investments, Ltd.

         Abbas Salih, age 52 Chairman and Director

     Mr. Salih is Chairman  and a Director of CanArab  Technology  Limited.  Mr.
Salih is a  graduate  of the  Khartoum  Technical  Institute  in the  Sudan.  He
received his formal  training  while  serving as a member of the Sudan Royal Air
force from 1965-1970  which  included  attendance at the British Royal Air Force
Academy,  Newton  No.  9 in  Nottingham,  England,  where  he  studied  aircraft
electronic and instrumentation.

         After  his  British  training,  Mr.  Salih  received  further  aviation
training in  Kyrgyzstan,  Southern  Russia,  as a guest of the Russian Air Force
where he  studied  and  maintained  MIG-21  jet  aircraft.  From  1970-1974,  he
conducted  business in the Sudan and  Germany  and in 1975  became the  Managing
Director to Prince Sultan Bin Saud Bin Abdullah Al Saud of Riyadh, Saudi Arabia.

         In 1975 Mr. Salih joined Bautechnque GmbH, a large German  construction
and engineering firm as their financial manager where he arranged a $140 million
financing  for the  construction  of schools in Saudi  Arabia.  In 1989,  he and
several  associates  formed Regions  International  Investment  Company  Limited
(RIICO)  the  largest  trucking  company  in  the  Sudan  with  a  fleet  of 125
tanker/cargo transport vehicles. Mr. Salih joined the Board of Directors of Arab
Group  International  for  Investment and  Acquisitions  (AGIIA) during 1992. In

<PAGE>

1997,  he  formed  CanArab  Acquisitions  Corp.  of which he is a  Director  and
Chairman to investigate, evaluate, and design the shrimp aquaculture concept.

Ronald M.J. Ginetz, age 52,  Secretary Treasurer

         Mr.  Ginetz  received  his B.Sc.  and M.Sc.  degrees  in Zoology at the
University  of British  Columbia  in 1970 and 1972,  respectively.  From 1971 to
1981,  he held  several  fisheries  development  positions  within the  Canadian
Department of Fisheries and Oceans,  Pacific Region.  From 1981-84, he served as
the  National  Coordinator  of  Employment  Programming  for the  Department  of
Fisheries  and Oceans in Ottawa,  and from 1984-87 as the  Director,  Employment
Development  Branch.  From 1987 to the  present,  he has served as the  Regional
Aquaculture Coordinator,  Department of Fisheries and Oceans, Pacific Region, in
Vancouver.

         Mr.  Ginetz  has  also  authored   several   scientific  and  technical
publications on fisheries research and development and has traveled  extensively
around the world to assess  foreign  fisheries  technology  for  application  in
Canada,  and for the transfer of Canadian  fisheries  technology  and management
systems to other jurisdictions  (i.e., Japan, China, USA, Italy, Chile,  Norway,
Scotland, Saudi Arabia, and Africa).

Item 10. Executive Compensation

         The  Company  accrued a total of $0 in  compensation  to the  executive
officers  as a group for  services  rendered  to the  Company in all  capacities
during the 1999 fiscal year. No one executive officer  received,  or has accrued
for his benefit, in excess of $60,000. No cash bonuses were or are to be paid to
such persons. No compensation was deferred.

         The Company does not have any employee incentive stock option plans.

         There are no plans pursuant to which cash or non-cash  compensation was
paid or  distributed  during the last fiscal year,  or is proposed to be paid or
distributed in the future,  to the executive  officers of the Company.  No other
compensation not described above was paid or distributed  during the last fiscal
year to the executive  officers of the Company.  There are no compensatory plans
or  arrangements,  with respect to any  executive  office of the Company,  which
result or will result from the resignation,  retirement or any other termination
of such individual's  employment with the Company or from a change in control of
the Company or a change in the individual's  responsibilities following a change
in control.


<PAGE>

<TABLE>
<CAPTION>

                    SUMMARY COMPENSATION TABLE OF EXECUTIVES

                           Annual Compensation Awards
-------------------------- ----------- ------------- ----------- ------------------------ -------------------- =====================
<S>                        <C>         <C>           <C>         <C>                      <C>                  <C>
Name and Principal         Year        Salary ($)    Bonus ($)   Other Annual             Restricted Stock     Securities
Position                                                         Compensation ($)         Award(s)             Underlying Options/
                                                                                          ($)                  SARs (#)
--------------------------
                           ----------- ------------- ----------- ------------------------ -------------------- =====================
Ralph Shearing, President  1997        0             0           0                        0                    0
                           ----------- ------------- ----------- ------------------------ -------------------- =====================
                           1998        0             0           0                        0                    0
                           ----------- ------------- ----------- ------------------------ -------------------- =====================
                           1999        0             0           0                        0                    0
========================== ----------- ------------- ----------- ------------------------ -------------------- =====================
Ron Ginetz, Secretary      1997        0             0           0                        0                    0
                           ----------- ------------- ----------- ------------------------ -------------------- =====================
                           1998        0             0           0                        0                    0
                           =========== ============= =========== ======================== ==================== =====================
                           1999        0             0           0                        0                    0
========================== =========== ============= =========== ======================== ==================== =====================

</TABLE>

Option/SAR Grants Table (None)

Aggregated  Option/SAR  Exercises in Last Fiscal Year an FY-End Option/SAR value
(None)

Long Term Incentive Plans - Awards in Last Fiscal Year (None)

DIRECTOR COMPENSATION FOR LAST FISCAL YEAR

(Except for  compensation of Officers who are also Directors which  Compensation
is listed in Summary Compensation Table of Executives)

<TABLE>
<CAPTION>

Cash Compensation Security Grants

================================= ----------------- -------------- --------------------- ------------- =============================
Name                              Annual Retainer   Meeting Fees   Consulting            Number of     Number of Securities
                                  Fees ($)          ($)            Fees/Other Fees ($)   Shares (#)    Underlying Options/SARs(#)
================================= ----------------- -------------- --------------------- ------------- =============================
<S>                               <C>               <C>            <C>                   <C>           <C>
A. Director                       0                 0              0                     0*            0
Ralph Shearing
================================= ----------------- -------------- --------------------- ------------- =============================
B. Director                       0                 0              0                     0*            0
Abbas Salih
================================= ================= ============== ===================== ============= =============================

</TABLE>

*  See "Compensation Table of Executives"


<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management

The  following  table sets forth  information,  as of December  31,  1999,  with
respect to the  beneficial  ownership of the Company's no par value common stock
by each person known by the Company to be the beneficial owner of more than five
percent of the outstanding common stock, and by the Company's management.

      Stock        Names and Address        Beneficial        Percent
  Title of Class   of Beneficial Owner       Ownership        of Class
---------------- ---------------------      ----------        --------
Common             Ralph Shearing            0                 0%
                   President/Director
                   650 W. Georgia St.
                   Suite 450
                   Vancouver, B.C.
                   Canada  V6B 4N8

Common             Abbas Salih               8,650,000         88%
                   (Chairman/Director)
                   650 W. Georgia St.
                   Suite 450
                   Vancouver, B.C.
                   Canada  V6B 4N8
                   (Beneficially
                   through CanArab
                   Acquisitions)

Common             Ronald M.J. Ginetz        0                 0%
                   (Secretary/Treasurer)
                   650 W. Georgia St.
                   Suite 450
                   Vancouver, B.C.
                   Canada  V6B 4N8

Officers and Directors as a group            8,650,000          88%


<PAGE>



Item 12. Certain Relationships and Related Transactions

None during 1999 fiscal year

                                     PART IV

Item 13.  Exhibits and Reports on Form 8-K

Exhibits are filed as part of this report.

1. Reports on Form 8-K (incorporated herein by reference):

None

2.  Exhibits:

Agreement with Canbau Construction GMBH


<PAGE>


                                                                 Form 10-K
Regulation                                                       Consecutive
S-K Number               Exhibit                                 Page Number

3.1      Articles of Incorporation                                     *
3.3      Bylaws                                                        *
24.2     Court Order dated August 23, 1991                             **
24.3     Court Order dated June 21, 1995                               **
24.4     Share Purchase Agreement                                      (1)
24.5     Plan and Agreement of Reorganization with Canarab Technology
         Corporation                                                   (2)
24.6     Agreement with Canbau Construction GMBH                      p. 30

 *Incorporated by reference to SEC filing #33-28188.
**Incorporated by reference to 10-KS B Report for 12/31/94 period.
(1)Incorporated by reference to Forms 8-K filed July 10, 1998.
(2)Incorporated by reference to Forms 8-K filed July 10, 1998.


<PAGE>


                                   SIGNATURES

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

                                           THE OHIO & SOUTHWESTERN ENERGY CO.
                                           (Registrant)

Date:  March 30, 2000


                                           /s/ Ralph Shearing
                                           -------------------------------------
                                           Ralph Shearing, President



                                           /s/ Ronald M.J. Ginetz
                                           -------------------------------------
                                           Ronald M.J. Ginetz
                                           Secretary

Pursuant to the  Securities  Exchange  Act of 1934,  this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.

                                    THE OHIO & SOUTHWESTERN ENERGY COMPANY

                                    (Registrant)
Date: March 30, 1999

                                    /s/ Ralph Shearing
                                    --------------------------------------------
                                    Ralph Shearing, Director



                                    /s/ Abbas Salih
                                    --------------------------------------------
                                    Abbas Salih, Director, Chairman




<PAGE>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)


Index to Financial Statements


Report of Independent Auditors           F-1
Balance Sheet                            F-2
Statement of Operations                  F-3
Statement of Changes in
  Stockholders' Equity                   F-4 - F-5
Statement of Cash Flows                  F-6
Notes to Financial Statements            F-7 - F-10

<PAGE>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                                December 31, 1999

                             (Stated in US Dollars)



                     THE OHIO & SOUTHWESTERN ENERGY COMPANY

                          (A Development Stage Company)

                         REPORT AND FINANCIAL STATEMENTS

                           December 31, 1999 and 1998

                             (Stated in US Dollars)



<PAGE>



The Ohio & Southwestern  Energy  Company (A Development  Stage Company) Notes to
the  Financial  Statements  December  31,  1999 and 1998 - Page 15 (Stated in US
Dollars)



TERRY AMISANO LTD.                                     /s/ AMISANO  HANSON
KEVIN HANSON, C.A.                                         CHARTERED ACCOUNTANTS

                                AUDITORS' REPORT

To the Stockholders,
The Ohio & Southwestern Energy Company

We have audited the balance sheet of The Ohio &  Southwestern  Energy Company (A
Development  Stage  Company) as at December 31, 1999 and 1998 and the statements
of loss and deficit  accumulated  during the  development  stage,  stockholders'
equity and cash flows for the years  ended  December  31,  1999 and 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  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards  require that we plan and perform an audit to obtain
reasonable  assurance  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.

In our opinion,  these  financial  statements  present  fairly,  in all material
respects,  the  financial  position of the  company as at December  31, 1999 and
1998,  and the results of its  operations and its cash flows for the years ended
December 31, 1999 and 1998 in  accordance  with  generally  accepted  accounting
principles in the United States.

The  financial  statements  as at  December  31,  1997 and for the  period  from
inception, February 28, 1989 to December 31, 1997 were audited by other auditors
who expressed an opinion without reservation on those statements in there report
dated April 16,1998.

Vancouver, Canada                                           "AMISANO HANSON"
February 16, 2000                                          Chartered Accountants

Comments by Auditors for U.S. Readers on Canada - U.S. Reporting Conflict
-------------------------------------------------------------------------

In the United States,  reporting  standards for auditors require the addition of
an  explanatory  paragraph  (following  the  opinion  paragraph)  when  there is
substantial doubt about a company's ability to continue as a going concern.  The
accompanying  financial statements have been prepared on the basis of accounting
principles applicable to a going concern which assumes the realization of assets
and discharge of liabilities  in the normal course of business.  As discussed in
Note 1 to the  accompanying  financial  statements  in respect of the  company's
working  capital   deficiency  and  its  substantial   losses  from  operations,
substantial  doubt about the  company's  ability to continue as a going  concern
exists.  The  accompanying  financial  statements do not include any adjustments
that might result from the outcome of this uncertainty.

Our  report  to the  Stockholders  dated  February  16,  2000  is  expressed  in
accordance with Canadian reporting standards, which do not permit a reference to
such  uncertainty  in the auditors'  report when the  uncertainty  is adequately
disclosed in the financial statements.

Vancouver, Canada                                         "AMISANO HANSON"
February 16, 2000                                         Chartered Accountants

Suite 604 - 750 West Pender Street, Vancouver, BC, Canada, V6C 2T7
Telephone: (604) 689-0188
Facsimile: (604) 689-9773
E-MAIL:    amishan@istar.ca



<PAGE>
<TABLE>
<CAPTION>



                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                                 BALANCE SHEETS
                           December 31, 1999 and 1998
                             (Stated in US Dollars)



                                         LIABILITIES
                                                               December 31,     December 31,
                                                                   1999             1998
<S>                                                            <C>              <C>

Current
  Accounts payable                                             $     27,188     $     21,642
  Due to related party - Note 4                                      58,772           28,323
                                                                   --------         --------
                                                                     85,960           49,965
                                                                   --------         --------

                                   STOCKHOLDERS' DEFICIENCY
Common stock - Note 3                                               118,730          118,730
Contributed capital                                                  25,442           25,442
Deficit accumulated during the development stage                 (  230,132)      (  194,137)
                                                                   --------         --------
                                                                 (   85,960)      (   49,965)
                                                                   --------         --------
                                                               $          -     $          -
                                                                   ========         ========
</TABLE>

Nature and Continuance of Operations - Note 1


ON BEHALF OF THE BOARD:
______________________, Director           _______________________, Director



<PAGE>
<TABLE>
<CAPTION>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                      STATEMENTS OF OPERATIONS AND DEFICIT
                 for the years ended December 31, 1999 and 1998
         and February 28, 1989 (Date of Inception) to December 31, 1999
                             (Stated in US Dollars)


                                                                                          Cumulative
                                                                                         from February
                                                                                        28, 1989 (Date
                                                                                         of Inception)
                                                                                              to
                                                                                         December 31,
                                                 1999          1998           1997           1999
                                                 ----          ----           ----           ----
<S>                                          <C>           <C>           <C>            <C>

Expenses
  Accounting and audit fees                  $      4,277  $      4,500  $          -   $      8,777
  Amortization                                          -             -             -            750
  Consulting fees - Note 4                              -         6,200        10,000         16,200
  Filing fees                                           -           300             -            300
  General and administrative  expenses -Note        5,619         8,542         7,261         71,124
4
  Legal fees - Note 4                              10,462        33,090         5,000         48,552
  Management fees - Note 4                              -         7,000             -          7,000
  Rent - Note 4                                     5,471         2,886             -          8,357
  Telephone expense                                 2,250         2,452             -          4,702
  Transfer agent fees                               3,058         1,358             -          4,416
  Travel and promotion                              4,858         1,444             -          6,302
                                                   --------      --------     --------    ----------
Loss before the following:                     (   35,995)   (   67,772)   (   22,261)    (  176,480)
  Unauthorized distribution                             -             -             -     (   69,116)
  Gain on settlement of debt                            -        15,464             -         15,464
                                                   --------      --------     --------    ----------
Net loss for the period                        (   35,995)   (   52,308)   (   22,261)  $ (  230,132)
                                                                                          ===========
Deficit, beginning of year                     (  194,137)   (  141,829)   (  119,568)
                                                   --------      --------     --------
Deficit, end of year                          $(  230,132)$  (  194,137)  $(  141,829)
                                                =========     =========     =========
Net loss per share                            $      -      $(     0.01)  $(     0.01)
                                                =========     =========     =========
Weighted average number of common shares
 outstanding                                    9,736,695     7,835,928     1,683,818
                                                =========     =========     =========
</TABLE>

                            SEE ACCOMOPANYING NOTES



<PAGE>
<TABLE>
<CAPTION>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 for the period from February 28, 1989 (Date of Inception) to December 31, 1999
                             (Stated in US Dollars)


                                                                           Deficit
                                                                         Accumulated
                                                                         During the
                                       Common Stock        Contributed   Development
                                 --------------------------
                                    Shares       Amount      Capital        Stage        Total
                                    ------       ------      -------        -----        -----
<S>                                  <C>      <C>          <C>          <C>           <C>

Balance, February 28, 1989                 -  $         -  $         -  $         -   $         -
 Issuance of stock to insiders
  on March 7, 1989 - at $0.30
  per share                           33,347       10,000            -            -        10,000
                                     -------      -------      -------      -------       -------
Balance, December 31, 1989            33,347       10,000            -            -        10,000
 Issuance of stock during
  public offering for $3.00 per
  share,  net of offering  costs
  of $27,270                          33,348       72,730            -            -        72,730

 Net loss                                  -            -            -    (  84,159)    (  84,159)
                                     -------      -------      -------      -------       -------
Balance, December 31, 1990            66,695       82,730            -    (  84,159)    (   1,429)
 Net loss                                  -            -            -    (   3,416)    (   3,416)
                                     -------      -------      -------      -------       -------
Balance, December 31, 1991            66,695       82,730            -    (  85,575)    (   4,845)
 Net loss                                  -            -            -    (   2,713)    (   2,713)
                                     -------      -------      -------      -------       -------
Balance, December 31, 1992            66,695       82,730            -    (  90,288)    (   7,558)
 Net loss                                  -            -            -    (   1,614)    (   1,614)
                                     -------      -------      -------      -------       -------
Balance, December 31, 1993            66,695       82,730            -    (  91,902)    (   9,172)
 Net loss                                  -            -            -    (   1,863)    (   1,863)
                                     -------      -------      -------      -------       -------
Balance, December 31, 1994            66,695       82,730            -    (  93,765)    (  11,035)

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                                       Continued
                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
             STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 for the period from February 28, 1989 (Date of Inception) to December 31, 1999
                             (Stated in US Dollars)


                                                                           Deficit
                                                                         Accumulated
                                                                         During the
                                       Common Stock        Contributed   Development
                                 --------------------------
                                    Shares       Amount      Capital        Stage        Total
                                    ------       ------      -------        -----        -----
<S>                                <C>        <C>          <C>          <C>           <C>

 Issuances of stock for
  services rendered - at $0.03
  per share                           50,000        1,500            -            -         1,500
 Contributed capital                       -            -       24,842            -        24,842
 Net loss                                  -            -            -    (  16,735)    (  16,735)
                                   ---------     ---------    ---------    ---------     ---------
Balance, December 31, 1995           116,695       84,230       24,842    ( 110,500)    (   1,428)
 Net loss                                  -            -            -    (   9,068)    (   9,068)
                                   ---------     ---------    ---------    --------      ---------
Balance, December 31, 1996           116,895       84,230       24,842    ( 119,568)    (  10,496)
 Issuance of stock for cash
  - at $0.011 per share            2,000,000       21,300            -            -        21,300
 Contributed capital                       -            -          600            -           600
 Net loss                                  -            -            -    (  22,261)    (  22,261)
                                   ---------     ---------    ---------    ---------     ---------
Balance, December 31, 1997         2,116,695      105,530       25,442    ( 141,829)    (  10,857)
 Issuance of stock for
  services rendered
  - at $0.001 per share            7,000,000        7,000            -            -         7,000
  - at $0.01 per share               620,000        6,200            -            -         6,200
 Net loss                                  -            -            -    (  52,308)    (  52,308)
                                   ---------     ---------    ---------    ---------     ---------
Balance, December 31, 1998         9,736,695  $   118,730  $    25,442  $ ( 194,137)  $ (  49,965)
Net loss                                   -            -            -    (  35,995)    (  35,995)
                                   ---------     ---------    ---------    ---------     ---------
Balance, December 31, 1999         9,736,695  $   118,730  $    25,442  $ ( 230,132)  $ (  85,960)
                                   =========     =========    =========    =========     =========
</TABLE>

                             SEE ACCOMPANYING NOTES


<PAGE>
<TABLE>
<CAPTION>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                for years ended December 31, 1999, 1998 and 1997
         and February 28, 1989 (Date of Inception) to December 31, 1999
                             (Stated in US Dollars)


                                                                                          Cumulative
                                                                                         from February
                                                                                           28, 1989
                                                                                        (Date of Incep-
                                                                                           tion) to
                                                                                         December 31,
                                                 1999          1998           1997           1999
                                                 ----          ----           ----           ----
<S>                                          <C>           <C>           <C>            <C>

Cash flow used in operating activities:
  Net loss                                   $ (   35,995) $ (   52,308) $ (   22,261)  $ (  230,132)
  Adjustments  to reconcile  net loss to net
   cash used in operations:
    Amortization                                        -             -             -            750
    Consulting fees                                     -         6,200             -          6,200
    Gain on settlement of debt                          -    (   15,464)            -     (   15,464)
    Management fees                                     -         7,000             -          7,000
  Changes in non-cash items:
    Accounts payable                                5,546        26,037           573         44,152
    Due to related party                           30,449        28,323             -         58,772
                                                  ---------    ---------     ---------      ---------
Net cash used in operating activities                   -    (      212)   (   21,688)    (  128,722)
                                                  ---------    ---------     ---------      ---------
Cash flows used in investing activity
  Organization costs                                    -             -             -     (      750)
                                                  ---------    ---------     ---------      ---------
Net cash used in investing activity                     -             -             -     (      750)
                                                  ---------    ---------     ---------      ---------
Cash flows from financing activities:
  Proceeds from issuance of common stock                -             -        21,300        131,300
  Payment of offering costs                             -             -             -     (   27,270)
  Contributed capital                                   -             -           600         25,442
                                                  ---------    ---------     ---------      ---------
Net cash provided by financing activities               -             -        21,900        129,472
                                                  ---------    ---------     ---------      ---------
Net increase in cash                                    -             -           212              -

Cash, beginning of period                               -           212             -              -
                                                  ---------    ---------     ---------      ---------
Cash, end of period                          $          -   $         -   $       212    $         -
                                                  =========    =========     =========      =========

Non-Cash Transactions - Note 7
</TABLE>
                             SEE ACCOMPANYING NOTES


<PAGE>


                     THE OHIO & SOUTHWESTERN ENERGY COMPANY
                          (A Development Stage Company)
                        NOTE TO THE FINANCIAL STATEMENTS
                           December 31, 1999 and 1998
                             (Stated in US Dollars)


Note 1     Nature and Continuance of Operations

           The company is in the  development  stage and is devoting its efforts
           to locating merger candidates.

           These  financial  statements  have been  prepared on a going  concern
           basis. The company has working capital  deficiency of $85,960 and has
           accumulated  a deficit of $230,132  since  inception.  Its ability to
           continue  as a going  concern is  dependent  upon the  ability of the
           company to generate  profitable  operations  in the future  and/or to
           obtain the necessary  financing to meet its obligations and repay its
           liabilities  arising from normal  business  operations when they come
           due.

           The company was incorporated in Colorado on February 28, 1989.

Note 2     Summary of Significant Accounting Policies

           The  financial  statements  of the  company  have  been  prepared  in
           accordance  with  generally  accepted  accounting  principles  in the
           United  States.  Because a precise  determination  of many assets and
           liabilities  is dependent  upon future  events,  the  preparation  of
           financial  statements  for a period  necessarily  involves the use of
           estimates  which  have  been made  using  careful  judgement.  Actual
           results could differ from those estimates.

           The financial statements have, in management's opinion, been properly
           prepared  within  reasonable  limits of  materiality  and  within the
           framework of the significant accounting policies summarized below:

           Development Stage Company

           The company is a development stage company as defined in Statement of
           Financial  Accounting  Standards  No.  7.  The  company  is  devoting
           substantially  all of its present efforts to establish a new business
           and none of its planned  principal  operations  have  commenced.  All
           losses  accumulated  since  inception have been considered as part of
           the company's development stage activities.

           Income Taxes

           The company  uses the  liability  method of  accounting  for income
           taxes  pursuant to Statement of Financial Accounting Standards, No.
           109 "Accounting for Income Taxes".

           Loss Per Share

           Loss per share figures have been  calculated  based upon the weighted
           average number of shares outstanding during the years.


<PAGE>



Note 2     Summary of Significant Accounting Policies - (cont'd)

           Fair Value of Financial Instruments

           The  carrying  value of accounts  payable and due to related  parties
           approximates  fair  value  because  of the  short  maturity  of these
           instruments.

Note 3     Capital Stock - Note 4

          i)  Preferred Stock
              a)  Authorized:
                  100,000,000, $0.01 par value

              b)  Issued:
                  None issued

          ii) Common stock
              a)  Authorized:
                  100,000,000, no par value

              b)  Issued:                                #                 $
                                                        ---------       --------
                  Balance, December 31, 1999 and 1998   9,736,695       118,730
                                                        =========       ========

Note 4     Related Party Transactions

           During the year ended  December  31,  1999, a director of the company
           charged management fees of $Nil (1998:  $7,000 - these 1998 fees were
           settled by the issuance of 7,000,000  shares of the company at $0.001
           per share).

           The  company was charged  the  following  by a company  with a common
           director or by a shareholder:
<TABLE>
<CAPTION>

                                                  1999         1998         1997        Total
                                                  ----         ----         ----        -----
<S>                                             <C>        <C>          <C>          <C>

           Consulting fees                      $       -  $     6,200  $    10,000  $    16,200
           General and administration expenses      4,639        2,171            -        6,810
           expenses
           Legal fees                                   -            -        5,000        5,000
           Management fees                              -        7,000            -        7,000
           Rent                                     5,471        2,886            -        8,357
                                                   ------       ------       ------       ------
                                                $  10,110  $    18,257  $    15,000  $    43,367
                                                   ------       ------       ------       ------
</TABLE>




<PAGE>



Note 4     Related Party Transactions - (cont'd)

           During the year ended  December 31, 1997, the company paid $10,000 to
           a shareholder for consulting services and $5,000 to a shareholder for
           legal fees.

           Due to a related  party at December 31, 1999 is comprised of expenses
           paid by a company with a common director on behalf of the company for
           operating costs. This amount is non-interest  bearing,  unsecured and
           is there are no specific terms for repayment.

Note 5     Deferred Tax Assets

           The Financial  Accounting Standards Board issued Statement Number 109
           in  Accounting  for Income Taxes ("FAS 109") which is  effective  for
           fiscal years  beginning after December 15, 1992. FAS 109 requires the
           use of the asset and liability  method of accounting of income taxes.
           Under the assets and liability method of FAS 109,  deferred tax assts
           and  liabilities  are  recognized  for the  future  tax  consequences
           attributable   to  temporary   differences   between  the   financial
           statements  carrying  amounts of existing  assets and liabilities and
           their  respective tax bases.  Deferred tax assets and liabilities are
           measured  using enacted tax rates expected to apply to taxable income
           in the years in which those temporary  differences are expected to be
           recovered or settled.

           The following  table  summarizes  the  significant  components of the
           company's deferred tax assets:

                                                                    Total
                                                                    -----
          Deferred Tax Assets
            Non-capital loss carryforwards                      $   230,132
                                                                   ========
          Gross deferred tax assets                             $   115,066
          Valuation allowance for deferred tax asset              ( 115,066)
                                                                   --------
                                                                $         -
                                                                   ========

           The amount taken into income as deferred tax assets must reflect that
           portion of the income  tax loss  carryforwards  which is likely to be
           realized from future operations. The company has chosen to provide an
           allowance   of  100%   against   all   available   income   tax  loss
           carryforwards, regardless of their time of expiry.


<PAGE>



Note 6     Income Taxes

           No provision  for income taxes has been  provided in these  financial
           statements due to the net loss. At December 31, 1999, the company has
           net  operating  loss  carryforwards  which expire  commencing in 2005
           totalling  approximately $230,132, the potential tax benefit of which
           has not been recorded in the financial statements.

Note 7     Non-Cash Transactions - Note 4

           Operating,  investing  and  financing  activities  that do not have a
           direct  impact on cash flows are excluded  from the statement of cash
           flows. The company issued common shares for services  provided to the
           company during the following years:
<TABLE>
<CAPTION>

                                      Number of             Price
                                    Common Shares         Per Share                $
                                    -------------         ---------              --------
<S>                                   <C>                     <C>                <C>

          1995                           50,000               $0.03               1,500
          1998                        7,000,000               $0.001              7,000
          1998                          620,000               $0.01               6,200
                                      --------                                   -------
                                      7,670,000                                  14,700
                                      ========                                   =======
</TABLE>



Note 8     Comparative Figures

           Certain figures of the prior years have been restated to conform with
           the presentation used in the current year.

Note 9     New Accounting Standards

           In December  1997, the  Accounting  Standard  Board Issued  statement
           3465,   "Income   Taxes",   which   establishes   standards  for  the
           recognition,  measurement,  presentation and disclosure of income and
           refundable  taxes.  This  statement  is  effective  for fiscal  years
           beginning on or after  January 1, 2000.  Adopting  this standard will
           not have a  material  impact  on the  company's  financial  position,
           results of operations or cash flows.

           In April 1998, the Accounting  Standards  Executive  committee issued
           SOP  98-5,  "Reporting  on the  cost of  start-up  activities".  This
           statement is effective for fiscal years  beginning after December 15,
           1998.  Adopting this  standard did not have a material  impact on the
           company's financial position, results of operations or cash flows.


<PAGE>



Note 9     New Accounting Standards - (cont'd)

           In June 1998, the Financial  Accounting  Standards  board issued SFAS
           No.  133,   "Accounting   for  Derivative   Instruments  and  Hedging
           Activities,"   which   standardized  the  accounting  for  derivative
           instruments.  SFAS is effective for all fiscal quarters of all fiscal
           years beginning after June 15, 1999.  Adopting this standard will not
           have a  significant  impact  on the  company's  financial  positions,
           results of operations or cash flows.

Note 10    Uncertainty Due to the Year 2000 Issue

           The Year 2000 Issue arises because many computerized  systems use two
           digits  rather than four to identify a year.  Date-sensitive  systems
           may recognize the year 2000 as 1900 or some other date,  resulting in
           errors when  information  using the year 2000 date is  processed.  In
           addition,  similar  problems  may  arise in some  systems  which  use
           certain  dates  in 1999 to  represent  something  other  than a date.
           Although  the  change in date has  occurred,  it is not  possible  to
           conclude  that all aspects of the Year 2000 Issue that may affect the
           entity,  including  those  related to  customers,  suppliers or other
           third parties, have been fully resolved.