UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                 --------------

                                   FORM 10-KSB

(Mark One)
  [X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended June 30, 2000

                                       OR

 [ ]              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                         Commission file number: 0-29381

                        PINECREST INVESTMENT GROUP, INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

               Florida                                  59-3467929
   ------------------------------                  ---------------------
   (State or other jurisdiction of                   (I.R.S. Employer
           incorporation)                           Identification No.)

                         1211 Tech Boulevard, Suite 101
                              Tampa, Florida 33619
                                 (813) 620-0044
          (Address and telephone number of principal executive offices)

        Securities registered pursuant to Section 12(b) of the Act: None

    Securities registered pursuant to section 12(g) of the Act: Common Stock
                                                                $.0008 par value

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. [ ]

The issuer's revenues for its most recent fiscal year were $-0-.

On May 2, 2001,  the  aggregate  market  value of  Pinecrest  Investment  Group,
Inc.'s, common stock held by non-affiliates was approximately $6,161,168,  based
on a price per share of common stock of $2.65.

On May  2,  2001,  7,654,836  shares  of  the  registrant's  Common  Stock  were
outstanding.

<PAGE>

                                TABLE OF CONTENTS

PART I

Item 1. Business..........................................................   1

Item 2. Properties........................................................  10

Item 3. Legal Proceedings.................................................  11

Item 4. Submission of Matters to a Vote of Security Holders...............  11

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder
        Matters...........................................................  12

Item 6. Management's Discussion and Analysis or Plan of Operation.........  14

Item 7. Financial Statements..............................................  18

Item 8. Changes in and Disagreements With Accountants on Accounting
        and Financial Disclosure..........................................  18

Item 9. Directors and Executive Officers of the Registrant................  18

Item 10. Executive Compensation...........................................  19

Item 11. Security Ownership of Certain Beneficial Owners and Management...  21

Item 12. Certain Relationships and Related Transactions...................  24

PART III

Item 13. Exhibits and Reports on Form 8-K.................................  27

Note Concerning Forward-Looking Information

Some of the information in this report contains forward-looking  statements that
involve  substantial risks and uncertainties.  You can identify these statements
by  forward-looking  words  such  as  "may,"  "will,"  "expect,"   "anticipate,"
"believe,"   "estimate"  and  "continue"  or  similar  words.  You  should  read
statements  that contain these words  carefully  because  they:  (1) discuss our
future expectations; (2) contain projections of our future results of operations
or  of  our  financial   condition;   or  (3)  state  other  "forward-  looking"
information.  We  believe  that  it  is  important  to  communicate  our  future
expectations to our investors.  However,  there may be events in the future that
we have not accurately predicted or over which we have no control.  These events
may include future  operating  results,  our efforts to address Year 2000 issues
and  potential  competition,  among other  things.  Cautionary  language in this
report provides  examples of risks,  uncertainties and events that may cause our
actual results to differ  materially  from the  expectations  we describe in our
forward-looking  statements.  You  should be aware  that the  occurrence  of the
events  described  in this report  could have a material  adverse  effect on our
business, operating results and financial condition.

<PAGE>

                                     PART I

ITEM 1.  BUSINESS

INTRODUCTION

         Pinecrest  Investment  Group,  Inc.  ("Pinecrest" or the "Company") was
incorporated  on  September  9,  1997,  in the state of  Florida  under the name
Synthetic Flowers of America, Inc. In connection with its original organization,
the Company issued 4,000,000 shares of its common stock to its former President.
On January 15, 1999 the former  President sold  3,680,000  shares to David Howe,
the  Company's  current  President  and  several  independent  investors  for an
aggregate of $150,000 in cash.  Concurrently with this transaction,  the Company
took the following  actions:  (i) amended its articles of  incorporation  to (a)
change its name to Pinecrest Investment Group, Inc. (b) increased its authorized
common  stock to  100,000,000  shares and (c)  authorized  25,000,000  shares of
preferred stock; (ii) elected new directors;  (iii) appointed new officers;  and
(iv) changed the registered corporate agent.

         On March 2, 1999,  Pinecrest  purchased certain hydroponic  information
and technology from Michael Foundation,  Limited and Tillman & Associates,  Inc.
in exchange for an  aggregate of 2,185,000  shares of our common stock valued at
$1.50 per share and a promissory  note in the  principal  amount of $85,000.  In
connection  with this  transaction,  2,135,000  shares  were  issued to  Michael
Foundation,  Limited and 50,000 shares and the $85,000  promissory note was paid
to  Tillman &  Associates,  Inc.  The  hydroponics  information  and  technology
included  hydroponic growth solution  formulas,  trade secrets and equipment and
greenhouse specifications and crop and equipment maintenance plans and programs.
In November 1999, we hired Thomas M. Tillman, President of Tillman & Associates,
Inc. as President of our subsidiary, Pinecrest Farms, Inc.

         In April 1999 we formed Pinecrest Farms, Inc. a Florida  corporation as
a wholly owned subsidiary.  This entity was formed for the purpose of owning and
operating the hydroponic  produce farms.  The technology and underlying  land is
owned by the Company.

         On April 9, 1999, the Company purchased  approximately 40 acres of land
located in  Lithia,  Florida,  approximately  20 miles  southeast  of its Tampa,
Florida corporate  offices from Hopewell Land Partners.  The land is the site of
the  Company's  first  hydroponic  food  production  facility  and,  when  fully
completed,  will be  comprised of 19  greenhouse  ranges,  a 10,000  square foot
packing and distribution building and temporary  administrative  offices for its
farming  operations.  Each  greenhouse  range will contain 30,000 square feet of
harvestable production area.

         Phase I, which was completed in August 2000,  included the construction
of the first two ranges (60,000 square feet of harvestable  production area), as
well as obtaining  building  permits for Phases II and III.  The initial  60,000
square feet of  harvestable  production  area  produces  weekly  harvests.  More
specifically,  the first range in Phase I was completed in June 2000 and product
sales began in July 2000. The second range was complete and fully operational in
August 2000.

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<PAGE>

         Phase II, will be comprised  of five more ranges and will  increase the
harvestable  production  area  by an  additional  150,000  square  feet,  and is
anticipated to be completed and operational by December 2001.

         Phase III  encompasses  the remaining 12 greenhouse  ranges and 360,000
square feet. Phase III is expected to be completed by the summer of 2002.

         The Company  currently  has over 60 customers  that include Walt Disney
World,  Disney Cruise Lines,  various  Marriott and Wyndham  resorts and hotels,
Grosvenor  Resorts,  Caribe Royale,  The Peabody Orlando and The Don Cesar Hotel
and a national food service  distributor to name a few. The Company is currently
finalizing  arrangements  with the Orange County  Convention  Center in Orlando,
Florida, Carnival Cruise Lines, Carrabba's Italian Restaurants,  Macaroni Grill,
Darden  Restaurants,  two additional local food  distributors and two additional
national  food  distributors.  In  addition,  the Company was asked to submit an
application  to  Avendra,  a national  purchasing  service  provider  founded by
Marriott  International,  Hyatt Hotels  Corporation,  ClubCorp USA,  Inc.,  Bass
Hotels & Resorts and  Fairmont  Hotels & Resorts to be a  preferred  provider of
herbs,  lettuces  and  specialty  produce  for the Florida  market.  The Company
submitted its application on February 20, 2001.

         The Company has  previously  announced  that it was  considering  joint
ventures with several  entities as technology  partners in various  geographical
locations.  At this time, the Company has determined  that it is not in the best
interest of the Company to pursue and/or consummate any joint ventures.

INDUSTRY  OVERVIEW

         Hydroponics  is the method of growing plants without soil and is a more
efficient way to provide  water and  nutrients to plants.  Instead of using soil
where a plant  must  first  grow a large  root  system to find  food and  water,
hydroponics uses a wet growing medium and specially  prepared nutrient solutions
that go directly to the roots of the plant. This enables the plant to spend more
energy growing above the surface,  producing more  vegetation and larger flowers
and  vegetables.  Because  root  systems are  compact in size in the  hydroponic
growing environment, plants may be grown closer together, yielding greater crops
per square  foot,  as well as  growing  up to twice as  quickly  due to the high
levels of oxygen in the root system.

         Other  advantages of a hydroponic  growing system are (i) because there
is no soil,  there will be no weeds or  soil-borne  pests and disease,  and (ii)
plants will  maintain  optimum  nutrient  and  moisture  levels  which  produces
healthier  plants,  faster  growing  plants and plants that will be more disease
resistant  as they are not  stressed  by drought.  Because of these  advantages,
hydroponic produce has a longer shelf life than soil-grown produce.

BUSINESS OVERVIEW

         Pinecrest's  proprietary  growing  system  centers  on  the  design  of
high-tech   greenhouses  and  specific  nutrient  feeding  formula  and  feeding
schedules.  Pinecrest's greenhouses differ from traditional greenhouses. Whereas
traditional  greenhouses  have a screening and  translucent  cover,

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Pinecrest's  design has a  microscreen  to keep out  virtually all insects and a
special roof to allow sunlight in without the damaging ultraviolet rays that can
burn leaves and cause a waxy  buildup on the plants,  both of which  deplete the
plant of its  essential  oils that  provide  flavor and  nutrition.  Pinecrest's
feeding  system is designed to  precisely  monitor  correct  dosages of specific
nutrients for delivery to plants based on their individual needs.

         Our  farming  system   encompasses   greenhouse   design,   nutritional
supplements,  feeding cycles and dosages and environmental effects.  Pinecrest's
growing  system  is  a  closed  environment  without  polluted  water,  airborne
pesticides or  mechanically  induced  non-organic  chemicals.  Due to the closed
environment,  Pinecrest's methods provide: (i) the elimination of damage control
of  infestation  by the  addition  of  insects  that are  natural  predators  to
plant-eating insects,  (ii) limited organic pesticides,  and (iii) the inclusion
of barrier plants which are not only discouraging to insects but are harvestable
as well; such as rosemary as a shrub line and marigolds and dandelions as edible
flowers.

OPERATIONAL OVERVIEW

         Pinecrest's  business operations will be categorized into the following
areas:  Hydroponic Food Production  Facilities  (HFPF),  Product Mix and Cost of
Production,  Nutrient Mix and Feeding Schedules,  Greenhouse  Design,  Method of
Irrigation,  Product  Distribution  and  Delivery,  Marketing  and Personnel and
Administration.

         The Company anticipates that a typical HFPF location will be built on a
40 to 50 acre tract of land.  These  tracts  would  contain up to  approximately
750,000  square  feet  of  harvestable  hydroponic  growing  area,  as  well  as
approximately  40,000 square feet of  administrative  and processing  buildings.
Roughly one-half of each site is dedicated to hydroponic  facilities.  Depending
on local building codes and ordinances, the remainder of the site will be needed
for parking, storm water retention and office facilities.

         The  Company  anticipates  its product  mix to include  herbs,  gourmet
lettuces,   herbal   medicinals,   edible   flowers  and  plants  for  medicinal
derivatives.  Product  mix  during the first six  months of  production  will be
limited to herbs and lettuces with approximately 80% of production  concentrated
in  lettuces  and  spinach.  It is  anticipated  that the basic crop mix for the
lettuce crops will be 60% spring  mix/mesclun  mix, 30% romaine  lettuce and 10%
spinach.

INITIAL FACILITY

         The location of our initial hydroponic production facility is on County
Road 640  approximately  one  mile  east of State  Road 39 in the  community  of
Lithia, in southeastern Hillsborough County, Florida. This 40-acre tract of land
was purchased in April 1999 for $360,000.  We paid $72,000 as a down payment and
the seller,  Hopewell Land Partners,  Limited,  provided purchase money mortgage
financing for the balance of $288,000.  The terms of the purchase money mortgage
are interest only at 12% per annum,  payable monthly, for one year at which time
the balance was due and payable.  Hopewell Land  Partners,  Limited has extended
the balloon payment on a  month-to-month  basis during which we continue to make
monthly interest  payments.  The

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<PAGE>

Company  is  pursuing  mortgage  financing  through  the  use  of a  U.S.  Rural
Development Act loan and with interested private lenders and individuals.

         We received building and development  permits from Hillsborough  County
with respect to the Lithia property in March 2000. The permits allow for a total
of 19 greenhouse ranges (10 greenhouse hoops per range) and a 40,000 square feet
processing/distribution  facility including  offices.  Construction on the first
two greenhouse ranges began  immediately  after  permitting.  The first range in
Phase I was  completed  in June 2000 and product  sales began in July 2000.  The
second  range was  completed  and  became  fully  operational  in  August  2000.
Approximately  10 greenhouse  ranges are targeted for  construction  by December
2001 bringing the total harvestable at that time to approximately 300,000 square
feet.  Several phases of  construction  are planned with the complete  build-out
scheduled for Summer 2002.

GREENHOUSE DESIGN

         The typical greenhouse  structure consists of 10 hoop-style  greenhouse
buildings  ("hoops").  Each  hoop is 30 feet in width,  120 feet in length  with
10-foot high sidewalls and 20-foot gable peaks to keep hot air off of the crops.
When  gutter-connected  together,  these 10  buildings  make up a  "range."  The
dimensions  of each range are 120 feet wide by 300 feet long.  The interior area
of each range is  approximately  36,000  square  feet with  harvestable  area of
approximately 30,000 square feet.

         In addition,  each range has a 300-foot  long by 12-foot wide  screened
lean-to that serves as an intake chamber for air going through the cooling pads.
The cooling  pads help keep  temperatures  down  during the hot  Florida  summer
months.

         The  roofs of the  buildings  are made of a double  layer of  polyvinyl
sheeting  that is  inflated  to  provide a small  degree of  insulation  without
significantly  reducing  beneficial  solar rays.  The  sidewalls  are  similarly
constructed using polyvinyl  sheeting  permanently  attached.  The end walls are
made of corrugated polycarbonate panels. The polyvinyl sheeting for the roof and
sidewalls has a useful life of approximately 5 years and will cost approximately
$6,000, including labor, to replace. The corrugated polycarbonate panels used on
the end walls  should  last in excess of 15 years and would  cost  approximately
$14,000 to replace at today's costs.

         Air  circulation  is  provided  by  greenhouse  exhaust  fans  in  each
greenhouse  range (3 fans per  greenhouse  hoop).  These  fans draw air into the
lean-to  intake  chamber and through the cooling pads. As the air passes through
the cooling  pads,  water from the cooling pads is absorbed and carried into the
greenhouse  growing  area.  As  the  water  evaporates  in the  greenhouse,  the
greenhouse  is  cooled.  The  water-depleted  air  is  then  pulled  out  of the
greenhouse by the exhaust  fans.  The air inside the  greenhouses  is completely
exchanged for fresh air approximately  every 53 seconds.  This system, when used
in conjunction  with an automatic  shade system that closes when the temperature
inside the greenhouse  reaches certain levels and cuts out  approximately 55% of
the sunlight, enables us to maintain temperatures inside the greenhouses of less
than 90 degrees Fahrenheit at the plant level. The humidity levels vary greatly.
The air inside of the  greenhouses  tends to be more humid than the air  outside
the greenhouse  since the air entering the  greenhouse is absorbing  water as it
passes  through  the  cooling  pads.  However,  extra  humidity  inside  of  the
greenhouse  does not in  itself  create  a  significant  problem  as long as the
temperatures  inside of the

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greenhouse are maintained at desired levels.  In addition,  circulating fans are
located  throughout each greenhouse  range to keep air constantly  moving within
the greenhouse growing area.

FEEDING SYSTEM

         The actual mix of nutritional  supplements and feeding schedules needed
for optimum growth varies with the following criteria: (i) the daily, weekly and
seasonal climate,  (ii) daily analysis of the water supply at the farm location,
(iii) the desired  weight and density of the product at harvest,  and (iv) plant
absorption rates. Using a hydroponic framework,  Pinecrest's research,  testing,
and  experimentation  have  resulted  in an 80+  mineral  supplement  containing
growth-optimizing  nutrients  not  found  in most  soils or  current  commercial
fertilizing  products.  Most  commercial  fertilizing  products  contain 4 basic
components:  nitrogen, phosphate, potassium and magnesium.  Additional secondary
ingredients  include sulfur and calcium.  In many instances,  depending upon the
desired result of a particular fertilizer and the coil and/or water composition,
iron, zinc,  boron,  manganese and molybdenum are used. By using Pinecrest's new
supplement  mixture,  maximum  growth is achieved.  Using the Company's  growing
system,  the cultivation  cycle for most of the products grown by the Company is
approximately  120 days, with  approximately  30 days from planting to the first
harvest and 90 days for harvesting, with an average harvest of once per week. In
the same  square  footage  where an ordinary  soil-based  farmer may plant three
harvestable  crops in one year, the Company  anticipates three 90-day harvesting
cycles with an average of 13 harvests per cycle or 39 harvests per year for most
of its herb and lettuce crops.

         Over-farming has depleted  soil-grown produce of the micronutrients and
trace  minerals  that are needed for proper human  health.  Pinecrest's  growing
process  schedules  the  delivery  of these  micronutrients  so that the produce
harvested   from  each   greenhouse  is  a  consistently   reliable   source  of
micronutrients for the consumer.  All micronutrients  used are plant derived and
non-toxic.

         Several  methods  of  feeding  were  considered.   After   considerable
experimentation and analysis,  it was determined that a feed/starve  flood/drain
system  design  was  the  best  all-around  system.  A brief  discussion  of the
reasoning follows.

         Many early hydroponic systems used a constant drip method of irrigation
or a pool that  remained  present at all times.  One of the problems  with these
irrigation  methods was that beds were  constantly  wet and it promoted pest and
fungi growth. The feed/starve concept of irrigation is based on the idea that if
the plants are only fed at certain  intervals  rather than a constant drip feed,
the plants will be heartier and when  harvested will survive for a longer period
of time before  wilting  occurs.  This will  provide a longer shelf life for the
crops. In addition,  since  water/nutrient mix is only present for short periods
of time, a significant  reduction in pest and fungi problems related to stagnant
moisture will be experienced.  Another  benefit of this  irrigation  method is a
significant  reduction in the amount of water and  fertilizer  needed during the
growing process.

         A primary variable to be dealt with on a location-by-location  basis is
the water supply.  The Lithia  location  currently has a 4" well on site that is
approximately  100 feet deep and has a current water table at  approximately  58
feet deep. In addition,  the Lithia location has received permits to drill three
additional  4" wells  approximately  300 feet deep.  The total cost of  drilling
these wells,  installing 5 horsepower  submersible pumps and installing a single
2000-gallon water tank will be

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approximately  $30,000.  An analysis of the water will be necessary to determine
the natural  level of sulfur and iron in the water along with the  unmodified pH
content of the water.  The water from the well  currently  on the Lithia site is
ideal for the operation and based upon water from deep wells in close  proximity
to the site, that water is also expected to be suitable for such purposes.

         The major  components in the basic design of the  technology is similar
to an ebb and flow hydroponics  system consisting of a flood and drain grow bed,
non-soil growing medium, plant pots or plug trays and a nutrient reservoir.  The
nutrient  reservoir  is used to mix the  nutrient  fertilizer  concentrate  into
water. A pump is submerged into the nutrient reservoir and connected to a timer.
The timer regulates when the nutrient solution flows to the grow beds and to the
plants.  The pots or plug trays are filled with the non-soil growing medium, the
pots or plug trays are then planted  with the desired  seeds and placed onto the
grow bed. A PVC fill pipe leads from the nutrient reservoir to the bottom of the
grow bed. When the submerged  pump in the nutrient  reservoir is activated,  the
grow bed fills with water to a point where  approximately the bottom 1/2 inch of
the pots or plug trays are  submerged  into the nutrient  solution.  The growing
medium  then  soaks up the  nutrient  solution  like a sponge  and  provides  it
directly  to the plant  roots.  It is  imperative  that the ebb and flow tray is
always  level.  The PVC fill pipe can also be used to drain the unused  nutrient
solution back into the nutrient  reservoir.  Temperature and humidity,  size and
type of the plants and type of growing medium used factor in on how many times a
day it comes on.

         In addition,  specific levels of certain nutrients will be increased or
decreased  on a daily basis  regardless  of the makeup of the basic  formula for
that particular crop in order to thicken the leaves, increase oil content in the
plants  and  increase  stamina or shelf life  immediately  prior to  harvesting.
Increased oil content means more flavor and a higher  quality  product.  Thicker
leaves and increased oil content  increases the weight of the produce,  which is
sold by the pound.

PINECREST PRODUCTS

         The product mix of each Pinecrest farm will initially be limited to the
categories of herbs,  lettuces and spinach.  Pinecrest anticipates that lettuces
and  spinach  will  comprise  approximately  80% of  overall  production.  It is
anticipated  that the basic crop mix for the  lettuce  crops will be: 60% spring
mix/mesclun mix; 30% romaine lettuce and 10% spinach.

         In  addition,  gourmet  herb crops  carrying  high  markup will also be
produced.   Although   the   anticipated   herb  crops  will  only  account  for
approximately  20% of  overall  production,  approximately  one-third  of  total
projected  revenues  and 40% of total gross  profits  will be derived from these
crops.  The initial  anticipated crop mix for herbs will be  approximately:  26%
basil,  20% chives,  20% rosemary,  13% thyme, 8% cilantro,  7.5% mint, 2% sage,
1.5% tarragon,  1.5% dill, .5% chervil and arugula.  However,  this crop mix may
vary somewhat based on customer usage and market trends.

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         Pinecrest  has  recently  seen  an  increased  demand  and  inquiry  on
specialty  vegetable  crops  such as a  thin-skinned  sweet  cucumber,  heirloom
tomatoes,   other  specialty  tomatoes,   baby  squash,  squash  blossoms,   and
micro-greens.  Pinecrest is currently producing these products, as there appears
to be a solid market and profit margin for these items.

PRODUCT DELIVERY

         One of the Company's  primary  concerns is with the prompt  delivery of
fresh, high quality produce. The Company intends that products will be delivered
to its customers  within 24 hours of the time it was harvested.  The Company has
designed an inventory management system for its larger customers, which requires
delivery  personnel to constantly monitor the customer's product usage and shelf
life and  replenish  as needed  while  supplementing  with  additional  specific
orders.  Local delivery will be accomplished  using a 14' - 16' refrigerated box
truck  with  regional,   bulk  deliveries  being  accomplished  by  refrigerated
semi-truck.  The  Company  plans to  lease or  purchase  the box  trucks  and to
contract for the semi-trucks.

TARGET MARKETS

         Pinecrest has defined its primary market as four- and five-star  hotels
and resorts.  Historically,  these  establishments  use large  volumes of herbs,
lettuces and gourmet  vegetables and usually employ master chefs who concentrate
on quality  rather  than  price.  An added  attraction  is that the  hydroponics
technology allows the crops to grow in a completely soil-free environment, which
virtually eliminates need for repeated washing.

         Secondary markets are cruise ship lines, smaller restaurants,  caterers
and retail  consumers.  These markets are typically  more cost conscious and, in
some  cases,  may have lower  consumption  levels.  The  Company  believes  that
establishments  having  lower  consumption  levels but a  reputation  for higher
quality foods will be attracted to the variety of gourmet lettuce mixes grown by
Pinecrest.  By offering  high  volume  crops such as spring  mix,  mesclun  mix,
romaine lettuce and spinach, it will be affordable for the Company to deliver to
smaller volume restaurants because the gourmet herbs and vegetables carry larger
profit margins.

         The  Company  will  also  continue  its  research  and  development  of
producing high potency medicinal herbs and plants.

MARKETING STRATEGY

         Pinecrest's  primary marketing strategy is to target executive chefs at
four and five star resorts and restaurants  through  distribution of samples and
promotional account servicing.  The Company targeted an initial customer base in
central Florida comprised of several large, high profile restaurants and resorts
during the research and development  phase.  Contact has been maintained and the
Company  has  received  strong  indication  of their  business.  Some  potential
customers  have asked the  Company to explore an  expanded  product  line,  with
comparable  or  potentially  higher  profit  margins.  Based  upon  Management's
experience during the research and development  phase,  management does not feel
that sales will be a primary  concern.  We are currently  delivering  product to
several Walt Disney World resorts,  restaurants,  and convention

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centers, Disney Cruise Lines, The Peabody Orlando, The Grosvenor Resort (at Walt
Disney World),  The Hotel Royal Plaza (a Marriott property at Walt Disney World)
and Cafe Creole (Tampa).

         As business  increases,  we believe a  significant  number of customers
will be acquired within a central  geographic area prior to having enough volume
to justify another farm location. In this situation,  a refrigerated  semi-truck
will  transport the products in bulk to a central  distribution  facility.  This
facility  could be similar to a florist  shop in design with a large area in the
back  portion of the  facility  to allow for  repackaging  of the  products  for
delivery to local  customers.  The front of the facility  would  provide a small
area for retail and walk-in traffic for small  customers such as caterers.  When
volume  reaches a level  that it can  support  another  farm  facility,  we will
determine a centralized location and construct a new facility.

         We also plan to use  Internet  marketing  to reach  customers in remote
locations.  Public relations articles written on the quality of the products are
expected to interest many restaurants.

COMPETITION

         The hydroponic  produce  industry is competitive  but  fragmented.  The
Company could face significant  competition.  The Company's  competitors  differ
depending  on product  type and  geographic  market with the  primary  volume of
competition coming from California, Florida, Israel, Central America and Mexico.
Several of the Company's  competitors are well  established and may have greater
assets and  financial  resources  than the  Company,  and larger  marketing  and
research and development budgets.

         However, competition in the fresh produce industry is influenced not as
much by price,  as by the consistent  supply of  high-quality  produce.  In many
cases,  competitor products are delivered from another state, across the U.S. or
in some instances from another country.  Generally, the produce is not delivered
until over a week after it is harvested.  Pinecrest  Farms expects to be able to
deliver its  products  within 24 hours of the time it is  harvested  and in many
instances within 12 hours.

         The Company  believes  that it can  successfully  compete in its chosen
target  markets  due to its  advanced  hydroponic  growing  techniques  that can
produce the highest quality produce  available,  efficient,  timely delivery and
the ability to meet customers' product demands and price points.

WORLD WIDE WEB

         The Company has a World Wide Web home page at http://www.pncr.net. This
web page  contains  basic  information  about  the  Company,  its  latest  news,
technology,  products,  investor information and frequently asked questions,  as
well as how to contact the Company.

TRADEMARKS AND PATENTS

         At this time,  the  Company has no patents or  trademarks,  however the
Company's  intellectual  property attorneys are reviewing the possibilities of a
patent on the nutritional formula used in its growing process.

                                       8
<PAGE>

GOVERNMENT APPROVALS

         Other than local business licenses and building permits, the Company is
not  required to obtain any  governmental  approval  for any of its  products or
services.  The Company does not know of any existing or probable governmental or
environmental regulations that would have an effect on its business.

SERVICE AND SUPPORT

         The primary concern of the market to be serviced is the prompt delivery
of fresh, high quality produce. Generally, the products will be delivered to the
customers within 24 hours of the time they are harvested.  In addition,  the use
of an inventory  management  system for larger  customers is  anticipated.  This
system  requires the  Company's  delivery  personnel to  constantly  monitor the
customer's  product usage volume and shelf life similar to bread truck  delivery
personnel. Many customers prefer this service because it guarantees the freshest
produce and saves time.

         Fresh  produce  must be stored  and  transported  at  certain  constant
temperatures. Most herbs and lettuces must be stored at approximately 37 degrees
Fahrenheit.   However,   basil  must  be  stored  at  approximately  54  degrees
Fahrenheit.  In many instances,  produce from competitors may be  unrefrigerated
for several hours after harvest  before it is received at a warehouse  where all
produce  is  stored  in  one  area,  regardless  of the  specific  refrigeration
requirements  of  particular  varieties of produce in order to maintain  optimum
freshness.  In  addition,  temperature  variances  within the  warehouse  can be
dramatic.  The Company will typically deliver in 14'-16' refrigerated box trucks
partitioned for zoned cooling to maintain temperatures at desired levels.

         Sales and delivery  personnel will discuss product and service concerns
of  customers  on a frequent  and  regular  basis in an effort to avoid  product
quality  problems,  service  issues and to  address  changing  product  needs of
customers.

SEASONALITY

         The Company's product  diversification and its ability to grow products
year round is such that it does not  expect to  experience  seasonal  up or down
turns.

SOURCES AND AVAILABILITY OF RAW MATERIALS

         The Company's  regular  operations relies on the availability of seeds,
growing media, and nutrient  growing  solution  ingredients in order to grow its
products.  None of these materials are proprietary;  it is how and when they are
used that is unique.  All of these ingredients are readily available from a wide
variety of  vendors,  none of which are deemed to be a  critical  single  source
supplier.  Materials  used to build  the  greenhouse  ranges  are  also  readily
available from numerous vendors across the U.S.

                                       9
<PAGE>

WORKFORCE

         The Company currently utilizes the services of Total Employment Company
("TEC"),  a  professional  employer  organization  based in  Tampa,  Florida  to
administer its human resources responsibilities.

         A professional  employer  organization is an organization that provides
an integrated and cost effective  approach to the management and  administration
of the human  resources  and  employer  risk of its  clients,  by  contractually
assuming  substantial employer rights,  responsibilities,  and risk, through the
establishment  and  maintenance  of an  employer  relationship  with the workers
assigned to its clients.

         More specifically,  a professional employer organization  establishes a
contractual relationship with its clients whereby it:

         o        assigns  workers  to client  locations,  and  thereby  assumes
                  responsibility  as an employer for  specified  purposes of the
                  workers assigned to the client locations;
         o        reserves a right of direction and control of the employees and
                  may share such responsibility with the client, consistent with
                  the client's responsibility for its product or service;
         o        pays wages and employment taxes of the employee out of its own
                  accounts;
         o        reports,  collects,  and deposits  employment taxes with state
                  and federal authorities;
         o        establishes and maintains an employment  relationship with its
                  employees which is intended to be long term and not temporary;
                  and
         o        retains a right to hire, reassign, and fire the employees.

         Through  this  relationship  with TEC,  as of June 30, 2000 the Company
employed 2 administrative  individuals in Pinecrest  Investment Group, Inc., the
parent entity. Our wholly owned subsidiary,  Pinecrest Farms, Inc.,  employed 68
employees  including  the  President of the  subsidiary  as of June 30, 2000. As
construction  is  completed  on  additional  greenhouses,  we  expect  to employ
additional  individuals  in  areas  of  production,   sales  and  marketing  and
administration.  We do not currently  have nor do we expect to have a collective
bargaining agreement with our employees.

         All production  personnel  attend  orientation  classes  describing the
practices and procedures designed and used by Pinecrest Farms.  Specific product
training  takes place both in the  classroom and in the  greenhouses  to educate
personnel in the following  areas:  product  inspection,  product care,  product
safety,  product  handling,  product  testing,  product  growth  rates,  product
classifications   and  product  harvesting,   nutrient  systems,   pest  control
management,   monitoring   techniques,   safety  issues,   water   conservation,
temperature control systems, lighting and company policy.

ITEM 2.  PROPERTIES.

         The Company's principal office is located at 1211 Tech Boulevard, Suite
101, Tampa,  Florida 33619, where it leases approximately 1,200 square feet on a
month-to-month basis.

                                       10
<PAGE>

         The Company also owns  approximately  40 acres in eastern  Hillsborough
County,  Florida located at 9107  Lithia-Pinecrest  Road  approximately  one and
one-half  mile east of Highway 39 on Highway  640.  This  location  is our first
hydroponic farming facility.

ITEM 3.  LEGAL PROCEEDINGS.

         The Company is not a party to any material litigation.

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

         On or about January 10, 2000, the Company mailed to its shareholders of
record as of close of business on December 31, 1999, an Information Statement in
which  proxies were not  requested or required.  The  Information  Statement was
mailed to the  Company  shareholders  in  connection  with a proposed  action by
written consent to authorize and approve the following actions:

         (a)      an Amendment to the  Company's  Articles of  Incorporation  to
                  authorize a class of Preferred Stock, consisting of 10,000,000
                  authorized  shares, no par value and to authorize the board of
                  directors to issue such Preferred Stock in one or more series,
                  without further approval of stockholders of the Company and to
                  permit the board of directors to establish  the  attributes of
                  any series of  Preferred  Stock  prior to the  issuance of any
                  such series.

         (b)      A forward  stock split of 5 shares for each 4 shares of common
                  stock  issued and  outstanding  on the record date of December
                  31, 1999. Any  fractional  share was rounded up to the nearest
                  full share.  The end result was the issuance of an  additional
                  1,506,175 shares of common stock.

         (c)      A tender  offer by the  Company to  purchase  shares of common
                  stock  from  its  shareholders  for $12  per  share  with  the
                  purchase  price to be paid in the form of a debenture with 12%
                  interest to be paid quarterly.  The Company  shareholders  had
                  until  February 29, 2000 to tender the shares and can call for
                  payment  anytime  after  August 31,  2000 and the  Company can
                  redeem the  debentures at any time. No shares were tendered in
                  connection with this offer.

         (d)      An Agreement and Plan of Reorganization to acquire 100% of the
                  issued and  outstanding  common stock of ISBRE or an aggregate
                  of  7,600,000  shares  of  common  stock of the  Company.  The
                  acquisition  was  expected  to close on or about  January  31,
                  2000.  Pursuant to the Agreement,  the Company was to issue an
                  aggregate of 7,600,000 shares of the Company's common stock to
                  the ISBRE  shareholders and retire certain shares owned by the
                  current shareholders of ISBRE.

                                       11
<PAGE>

         Subsequent to the mailing of the Information Statement to the Company's
shareholders,  (i) the Articles of  Amendment  to the Articles of  Incorporation
were filed to provide for the authorization of 10,000,000 preferred shares at no
par value;  (ii) 1,506,770  common shares were issued by the Company's  transfer
agent in  connection  with the 5 for 4 stock  split  and the  certificates  were
mailed to the  shareholders  on February  4, 2000;  (iii) based on the advice of
legal counsel,  the Company  notified its  shareholders on February 4, 2000 that
the  stock  tender  offer had been  abandoned;  and (iv) due to  protracted  due
diligence  on  the  potential  merger  with  ISBRE,  the  Company  notified  its
shareholders  on February 4, 2000 that the  Company had  abandoned  its plans to
pursue this merger.

                                       12
<PAGE>

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

         The  Company's  Common  Stock has been traded  over-the-counter  on the
Electronic  Pink  Sheets  under the symbol  "PNCR"  since April 20,  2000.  From
February 25, 1999 to April 19, 2000 our Common Stock was traded over-the-counter
on the OTC-Bulletin Board under the same symbol.

         The following table sets forth the range of high and low bid quotations
for the Company's Common Stock for the periods  indicated as reported by the OTC
Bulletin Board or Electronic Pink Sheets, as the case may be:

         Fiscal 2000                                  High              Low

         First Quarter (ending 9/30/99)              $ 6.38            $ 3.00
         Second Quarter (ending 12/31/99)            $20.00            $ 5.00
         Third Quarter (ending 3/31/00)              $21.00            $11.95
         Fourth Quarter (ending 6/30/00)             $15.00            $ 6.50

         Fiscal 1999                                  High              Low

         First Quarter (ending 9/30/98)               N/A               N/A
         Second Quarter (ending 12/31/98)             N/A               N/A
         Third Quarter (2/25/99-3/31/99)             $ 4.00            $ 2.10
         Fourth Quarter (ending 6/30/99)             $ 6.00            $ 2.75

Common Stock

         The Company is authorized to issue 100,000,000  shares of common stock,
 .0008 par value per share.  The holders of common stock:  (i) have equal ratable
rights to dividends from funds legally  available for payment of dividends when,
as and if declared by the board of directors, (ii) are entitled to share ratably
in all of the assets  available for distribution to holders of common stock upon
liquidation,  dissolution  or  winding  up of our  affairs;  (iii)  do not  have
preemptive,  subscription or conversion  rights,  or redemption or access to any
sinking fund; and (iv) are entitled to one non-cumulative  vote per share on all
matters submitted to stockholders for a vote at any meeting of stockholders. The
Company has not paid any  dividends on its common stock to date.  We  anticipate
that, for the foreseeable  future,  we will retain earnings,  if any, to finance
the continuing operations of its business.  The payment of dividends will depend
upon,  among  other  things,  our capital  requirements  and our  operating  and
financial conditions.  As of May 2, 2001 we had 7,654,836 shares of common stock
issued and  outstanding.  The  Company has  approximately  265  shareholders  of
record.  As of May 2, 2001 the board of directors  authorized the issuance of an
aggregate of 597,946 shares of common stock to Michael Foundation,  Limited upon
the conversion of its line of credit into equity.  As of the date hereof,  these
shares have not been issued.

                                       13
<PAGE>

Preferred Stock

         The  Company is  authorized  to issue  10,000,000  shares of  preferred
stock, no par value, with designations,  rights and preferences  determined from
time to time by its board of  directors.  Our board of directors  is  empowered,
without  stockholder  approval,  to issue shares of preferred stock with voting,
liquidation,  conversion, or other rights that could adversely affect the rights
of the  holders of the common  stock.  To date,  no  preferred  shares have been
issued and the Company has no present intention to issue any shares of preferred
stock. There can be no assurance that we will not do so in the future.

Recent Sales of Unregistered Securities

         On March 2, 1999 we purchased 2,185,000 shares from Mr. David Howe, our
President and Chairman and certain third parties for $90,000, representing their
cost, payable as follows:  $30,000 in cash and the delivery of a promissory note
in the principal  amount of $60,000 bearing interest at 10% and due September 2,
2000. On December 6, 1999,  the $60,000 note was converted into 13,334 shares of
our Common Stock.  The issuance of the shares was a non-public  offering  exempt
from registration pursuant to Section 4(2) of the Act.

         The following  securities were sold in reliance upon Regulation D, Rule
504 of the  Securities  Act of 1933, as amended,  and the rules and  regulations
promulgated  thereunder.  The company kept 100% of the proceeds from the sale of
securities  and no  underwriters  were used and no commissions or discounts were
paid.

ISSUE                NO. OF
DATE        TITLE    SHARES     SHARES ISSUED TO        CONSIDERATION    AMOUNT
----        -----    ------     --------------------    -------------    ------
02/11/99    Common   380,000    Michael Foundation      Services        $ 3,800
02/11/99    Common   380,000    Maple Hill Trust        Services          3,800
02/11/99    Common   280,000    Daisy Schapheer         Cash              2,800
02/11/99    Common   360,000    Robert Goldberg         Cash              3,600
02/11/99    Common   200,000    Walter W. Knitter       Cash              2,000
02/24/99    Common   150,000    Ralph Loveday           Cash              4,500

         The 2,185,000 shares were then simultaneously  exchanged as part of the
purchase price for the  hydroponics  technology  from Michael  Foundation,  Ltd.
(2,135,000  shares) and Tillman & Associates  (50,000 shares).  The issuance was
non-public  offering  exempt from  registration  pursuant to Section 4(2) of the
Act.

         In December  1999,  we issued 10,000  shares to Sheryl  Salvadore,  our
corporate secretary.  The shares were issued to her as a bonus. The issuance was
a non-public  offering exempt from registration  pursuant to Section 4(2) of the
Act.

                                       14
<PAGE>

         In March 1999,  we entered into a $900,000  convertible  line of credit
with Michael Foundation, Limited. In December 1999, the credit line was modified
to a  purchase  of 150,000  shares at $6.00 or an  aggregate  purchase  price of
$900,000.  The shares issued upon the  conversion of the credit line were issued
pursuant to Section 4(2) of the Act.

         In April 2000, we entered into a $1,500,000  convertible line of credit
with Michael Foundation,  Limited. On June 25, 2000, Michael Foundation, Limited
converted $744,758 of indebtedness,  including  approximately  $8,991 of accrued
interest,  into  124,127  shares at a  conversion  rate of $6.00 per  share.  On
October 6, 2000, Michael  Foundation,  Limited converted the balance of $664,602
outstanding  under  the line of  credit  as of  September  30,  2000,  including
approximately  $9,507 in accrued  interest,  into 110,768 shares at a conversion
rate of $6.00 per share.  Theses shares were issued  pursuant to Section 4(2) of
the Act.

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

         This  annual  report  on  Form  10-KSB  contains  both  historical  and
forward-looking statements. Forward-looking statements involve known and unknown
risks,  uncertainties  and other  factors  that may cause  the  actual  results,
performance  or  achievements  of  Pinecrest  to be  different  from any  future
results,  performance and achievements expressed or implied by these statements.
You should review carefully all information,  including the financial statements
and the notes to the financial statements included in this annual report on Form
10-KSB. The following important factors could affect future results, causing the
results  to  differ  materially  from  those  expressed  in the  forward-looking
statements contained herein:

         -        the  timing,  impact  and other  uncertainties  related to the
                  construction of Phase II and Phase III;

         -        the impact of new technologies;

         -        the ability to obtain new customers;

         -        our  ability  to satisfy  the  produce  needs of our  existing
                  customer base; and

         -        interest   rate   fluctuations   and  other   capital   market
                  conditions.

         These factors are not  necessarily  all of the  important  factors that
could cause  actual  results to differ  materially  from those  expressed in the
forward-looking  statements  in this  report.  Other  unknown  or  unpredictable
factors  also  could have  material  adverse  effects  on the future  results of
Pinecrest. The forward-looking statements in this report are made only as of the
date of this report and,  under  Section 27A of the  Securities  Act of 1933 and
Section 21E of the Securities Exchange Act of 1934,  Pinecrest does not have any
obligation  to  publicly  update  any  forward-looking   statements  to  reflect
subsequent events or  circumstances.  Pinecrest cannot assure you that projected
results will be achieved.

                                       15
<PAGE>

Introduction

         This  discussion  summarizes  the  significant  factors  affecting  the
operating results,  financial  condition and liquidity/cash  flow of the Company
during the period from  January  1999 to June 30,  2000.  This should be read in
conjunction with the financial statements and notes thereto included.

Cash Requirements and Operations Analysis

         Due to the Company being in a development stage, operations and capital
expenditures  have been  completely  financed  through the use of short-term and
long-term  credit  arrangements  as  well as the  sale  and/or  exchange  of the
Company's  common stock.  Cash generated  over the 12-month  period from January
1999 through  December  1999 from the  Company's  financing  activities  totaled
approximately   $558,000   (inclusive  of  the  funds  raised  through   Michael
Foundation,  Limited, plus a subscription  receivable due of $437,000).  For the
three-month period from January 2000 through March 2000, the only funds received
were from payment of the subscription  receivable of approximately $395,000. For
the  three-month  period from April 2000 through  June 2000,  the balance of the
subscription  receivable  of $42,000 was received  plus  approximately  $735,766
received  from Michael  Foundation,  Limited  pursuant to a  subsequent  line of
credit arrangement.  Pursuant to FASB EITF 98-5, $503,230.96 in interest expense
was recorded during the  three-month  period from April 1, 2000 through June 30,
2000 as a beneficial  feature of the convertible line of credit arrangement with
Michael Foundation, Limited.

         The Company is pursuing a Federal Rural  Development  Act Loan or other
comparable  financing  to  finance  Phase II of the Lithia  facility.  While the
Company has already received significant interest and expects to complete such a
transaction  within the next few  months,  it is possible  the Company  could be
unsuccessful in obtaining such financing.  In this event,  the rate of build-out
of Phase II of the  Company's  Lithia  Operations  and  resulting  revenues  and
profits would be slower than projected since construction would then be financed
out of profits.  However, the Company would still be able to maintain a positive
cash flow position and positive net profits from operations.

         Construction of Phase II has been delayed due to construction materials
delays and  subcontractor  scheduling  conflicts  created  due to the  materials
delays. However, once Phase II, containing 5 greenhouse ranges, is completed and
in  operation,  total  monthly  revenues from Phase I and Phase II facilities (a
total of 7 greenhouse  ranges) are  anticipated  to be in excess of $700,000 and
monthly net income to be in excess of $300,000 ($42,857 per range).

         Based on our cash flow projections,  Phase III is to be financed out of
profits  and,  therefore,  no  financing is  anticipated  at that time.

Product Research & Development

         The Company will continue to research new product lines to which it can
apply its technology on a project-by-project basis. The general budget for these
expenditures  will be

                                       16
<PAGE>

allocated  based on a  percentage  of  profits  that  will  vary as the  Company
expands.  Although the specific projects change regularly, it is not anticipated
that additional  funding beyond this  allocation will be necessary.  Some of the
projects that are currently  being tested are tomatoes,  cucumbers,  and various
varieties of peppers,  squash,  zucchini, and edible flowers. Future products to
be tested  include  exotica  melons  and  strawberries.  One of the  methods  of
production  being tested using the technology is a gravity fed hydroponic  tree.
However,  since  these  projects  are  investigative  in  nature,  it  cannot be
determined  at this time,  how long the research and testing will take nor when,
if or which projects will ever produce revenues.

Significant Capital Expenditures

         The Company  spent  approximately  $175,000 on  engineers,  permitting,
materials and equipment to be incorporated  into the Phase I Lithia facility and
approximately  $10,000 on research and  development  in November and December of
1999.  Additional  costs to  complete  Phase I of the  Lithia  facility  totaled
approximately $850,000.

         Phase II costs for  greenhouses  and equipment are anticipated to total
approximately  $400,000  per  greenhouse  range.  Phase  II  will  consist  of 5
greenhouse ranges for a total of $2,000,000.

         Phase I and II costs are expected to be expended  late in the year 2000
and in 2001.

         Phase III costs are  anticipated  to be expended in late 2001 and 2002.
The rate of completion  of Phase III will depend  greatly upon the timing of the
build-out of Phase II. Phase III  construction  costs will also be approximately
$400,000 per greenhouse  range. A total of 12 greenhouse ranges will be built in
Phase III at a total cost of $4,800,000.

Changes in Personnel

         The Company  currently has 2 employees  that are employed by the parent
corporation, Pinecrest Investment Group, Inc. and approximately 100 employees of
the subsidiary corporation, Pinecrest Farms, Inc.

         It is anticipated that the parent  corporation will hire  approximately
five employees over the next twelve months. Pinecrest Farms, Inc. is anticipated
to increase to approximately  200 employees over the next twelve months with the
majority of them being provided through a professional employer organization.

Subsequent Events

         Production operations began in July 2000. During the three-month period
from July 1, 2000 through  September  30, 2000 the Company  generated  cash from
financing  activities  in the amount of $664,602  inclusive  of the funds raised
through  Michael  Foundation,  Limited  pursuant  to the  previously  referenced
convertible line of credit arrangement and cash from operations of $1,222. Total
sales from  operations  for this  period  totaled  approximately  $6,841.  Trade
accounts receivable as of September 30, 2000 totaled  approximately  $5,641. The
Company posted a $571,765 deficit from operations for this  three-month  period.
Pursuant to FASB EITF 98-5, $191,779 in interest expense was recorded during the
three-month  period from July 1, 2000

                                       17
<PAGE>

through  September 30, 2000 as a beneficial  feature of the convertible  line of
credit arrangement with Michael Foundation, Limited.

         During the  three-month  period from October 1 to December 31, 2000 the
Company  generated  cash from  financing  activities  in the amount of  $681,846
inclusive of the funds raised through Michael  Foundation,  Limited  pursuant to
the previously  referenced  convertible line of credit arrangement and cash from
operations of approximately $86,901. Total sales from operations for this period
totaled  approximately  $100,817.  Trade accounts  receivable as of December 31,
2000 totaled approximately  $21,557. The Company's farming operations produced a
Gross Profit of $43,980,  a Net Operating  Deficit of $504,466 and a Net Loss of
$548,280 for this three-month  period. The Company's Farming Operations revenues
were approximately $12,000 per week at the end of December and growing steadily.
Due to the low price of the stock over  recent  months,  there was no accrual of
interest  expense  pursuant  to FASB EITF 98-5 as a  beneficial  feature  of the
convertible line of credit arrangement with Michael Foundation, Limited.

         Arrangements  have been made with Michael  Foundation,  Limited for the
availability  of  approximately  $1,000,000 in additional cash from financing if
needed.

         The Company  currently  has over 60 customers  that include Walt Disney
World,  Disney Cruise Lines,  various  Marriott and Wyndham  resorts and hotels,
Grosvenor  Resorts,  Caribe Royale,  The Peabody Orlando and The Don Cesar Hotel
and a national food service  distributor to name a few. The Company is currently
finalizing  arrangements  with the Orange County  Convention  Center in Orlando,
Florida, Carnival Cruise Lines, Carrabba's Italian Restaurants,  Macaroni Grill,
Darden  Restaurants,  two additional local food  distributors and two additional
national  food  distributors.  In  addition,  the Company was asked to submit an
application  to  Avendra,  a national  purchasing  service  provider  founded by
Marriott  International,  Hyatt Hotels  Corporation,  ClubCorp USA,  Inc.,  Bass
Hotels & Resorts and  Fairmont  Hotels & Resorts to be a  preferred  provider of
herbs,  lettuces  and  specialty  produce  for the Florida  market.  The Company
submitted its  application on February 20, 2001.

Recent Accounting Pronouncements

         In 1998, the FASB issued  Statement of Financial  Accounting  Standards
No. 133 ("SFAS No. 133"),  "Accounting  for Derivative  Instruments  and Hedging
Activities." This statement establishes  accounting and reporting guidelines for
derivatives and requires an establishment to record all derivatives as assets or
liabilities  on the balance sheet at fair value.  Additionally,  this  statement
establishes  accounting treatment for four types of hedges: hedges of changes in
the  fair  value  of  assets  or  liabilities,   firm  commitments,   forecasted
transactions  and hedges of foreign  currency  exposures of net  investments  in
foreign operations. Any derivative that qualifies as a hedge, depending upon the
nature of that hedge,  will either be offset against the change in fair value

                                       18
<PAGE>

of the hedged  assets,  liabilities  or firm  commitments  through  earnings  or
recognized in other comprehensive  income until the hedged item is recognized in
earnings. SFAS No. 133 is effective for years beginning after June 15, 2000. The
Company does not currently  participate  in these types of financing  activities
and does not anticipate that the adoption of this statement will have a material
impact on its  consolidated  balance sheets,  statements of operations,  or cash
flows.

Impact of Inflation

         The  Company is subject to normal  inflationary  trends and  anticipate
that any increased costs would be passed on to its customers.

ITEM 7.  FINANCIAL STATEMENTS

         The information  required by this Item is found  immediately  following
the signature page of this report.

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

         None.

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS.

         The following table sets forth certain  information  concerning each of
the Company's directors and executive officers:

Name                       Age                         Position
----                       ---                         --------
David B. Howe              48            Chairman of the Board, President, Chief
                                         Executive Officer

Sheryl B. Salvadore        44            Secretary, Treasurer, Director

Thomas M. Tillman          43            President, Pinecrest Farms, Inc.

David B. Howe - Chairman of the Board, President,  and Chief Executive Officer -
Mr.  Howe has served as Chairman of the Board,  President,  and Chief  Executive
Officer of the Company since founding the Company in January 1999.  From 1988 to
the present,  Mr. Howe has served as President  of  Blackhawk  Financial  Group,
Inc., a privately held Florida corporation formerly  specializing in mergers and
acquisitions.  Blackhawk,  a company controlled by Mr. Howe, has not been active
since 1996 and no activities are planned for the future.  From 1991 to 1998, Mr.
Howe consulted for Baylor Medical Products,  Ltd., Baylor  BioTechnologies  Co.,
Ltd.  and  Beijing  Regene  Latex  Products  Co.,  Ltd.  Mr. Howe earned a BA in
business  finance at the State  University of New York at Fredonia  where he has
just completed a 12-year term as a member of its Foundation Board.

Sheryl B.  Salvadore - Secretary,  Treasurer  and Director - Ms.  Salvadore  has
served as  Secretary,  Treasurer and Director of the Company since January 1999.
From 1995 to the  present,  Ms.  Salvadore  has served as Secretary of Blackhawk
Financial  Group,  Inc., a privately held Florida  corporation  specializing  in
mergers and acquisitions.  Her duties included administrative  assistance to Mr.
Howe. Blackhawk has not been active since 1996 and no activities are planned for
the future.  From 1981 to 1995, Ms. Salvadore  served in various  positions with
Brandon State Bank, her last position being Vice President from 1993 to 1995.

                                       19
<PAGE>

Thomas M. Tillman - President of Pinecrest Farms,  Inc. - Mr. Tillman has served
as President of Pinecrest  Farms,  Inc. since  November  1999.  From 1997 to the
present,  he has served as President of Tillman & Associates,  Inc., a privately
held Florida  corporation  specializing in financial and management  consulting.
Tillman & Associates, Inc. ("TA") is a sub-chapter S corporation organized under
the laws of the  State  of  Florida  in 1997  that is owned  100% by  Thomas  M.
Tillman.  Most of the consulting  services rendered by TA involved tax planning,
employee relations,  efficiency  analysis,  computerized  accounting systems and
employee  leasing  enterprise   management  and   profitability.   TA  typically
maintained 5 or 6 clients at any one time. In 1999,  TA generated  revenues over
$100,000,  of which  approximately 70% were generated from Pinecrest  Investment
Group, Inc. Income tax services comprised approximately 5% of revenues.

         From  1996 to 1997,  Mr.  Tillman  served as Vice  President  and Chief
Financial Officer of Employers 1st Trust Corp., an employee leasing company.  In
October 1992,  Mr.  Tillman filed for  protection  under Chapter 7 of the United
States Bankruptcy Code with the action being discharged as of January 1993. From
1993 to 1997, Mr. Tillman  served as President of ATR Financial  Group,  Inc., a
privately held Florida corporation providing accounting and financial consulting
services.  ATR  Financial  Group,  Inc.  ("ATR") was a sub-chapter S corporation
organized  under the laws of the State of Florida in 1993 that was owned 100% by
Thomas   M.   Tillman   and  his   wife,   Phyllis   M.   Tillman.   ATR  was  a
management-consulting  firm that  revolved  around  tax  planning,  computerized
accounting  systems and employee leasing company start-ups.  The financial,  tax
and business  management portion of the business accounted for approximately 20%
of revenues. At its largest, ATR had approximately 30 accounting clients, 25 tax
clients  and 5  consulting  clients  that  generated  annual  gross  revenues of
approximately  $100,000.  ATR was sold to Michael  Fitzgerald,  P.A.  in June of
1996.  Mr. Tillman earned a Bachelor of Arts degree from the University of South
Florida majoring in Pre-law and Accounting.

                                       20
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

The Summary Compensation Table below details all plan and non-plan  compensation
awarded to, earned by, or paid to the named executive officers during the period
from July 1, 1999 through June 30, 2000.

                           SUMMARY COMPENSATION TABLE
  -----------------------------------------------------------------------------
                                                   Annual Compensation
  ------------------------------------ ---------------------- -----------------
  Name and Principal Position                      Year               Salary
  ------------------------------------ ---------------------- -----------------
  David B. Howe (1)                                2000              $78,000
  Chairman, President, CEO                         1999                    0
  ------------------------------------ ---------------------- -----------------
  Sheryl B. Salvadore (2)                          2000              $19,500
  Secretary, Treasurer, Director                   1999                    0
  ------------------------------------ ---------------------- -----------------
  Thomas M. Tillman (3)                            2000              $60,000
  President of Pinecrest Farms, Inc.               1999              $13,846
  ------------------------------------ ---------------------- -----------------

(1)      Mr. Howe entered into an  employment  agreement  with the Company at an
         annual salary of $156,000  beginning in January 2000. Mr. Howe received
         compensation of $78,000 from January through June 2000.

(2)      Ms.  Salvadore began receive annual  compensation of $39,000 in January
         2000. Ms.  Salvadore  received  $19,500 in salary from January  through
         June 2000. During 1999, Ms. Salvadore  received a stock grant of 10,000
         shares of  restricted  common stock of the Company  valued at $1.50 per
         share.

(3)      Mr. Tillman entered into an employment agreement with the Company at an
         annual  salary of $120,000  beginning in November 1999 of which $13,846
         was paid through  December  31, 1999 and $60,000  from January  through
         June 2000.  Mr.  Tillman was also paid car and gasoline  allowances  in
         1999 totaling $1,038 and in 2000 totaling $4,500.  In 1999, Mr. Tillman
         also  received  compensation  in the amount of $71,500 in exchange  for
         consulting services paid to Tillman & Associates, Inc.

                                       21
<PAGE>

         In 1999 and in 2000 there were no Bonuses or Other Annual  Compensation
awarded, earned, or paid.

         In 1999 and in 2000  there was no Long Term  Compensation  and no Other
Compensation awarded, earned, or paid. Pinecrest's directors are not compensated
and the  Company  has no  compensation  plan for its  directors.  The  Company's
directors are elected by the shareholders at an annual meeting.

                                       22
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following  table sets forth,  as of April 24, 2001,  information  concerning
ownership of the Company's securities by (i) each Director,  (ii) each executive
officer,  (iii) all Directors and executive  officers as a group;  and (iv) each
person known to the Company to be the beneficial owner of more than five percent
of each class:
<TABLE>
<CAPTION>
                             Name and Address                              Amount              Percent
Title of Class            of Beneficial Owner (1)                          Owned             of Class (2)
--------------            -----------------------                          ------            ------------
<S>                 <C>                                               <C>                     <C>
Common              David B. Howe, Chairman, President and Chief
                    Executive Officer
                    1211 Tech Blvd., Suite 101
                    Tampa, FL  33619                                       512,500               6.695%

Common              Sheryl B. Salvadore, Secretary, Treasurer
                    and Director
                    1211 Tech Blvd., Suite 101
                    Tampa, FL  33619                                        12,500               0.163%

Common              Thomas M. Tillman (3)
                    President of Pinecrest Farms, Inc.
                    1211 Tech Blvd., Suite 101
                    Tampa, FL  33619                                        74,168               0.969%

Common              Michael Foundation, Limited (4)
                    Parque Empresarial Forum
                    Edificio B
                    1 Piso
                    Corretara Prospero Fernandez                                                47.259%
                    Santa Ana, Costa Rico                                3,617,684

All Executive Officers and Directors
    as a group (3 persons)                                                 599,168               7.827%
</TABLE>
----------------------
(1)      Beneficial  ownership has been determined in accordance with Rule 13d-3
         under the  Exchange  Act and  unless  otherwise  indicated,  represents
         securities  for  which  the  beneficial   owner  has  sole  voting  and
         investment power.
(2)      Based upon 7,654,836 shares currently outstanding.
(3)      All  shares  issued  to  Tillman  &  Associates,  Inc.,  a  corporation
         controlled by Thomas M. Tillman.

                                       23
<PAGE>

(4)      Michael  Foundation,  Limited is controlled by general  manager,  Simon
         Shaw.  According  to  Simon  Shaw,  Michael  Foundation,  Limited  is a
         privately held company whose primary  efforts are as passive  investors
         in  commercial  ventures  such as farming,  principally  located in the
         western hemisphere. Mr. Shaw indicates that Michael Foundation, Limited
         does not exert pressure or influence on companies in which they make an
         investment  and  routinely  performs  extensive  due  diligence  on the
         front-end  of  any  venture  they   consider  to  make  sure  they  are
         comfortable  with its  structure.  Mr. Shaw has indicated  that Michael
         Foundation,  Limited  would  consider a proposal  with the  Company for
         further funding. On May 11, 2000, Michael Foundation,  Limited executed
         a Shareholder  Voting  Agreement and Irrevocable  Proxy with respect to
         its  3,804,589  shares  of  common  stock,  granting  David  Howe,  the
         Company's  Chairman and CEO the right to vote these shares for a period
         of ten years. Accordingly, despite the fact that they are the Company's
         largest  shareholder,  they will not be able to  influence  the  future
         plans of the Company.

Incentive Stock Option Plan

         On January 10,  2000,  the board of  directors  adopted  the  Pinecrest
Investment  Group,  Inc.  Incentive Stock Option Plan December 1999 (the "Plan")
which was subsequently  approved by a majority of our shareholders.  The Plan is
administered by the executive committee of the board of directors and authorizes
the  committee  to grant or award to eligible  executives  and  employees of the
Company and its  subsidiaries,  until January 10, 2010,  incentive stock options
for up to 1,200,000 shares of our common stock.

         The following is a general description of certain features of the Plan:

         Participation. Participants will be selected by the committee from time
         to time among the  executives  and key employees of the Company and our
         subsidiaries.  Directors  who  are  employees  of the  Company  and our
         subsidiaries will be eligible for inclusion.  Participation in the Plan
         will be on an individual  basis and the  committee  shall have complete
         discretion in selecting those persons, if any, who may participate.

         Number of Shares.  The total number of shares of common stock for which
         options may be granted pursuant to this Plan shall not exceed 1,200,000
         shares  except that,  if options as to any shares lapse  without  being
         exercised,  such shares may be  re-optioned.  Within the limits  herein
         contained,  the number of shares for which options will be granted from
         time to time and the periods for which the options will be  outstanding
         will be determined by the committee.

         No  participant  may be granted an option  pursuant to this Plan in any
         one calendar year to purchase more than $100,000 of common stock of the
         Company,  valued  at the time of the  grant,  provided,  however,  that
         one-half of any unused  portion of such  amount may be carried  over or
         granted  in any of the three  succeeding  calendar  years,  and as such
         shall be added to the otherwise  applicable  dollar limitation for such
         succeeding years.

                                       24
<PAGE>

         Option Price. The option price of options granted pursuant to this Plan
         shall  be (a)  one  hundred  percent  (100%)  or (b) in the  case of an
         individual who owns stock  possessing more than 10 percent of the total
         combined  voting power of all classes of stock of the Company or of any
         subsidiary of the Company one hundred ten percent  (110%),  of the fair
         market  value of the  shares of  common  stock at the date on which the
         options are granted,  which date shall be the date on which the letters
         to the grantees  setting  forth the terms of the option are executed by
         the Company.

         Term of the Option.  No option  granted  pursuant to this Plan shall be
         exercisable  after the expiration of ten years from the date the option
         is granted.  Within these  limits,  the  committee  will  determine the
         expiration date of the options.

         Time of  Exercise.  An  option  granted  pursuant  to this  Plan may be
         exercised  in whole or in part at any time after one year from the date
         of grant  until the  expiration  of the term of the  option.  No option
         granted  pursuant to this Plan shall be exercised by the grantee  while
         there is outstanding any incentive stock option  previously  granted to
         him to purchase  stock in the Company or any  corporation  which at the
         time of granting the option is a parent or a subsidiary  of the Company
         or a predecessor corporation of any such corporation.

         Payment of Shares.  Upon the exercise of an option granted  pursuant to
         this Plan,  payment  may be made at  Employee's  option,  in cash or by
         check.

         Sale of Option Shares.  The  participant  must represent and warrant to
         the Company as condition of the  granting of an option  hereunder,  and
         for the continued validity thereof,  that the participant will not sell
         or offer for sale any shares of stock obtained hereunder in the absence
         of an  effective  registration  statement  as to such  stock  under the
         Securities  Act of 1933,  as  amended,  unless the  Company  shall have
         received opinion of counsel  satisfactory that such registration is not
         required,  and  that no  stock  will be sold  or  offered  for  sale in
         violation of any applicable state securities  legislation.  The Company
         may legend any shares  issued on exercise of an option to reflect  this
         provision.

         Amendment to the Plan. The Plan may be amended at any time by the board
         of  directors,  provided  that no  amendment  shall be made without the
         approval of the  stockholders  which shall increase the total number of
         shares  covered  by the Plan,  change the  description  of the class of
         employees eligible to receive options, or reduce the option price.

No stock options have yet been granted under the Plan.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         On March 2, 1999, the Company reacquired 2,185,000 shares of restricted
common stock from President, David B. Howe and independent investors for $90,000
(Mr.  Howe's cost) payable as follows:  $30,000 cash and a note in the principal
amount of $60,000  bearing 10% simple  interest,  due  September 2, 2000.  These
shares were  acquired  by Mr.  Howe and the  investors  in  connection  with his
purchase of the Company. These shares were then simultaneously exchanged

                                       25
<PAGE>

as part of the  purchase  price  for the  hydroponics  technology  from  Michael
Foundation,  Limited,  and Tillman & Associates,  Inc., that is necessary in the
overall  operation of the hydroponic  growing  system.  On December 6, 1999, the
$60,000  promissory note to Mr. Howe was converted into restricted common shares
of the  Company at a rate of $6.00 per share for a total of 10,000  shares.  The
interest due on the note of $3,027 was paid in cash.

         On December 6, 1999, the remaining  balance of $80,000 due to Tillman &
Associates,  Inc. on the  promissory  note given in exchange for  technology was
converted  into  restricted  common  stock of the Company at a rate of $6.00 per
share for a total of 13,334  shares.  The interest due on the note of $6,525 was
paid in cash.  Mr.  Tillman is  President of Tillman &  Associates,  Inc. and is
President of Pinecrest Farms, Inc.

         In March 1999,  the Company  entered into a convertible  line of credit
arrangement with Michael Foundation Limited, a major stockholder of the Company.
This  credit  arrangement  called  for  Michael  Foundation,  Limited to provide
working capital for the Company while it was arranging for acceptable  long-term
funding for its Phase I construction and working capital needs until the Company
attained  positive  cash flow.  This line of credit was for a total of $900,000,
which amount could be converted  into  restricted  shares of common stock of the
Company  at a price of $6.00 per  share.  During  the month of March  1999,  the
Company's  stock  averaged a closing bid price of $3.70.  By the end of November
1999,  the  Company  had  borrowed  approximately  $300,000  against the Michael
Foundation,  Limited  line of  credit.  In  December  1999,  the line of  credit
arrangement  with  Michael  Foundation,  Limited,  was  modified to call for the
absolute  purchase  of  150,000  shares of  restricted  common  stock by Michael
Foundation,  Limited  at a price of $6.00  per  share  for a total of  $900,000.
During the month of December  1999,  the Company's  stock averaged a closing bid
price of $9.64 per share. As of the date hereof,  the shares have been delivered
to Michael Foundation, Limited and the Subscription Receivable paid.

         In April 2000,  the Company  entered into a convertible  line of credit
arrangement  with  Michael  Foundation,  Limited,  a  major  stockholder  of the
Company.  This  credit  arrangement  called for Michael  Foundation,  Limited to
provide  working  capital for the Company while it was arranging for  acceptable
long-term  funding for its Phase I construction  and working capital needs until
the Company attained  positive cash flow. This line of credit was for a total of
$1,500,000,  which amount could be converted into restricted common stock of the
Company  at a price of $6.00 per  share.  During  the month of April  2000,  the
Company's  stock averaged a closing bid price of $9.14. By the end of June 2000,
the Company had borrowed  approximately $735,766 against the Michael Foundation,
Limited line of credit. In July 2000, Michael Foundation,  Limited exercised its
right to convert the  outstanding  balance as of June 30, 2000, plus interest of
approximately  $8,991 for a total of approximately  $744,758 into 124,127 shares
of  restricted  common stock at a price of $6.00 per share.  During the month of
June 2000, the Company's  stock averaged a closing bid price of $9.58 per share.
Pursuant to FASB EITF 98-5, $503,231 in interest expense was recorded during the
three-month  period from April 1, 2000  through  June 30,  2000 as a  beneficial
feature of the convertible line of credit  arrangement with Michael  Foundation,

                                       26
<PAGE>

Limited.  Although the balance due was converted to restricted  common shares as
of the year ended June 30, 2000,  the 124,127  common shares were not physically
issued until July 17, 2000.

         During the three-month  period from July 1, 2000 through  September 30,
2000 the  Company  generated  cash from  financing  activities  in the amount of
$664,602  inclusive  of the funds raised  through  Michael  Foundation,  Limited
pursuant to the previously  referenced  convertible line of credit  arrangement.
Pursuant to FASB EITF 98-5, $191,779 in interest expense was recorded during the
three-month  period from July 1, 2000 through September 30, 2000 as a beneficial
feature of the convertible line of credit  arrangement with Michael  Foundation,
Limited.

         During the  three-month  period from October 1 to December 31, 2000 the
Company  generated  cash from  financing  activities  in the amount of  $681,846
inclusive of the funds raised through Michael  Foundation,  Limited  pursuant to
the previously  referenced  convertible line of credit arrangement and cash from
operations of approximately $84,901. Total sales from operations for this period
totaled  approximately  $100,817.  Trade accounts  receivable as of December 31,
2000 totaled approximately  $21,557. The Company's farming operations produced a
Gross Profit of $43,980,  a Net Operating  Deficit of $504,466 and a Net Loss of
$548,280 for this three-month  period. The Company's Farming Operations revenues
were approximately $12,000 per week at the end of December and growing steadily.
Due to the low price of the stock over  recent  months,  there was no accrual of
interest  expense  pursuant  to FASB EITF 98-5 as a  beneficial  feature  of the
convertible line of credit arrangement with Michael Foundation, Limited.

         Arrangements  have been made with Michael  Foundation,  Limited for the
availability  of  approximately  $1,000,000 in additional cash from financing if
needed.

                                       27
<PAGE>

                             ADDITIONAL INFORMATION

The Exchange Act Registration  Statement and the exhibits and schedules  thereto
filed  by  Pinecrest  may  be  inspected  and  copied  at the  public  reference
facilities  maintained  by the  Commission  at Room  1024,  450 5th  Street  NW,
Washington,  D.C.  20549.  Information  may be obtained on the  operation of the
Public  Reference  Room  by  calling  the  Commission  at  1-800-SEC-0330.   The
Commission  maintains  an  Internet  site  that  contains  reports,   proxy  and
information  statements,  and  other  information  regarding  issuers  that file
electronically  (http://www.sec.gov.)  The  Internet  address for the Company is
http://www.pncr.net.

                                       28
<PAGE>

                                    PART III

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         a.       Exhibits

Exhibit No.                Description of Document
-----------                -----------------------

3(i)           Articles of Incorporation for Synthetic Flowers of America,  Inc.
               (now known as Pinecrest  Investment Group,  Inc.) filed September
               5, 1997.*

3(ii)          Articles of Amendment to Articles of  Incorporation  of Synthetic
               Flowers of America, Inc., (name change) filed February 15, 1999.*

3(iii)         Articles of Amendment to Articles of  Incorporation  of Pinecrest
               Investment  Group,  Inc. (to  authorize  preferred  shares) filed
               January 25, 2000.*

3(iv)          Bylaws.*

10.0           Stock Purchase  Agreement  between  Synthetic Flowers of America,
               Inc., Sheila Langley and David B. Howe and assigns, dated January
               15, 1999.*

10.1           Stock Purchase  Agreement between Pinecrest  Investment Group and
               David B. Howe, dated March 2, 1999.*

10.2           Agreement  for Sale  and  Purchase  of  Business  Assets  between
               Tillman & Associates,  Inc. and Pinecrest Investment Group, Inc.,
               dated March 2, 1999.*

10.3           Agreement  for Sale  and  Purchase  of  Business  Assets  between
               Michael Foundation, Limited and Pinecrest  Investment Group, Inc.
               dated March 2, 1999.*

10.4           Mortgage and accompanying  Promissory Note on purchase of 40-acre
               land tract.*

10.5           Employment Agreement between Pinecrest Investment Group, Inc. and
               Thomas M. Tillman, dated November 22, 1999.*

10.6           Employment Agreement between Pinecrest Investment Group, Inc. and
               David B. Howe, dated January 1, 2000.*

21.0           Subsidiaries of Pinecrest Investment Group, Inc.*

99.0           Form of Stock Certificate.*

*Previously submitted.


         b.       Reports on Form 8-K

                  No reports on Form 8-K were filed  during the last  quarter of
the period covered by this report.

                                       29
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  has duly caused this  registration  statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                               PINECREST INVESTMENT GROUP, INC.


Date:  May 21, 2001                            By:  /s/ David B. Howe
                                                   ---------------------------
                                                   David B. Howe, President



         Pursuant to the  requirements  of 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.

     Signature                         Title                         Date


/s/ David B. Howe                 Chairman of the Board,         May 21, 2001
-----------------------------     President and CEO
David B. Howe

/s/ Sheryl B. Salvadore           Secretary, Treasurer and       May 21, 2001
-----------------------           Director
Sheryl B. Salvadore


                                       30
<PAGE>



                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                              FINANCIAL STATEMENTS
                        FOR THE YEAR ENDED JUNE 30, 2000

                                      F-1
<PAGE>

                                      INDEX

         Auditors' Report                                          F-3

         Balance Sheet                                             F-4

         Statement of Operations                                   F-5

         Statement of Cash Flows                                   F-6

         Statement of Changes in Stockholders' Equity              F-7

         Notes to Financial Statements                           F-8-13


                                      F-2
<PAGE>

                                    DRAKEFORD
                                        &
                                    DRAKEFORD
                         A LIMITED LIABILITY CORPORATION
                            ACCOUNTANTS & CONSULTANTS


John A. Della-Donna, CPA    3235 Satellite Boulevard
Georgia #3424               Building 400, Suite 300
                             Duluth, Georgia 30096



                            INDEPENDENT AUDIT REPORT

To Shareholders of:
PINECREST INVESTMENT GROUP, INC.
TAMPA, FLORIDA

We have audited the accompanying  balance sheet of PINECREST  INVESTMENT  GROUP,
INC.  (A  Development  Stage  Company)  as of June  30,  2000,  and the  related
statements of operations,  stockholders' equity and cash flows for the year then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audit.

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

In our opinion the accompanying  financial  statements  referred t above present
fairly, in all material respects, the financial position of PINECREST INVESTMENT
GROUP,  INC. as of June 30, 2000, and the results of its operations and its cash
flows for the year then ended in conformity with generally  accepted  accounting
principles.

/s/ DRAKEFORD & DRAKEFORD, LLC

September 15, 2000

                                      F-3
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                                  BALANCE SHEET
                                  JUNE 30, 2000

                                     ASSETS
Current Assets
         Cash                                                   $       78,683
         Employee Advances                                               1,050
                                                                --------------
                  Total Current Assets                          $       79,733

Property, Plant, and Equipment
         Greenhouses and Equipment                                     681,939
         Office Furniture and Equipment                                 27,609
         Vehicles                                                       12,000
         Land and Improvements                                         524,882
                                                                --------------
                                                                     1,246,430
                  Less: Accumulated Depreciation                       (14,306)
                                                                --------------
                  Total Property, Plant, and Equipment               1,232,124

Other Assets
         Hydroponic Technology                                       3,446,715
         Deposits                                                        3,066
                                                                --------------
         Organizational Cost                                               193
                  Less: Accumulated Amortization                          (193)
                                                                --------------
                  Total Other Assets                                 3,449,781
                                                                --------------
TOTAL ASSETS                                                    $    4,761,638
                                                                ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
         Accounts Payable                                       $       27,675
         Mortgage Payable-Current                                      288,000
                                                                --------------
                  Total Current Liabilities                     $      315,675

Stockholders' Equity
         Common Stock, $.0008 par value,
           100,000,000 authorized, 7,654,836 issued
           and outstanding                                               6,124
         Additional Paid-in Capital                                  5,704,702
         Less: Stock Subscriptions Receivable                               (4)
         (Deficit) accumulated during dev. stage                    (1,264,859)
                                                                --------------
                  Total Stockholders' Equity                         4,445,963
                                                                --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $    4,761,638
                                                                ==============

     The accompanying notes are an integral part of the financial statements

                                      F-4
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                             STATEMENT OF OPERATIONS
                        FOR THE YEAR ENDED JUNE 30, 2000



Income (Development Stage)

         Executive Bonuses                                      $       15,000
         Officers' Salary                                               97,500
         Admin. Leased Employees Salaries                              107,788
         Payroll Taxes and Leasing Cost                                 49,911
         Employee Benefit Programs                                       3,368
         Advertising                                                     3,307
         Automotive Expense                                              6,885
         Bank Charges                                                      603
         Travel and Entertainment                                        7,734
         Farm Operation Expenses                                       101,733
         Consulting Fees                                                97,682
         Insurance                                                       9,131
         Depreciation                                                   13,139
         Legal and Professional                                          5,043
         Repairs and Maintenance                                           984
         Taxes and Licenses                                              1,645
         Postage and freight                                             4,751
         Marketing Expense                                              25,997
         Permitting Fees                                                 9,102
         Rent                                                           22,375
         Office Supplies and Expense                                    11,769
         Telephone                                                      14,306
         Stock Transfer Fees                                             3,589
         Public Stock and Administrative Fees                            6,693
         Utilities                                                       1,695
         Miscellaneous Expense                                           6,617
                                                                --------------
                  Total Operating Expenses                             628,347

Other Income (Expenses)
         Interest Income                                                 4,536
         Interest Expense                                             (567,742)
                                                                --------------
                  Total Other Income (Expenses)                       (563,206)
                                                                --------------

                  NET LOSS                                      $   (1,191,553)
                                                                ==============

                  Earnings Per Share (Loss)                     $        (.179)
                  Weighted Average Shares Outstanding                6,670,974

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

                                       F-5
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                             STATEMENT OF CASH FLOWS
                        FOR THE YEAR ENDED JUNE 30, 2000


Net Loss                                                        $   (1,191,553)

Adjustments to Reconcile Net Income to Net
   Cash Provided from Operating Activities:
   Depreciation & Amortization                                          13,139
   Executive Bonuses in exchange for stock                              15,000
   Employee Advances                                                    (1,050)
   Accounts payable                                                     25,370
   Accrued interest                                                     (6,205)
                                                                --------------
         Net Cash Provided (Used) by Operating Activities           (1,145,299)

 Cash Flows From (Used In) Investing Activities:
    Land and Improvements                                             (158,619)
    Greenhouses and Equipment                                         (681,939)
    Deposits                                                            (3,066)
    Other Fixed Assets                                                 (39,609)
                                                                --------------
         Net Cash Used In Investing Activities                        (883,233)

 Cash Flows From (Used In) Financing Activities:
    Common Stock Sold For Cash                                       2,294,797
    Notes and Mortgages                                               (189,464)
                                                                --------------
         Net Cash From Financing Activities                          2,105,333
                                                                --------------

Increase in cash                                                        76,801

Cash and cash equivalents, beginning of period                           1,882

Cash and cash equivalents, end of period                        $       78,683
                                                                ==============

     The accompanying notes are an integral part of the financial statements

                                       F-6
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                             STATEMENT OF CASH FLOWS
                        FOR THE YEAR ENDED JUNE 30, 2000


 Supplemental Cash Flow Information:

    Cash paid for interest                                      $      567,742
    Cash paid for income taxes                                  $            0


Non- cash Investing and Financing Activities:
    Conversion of Notes Payable To Restricted Stock             $      140,000
    Stock Subscriptions Receivable                              $            4

     The accompanying notes are an integral part of the financial statements

                                      F-6B
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                        FOR THE YEAR ENDED JUNE 30, 2000



                            Common Shares   Capital Amount    Retained Deficit
                            -------------   --------------    ----------------

Balance, June 30, 1999         5,841,200       3,407,834           (73,306)

  Common Shares Issued
  Under rule 504                 150,000         900,000

  Common Shares Issued
  To Discharge Debt               23,334         140,000

  Common Shares Issued
  As Executive Bonus              10,000          15,000


  5 for 4 Stock Split
  Approved Jan. 10, 2000
  for Stockholders' on
  Rec. as of December
  31, 1999                     1,506,175

  Exercised right to convert
  $744,758 line of credit
  into 124,127 shares of
  restricted common shares
  on June 25, 2000               124,127       1,247,992

  Net Loss for the year ended
  June 30, 2000                                                 (1,191,553)
                               ---------       ---------         ---------

Balance June 30, 2000          7,654,836       5,710,826        (1,264,859)
                               =========       =========         =========

     The accompanying notes are an integral part of the financial statements

                                       F-7
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                         NOTES TO FINANCIAL STATEMENTS

NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Company was incorporated on September 9, 1997, in the State of Florida under
the name of Synthetic Flowers of America, Inc. On January 15, 1999, a stock
purchase agreement was signed between Synthetic Flowers of America, Inc. and
David B. Howe, and the corporate name was changed to Pinecrest Investment Group,
Inc. (See Note B-Stockholders' Equity) Since January 15, 1999, the Company has
been involved in financial planning, the raising of capital, acquisition of
property, plant, equipment and other operating assets, training personnel and
developing of Markets. A brief list of the activities engaged in are as follows:
(a) the purchase of hydroponic technology from Michael Foundation, Limited and
Tillman & Associates, Inc., (b) entering into financial arrangements for funding
of hydroponic growth facility in Lithia, Florida, (c) purchase of 40-acre
property in Lithia, Florida to be used as site of first hydroponic growth
facility of the Company, (d) negotiate, contract and purchase greenhouse
materials and equipment to be used for the first hydroponic growth facility of
the Company, (e) acquire building and development permits for construction of
the Company's first hydroponic growth facility, (f) begin construction on first
hydroponic growth facility, (g) hire and train personnel for the Company's first
hydroponic growth facility, (h) specify and acquire computers, software and
furniture to be used in the Company's first hydroponic growth facility, (I)
maintain contact with future customers on timing of start-up of operations of
the Company's first hydroponic growth facility, and (j) revise the Company's
business plan as necessary.

Year End

The Company has elected June 30th as its fiscal year end.

Cash, Equivalents and Fair Value of Financial Instruments

All highly liquid investments with maturaties of three months or less when
purchased are cash equivalents. Cash equivalents are carried at the lower of
cost or market. Financial instruments that potentially subject the Company to a
concentration of credit risk consist principally of cash. During the period
presented the Company did not maintain cash deposits at financial institutions
in excess of the $100,000 limit covered by the Federal Deposit Insurance
Corporation. The Company does not hold or issue financial instruments for
trading purposes nor does it hold or issue interest rate or leveraged derivative
financial instruments.

Net Loss Per Share

In February 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings Per Share." SFAS No. 128 supersedes and simplifies the
existing computational guidelines under Accounting Principles Board ("APB")
Opinion No. 15, "Earnings Per Share." The statement is effective for financial
statements issued for periods ending after December 15, 1997. Among other
changes, SFAS No. 128 eliminates the presentation of primary earnings per share
and replaces it with basic earnings per share for which common stock equivalents
are not considered in the computation. It also revises the computation of
diluted earnings per share. The Company has adopted SFAS No. 128 and there is no
material impact to the Company's earnings per share, financial condition, or
results of operations. The Company's earnings per share have been restated for
all periods presented to be consistent with SFAS No. 128.

                                       F-8
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                          NOTES TO FINANCIAL STATEMENTS

NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(Continued)

The basic loss per share is computed by dividing the net loss for the period by
the weighted average number of common shares outstanding for the period. When
present, common stock equivalents are excluded from the computation if their
effect would be anti-dilutive. Shares issued at inception are considered to be
outstanding for the entire period presented.

Income Taxes

Deferred income taxes may arise from temporary differences resulting from income
and expense items reported for financial accounting and tax purposes in
different periods. Deferred taxes are classified as current or non-current,
depending on the classifications of the assets and liabilities to which they
relate. Deferred taxes arising from temporary differences that are not related
to an asset or liability are classified as current or non-current depending on
the periods in which the temporary differences are expected to reverse. The
deferred tax asset related to the operating loss carryforward has been fully
reserved.

The Company has not provided current or deferred income taxes for the period
presented due to a loss from operations. The Company currently has a net
operating loss carryforward which expires in 2013.

Property, Plant and Equipment

Property, plant and equipment are carried at cost. Depreciation of furniture and
fixtures, equipment, and other fixed assets are provided on the straight-line
method over the estimated useful life of the asset. Expenditures for maintenance
and repairs are charges against operations.

The technology purchased from Michael Foundation and Tillman & Associates, Inc.
will be amortized on a unit of production basis. The rate of amortization will
be $.015 per pound of product produced and will begin once the Company begins
production. Revenue generating operations are anticipated to begin in July 2000.
It is anticipated that the technology will be fully amortized over seven years.
Organizational cost have been fully expensed.

NOTE B-STOCKHOLDERS' EQUITY

On September 5, 1997, in connection with the original organization of the
Company, 4,000,000 shares of common stock was issued to Sheila Langley, the
original President of the Company, for services provided and reimbursement of
organizational costs and stock offering costs incurred by the Company but paid
for by Langley. Fair value used for this transaction of $.0025 per share is
based upon the fair value to the Company of the services provided and billings
from the Company's attorney.

Subsequently, on January 15, 1999, David B. Howe executed a stock purchase
agreement on behalf of himself and several independent investors to purchase
3,680,000 of the 4,000,000 shares owned by Langley for $150,000 cash. On March
2, 1999, the Company repurchased 2,185,000 shares of the 3,680,000 purchased by
Howe and the investors, for the purchase of the hydroponics technology from
Michael Foundation, Ltd. (See Note-E- Related Party Transactions); of the
remaining 1,495,000 shares, 400,000 shares were issued to Howe and the balance
between the investors.

On January 16, 1999, the Articles of Incorporation were amended to provide that
the aggregate number of shares of capital stock that the Corporation shall be
authorized to have outstanding at any one time shall be one hundred million
shares of common stock at $.001 par value per share and twenty-five million
shares of preferred at $.001 par value per share.

                                       F-9
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                          NOTES TO FINANCIAL STATEMENTS


NOTE B-STOCKHOLDERS' EQUITY-(Continued)

On January 10, 2000 the Company's Board of Directors' approved a 5 for 4 stock
split for shareholders of record on December 31, 1999, for a total of 1,506,175
additional shares. Also, the Board adopted the Pinecrest Investment Group, Inc.
Incentive Stock Option Plan December 1999, which was approved by a majority of
the shareholders. The Plan will be administered by the Executive Committee of
the Board of Directors of the Company and authorizes the Committee to grant or
award to eligible executives and employees of the Company and its subsidiaries,
until January 10, 2010, incentive stock options for up to 1,200,000 shares of
restricted common stock of the Company.

On January 26, 2000 the Company amended its Articles of Incorporation to
authorize a class of preferred shares consisting of 10,000,000 shares with no
par value per share.

NOTE C-OTHER ASSET-HYDROPONICS TECHNOLOGY

On March 2, 1999, the Company entered into agreements with Michael Foundation,
Ltd., a Costa Rican corporation, and Tillman & Associates, Inc., a Florida
corporation, for the purchase of certain hydroponics technology at a total
purchase price of $3,437,500. The purchase price in the agreement with Michael
Foundation, Ltd., consisted of 2,185,000 shares of restricted common stock with
a current market value of $1.50 per share. The purchase price in the agreement
with Tillman & Associates, Inc., consisted of 50,000 shares of restricted common
stock with a current market value of $1.50 per share plus a note in the amount
of $85,000.

The aforementioned information and technology purchase includes, but may not
necessarily be limited to, proprietary hydroponic growth solution formulas,
equipment and greenhouse specifications and crop and equipment maintenance plans
and programs.

An independent expert analysis opinion, dated January 22, 1999, was performed by
Jerry Pruitt, an agricultural consultant from Marbury, MD. His test included the
validity of the Hydroponics Growing System and the salability of the
retail/wholesale products derived from the process. Mr. Pruitt valued the
Hydroponics Growing System purchased by the Company at $3.2 million dollars.

The Company intends to grow several varieties of leaf lettuce, romaine lettuce,
spinach and a wide assortment of culinary herbs that it sell and distribute
directly to 4 and 5 star restaurants and resorts such as Disney World and
Marriott.

                                      F-10
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                          NOTES TO FINANCIAL STATEMENTS

NOTE D-MORTGAGE PAYABLE

Current debt consists of the following mortgage payable:

                                        Current    Non-Current       Total
                                        -------    -----------       -----
Hopewell Land Partners. Ltd.
Secured by 40 acres,Lithia, Fl.
Dated April 9, 1999. Rate of
interest- 12%, simple interest.
Interest only, balance July 9, 2000   $  288,000        -0-       $   288,000
                                      ----------    -------       -----------
                  TOTALS              $  288,000        -0-       $   288,000
                                      ==========    =======       ===========


On April 9, 1999 the Company purchased a 40-acre tract of land in Lithia, Fl.,
approximately 20 miles southeast of its Tampa, Fl. Corporate offices, for
$360,000. The Company provided $72,000 as a down payment and the seller,
Hopewell Land Partners, Limited, provided purchase money mortgage financing for
the balance of $288,000. The terms of the purchase money mortgage are interest
only at 12% per annum, payable monthly for one year, at which time, July 9,
2000, the balance is due and payable in full. The Company is pursuing mortgage
financing via a U.S. Rural Development Act Loan. However, discussions with
interested private lenders and individuals indicate that, should the need arise,
refinancing the first mortgage would not be a problem since the value of the
property along with the improvements currently being built indicate a loan to
value ratio of less than 50 percent. In addition, the mortgagee has granted the
Company an addition of ninety days on the payoff of this mortgage to July 9,
2000.

                                      F-11
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                          NOTES TO FINANCIAL STATEMENTS

NOTE E- RELATED PARTY TRANSACTIONS

On March 2, 1999, the Company purchased 2,185,000 shares of restricted common
stock from President, David B. Howe and affiliated investors for $90,000 (Howe's
cost) payable as follows: $30,000 cash and a note in the principal amount of
$60,000 bearing 10% simple interest, due September 2, 2000. These shares were
acquired by Howe and the investors in connection with his purchase of the
Corporation. (See Note-B-Stockholders' Equity). As of December 6, 1999, this
debt was converted to 13,334 shares of restricted stock.

These shares were then simultaneously exchanged as part of the purchase price
for the hydroponics technology from Michael Foundation, Ltd., and Tillman &
Associates, Inc., that is necessary in the overall operation of the hydroponic
herb and lettuce farm.

On December 6, 1999, the remaining balance of $80,000 due Tillman & Associates,
Inc. on the promissory note given in exchange for technology, was converted into
restricted common stock of the Company at a rate of $6.00 per share for a total
of 13,334 shares. The interest due on the note of $6,525.19 was paid in cash.
Mr. Tillman is President of Tillman & Associates, Inc. and is President of
Pinecrest Farms, Inc.

In December 1999, 10,000 restricted shares of common stock were issued to Sheryl
Salvadore, the Company's Corporate Secretary, pursuant to a grant to her as a
bonus on March 2, 1999 at a value of $1.50 per share.

In March 1999, the Company entered into a convertible line of credit with
Michael Foundation, Limited, a major stockholder of the Company. This credit
arrangement called for Michael Found- ation, Limited, to provide working capital
for the Company while it was arranging for acceptable long-term funding for its
Phase I construction and working capital needed until the Company att- ained
profitability. This line of credit was for a total of $900,000, which amount
could be converted into restricted common stock of the Company at a price of
$6.00 per share. By the end of November 1999, the Company had borrowed
approximately $300,000 against the Michael Foundation, Limited line of credit.
In December 1999, the line of credit arrangement with Michael Foundation,
Limited, was modified to call for the absolute purchase of 150,000 shares of
restricted common stock by Michael Foundation, Limited at a price of $6.00 per
share for a total of $900,000.

On April 10, 2000, the Company entered into a convertible line of credit
arrangement with Michael Foundation, Limited, a major stockholder of the
Company. This credit arrangement called for Mich- ael Foundation, Limited to
provide working capital, from time to time, for the Company while it was
arranging for acceptable long-term funding for its Phase 1 construction and
working capital needs until the Company attained positive cash flow. This line
of credit was for a total of $1,500,000, which could be converted into
restricted common stock of the Company at a price of $6.00 per share. On June
25, 2000, Michael Foundation, Limited exercised its right to convert $744,758 on
the line of credit, including approximately $8,991 in accrued interest, into
124,127 shares of restricted common stock at a price of $6.00 per share.

                                      F-12
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                          NOTES TO FINANCIAL STATEMENTS


NOTE E- RELATED PARTY TRANSACTIONS-(continued)

Pursuant to EITF 98-5, when the Company makes a draw of funds against the
aforementioned line of credit, a journal entry is made that: (1) debits the
amount of cash received; (2) credits the line of credit liability account; (3)
debits interest expense for the intrinsic value of the beneficial conversion
feature; and (4) credits Additional Paid in Capital for the same amount as
interest expense. The amount debited to the interest expense is calculated as
the difference between the fair value of the stock on the date the funds are
received and the beneficial conversion price of $6.00 multiplied by the number
of shares to be issued upon conversion, based upon that particular draw amount.
Upon conversion, a journal entry is made that (1) debits the line of credit
liability account for the appropriate amount to be converted (Conversion Price
of $6.00 per share times the number of shares being issued); (2) credits Common
Stock for the par value of the shares being issued; and (3) credits Additional
Paid in Capital for the balance.

NOTE F- INVESTMENT IN SUBSIDIARY

On April 8, 1999, Articles of Incorporation were filed for Pinecrest Farms,
Inc., a Florida corporation wholly-owned by Pinecrest Investment Group, Inc.
Pinecrest Farms, Inc., functions as a subsidiary of the Company and was formed
for the purpose of owning and operating the produce farms. The growing
technology and the land for the farms is owned by the Company.

As of June 30, 2000, substantially all expenditures were comprised of
construction of Phase 1 of the Company's Lithia, Florida hydroponic farming
facilities. The balance sheet of Pinecrest Investment Group, Inc. and Pinecrest
Farms, Inc. are consolidated for these financial statements.

                                      F-13
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY)


                             SUPPLEMENTAL STATEMENTS



Statement of Operations                                                   F-15
         For the period from September 9, 1997 (date of inception)
         through June 30, 2000


Statement of Cash Flows                                                   F-16
         For the period from September 9, 1997 (date of
         inception) through June 30, 2000


Statement of Stockholders' Equity                                         F-17
         For the period from September 9, 1997 (date of
         inception) through June 30, 2000

                                      F-14
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS
                FOR THE PERIOD FROM INCEPTION (SEPTEMBER 9, 1997)
                                TO JUNE 30, 2000

Income (Development Stage)

         Executive Bonuses                                      $       15,000
         Officers' Salary                                               97,500
         Admin. Leased Employees Salaries                              107,788
         Payroll Taxes and Leasing Cost                                 49,911
         Employee Benefit Programs                                       3,368
         Advertising                                                     3,307
         Automotive Expense                                              6,885
         Bank Charges                                                      718
         Travel and Entertainment                                        7,734
         Farm Operation Expenses                                       101,733
         Consulting Fees                                               124,442
         Dues and Subscriptions                                            160
         Insurance                                                       9,561
         Depreciation and Amortization                                  14,499
         Legal and Professional                                         13,543
         Repairs and Maintenance                                           984
         Taxes and Licenses                                              1,645
         Postage and freight                                             5,626
         Marketing Expense                                              26,676
         Permitting Fees                                                 9,102
         Rent                                                           23,375
         Office Supplies and Expense                                    12,338
         Telephone                                                      16,643
         Stock Transfer Fees                                             5,787
         Public Stock and Administrative Fees                           11,693
         Utilities                                                       1,695
         Miscellaneous Expense                                          16,684
                                                                --------------
                  Total Operating Expenses                             688,397

Other Income (Expenses)
         Interest Income                                                 4,536
         Interest Expense                                             (580,998)
                                                                --------------
                  Total Other Income (Expenses)                       (576,462)
                                                                --------------
                  NET LOSS                                      $   (1,264,859)
                                                                ==============

                  Earnings Per Share (Loss)                     $        (.190)
                  Weighted Average Shares Outstanding                6,670,974

                                      F-15
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                             STATEMENT OF CASH FLOWS
                FOR THE PERIOD FROM INCEPTION (SEPTEMBER 9, 1997)
                                TO JUNE 30, 2000


Net Loss                                                        $   (1,264,859)

Adjustments to Reconcile Net Income to Net
 Cash Provided from Operating Activities:
   Depreciation & Amortization                                          14,499
   Executive Bonuses in exchange for stock                              15,000
   Employee Advances                                                    (1,050)
   Accounts payable                                                     27,675
                                                                --------------
         Net Cash Provided (Used) by Operating Activities           (1,208,735)

Cash Flows From (Used In) Investing Activities:
   Land and Improvements                                              (158,619)
   Greenhouses and Equipment                                          (681,939)
   Deposits                                                             (3,066)
   Other Fixed Assets                                                  (39,609)
                                                                --------------
         Net Cash Used In Investing Activities                        (883,233)

Cash Flows From (Used In) Financing Activities:
   Common Stock Sold For Cash                                        1,981,187
    Notes and Mortgages                                               (189,464)
                                                                --------------
         Net Cash From Financing Activities                          2,170,651
                                                                --------------

Increase in cash                                                        78,683
Cash and cash equivalents, beginning of period                               0
                                                                --------------
Cash and cash equivalents, end of period                        $       78,683
                                                                ==============

                                      F-16
<PAGE>

                        PINECREST INVESTMENT GROUP, INC.
                         ( A DEVELOPMENT STAGE COMPANY )
                        STATEMENT OF STOCKHOLDERS' EQUITY
                FOR THE PERIOD FROM INCEPTION (SEPTEMBER 9, 1997)
                                TO JUNE 30, 2000



                            Common Shares   Capital Amount    Retained Deficit
                            -------------   --------------    ----------------

Common Shares Issued           5,841,200       3,407,834

Common Shares Issued
Under rule 504                   150,000         900,000

Common Shares Issued
To Discharge Debt                 23,334         140,000

Common Shares Issued
As Executive Bonus                10,000          15,000


5 for 4 Stock Split
Approved Jan. 10, 2000
for Stockholders' on Rec.
as of December 31, 1999        1,506,175

Exercised right to
convert $744,758 line of
credit into 124,127
shares of restricted
common shares on June 25,
2000                             124,127       1,247,992


Accumulated Loss from
incep. to June 30, 2000                                         (1,264,859)
                               ---------       ---------        ----------

Balance June 30, 2000          7,654,836       5,710,826        (1,264,859)
                               =========       =========        ==========

                                      F-17