U. S. SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549
                                     FORM 10-KSB
          (Mark One)
           ANNUAL REPORT  UNDER  SECTION  13  OR 15(d)  OF  THE  SECURITIES
          EXCHANGE ACT OF 1934

          For the fiscal year ended     December 31, 1999

           TRANSITION REPORT UNDER  SECTION 13 OR  15(d) OF THE  SECURITIES
          EXCHANGE ACT OF 1934

          For the transition period from                   to


          Commission file number      0-28291

                                 Far West Group, Inc.
                    (Name of small business issuer in its charter)

                 Arizona                                   86-0867960
          (State or other jurisdiction of       (I.R.S. Employer Identification
          incorporation or organization)         No.)

          1665 E. 18th Street, Tucson, AZ                    85719
          (Address of principal executive office)          (Zip Code)

          Issuer's telephone number (520) 740-1119

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

               Title of each class              Name of each exchange on which
                                                registered

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

                             $.0001 par vale common stock
                                   (Title of class)

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

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

          State issuer's revenues  for its most recent fiscal year     None.

          State  the aggregate  market value  of the voting  and non-voting
          common equity held by non-affiliates computed by reference to the
          price at which the common equity was sold, or the average bid and
          ask price of such  common equity, as of  a specified date  within
          the past 60 days.

          March 31, 2000                           $7,138,821

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

                        7,003,532 share as of March 31, 2000.

          If the following documents are incorporated by reference, briefly
          describe them and  identify the  part of the  Form 10-KSB  (e.g.,
          Part  I, Part II, etc.) into which the documents incorporate: (1)
          any  annual  report  to  security  holders;  (2)   any  proxy  or
          information statement;  and (3) any prospectus  filed pursuant to
          Rule 424(b) or  (c) of  the Securities Act  of 1933  ("Securities
          Act").   The  listed documents  should be  clearly described  for
          identification  Transitional  Small  Business  Disclosure  Format
          (Check one). Yes    ; No    .


<PAGE>
          PART I

          Item 1:  Description of Business.

          Organization

          Far  West Group  Inc. (The  Company or  "FarWest")  was organized
          under the laws  of the state of Nevada in July  1996.  In July of
          1996,  the Company was  merged with  Pro Vantage  Corporation, an
          inactive public Company  which was incorporated  in the State  of
          Florida  in  1992.   FarWest was  the  surviving Company  in that
          merger.  Concurrently, the FarWest Pump Company ("Pump Company"),
          an  Arizona  corporation formed  in  1986 became  a  wholly owned
          subsidiary of the Company.   From July 1996 through  December 31,
          1998, the Company  operated FarWest Pump Company as  an operating
          subsidiary.   The operations of  Pro Vantage were discontinued in
          July 1996,  immediately following the merger  with FarWest Group,
          Inc.  as of  January  1,  1999,  the  Company  had  no  operating
          subsidiaries.

          In  March of  1999, the  Company's Board  of Directors  agreed to
          accept  an  offer from  Pump  Company management  to  acquire the
          outstanding shares of the Pump Company, retroactive to January 1,
          1999.  The stock sales agreement was completed in May of 1999 for
          deferred payments  totaling  $270,000  to be  paid  to  the  Pump
          Company for assuming all existing liabilities,

          Current Transactions

          In  late December  1999, the  Company entered  into a  multi-step
          investment contract with  Asea Brown Boveri,  Inc. (ABB). In  the
          investment  agreement, ABB  agreed to  purchase from  the Company
          250,000  shares of the Company's common stock at a purchase price
          of $2.00 per share on or before December 31, 1999.  That purchase
          was  completed   and   provided  resources   for  the   Company's
          activities.

          In addition,  ABB purchased an  additional 250,000 shares  of the
          Company's common stock at a purchase price of $2.00 per  share in
          February  2000.    ABB  also  received   options  to  acquire  an
          additional  250,000 shares  of  FarWest Group  common stock  at a
          purchase price of $2.00 per  share on each of March 30,  2000 and
          April  30, 2000.    On  April  10,  2000,  the  Company  received
          notification  from ABB  that  it would  not  exercise the  equity
          options, which eliminated any other options which  ABB would have
          maintained  if such  equity  options  had  been exercised.    ABB
          currently  is  the  largest  non-management  shareholder  of  the
          Company   with  500,000   shares  of   common   stock  reflecting
          approximately seven (7%) percent equity position in the Company.

          Technology

          In  January 1997,  the Company entered  into a  manufacturing and
          marketing  license  agreement  with Lawrence  Livermore  National
          Laboratories ("Lawrence Livermore") whereby the  Company obtained
          the   rights  to   Lawrence   Livermore's   patented   Capacitive
          Deionizaton  Technology  (CDT).   (That  technology  is described
          below.)  The manufacturing and marketing license is effective for
          the life of the patents (up to 17 years), with  most such patents
          expiring in the year 2010.   To maintain the license the  Company
          must make contracted minimum  annual royalty payments to Lawrence

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          Livermore,  in  the amount  of $25,000  per  year.   Although the
          Company  has  in the  past failed  to  make the  minimum annually
          royalty payment  when due, the  Company has recently  brought its
          obligations  to  Lawrence  Livermore  current and  has  made  all
          minimum  royalty  payments  due.   The  agreement  provides  that
          Lawrence  Livermore can  terminate the  license agreement  in the
          event that the Company fails to perform its obligations under the
          agreement by  giving the Company  sixty (60) days  written notice
          within which to cure its obligations under the license agreement.
          The  Company has  never  received  such  a notice  from  Lawrence
          Livermore.     In  the  future,  as  the  Company  begins  active
          production   of  products  covered   by  license   from  Lawrence
          Livermore,  the  Company  will  owe  Lawrence  Livermore  royalty
          payments  varying from one (1%)  percent of product  revenue to a
          maximum of five (5%)  percent of product revenue.   The variation
          is  determined by  the volume  of sales,  as well  as the  use of
          different  portions  of  the  Lawrence  Livermore  technology  in
          products which are the source of the revenues which determine the
          royalties  that must  be  paid.   Although  FarWest is  the  only
          licensee  for the carbon aerogel technology which is the basis of
          the Company's capacitive deionization technology, the license  is
          non-exclusive  in that  Lawrence  Livermore  could license  other
          entities to use  some or  all of  the technology  covered by  the
          existing license with the Company.

          The  Company's capacitive deionization  technology, or  CDT, uses
          deionization  to  convert  a  contaminated water  supply  into  a
          "clean" water stream  and a waste stream.  As  implemented by the
          Company, the technology involves coating pairs of electrodes with
          a carbon coating known as carbon aerogel.  The carbon  aerogel is
          porous  and has an extremely high ratio of ion collection area to
          surface area,  due to  the structure  of the  aerogel.   The  ion
          collection  area  presented by  carbon  aerogel  is greater  than
          60,000 times the surface area of the electrode.  In the Company's
          system, a salt water or impure water stream is  passed through an
          electrostatic  field  established  between  pairs  of  electrodes
          coated  with carbon  aerogel.   The  negative electrode  attracts
          positively charged  ions, such as calcium or magnesium, while the
          positive  electrode attracts  negatively  charges  ions  such  as
          chloride or nitrate.  Those ions are pulled  out of suspension of
          the  water  stream  and held  by  the  electrodes  in the  carbon
          aerogel,  until either the power  is turned off  or the electrode
          charge  is  reversed.    As  a  result,  with  a  relatively  low
          application of energy, the Company's technology is able to remove
          a  wide variety of contaminants  or other molecules  from a water
          steam through the creation and holding of charged particles.

          The Lawrence Livermore license authorized FarWest to manufacture,
          market and enhance the CDT, specifically in the fields of:

          Desalination and Brackish Water
          Groundwater Remediation
          Pure Water for Boiler Applications
          Ultra Pure Water for Manufacturing
          Nuclear Waste Remediation
          Medical Application
          Bottled Water for Drinking

          The aerogel product licensed from Lawrence Livermore Laboratories
          in January 1997 operated  at low voltage levels  (compatible with
          solar   energy  sources)   with  resulting   favorable  operating
          economics,  but  the  cost   of  manufacture  with  the  original
          technology  was too  expensive  to be  commercially  competitive.
          Therefore, initial Company efforts were focused on cost reduction

                                       3
<PAGE>
          programs.   Those programs,  aimed at reducing  the manufacturing
          cost of carbon aerogel, included improvement related to utilizing
          equally effective but  less costly  materials as a  base for  the
          carbon  aerogel  and developing  systems  which  allow the  waste
          stream to access both sides of carbon aerogel, as  opposed to the
          single side of carbon aerogel which could be accessed in the form
          in  which the technology was developed by Lawrence Livermore.  In
          addition,  the   Company  continues   its   efforts  to   develop
          proprietary   improvements   to  further   reduce  the   cost  of
          manufacturing and operation of the CDT system.

          FarWest has completed development  of its first release CDT  unit
          and  plans   to  commence  in-house   prototype  manufacture  and
          construction of  demonstration and  pilot water  treatment plants
          for  clients during fiscal year 2000.

          Development

          Since 1997,  FarWest has increased the  cost-effectiveness of the
          original aerogel product by approximately 15 times.  The  Company
          had research and development expense of $234,000 in 1998 and over
          $500,000  in 1999.  The Company believes that its current version
          of the CDT  product is competitive  with other water  remediation
          methods,  particularly for  brackish  water (up  to 10,000  parts
          total  dissolved solids (TDS) per  million), in light  of its low
          power  and other operating cost advantages.  CDT, as developed by
          the Company, has been reviewed  by Lawrence Livermore and several
          large  companies familiar  with Reverse  Osmosis and  other water
          treatment systems.   Officials  from foreign governments  such as
          Jordan  and South  Africa  have  indicated  an  interest  in  the
          Company's  technology and  the  response  from  those  government
          officials, as well  as the  interest in the  technology shown  by
          multi-national companies,  lead the  Company to believe  that the
          technology will be competitive.  The Company believes that CDT is
          the  only available  economically viable  alternative to  Reverse
          Osmosis, the most  widely used  system, for a  broad spectrum  of
          large-scale    brackish    water   and    industrial   ultra-pure
          applications.

          While  the basic  carbon  aerogel patent  is  owned by  the  U.S.
          Government,  through Lawrence  Livermore, there  are a  number of
          improvements in  other materials  and processing which  have been
          developed by, and  are proprietary  to FarWest, and  need not  be
          licensed  back to Lawrence Livermore.   The Company believes that
          the improvements account for  the significant improvement in cost
          effectiveness  of  CDT.   It is  expected  that several  of these
          proprietary improvements will be  patented by FarWest and certain
          others may be maintained as "trade secrets".  To date the Company
          has not obtained patents  on any of its improvements on  the base
          technology  license  from Lawrence  Livermore.    The Company  is
          continuing to evaluate with its counsel the best policy regarding
          protection  of intellectual  property rights.    Those strategies
          could include  filing  patents  with  regard to  certain  of  the
          improvements, treating the improvements and developments as trade
          secrets or  pursuing other intellectual  property strategies  for
          the protection  of the technology  developed by the  Company from
          the Lawrence Livermore technology.

          The Business

          In 1998, the Company began a marketing effort to bring its carbon
          aerogel  technology  to  the  attention of  the  water  treatment
          market.   The Company  believes that potential  customers for the
          Company's   CDT  technology  will  initially  include  government
          organizations in developing  nations, particularly  those in  the
          Middle  East, North  Africa  and Asian  Pacific geographic  areas

                                       4
<PAGE>
          where  access  to  sufficient  amounts  of  potable  water  is of
          concern.   In  addition  to government  organizations seeking  to
          insure appropriate water supplies for their citizens, the Company
          believes that international and  humanitarian groups will also be
          interested in  pursuing the Company's  technology as  a means  of
          providing  humanitarian  relief  in  areas suffering  from  water
          shortages.  The Company also believes that potential users of its
          technology include  corporations in  the United States  and other
          global markets  that require  water purification  and filtration.
          The technology also should have market applications in industries
          such  as  electronic  manufacturing,  medical  manufacturing  and
          multiple  waste  water  treatment  applications.    FarWest  will
          concentrate on water  industry seminar presentations,  technology
          papers and technology demonstrations  to reach its target market.
          The Company's marketing  efforts are occurring in the  context of
          the pervasive world-wide search for water safe to drink and water
          suitable for agriculture, industry,  and other applications.  CDT
          is capable  of treating   a wide  range of water  inputs and  can
          provide from  a single CDT system  a range of  outputs, geared to
          the ultimate use of  purified water, that is, human  consumption,
          agriculture,  or ultra-pure  water for  industrial  and medicinal
          use.  CDT is thus not confined to a particular niche in the water
          treatment industry.   The industry as a  whole has become a focus
          of interest  among the  sources of international  grant and  loan
          financing  due to the belief  that a global  water crisis appears
          imminent.

          The  Company  shifted  its  emphasis  in  mid-1999  to  bring its
          prototype manufacturing  capability on-line  to satisfy  at least
          the  first group  of  pilot  plants  for  which  it  had  already
          committed (Arizona Public Service  for industrial water and solar
          power  use; Carlsbad,  California  for municipal  water; and  the
          Kingdom  of Jordan  for municipal  water.   The Company  has been
          informed by the Minister  of Water and Irrigation of  the Kingdom
          of  Jordan that formal approval  has been received to immediately
          proceed  with final  contractual  negotiations  of the  project).
          Under the Jordan agreement, the Company and the Kingdom of Jordan
          will  establish a  pilot plant  which will  have the  capacity to
          produce  100,000 gallons of drinking  water per day  and with and
          estimated value of approximately  $1,000,000.  The drinking water
          will be processed from  a brackish water input  with installation
          of the  pilot plant scheduled to  be completed in late  2000.  If
          the pilot plant is successfully operated  for 6 to 12 months, the
          Kingdom of Jordan and the Company will expand the relationship to
          create a  production plant producing  over 20 million  gallons of
          drinking water per day.

          To manufacture the large quantities of carbon aerogel expected to
          be required to meet future industrial demands, beyond the limited
          requirements of demonstration and pilot plant facilities, FarWest
          must  arrange major  plant  financing perhaps,  in part,  against
          delivery  contracts, or as joint venture operations.  The Company
          is currently exploring  strategic corporate partnerships  as well
          as  evaluating  suitable out-sourcing  manufacturing partnerships
          for short-term requirements.

          Sales and Marketing

          FarWest plans to operate primarily as a supplier of CDT units and
          the  related electronic control systems to  builders of new water
          treatment  plants or  as replacement  technology for  other water
          treatment  equipment  as it  becomes  obsolete or  too  costly to
          operate and maintain.  The CDT units will represent a substantial
          part of the cost of new or renovated water treatment facilities.

          The Company does not plan to develop its own capability to act as
          prime  contractor for  engineering, constructing,  operating, and
          owning treatment plants.   It will  engineer and construct  pilot

                                       5
<PAGE>
          plants, and  will support the planning,  proposing, training, and
          maintenance  activities  of  prime  contractors  who contract  to
          install  CDT-based   plants.     The  Company  expects   to  sell
          purchasers, both private and governmental, on the merits of using
          CDT, either alone or in conjunction with  prime contractors where
          it has entered into selling or strategic relationships.

          In  some  countries,  FarWest   is  negotiating  with   potential
          partners, local  or  international, capable  of  engineering  and
          executing major water treatment plant construction and subsequent
          operation.   In addition to the financing from equity investments
          made  by strategic  partners, the  contract with  the  Kingdom of
          Jordan includes an initial payment of approximately $300,000 with
          additional progress  payments during the construction  of the CDT
          system.

          Discontinued Operations - Well Drilling Pump and Services

          FarWest Pump Company was  formed in 1986 to provide  drilling and
          pump services in Arizona and Western  New Mexico.  It included an
          operating  division,   Arizona  Well  Services,   which  provided
          wholesale parts services to  FarWest Pump and other clients.   In
          the  fourth quarter of 1998  discussions were initiated with Pump
          Company  management for the purchase  of Pump Company.   In March
          1999,  the Company's Board  of Directors  agreed to  sell FarWest
          Pump  to  their management  team effective  January  1, 1999.   A
          Purchase  Agreement was  entered into  May 24, 1999,  whereby the
          stock of FarWest Pump was acquired by the Pump Company Management
          team for deferred  guaranteed payments  from the  Company of  two
          hundred seventy thousand ($270,000) dollars as  consideration for
          the assumptions  of all  net liabilities (over  $650,000) of  the
          Pump Company.

          Item 2:   Description of Properties.

          The Company  maintains administrative  offices at 1665  East 18th
          Street, Suite 113,  Tucson, AZ   85719.   There is  approximately
          1,500  square feet of administrative space.  At the same location
          the Company has completed a prototype system assembly facility of
          approximately  3,000 square  feet.   This  is leased  space which
          offers expansion capabilities.

          The  Company  is  in  discussions  with  an investment  group  in
          Livermore, California to build  a Research and Development Center
          adjacent to Lawrence Livermore  which would be operational within
          the  next year.  The Corporate Headquarters may also be relocated
          to this Livermore,  California location.   However, at this  time
          the Company  has no definitive  agreements for any  additional or
          different facilities  and will pursue any  such arrangements only
          if financial resources are available.

          Item 3:  Legal Proceedings.

          Three former  employees of the  Company or its  former subsidiary
          FarWest Pump Co. have filed a lawsuit in Maricopa County Superior
          Court alleging the Company  failed to pay them certain  wages and
          provided them with certain stock options.  The  former subsidiary
          of  the Company, FarWest Pump, Inc., has also entered the lawsuit
          and asserted  various claims  against the three  former employees
          and  their   current  employer,  Duncan   Pump,  Inc.,  including
          conversion,   civil   conspiracy,   wrongful  interference   with
          contractual relationships,  and violation of trade  secrets.  The
          employees  seek  to recover  approximately $250,000.00  in future
          wages  and,  in the  aggregate, have  asked  to be  awarded stock

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          options  permitting the purchase of up to 630,000 shares of stock
          of  the  Company at  $.25  per share.    The employees  have also
          requested that any  damages awarded be trebled under  Arizona law
          applicable to the failure of an employer to pay wages.

          The  Company is contesting  this matter vigorously.   The Company
          does not believe that  there is validity to the  claims; however,
          should the Company be required to pay damages as a  result of the
          litigation,  beyond stock  considerations,  the payments  of such
          damage  awards may  have  an adverse  effect  upon its  financial
          condition.

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

          There were no matters submitted during the fiscal year covered by
          this report to a vote  of security holders, through  solicitation
          of  proxies or otherwise prior to the  filing of the Form 10SB in
          November 1999. The Company  has not previously been obligated  to
          file  quarterly or annual reports  timely.  The  Company will now
          file those  reports with the SEC.   The public may  read and copy
          any material files  with the  SEC at the  SEC's Public  Relations
          Reference Room at 450 Fifth Street, N.W., Washington, D.C.  20549
          and/or  obtain  information  on   the  operation  of  the  Public
          Reference  Room  by  calling  the  SEC  at  1-800-SEC-0330.    In
          addition, the  Company  has become  an electronic  filer and,  as
          such, all items filed by the  Company with the SEC which  contain
          reports, information statements,  and other information regarding
          issuers that file  electronically with the SEC  will be available
          at   the   SEC's   website.      That  site   is   available   at
          http://www.sec.gov.  The Company also  maintains an Internet site
          which  contains  information about  the  Company.    The site  is
          available at http//www.FarWestgroup.com.

          PART II

          Item  5:   Market  for  Common  Equity  and  Related  Stockholder
          Matters.

          Stock Prices and Dividend Information

          The Common shares of  the Company traded on the  NASDAQ Over-the-
          Counter market  under the  trading symbol  "FWST" from  July 1996
          through December 2, 1999, at which time the Company's shares were
          removed  from the  NASDAQ  Over-the-Counter system  and began  to
          trade  in the "pink sheets".  The following NASDAQ supplied table
          sets forth  for the period indicated the  high and low bid prices
          during the period through  to December 31, 1999.   The quotations
          below  reflect   inter-dealer  prices,  without   retail  markup,
          markdown or commission and may not represent actual transactions.
          For current  price information, FWST shareholders  are encouraged
          to consult publicly available sources.


          1999HighLow
          First Quarter                       1 1/8             1/4
          Second Quarter                      5 1/4          2 1/32
          Third Quarter                       3 1/8           1 1/2
          Fourth Quarter                      2 5/8           1 1/8

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          1998
          First Quarter                       1 1/4            5/16
          Second Quarter                        3/4            5/16
          Third Quarter                         3/4             1/2
          Fourth Quarter                       9/16             1/4

          1997
          First Quarter                       1 3/8             1/8
          Second Quarter                        1/2             1/4
          Third Quarter                           1             1/4
          Fourth Quarter                       3/16             1/4

          At  March 31,  2000  the  Company  had  8,163,532  Common  Shares
          outstanding on a fully diluted  basis and had approximately three
          hundred and fifty (350) shareholders of record.

          Recent Financing

          In  April 1999, the Company issued 626,500 shares of Common Stock
          of  the  Company  to a  group  of  investors  under Rule  504  of
          Regulation  D as additional capital for the Company.  The Company
          received  $283,250 for  those shares.   The  market price  of the
          Company shares  of the  Company when  this private  placement was
          subscribed  ranged from $0.25 to $0.75 during the months of March
          and  April 1999, prior  to the transaction.   The pricing  of the
          placement ($0.32 to  $0.50) was determined with reference  to the
          mid-range of prices  during the  prior month with  a discount  to
          reflect the restrictive nature of these securities.

          In March of 1999, the Company issued 1,643,000 shares to  a group
          including  directors,  officers,   employees,  consultants,   and
          service  providers as  compensation  for the  services previously
          furnished  the  Company.   These shares,  which  have a  two year
          restriction, were issued at  a rate of $0.25 per share  bid based
          on  the average  bid  price of  the common  stock at  the closing
          quarter's prices.    The  shares were  issued  in  reliance  upon
          Section 4(2) of the Securities Act of 1933.

          In July 1999,  the Company  issued 253,333 shares  of its  common
          stock  upon the  partial conversion  of a  convertible promissory
          note issued by the Company in January 1998.  The issuance of such
          stock  was  completed  in  reliance  upon  Section  4(2)  of  the
          Securities Act of 1933.

          In  September 1999, the Company  issued warrants for the purchase
          of  410,000 shares of its  Common Stock, with  exercise prices of
          $0.50 to $1.70 per share and expiring in 2002.  The warrants were
          issued in settlement of a  dispute with a party which  had sought
          to obtain financing and  for legal services for the Company.  The
          warrant  was  issued in  reliance  upon  the exemption  found  in
          Section 4(2) of the Securities Act of 1933.

          In  December  1999,  the   Company  entered  into  an  Investment
          Agreement with  ABB  Inc.  (Item 1)  whereby  ABB  would  acquire
          500,000  shares  of unregistered  Rule 144  stock  at a  price of
          $2.00.  ABB also had two equity  options to acquire an additional
          250,000 shares  (at $2.00) on March  30 and April 30,  2000.  The
          initial 500,000  share purchase  was completed in  February 2000.
          In April,  the Company  received notification  from  ABB that  it
          would not exercise its equity options.

                                       8
<PAGE>
          The  only investments within the  past two years  (1998 and 1999)
          involving management were the payment of accrued salaries through
          the  issuance of  restricted common  stock.   Mr. Vaught  and Mr.
          Talley  each converted  $105,000 of  salaries accrued  during the
          last  two  years  to stock  as  indicated  (Item  10    Executive
          Compensation).   No other director, officer,  or beneficial owner
          of over five (5%) percent of a class stock had involvement in any
          transaction exceeding $60,000.

          The Company has no fixed dividend policy.  The Board of Directors
          from time  to time  having regard to  operating results,  capital
          requirements,  and general  financial condition  and requirements
          may consider  dividend distributions.   The  Company has  paid no
          dividends  at  any  time.   For  the  foreseeable  future, it  is
          anticipated that the Company will use all available cash flows to
          finance  its  growth  and that  dividends  will  not  be paid  to
          shareholders.

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

          Financial Condition and Results of Operations

          The  Company   has  recently  completed  its   development  stage
          operations.  Pilot production began in the first quarter of 2000.
          From execution of the Lawrence Livermore licenses in January 1997
          through  the current  period,  the Company  has concentrated  its
          efforts  primarily on improving the cost performance basis of the
          CDT technology.

          The Company did not recognize  any revenue through 1999  although
          pilot  contracts were  received during the  period.   The Company
          currently is negotiating additional pilot contracts and alliances
          both domestically and in the international market.

          The Company was funded  initially through the merger of  the Pump
          Co.  and investment by the major shareholder.  Since 1998 funding
          has been through private  placements; which totaled approximately
          $800,000.   Private  placement  opportunities have  continued  in
          early  2000.  In addition, the equity financing received from ABB
          provided the operating capital required by the Company until  the
          Company receives funding from  the Kingdom of Jordan pursuant  to
          the pilot contract in negotiations.

          Operations for the Next Twelve Months

          Business  opportunities  for  the   next  twelve  months  include
          international  CDT  systems   sales  to  governments   and  major
          multinational  industrial  corporations  and  U.S.  pilot  sales.
          Several   opportunities  are   now  being   discussed  including:
          governments, humanitarian trust funds, industrial joint ventures,
          market  sectors,  and  geographic  distribution  agreements.   As
          indicated above, the  Company is  engaged in a  variety of  pilot
          plant activities.  Those  activities can be categorized  into two
          sectors:    the first;  the pilot  plant  is operated  at Company
          expense  to  continue  the   development  of  the  Company's  CDT
          technology and to prove the concept for which a larger production
          plant might be established.  A second type of pilot program is to
          produce revenue  and/or gain contracts for  larger production CDT
          systems, to be built in the future.  Pilot contracts usually last
          from 3 to 12 months.   Although some contracts, such as the pilot
          program with the Kingdom of  Jordan described above will generate
          revenue for the Company,  the Company does not expect  to require
          funds beyond potential private placements, the  equity investment
                                       9
<PAGE>
          which  was provided by  ABB plus the  payments to be  made by the
          Kingdom of Jordan.

          The Company  recognizes  the  financial  investment  required  to
          support  the  potential business  opportunities  which  are being
          discussed.  There is  no guarantee that the Company  can complete
          the  funding   necessary   to  develop   the  manufacturing   and
          engineering infrastructure to complete  the potential CDT orders.
          The  Company  is  currently  discussing  financing  options which
          include:

          -    International   Investment    Agreement   with   application
               marketing rights;
          -    Corporate  Partnership  for  Manufacturing  which  could  be
               expanded to include marketing services;
          -    Joint ventures with international investment groups; and
          -    Government-sponsored programs.

          In addition,  a religious humanitarian fund  is evaluating equity
          investment in  the Company and CDT  installation opportunities in
          the Mid-East.  Management believes that there is a probability of
          obtaining  the  required financing  for  the  next twelve  months
          through one  of the above.   However, there is no  assurance that
          such  funding  will be  obtained in  the  time cycle  required to
          support ongoing Company operations.

          Limited Operating History

          The Company, although having completed its development stage, has
          had a limited operating  history upon which an evaluation  of its
          future  performance and prospects  could be made.   The Company's
          prospects  must be  considered in light  of the  risks, expenses,
          delays, problems, and difficulties frequently  encountered in the
          establishment  of a  new  business in  an  emerging and  evolving
          industry.  Since inception, the Company has generated no revenues
          and has incurred operating losses resulting in a  working capital
          deficit.  Inasmuch as  the Company will have an  increasing level
          of operating expenses  and will be  required to make  significant
          up-front expenditures  in connection with the  development of its
          business, the  Company anticipates that losses  will continue for
          at least the next twelve months or until such time as the Company
          is able to generate sufficient revenues to finance its operations
          and the costs of continuing expansion.  There can be no assurance
          that the Company will be able to generate significant revenues or
          achieve  profitable  operations.    In addition  to  the  efforts
          described above, the Company will engage in a variety of research
          and  development activities  including Joint  Venture Development
          Contracts during the next  12 months.  The Company  will continue
          to  seek to improve the  price performance and  efficiency of the
          carbon aerogel.  In  addition, the Company will seek  to increase
          the efficiency of power utilization and power recapture, as  well
          as seeking  to automate manufacturing and increase the ability to
          monitor and control its pilot systems through the Internet.

          Need for Additional Financing

          The Company is  dependent upon the proceeds of proposed offerings
          of the Company's securities to implement its business plan and to
          finance its  working capital requirements.   Should the Company's
          plans  or its  assumptions change  or prove  to be  inaccurate or
          offering  proceeds   be  insufficient   to  fund  the   Company's
          operations,  the Company  would  be required  to seek  additional
          financing sooner  than anticipated.   Management is  confident it

                                       10
<PAGE>
          will be able to  continue obtaining equity investment principally
          through private placements.

          There  can  be  no assurances  given  that  the  Company will  be
          successful  in generating  sufficient revenues  from  its planned
          activities  or in  raising  sufficient  capital  to allow  it  to
          continue  as   a  going  concern  which   contemplates  increased
          operating expenses, acquisition of assets, and the disposition of
          liabilities  in the normal course of business.  These factors can
          affect the  ability  of  the  Company to  implement  its  general
          business   plan   including  the   completion  of   the  required
          manufacturing  facilities and  continued proprietary  CDT product
          improvements.

          The Company  recently expanded  its  facility and  is engaged  in
          preliminary  discussions for  the development  of a  new facility
          adjacent to Lawrence Livermore  in which the Company's operations
          would  be  housed.   Final  decisions regarding  any  such future
          activity will be dependent on the Company's ability  to negotiate
          a transition to a new facility which does not involve significant
          capital investment  by the Company, but  instead involves monthly
          lease  payments in  a  range acceptable  to  the Company.   As  a
          result,  the   Company's  activities  with  regard   to  possible
          expansion of its physical  facilities are not expected to  have a
          significant  adverse effect  on the  Company's budget  or working
          capital.

          As disclosed elsewhere herein,  full utilization of the Company's
          CDT technology will require the establishment of a carbon aerogel
          production facility, to produce the CDT systems incorporating the
          aerogel  technology and  the  capactive deionization  technology.
          The  Company believes that  the production facility  will have an
          initial cost  of approximately $5 million.   Although the Company
          has  no commitments with any  party to provide  such funding, the
          funding   of  such   facility  is   being  discussed   with  both
          organizations  skilled  in  the  establishment  of  manufacturing
          facilities   and   financial   parties   considering   additional
          investments.

          Technology

          Capacitive  Deionization  Technology,  which  was  licensed  from
          Lawrence Livermore, has  been and remains  the foundation of  the
          Company's future.   The Company  has concentrated its  efforts on
          adding proprietary enhancements to CDT to provide insulation from
          not  only  other  technologies  but  as  protection  if  Lawrence
          Livermore  decided  to  consider  other  licensees.    Any  other
          licensee  would have  to  license Lawrence  Livermore's 1996  CDT
          Technology  and  avoid  FarWest's  proprietary  rights  and trade
          secrets  to  enter  the  market.     FarWest  has  discussed  the
          possibility of  obtaining  an  exclusive  license  from  Lawrence
          Livermore;  however,  there  is  no   guarantee  that  continuing
          negotiations with Lawrence Livermore will result in any exclusive
          arrangement with respect to the CDT technology.

          Other Business Matters

          Government Approvals and Regulations

          The  Company understands that  governmental approvals, particular
          those from  the Environmental  Protection Agency with  respect to
          emission   controls  at   any   aerogel  manufacturing   facility
          established   by  the   Company,  will   be  necessary   for  the
          establishment  of the  Company's  operations.   In addition,  the
          Company believes  that compliance with federal,  state, and local
          laws or  regulations  which  have  been  enacted  or  adopted  to
          regulate  the environment have not to date, nor are they expected

                                       11
<PAGE>
          to  have  a material  effect in  the  future, upon  the Company's
          operations, product development, capital  expenditures, earnings,
          competition, or financial position.  The expenditures required to
          allow the Company to  comply with Environmental Protection Agency
          statutes  and  regulations  must  be included  in  any  financial
          package obtained to establish the  manufacturing facilities which
          will become subject to the environmental regulations.

          Information  Regarding  and  Factors   Affecting  Forward-Looking
          Statements

          Forward-looking statements include  statements concerning  plans,
          objectives, goals, strategies, future events  or performances and
          underlying assumption, and other  statements which are other than
          statements of  historical  facts.   Certain statements  contained
          herein are  forward-looking statements and,  accordingly, involve
          risks  and  uncertainties which  could  cause  actual results  or
          outcomes  to  differ  materially  from  those  expressed  in  the
          forward-looking statements.  The Company's expectations, beliefs,
          and projections are expressed  in good faith and are  believed by
          the  Company  to  have  a  reasonable  basis,  including  without
          limitations,  management's  examination  of historical  operating
          trends, data contained in  the Company's records, and other  data
          available  from third parties, but there can be no assurance that
          management's expectations, beliefs,  or projections will  result,
          or be achieved, or accomplished.

          Item 7:  Financial Statements.

          Information  required  by  this  item appears  in  the  Financial
          Statements  and  Auditor's  Report  of FarWest  Group,  Inc.  for
          December 31, 1999 and 1998 as listed under Item 13.

          Item 8:  Changes in and Disagreements with Accountants

          There  have been  no  disagreements on  accounting and  financial
          disclosures from the inception of the Company through to the date
          of this Registration Statement.

          On  November  1,  1999,  the  Company's  directors  approved  the
          appointment of  Jackson & Rhodes  P.C. as the  Company's auditors
          for  the periods ending December 31, 1997, December 31, 1998, and
          December 31,  1999.   The Company's audited  financial statements
          for  the period ending  December 31, 1998,  and 1999 are  part of
          this Statement.

          PART III

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

          See Item 11.

                                       12
<PAGE>
          Item 10:  Executive Compensation

          Executive Name and Principal Position

          Clark Vaught   Chairman, Chief Executive Officer
          Dallas Talley   President, Financial Officer, Director
          Chris Sheppard   Vice President Development, Director

                                       Cash         Non-Cash           Total
          Name               Year  Compensation  Compensation(2)  Compensation

          Clark Vaught       1999    $37,500       $105,000          $142,500
          Dallas Talley      1999    $37,500       $105,000          $142,500
          Chris Sheppard     1999    $37,500       $ 37,625          $ 75,125

          Clark Vaught       1998    $96,000       $     0           $ 96,000
          Dallas Talley      1998    $72,000       $     0           $ 72,000
          Chris Sheppard     1998    $72,000       $     0           $ 72,000

          Clark Vaught       1997    $72,000       $     0           $ 72,000
          Dallas Talley (1)  1997    $    0        $     0           $     0
          Chris Sheppard     1997    $60,000       $     0           $ 60,000

          (1) Mr. Talley joined the Company in March 1998.
          (2) Represents the  issuance of Common  Stock in satisfaction  of
          accrued, unpaid salary.

          There are currently no  Long-Term Compensation programs in effect
          for officers or directors.

          1998-1999 Stock Option Grants

          NONE

          The Company does not provide cash compensation for the members of
          the  Company's Board of  Directors, in their  roles as directors.
          (Directors who  are employees receive  the compensation described
          above  for their services as employees of the Company.)  However,
          each director is  reimbursed for direct expenses  incurred due to
          service  on the Board of Directors.   Each director who is not an
          employee also is granted  an option to acquire 100,000  shares of
          the  Company's Common Stock, for three years service on the Board
          of Directors.  One third of the options granted to each "outside"
          director are vested on the date of grant and one third on each of
          the next two  anniversaries of the date they  joined the Board of
          Directors.


          Item 11:   Security Ownership  of Certain  Beneficial Owners  and
          Management

          Item  11 sets  forth the  number  of shares  of  common stock  of
          holders of the  Company known  to the Company  and to  beneficial
          owners of more  than five  (5%) percent  of its  Common Stock  at
          December 31, 1999.

                                          13
<PAGE>
          Directors and Officers of Registrant

          The  following persons served as directors of the Company for the
          Fiscal Year ending December 31, 1999.

                                                                 Shares
                                                             Beneficially
                                                                 Owned
                                                   Director Of Outstanding  %
          Name and Age                 Position     Since        Stock    Stock

          Clark Vaught(49)            Chairman of    1996      2,675,000  32.77
                                       The Board
                                    CEO and Director

          Dallas Talley (66)           President     1998        600,000   7.35
                                   Financial Officer
                                      and Director

          Chris Sheppard (42)       Vice President   1997        425,000   5.21
                                      and Director

          Thomas Friezen (41)          Director      1996        252,000   3.09

          Dr. Nicholas Yensen (53)     Director      1997        130,000   1.59

          All Officers and Directors as a Group                4,082,000  50.00
          (as of December 31, 1999)

          No  officer or  director listed  in the  foregoing table  has any
          options,  warrants, conversion  rights or  privileges to  acquire
          additional  shares which  are exercisable  during the  sixty days
          after the date hereof.

          Executive Officers/Management

          The  FarWest  management team  has  extensive  experience in  the
          establishment and management of entrepreneurial and publicly-held
          technology companies.

          Clark Vaught,  Chairman,  CEO,  and  major  shareholder,  founded
          FarWest  Pump and developed it  into today's FarWest  Group.  His
          background with Westinghouse Hanford  Systems aptly prepares  him
          for  the technology  driven  CDT market.   Management  experience
          includes large aquifer development projects, water management for
          White Sands Missile Range, and several Arizona City programs.

          Dallas Talley,  President, also  currently  serving as  Financial
          Officer, has  over twenty  years of  high  tech senior  executive
          experience.  He has been CEO  of Qantel Business Computers, a New
          York Stock Exchange listed Company, and  of two NASDAQ technology
          companies.   He  has  also  been a  founder/director  of  several
          emerging  companies, was  executive  partner in  an international
          technology marketing  and licensing  partnership and served  as a
          director of the American  Electronics Association and as Chairman

                                       14
<PAGE>
          of its Silicon Valley Chapter.

          Chris Sheppard, Vice President,  has had management experience in
          several high  technology fields.   This includes the  "Star Wars"
          SDI program where he consulted  for Lockheed and Martin Marietta.
          He has been employed  at Lawrence Livermore National Laboratories
          and other  National Laboratories.   His background  also includes
          experience as Chief Mechanical Engineer for Kaman Aerospace.

          At December  31, 1999, the  Company had five  full-time employees
          and six consultants on a part-time basis.

          Board of Directors

          The Company's Board of Directors  at the end of Fiscal  Year 1999
          consisted  of five (5) members.  The Company's By-laws permit the
          Board  of Directors to consist  of any number  of members greater
          than  two  (2),  as  determined  by  the  then-current  Board  of
          Directors.

          Employees who serve on the FarWest Board of Directors include Mr.
          Vaught, Mr. Talley, and Mr. Sheppard, who are identified above in
          "Management".  Other Directors are:

          Tom Friezen is CFO of a $150 million Food Processing Cooperative.
          He  manages  the  financial  operations and  oversees  the  legal
          activities of the Cooperative.

          Dr.  Nick Yensen has  served as a director  and consultant to the
          Company.    Dr.  Yensen  is  a  recognized  expert  in  saltwater
          technology.    He  is   president  of  NyPa  International,  with
          subsidiaries and  projects throughout the  world.  Dr.  Yensen is
          not standing for re-election to the Company's Board of Directors.

          The future success of the Company depends to a significant extent
          upon   certain  senior   management,  technical   personnel,  and
          development personnel.  The Company also believes that its future
          success will  depend in  large part  on its  ability to hire  and
          retain   highly  skilled  technical,  managerial,  and  marketing
          personnel, as well as  to attract and retain replacements  for or
          additions  to  such personnel  in the  future.   Demand  for new,
          specially  trained  and   experienced  personnel  has   increased
          worldwide.   The loss of  certain key employees  or the Company's
          inability to  attract and retain other  qualified employees could
          have a material  adverse effect  on the Company's  business.   In
          order to reduce  this risk  to the Company,  the Company's  legal
          counsel  has  recently  prepared  employment  contracts  for  Mr.
          Vaught, Mr. Talley, and  Mr. Sheppard.  Each of  those agreements
          has a two  year term, effective on January 1,  2000 and ending on
          December  31, 2001.    However, each  agreement is  automatically
          extended  by  an additional  year  upon each  anniversary  of the
          agreement.    The contracts  will be  submitted  to the  Board of
          Directors  for approval at the  May 2000 meeting.   The Company's
          Board  of Directors  will evaluate  the need  for the  Company to
          enter into future employment agreements with other employees.

          Item 12:  Certain Relationships and Related Transactions

          Pump  Company  Management  approached   the  Company's  Board  of
          Directors  to acquire  the  Pump  Company  in  late  1998.    The
          Company's Board of Directors, at its March 1999 meeting, approved

                                       15
<PAGE>
          the sale of  the Pump  Company to the  Pump Company's  management
          team effective as of January 1, 1999.  As discussed in Item 6, to
          induce the Pump  Company management to assume Pump  Company's net
          liabilities of over  $650,000, FarWest agreed to pay Pump Company
          $70,000  upon financing.  In addition, the Company had an account
          payable  of  approximately  $200,000  to Mr.  Clark  Vaught,  the
          Company's  chairman which Mr. Vaught agreed to assign to the pump
          Company.  As of March  20, 2000 the Company has paid to  the Pump
          Company  $200,000  according  to  the agreement.    In  addition,
          $70,000  will  be  paid  to  the  Pump  Company  upon  additional
          significant equity investment.

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

          (a)  Documents filed as part of this report

          1.Financial Statements

          Consolidated Financial Statements of FarWest Group, Inc.   Page

          (i)Independent Auditor's Report                              18

          (ii)Consolidated Balance Sheets as of December
          31, 1999 and 1998                                            19

          (iii)Consolidated Statements of Operations for the
          years ended December 31, 1999 and 1998                       20

          (iv)Consolidated Statements of Changes in Stockholders'
          Equity (Deficit) for the years ended December 31,
          1999 and 1998                                                21

          (v)Consolidated Statements of Cash Flows for the
          years ended December 31, 1999 and 1998                       22

          (vi)Note to Consolidated Financial Statements             23-32

          2.Exhibits

            (2)     Stock  Purchase  Agreement  (Revised)  between  FarWest
                    Group, Inc. and New  Pumpco dated May 24, 1999  for the
                    acquisition  of  100%  of FarWest  Pump  Co.  effective
                    January 1, 1999 (Filed  as Exhibit 2(a) to Registration
                    Statement  on  Form   10SB  dated  February  14,   2000
                    Registrant No. CIK #0001098584 and  incorporated herein
                    by reference).

            (2)     The  Articles  of  Merger  of Pro  Vantage,  Inc.  into
                    FarWest  Group,  Inc.  dated  July 2,  1996  (Filed  as
                    Exhibit  2.6  to Registration  Statement  on Form  10SB
                    dated  November 22, 1999  Registrant No. CIK#0001098584
                    and incorporated herein by reference).

                                          16
<PAGE>
            3(i)    Articles of  Incorporation of  Registrant (Filed  as to
                    Exhibit 2.1  Registration Statement on  Form 10SB dated
                    November 22,  1999  Registrant No.  CIK#0001098584  and
                    incorporated herein by reference).

            3(ii)   By-laws  of  Registrant  (Filed   as  Exhibit  2.2   to
                    Registration Statement on Form 10SB dated  November 22,
                    1999  Registrant  No.  CIK#0001098584 and  incorporated
                    herein by reference).

            (4)     Specimen Copy  of Common  Stock  Certificate (Filed  as
                    Exhibit  2.3  to Registration  Statement  on  Form 10SB
                    dated November 22,  1999 Registrant No.  CIK#0001098584
                    and incorporated herein by reference).

            (10)    Lawrence  Livermore License Agreement (Filed as Exhibit
                    10  to  Registration  Statement   on  Form  10SB  dated
                    November 22,  1999 Registrant  No.  CIK 0001098584  and
                    incorporated herein by reference).

            (10)    Option  and  Warrant  Agreements  and  Text of  Warrant
                    (Filed as Exhibit 2.4 and 2.5 to Registration Statement
                    on  Form 10SB  dated November  22, 1999  Registrant No.
                    CIK#0001098584 of Registrant and incorporated herein by
                    reference).

            (10)    Investment  Agreement between  FarWest Group,  Inc. and
                    Asea Brown Boveri, Inc.  dated December 29, 1999 (Filed
                    as Exhibit  (g) to Registration Statement  on Form 10SB
                    dated  February  14,2000 Registrant  No. CIK#0001098584
                    and incorporated herein by reference).

          (b)  Reports on form 8-K

          None

                                       17
<PAGE>

                                      SIGNATURES

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


          FARWEST GROUP, INC.


          By:/s/ Dallas Talley
          Dallas Talley
          President and Principal Financial
          Officer

          April 14, 2000

          Pursuant  to the requirements  of the Securities  Exchange Act of
          1934,  this report has been signed below by the following persons
          on behalf of Registrant and in  the capacity and on the date set-
          forth following their name:

          Signature                    Capacity                Date

           /s/ Clark Vaught            Chairman                April 14, 2000
          Clark Vaught

           /s/ Dallas  Talley          President,  Financial
          Dallas Talley                    Officer and
                                           Director            April 14, 2000

           /s/ Chris  Sheppard         Vice President and
          Chris Sheppard                   Director            April 14, 2000

           /s/ Thomas Friezen          Director                April 14, 2000
          Thomas Friezen

           /s/ Dr. Nicholas Yensen     Director                April 14, 2000
          Dr. Nicholas Yensen

                                       18
<PAGE>

                             INDEPENDENT AUDITORS' REPORT

          Board of Directors
          FarWest Group, Inc.

          We have  audited the accompanying consolidated  balance sheets of
          FarWest  Group, Inc. and subsidiary  as of December  31, 1999 and
          1998,  and the  related  consolidated  statements of  operations,
          stockholders' equity (deficit) and cash flows for  the years then
          ended.   These  consolidated   financial   statements   are   the
          responsibility of the Company's management. Our responsibility is
          to express an opinion  on these consolidated financial statements
          based on our audits.

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

          In our opinion, the consolidated financial statements referred to
          above present fairly, in  all material respects, the consolidated
          financial position of FarWest Group, Inc. as of December 31, 1998
          and  1997, and  the results  of their  operations and  their cash
          flows  for the  years then  ended, in  conformity with  generally
          accepted accounting principles.

          The accompanying financial statements have been prepared assuming
          that the Company will continue as a going concern.  As  discussed
          in Note 1 to the  financial statements, the Company's significant
          operating   losses   and   its  working   capital   deficit   and
          stockholders' deficit  raise substantial doubt  about its ability
          to continue as a going concern.  The  financial statements do not
          include any  adjustments that  might result  from the  outcome of
          this uncertainty.

          As explained in Note 10, during the year ended December 31, 1999,
          the  Company discovered an error in the measurement of fair value
          of common shares issued in 1999 for services rendered in 1998 and
          1999.    The  1998  financial statements  have  been  restated to
          reflect this restatement.


                                 Jackson & Rhodes P.C.

          Dallas, Texas
          April 12, 2000


                                       19
<PAGE>

                                 FARWEST GROUP, INC.
                             CONSOLIDATED BALANCE SHEETS
                              December 31, 1999 and 1998
                                        Assets
                                                             1999       1998
          Current assets:(Restated)
          Cash                                           $  389,401  $     -
          Accounts receivable                                   -       28,704

          Total current assets                              389,401     28,704

          Furniture and equipment                            11,125      2,952
          Less accumulated depreciation                      (3,728)    (1,968)

                                                              7,397        984

                                                         $  396,798  $  29,688

                         Liabilities and Stockholders' Equity
          Current liabilities:
          Accounts payable and accrued liabilities       $  348,929  $ 691,484
          Accounts payable to shareholder (Note 2)          152,388    127,809
          Current portion of long-term debt                 109,891        -
          Payable to former subsidiary (Note 2)             270,000        -
          Net liabilities of discontinued operations
               (Note 2)                                         -      620,075

          Total current liabilities                         881,208  1,439,368

          Long-term and convertible debt (Note 5)            53,174    200,000
          Commitments and contingencies (Note 6)                -          -

          Stockholders' equity:
          Preferred stock, $.0001 par value, 20,000,000
            shares authorized; 60,000 issued and
            outstanding at December 31, 1998                    -            6
          Common stock, $.0001 par value, 80,000,000
            shares authorized; 6,684,057 and 3,591,480
            shares issued and outstanding                       668        359
          Additional paid-in capital                      2,985,725    699,525
          Accumulated deficit                            (3,523,977)(2,309,570)

          Total stockholders' equity                       (537,584)(1,609,680)

                                                        $   396,798 $   29,688

             See accompanying notes to consolidated financial statements.

                                       20
<PAGE>
                                 FARWEST GROUP, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                        Years Ended December 31, 1999 and 1998

                                                              1999       1998
                                                                     (Restated)
          Revenues                                       $      -   $      -

          Operating expenses:
          Common stock and options issued for services      963,500    311,750
          General and administrative (excluding amounts
            applicable to stock and options issued for
            for services each period)                       700,780    259,958

                                                          1,664,280    571,708

          Loss from operations                           (1,664,280)  (571,708)

          Other expenses
          Interest expense                                  (37,136)   (56,539)

          Loss from continuing operations                (1,701,416)  (628,247)

          Discontinued operations (Note 2):
          Income (loss) from discontinued operations          8,227   (310,661)
          Gain on sale of discontinued operations           478,782        -

                                                            487,009   (310,661)

          Net loss                                      $(1,214,407) $(938,908)

          Loss per common share:

          From continuing operations                          $(.30)     $(.18)

          Net loss                                            $(.21)     $(.28)

          Weighted average common shares outstanding      5,702,931  3,408,147


             See accompanying notes to consolidated financial statements.

                                       21
<PAGE>
<TABLE>
                                              FARWEST GROUP, INC.
                               CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                     Years ended December 31, 1999 and 1998
          <S>                      <C>      <C>     <C>        <C>     <C>         <C>           <C>
                                                                       Additional
                                   Preferred Stock     Common  Stock     Paid-in    Accumulated
                                    Shares  Amount    Shares   Amount    Capital      Deficit         Total

          Balance December 31, 1997    -    $  -    3,191,480   $319   $  527,289  $(1,370,662)  $  (843,054)

          Shares issued for cash    60,000      6     400,000     40      172,236          -         172,282

          Net loss                     -       -          -        -          -       (938,908)     (938,908)

          Balance December 31, 1998 60,000      6   3,591,480    359      699,525   (2,309,570)   (1,609,680)

          Shares issued for cash       -       -    1,059,000    106      884,480          -         884,586
          Shares issued to
            convert preferred      (60,000)    (6)     60,095      6          -            -             -
          Shares issued to
            convert debt               -       -      253,332     25      126,642          -         126,667
          Shares issued for
            services rendered in
          1998                         -       -    1,247,000    125      311,625          -         311,750
          1999                         -       -      531,600     53      132,847          -         132,900
          Cancel shares issued in
          1997                         -       -      (58,000)    (6)           6          -             -
          Stock options issued as
            compensation               -       -          -        -      830,600          -         830,600

          Net loss                     -       -          -        -          -     (1,214,407)   (1,214,407)

          Balance, December 31, 1999   -    $  -    6,684,507   $668   $2,985,725  $(3,523,977)   $ (537,584)

                                          See accompanying notes to consolidated financial statements.
</TABLE>
                                       22
<PAGE>

                                 FARWEST GROUP, INC.
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                        Years ended December 31, 1999 and 1998

                                                             1999      1998
          Cash flows from operating activities:                      (Restated)
          Net loss                                      $(1,214,407) $(938,908)
          Adjustments to reconcile net loss to net
            cash used in operating activities:
          Depreciation                                        1,760        984
          Shares issued for services                        132,900        -
          Stock options issued as compensation              830,600        -
          Gain on sale of discontinued operations,
            less note assigned to former subsidiary        (278,782)       -
          Changes in operating assets and liabilities:
            Accounts receivable                              28,704    (25,561)
            Accounts payable and accrued liabilities         (4,139)   554,484
            Net liabilities of discontinued operations          -       38,147

          Net cash used in operating activities            (503,364)  (370,854)

          Cash flows from investing activities:
          Purchase of furniture and equipment                (8,173)       _

          Cash flows from financing activities:
          Net advances from shareholder (Note 3)             16,352     95,361
          Sale of common and preferred shares               884,586    172,282
          Proceeds from convertible debt                        -      100,000

          Net cash provided by financing activities         900,938    367,643

          Net increase(decrease)in cash and cash
              equivalents                                   389,401     (3,211)
          Cash at beginning of year                             -        3,211

          Cash at end of year                              $389,401   $    -

          Supplemental disclosure:
          Interest paid                                    $    -     $    -

          Non-cash transactions:
          During  1999,  the Company  issued  1,778,600  common shares  for
          services rendered in 1999 and 1998, of which $211,750 had been
          accrued in 1998.

          During 1999, the Company issued  253,332 common shares to convert
          $100,000 in convertible debt and $26,667 in accrued interest.

          During  1999, the Company  sold its subsidiary,  Pump Company, by
          assuming certain debt amounting to $63,066 and assigning  to Pump
          Company $200,000 of debt payable to a shareholder ( See Note 2).

             See accompanying notes to consolidated financial statements.

                                       23
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          1.Summary of Significant Accounting Policies

          Description of Business

          FarWest  Group, Inc.  (the "Company"or  "FarWest") was  organized
          under the laws of the state of Nevada in July 1996  to serve as a
          water technology company  dedicated to advanced water  filtration
          and purification.   In July  1996 the  Company was acquired  in a
          reverse  acquisition by Pro  Vantage Corporation ("Pro Vantage"),
          an inactive  public company  which had  been incorporated in  the
          state  of  Florida  in   1992.      FarWest  was   the  surviving
          corporation.  Concurrently,  the  FarWest  Pump   Company  ("Pump
          Company"),  an  Arizona   Corporation,  became  a   wholly  owned
          subsidiary  of the Company.  The transaction with Pro Vantage was
          accounted for as a "reverse acquisition" whereby FarWest acquired
          Pro Vantage in a  transaction accounted for  as a purchase.   The
          purchase price has been determined based on the fair value of Pro
          vantage's net assets  at the  date of acquisition.   Because  Pro
          Vantage was  inactive  and  had no  assets  or  liabilities,  the
          purchase  price was  determined  essentially to  be  zero and  no
          goodwill was recognized in the transaction.

          In January  1997 the  Company entered  into  a manufacturing  and
          marketing  license  agreement  with  Lawrence  Livermore National
          Laboratories  ("Lawrence Livermore") whereby the Company obtained
          the   rights   to   Lawrence  Livermore's   patented   Capacitive
          Deionization Technology ("CDT").   The company has the  rights to
          develop  and  manufacture  a  carbon  aerogel  CDT  product   for
          commercial use in the  desalination, filtration and  purification
          of water.  The manufacturing  and marketing license is  effective
          for the life  of the patents (up to  17 years).  To  maintain the
          license the Company must make contracted annual royalty  payments
          to Lawrence  Livermore of beginning  with $30,000 per  year, then
          becoming a percentage  of revenue.  The Company was in arrears on
          its annual royalty payments to Lawrence Livermore as  of December
          31,  1999, but has  become current on  its payments subsequently.
          The Company has  completed development of  its first release  CDT
          unit  and  has  commenced   in-house  prototype  manufacture  and
          construction of  demonstration and pilot  water treatment  plants
          for clients in the first quarter of 2000.

          See Note 2 regarding the  Company's sale of Pump Company to  Pump
          Company management.

          Going Concern

          The  Company's financial  statements have  been presented  on the
          basis  that  it  is  a  going  concern,  which  contemplates  the
          realization of assets and the satisfaction of liabilities in  the
          normal course  of  business.  The  financial  statements  do  not
          include any  adjustments that  might result  from the  outcome of
          this uncertainty.  The Company is reporting cumulative net losses
          from continuing operations since January 1, 1997 of $2,809,277 as
          of  December  31, 1999  and has  utilized  $983,334 in  cash from
          operations during the same period.  The following is a summary of
          management's  plan  to  raise  capital  and  generate  additional
          operating funds.

          The Company  was  funded  initially  through  investment  by  the
          principal shareholder.   Since 1998 funding  has been principally
          through private placements.

                                       24
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          1.Summary of Significant Accounting Policies (Continued)

          The Company is dependent upon  the proceeds of proposed offerings
          of the Company's securities to implement its business plan and to
          finance its  working capital requirements.   Should the Company's
          plans  or its  assumptions change  or prove  to be  inaccurate or
          offering  proceeds  are  insufficient   to  fund  the   Company's
          operations, the  Company would  be  required to  seed  additional
          financing sooner than  anticipated.  Management  is confident  it
          will be  able to continue raising funds in the balance of 2000 as
          it has in  the early  part of 1999,  principally through  private
          placements.   With  the filing  of  a Form  10-SB in  the  fourth
          quarter of 1999 and becoming a Securities and Exchange Commission
          fully reporting Company,  management anticipates that  additional
          funding will be more likely in 2000.

          Business  opportunities  for  the  next  twelve  months   include
          international CDT  systems sales to governments  and major multi-
          national industrial  corporations and U.S. pilot  sales.  Several
          opportunities are now  being discussed  including:   governments,
          humanitarian  trust  funds,  industrial  joint  ventures,  market
          sectors and geographic distribution agreements.

          The  Company  recognizes  the  financial  investment  required to
          support  the potential  business  opportunities  which are  being
          discussed.  There is  no guarantee that the Company  can complete
          the   funding   necessary  to   develop  the   manufacturing  and
          engineering structure  to manufacture  and install the  potential
          CDT orders.    The  company  is  currently  discussing  financing
          options which include:  a Corporate Partnership for Manufacturing
          which could  be expanded  to  include marketing  services;  joint
          ventures with  an international investment group;  and a European
          government-sponsored   program.     In   addition,  a   religious
          humanitarian  fund  is  evaluating  equity   investment  and  CDT
          installation opportunities  in the Mid-East.  Management believes
          that  there is a probability of  obtaining the required financing
          for the next twelve months through one of the above.

          There  can  be  no assurances  given  that  the  Company will  be
          successful in  generating sufficient  revenues  from its  planned
          activities  or in  raising  sufficient  capital  to allow  it  to
          continue  as  a  going   concern  which  contemplates   increased
          operating expenses, acquisition of assets and the disposition  of
          liabilities  in the normal course of business.  These factors can
          affect the  ability  of  the  Company to  implement  its  general
          business   plan  including   the  completion   of  the   required
          manufacturing  facilities and  continued proprietary  CDT product
          improvements.

          Principles of Consolidation

          The consolidated financial statements include the accounts of the
          Company and  its  subsidiaries.    All  significant  intercompany
          balances and transactions are eliminated in consolidation.

          Use of Estimates and Assumptions

          Preparation of  the Company's financial  statements in conformity
          with generally accepted accounting principles requires management
          to make estimates  and assumptions that  affect certain  reported
          amounts  and  disclosures.    Accordingly, actual  results  could
          differ from those estimates.

                                       25
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          1.Summary of Significant Accounting Policies (Continued)

          Cash and Cash Equivalents

          The Company considers  all liquid investments,  with an  original
          maturity  of  three months  or less  when  purchased, to  be cash
          equivalents.

          Furniture and Equipment

          Furniture  and equipment  are stated  at  cost.   Depreciation is
          computed  principally by  the straight-line  method based  on the
          estimated useful lives of five to seven years.

          Net Loss Per Common Share

          In March 1997,  the Financial Accounting  Standards Board  issued
          Statement of Financial Accounting Standards No. 128, Earnings Per
          Share  ("SFAS 128").  SFAS  128 provides  a  different method  of
          calculating  earnings per  share than  was  formerly used  in APB
          Opinion  15.  SFAS 128 provides  for the calculation of basic and
          diluted earnings per share.  Basic earnings per share includes no
          dilution  and is computed by  dividing income available to common
          stockholders by  the weighted  average  number of  common  shares
          outstanding for the period.  Dilutive earnings per share reflects
          the  potential dilution  of securities  that could  share in  the
          earnings  of  the  Company.    Because  the  Company's  potential
          dilutive   securities   are   antidilutive,    the   accompanying
          presentation is only of basic loss  per share.  The numerator  in
          the  basic loss per share calculation is the loss from continuing
          operations and  net loss, respectively.   The denominator  in the
          calculation is weighted average shares for each period.

          Stock-Based Compensation

          The Company has issued stock options.  Compensation costs arising
          from such options will be recorded as an expense. The measurement
          date for determining compensation costs is the date of the grant.
          Compensation cost is the  excess, if any, of the  market value of


          the stock at date of grant over the amount the  employee must pay
          to acquire  the stock.   The Company measures  compensation costs
          using  the intrinsic value  based method of  accounting for stock
          issued to employees.

          Income taxes

          The  Company  accounts  for  income  taxes  in  accordance   with
          Statement of Financial Accounting Standards No.  109, "Accounting
          for Income  Taxes" ("SFAS 109").  The  objective of the asset and
          liability  method  is  to  establish  deferred  tax  assets   and
          liabilities for  the temporary differences between  the financial
          reporting basis and  the tax  basis of the  Company's assets  and
          liabilities  at enacted tax rates  expected to be  in effect when
          such amounts are realized or settled.  Under SFAS 109, the effect
          on deferred tax  assets and liabilities of a  change in tax rates
          is recognized in income in the period that includes the enactment
          date.

                                       26
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          1.Summary of Significant Accounting Policies (Continued)

          Research and Development

          Research and development expenditures are expensed when incurred.
          Research  and  development  expenses  amounted  to  $517,000  and
          $234,000  for  the  years  ended  December  31,  1999  and  1998,
          respectively.

          Accounts Receivable

          Receivables at December 31,  1998 represented cash advanced to  a
          professional  services organization  to support  an international
          business opportunity.  This receivable was collected in 1999.

          2.Discontinued Operations

          Pump  Company was formed to provide drilling and pump services in
          Arizona  and  Western  New  Mexico.    It includes  an  operating
          division, Arizona  Well Services, which provided  wholesale parts
          services to Pump and other companies.

          In the fourth  quarter of  1998 discussions  were initiated  with
          Pump Company management for the purchase of the Pump Company.  In
          March 1999 the Company's  Board of Directors agreed to  sell Pump
          Company to its management,  effective January 1, 1999.   In order
          to induce Pump  Company management to assume  the net liabilities
          of Pump  Company,  FarWest agreed  to pay  Pump Company  $70,000.
          These funds  will be satisfied upon the  successful completion of
          additional significant private equity  placements.  In  addition,
          on January 31,  2000, FarWest  paid $200,000 to  Pump Company  to
          satisfy a FarWest payable  to a stockholder who has  assigned the
          receivable  to Pump  Company.   The Company  also assumed  a note
          payable in the amount of approximately $63,000 in connection with
          the sale of Pump Company.


          The  Company  has   accounted  for  the   Pump  Company  in   the
          accompanying  financial statements  as a  discontinued operation.
          The sale was closed in November 1999.

          Pump  Company  had  revenues   of  approximately  $1,868,000  and
          $2,250,000  for the eleven months ended November 30, 1999 and the
          year ended 1998, respectively.

          Following  is  a   description  of  the   remaining  assets   and
          liabilities of the Pump Company at December 31, 1998:

          Current assets                                   $ 210,586
          Net property, plant and equipment                  630,393
          Notes payable                                     (454,361)
          Accounts payable and accrued liabilities          (588,465)
          Accounts payable - shareholder                    (418,228)

            Net liabilities of discontinued operations     $(620,075)

                                       27
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          3.Related Party Transactions

          A principal  shareholder has loaned the Company  funds at various
          times.    The  payable   is  included  in  accounts  payable   to
          shareholder in the  accompanying balance sheet.   While the funds
          were not loaned under  a note agreement, the Company  has accrued
          interest,  under an  informal  agreement, at  8% on  the balances
          payable.   The  accrued interest  has been  added to  the amounts
          payable.

          4.Income Taxes

          There  were  no  significant  temporary  differences  between the
          Company's tax and  financial bases, except for  the Company's net
          operating   loss   carryforwards   amounting   to   approximately
          $2,500,000   and   $1,350,000  December   31,   1999   and  1998,
          respectively.  These carryforwards will expire, if not  utilized,
          in 2012-2014.

          The Company has  deferred tax assets  amounting to  approximately
          $850,000  and   $450,000  at   December   31,  1999   and   1998,
          respectively, related  to the net operating loss carryovers.  The
          realization of  the  benefits  from  these  deferred  tax  assets
          appears uncertain due  to recurring net  losses.  Accordingly,  a
          valuation allowance has been recorded which offsets the  deferred
          tax assets at the end of each period.

          5.Long-term Debt and Convertible Debt

          During  December  1997  and  January  1998,  the  Company  issued
          $200,000  in 7% convertible debt.   The debt  is convertible into
          shares  of the  Company's common  stock at  $.50 per  share until
          maturity of the principal on January  15, 2001.  During 1999, the
          holder of the debt converted $100,000 of principal and $26,666 of
          accrued interest into 253,332  shares of common stock.   The note
          is collateralized by 750,000 shares of Company common stock.  The
          debt was paid in February 2000.

          As  explained  in Note  2,  the  Company has  assumed  a  note in
          connection with the  sale of the  Pump Company.   The 8% note  is
          payable $1,200  per month,  including interest,  through February
          2005  and  is  collateralized  by real  property  owned  by  Pump
          Company.    Following are  the scheduled  maturities of  the debt
          principal:

                      2000                    $ 9,891
                      2001                     10,711
                      2002                     11,600
                      2003                     12,564
                      2004                     13,606
                      2005                      4,693

                      Total                   $63,065

                                       28
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          6.Capital Stock

          During 1999 and 1998,  the Company issued common shares  for cash
          as follows:
                                                      No. of     Price
                                 Date           Shares   Per Share   Amount

          Private placement     March-99       160,000      $.31    $ 50,000
          Private placement     April-99       466,500      $.50     233,251
          Private placement     December-99    262,500     $2.00     500,000
          Private placement     December-99    170,000      $.78     101,335

                                             1,059,000              $884,586

          During  1998, the Company issued 60,000 shares of preferred stock
          for  cash of $30,000. The shares  pay no dividends and each share
          is convertible into  one share  of common stock.   The  preferred
          shares were converted to 60,095 shares of common stock in 1999.

          The Company has issued stock options to non-employees.  A summary
          of the status of stock options is set forth below:

                                                      Period Ended
                                                   September 30, 1999
                                                           Weighted Average
          Stock options                       Shares        Exercise price

          Outstanding, beginning of period       -               $  -
          Granted                            410,000             $.82
          Exercised                              -                  -
          Forfeited/expired                      -                  -
          Outstanding, end of period         410,000             $.82


          Options exercisable, end of period410,000$.82

          The weighted  average  grant date  fair value  of options  issued
          during the period ended December 31, 1999 was $.82.

          Compensation costs  for employee  options  are recognized  as  an
          expense in an amount equal to the excess of the fair market value
          of  the stock  at the  date of  measurement over  the amount  the
          employee must pay.   The measurement date is generally  the grant
          date.   There were no options issued  to employees as of December
          31, 1999.  The Company  recorded $830,600 in compensation expense
          during the year ended December 31, 1999 under FASB

                                       29
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          6.Capital Stock (Continued)

          Statement  123 for options issued  to non-employees.  The options
          were  issued for legal services and settlement of a legal action.
          There  is  no  future  compensation  expense  to be  recorded  in
          subsequent  periods as  of September  30, 1999.   Using  the fair
          value method, the fair value of each option grant is estimated on
          the date  of grant using  the Black-Scholes option  pricing model
          with the  following weighted-average assumptions  used for grants
          in 1999:  dividend yield of  0.0 percent; expected  volatility of
          783  percent; risk free  interest rates of  4.5 percent; expected
          lives of two years.

          Compensation  expense   for   non-employees  is   recognized   in
          accordance with  Statement of Financial Accounting  Standards No.
          123 based on the fair value of the consideration received  or the
          fair value  of the equity  instruments issued, whichever  is more
          reliably measurable.   During the years  ended December 31,  1999
          and December 31, 1999, the Company utilized the fair value of the
          equity instruments issued to recognize expense for shares  issued
          to  non-employees.   Following is  a summary of the common shares
          issued for services rendered during  the years ended December 31,
          1999 and, 1999:
                                                    Number
                                         Date     of Shares      Expense

          Employee compensation         Jan-99    1,550,000     $387,500
          Professional services         Jan-99      202,600       50,650
          Marketing                     Jan-99        8,500        2,125
          Research and Development      Jan-99        7,500        1,875
          Legal services                Jan-99       10,000        2,500

                                                  1,778,600     $444,650

          The  expense for the above services was recognized based upon the
          market value of the common stock at the time it  was committed to
          be  issued.   Because  the Company  did  not keep  complete  time
          records of its employees with which to determine a fair  value of
          services rendered each  period, the Company has utilized the fair
          value of the shares at the date of issue and  allocated the value
          to expense on  a pro rata basis during the  periods of service of
          1998  and  1999.   The  shares  were  not  issued  under a  stock
          compensation plan.   The Company accrued $311,750  as of December
          31, 1998, included in accounts payable and accrued liabilities in
          the balance sheet at that  date and included in common  stock and
          options issued for services in the 1998 statement of operations.

          7.Commitments and Contingencies

          Lease Commitments

          The Company leases  office space under  an operating lease  which
          expires in May 2001.  Future minimum  rental commitments   amount
          to $19,000  for 2000 and $8,000  for 2001.  Rent  expense for the
          years  ended December 31, 1999  and 1998 amounted  to $22,183 and
          $34,501, respectively.

                                       30
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          7.Commitments and Contingencies (Continued)

          Fair Value of Financial Instruments

          The following disclosure of the estimated fair value of financial
          instruments is made  in accordance with the  requirements of SFAS
          No. 107,  Disclosures about Fair Value  of Financial Instruments.
          The  estimated fair  value  amounts have  been determined  by the
          Company,  using  available  market  information  and  appropriate
          valuation methodologies.

          The  fair value  of financial  instruments classified  as current
          assets  or liabilities  including cash  and cash  equivalents and
          notes and  accounts payable approximate carrying value due to the
          short-term  maturity of the instruments.   The fair  value of the
          convertible  debt  is estimated  to be  $405,000 and  $120,000 at
          December 31, 1999 and 1998, respectively, based on the underlying
          value  of the conversion rights  of the debt,  discounted for its
          two-year holding restrictions.

          Concentration of Credit Risk

          The  Company  invests  its  cash  and  certificates  of   deposit
          primarily in  deposits with  major banks.   Certain  deposits, at
          times,  are in excess of  federally insured limits.   The Company
          has not incurred losses related to its cash.

              Uncertainty Due to the Year 2000 Issue

          The  Company did  not  and  does  not  expect  to  encounter  any
          significant matter which will affect its operations arising  from
          the so called Y2K or Year 2000 problem.

              Litigation

          Three former employees  of the Company or its  former subsidiary,
          Pump  Company, have  filed a  lawsuit alleging  that  the Company
          failed  to pay them certain wages provide them with certain stock
          options.   Pump Company has also entered the lawsuit and asserted
          various  claims  against the  three  former  employees and  their
          current   employer,   including  conversion,   civil  conspiracy,
          wrongful   interference   with  contractual   relationships,  and
          violation of trade secrets.  The former employees seek to recover
          approximately  $250,000 in  future wages  and, in  the aggregate,
          have asked to be awarded stock options permitting the purchase of
          up to 630,000 shares of  stock of the Company at $.25  per share.
          The employees  have also  requested that  any damages awarded  be
          trebled  under  Arizona  law  applicable to  the  failure  of  an
          employer to pay  wages.   The Company is  contesting this  matter
          vigorously.   The Company does not believe that there is validity
          to the claims;  however, should  the Company be  required to  pay
          damages  as  a result  of the  litigation,  the payments  of such
          damage  awards  may have  an  adverse effect  upon  its financial
          condition.

                                       31
<PAGE>
                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          8.New Accounting Pronouncements

          SFAS 130

          Statement  of   Financial   Accounting  Standards   (SFAS)   130,
          "Reporting  Comprehensive  Income",  establishes   standards  for
          reporting and display of comprehensive income, its components and
          accumulated balances.  Comprehensive income is defined to include
          all changes in equity except those resulting from investments  by
          owners  and distributions  to owners.   Among  other disclosures,
          SFAS  130 requires  that  all  items  that  are  required  to  be
          recognized  under current  accounting standards as  components of
          comprehensive income be reported in a financial statement that is
          displayed with the same prominence as other financial statements.
          This  pronouncement  had no  effect  on  the Company's  financial
          statements.

          SFAS 131

          SFAS 131,  "Disclosure about Segments of  a Business Enterprise",
          establishes standards for the way that public enterprises  report
          information   about  operating   segments  in   annual  financial
          statements and  requires reporting of selected  information about
          operating segments in interim financial statements issued to  the
          public.  It also establishes standards for disclosures  regarding
          products and services, geographic areas and major customers. SFAS
          131  defines operating  segments as  components of  an enterprise
          about which  separate financial information is  available that is
          evaluated regularly  by the  chief  operating decision  maker  in
          deciding how to allocate resources and in assessing  performance.
          This accounting pronouncement has had no effect on  the Company's
          financial statements for the periods presented.

          SFAS 132

          Statement  of   Financial   Accounting  Standards   (SFAS)   132,
          "Employers'  Disclosure about  Pensions and  Other Postretirement
          Benefits," revises  standards for disclosures  regarding pensions
          and other  postretirement benefits.  It  also requires additional
          information on changes in the benefit obligations and fair values
          of  plan assets  that will  facilitate financial analysis.   This
          statement does not  change the measurement or  recognition of the
          pension and other postretirement plans.  The financial statements
          are unaffected by implementation of this new standard.

          SFAS 133

          Statement  of   Financial   Accounting  Standards   (SFAS)   133,
          "Accounting for Derivative  Instruments and Hedging  Activities,"
          establishes  accounting and  reporting  standards for  derivative
          instruments, including certain derivative instruments embedded in
          other contracts,  (collectively referred  to as  derivatives) and
          for hedging activities.  It requires that an entity recognize all
          derivatives as either  assets or liabilities in the  statement of
          financial position  and measure those instruments  at fair value.
          If certain conditions  are met, a derivative  may be specifically
          designated as  (a) a hedge of the exposure to changes in the fair
          value  of a recognized asset or liability or an unrecognized firm
          commitment, (b) a hedge of the exposure to variable cash flows of
          a  forecasted transaction, or (c) a hedge of the foreign currency
          exposure  of  a  net  investment  in   a  foreign  operation,  an
          unrecognized  firm commitment, an available-for sale security, or
          a foreign-currency-denominated forecasted  transaction.   Because
          the Company has no derivatives, this accounting pronouncement has
          no effect on the Company's financial statements.

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                                 FARWEST GROUP, INC.
                      Notes to Consolidated Financial Statements

          9.Subsequent Events

          On  January 6, 2000, the  Company entered into  an agreement with
          ABB,   Inc.,  an   international  conglomerate   specializing  in
          technology.    The  terms  of  the  agreement  are summarized  as
          follows:

          ABB contracted to purchase 500,000 shares of FarWest common stock
          at $2 per share in  two payments.  The payments of  $500,000 each
          were  received  on  December  31,  1999  and  February  15, 2000,
          respectively.  ABB declined to exercise its remaining options.

          10.Restatement

          During the year  ended December 31, 1999, the  Company discovered
          an error in the measurement of fair value of common shares issued
          in 1999 for services rendered in 1998 and 1999 (see Note 6).  The
          Company had previously discounted the market value  of the shares
          by  30% to account for restrictions  on the shares and their thin
          market.  The accompanying financial statements for 1998 have been
          restated  to correctly reflect the shares  valued at market value
          without  discount.  The effect of the restatement was to increase
          net  loss for 1998 and  stockholders' deficit as  of December 31,
          1998 by $93,525 (an increase of $.03 in net loss per share).

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