SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   Form 10-KSB/A

     This is the Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the full year ending December 31, 1998 concerning


                        TOUPS TECHNOLOGY LICENSING, INC.
                        A Florida Corporation located at



     7887  Bryan  Dairy  Road,   Suite  105,   Largo,   Florida  33777  o  voice
(727)-548-0918 o fax (727)-549-8138



    0-23897                                             59-3462501
Commission File Number                          IRS Employer Identification No.

Over-The-Counter Bulletin Board ("OTC:BB")                Common
     Name of each exchange                       Securities registered under
     on which registered                     Section 12(g) of the Exchange Act:


     The  Company  has filed all  reports  required to be filed by Section 13 or
15(d) of the  Exchange  Act during the past 12 months and the  Company  has been
subject to such filing requirements for the past 90 days.


     The  Company's  revenues for the fiscal year ending  December 31, 1998 were
$2,221,709.


     At July 21, 1999, the closing bid price of the Company's  common stock was
$0.96 The Company's common stock is traded under the symbol "TOUP."


     At December 31, 1998, the Company had  22,217,299  common shares issued and
outstanding.


<PAGE>
                                 Reference Page

                                     Part I

           Item                                                     Page Number

Item 1     Description of Business

Item 2     Description of Property

Item 3     Legal Proceedings

Item 4     Submission of Matters to a Vote of Security Holders

Item 5     Market for Common Equity and Related Stockholder Matters

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

Item 7     Financial Statements

Item 8     Changes In and Disagreements With Accountants on
            Accounting and Financial Disclosure

                                    Part III

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

Item 10     Executive Compensation

Item 11     Security Ownership of Certain Beneficial Owners
             and Management

Item 12     Certain Relationships and Related Transactions

Item 13     Exhibits and Reports on Form 8-K

Part F/S

Signatures
<PAGE>
                                     Part I

Item 1            Description of Business.

     The Company

     Toups Technology  Licensing,  Inc. was incorporated in the state of Florida
on July 28, 1997.  The Company was formed to improve,  enhance or remediate  the
environment  through  technologies and services.  During June, 1999, the Company
grouped its nine  divisions  into three  major  divisions  titled  Environmental
Solutions,  Manufactured  Products  and  E-Commerce.  Led by  its  Environmental
Solutions  Division,  the Company works to achieve its business  purpose through
these three major divisions:

     Toups  Technology  Environmental  Solutions  sells equipment and techniques
principally  through its Village  Concept of converting  solid and liquid wastes
into useable energy and carbon black.

     The Company's  Manufactured  Products division is the manufacturing  source
for the Balanced Oil Recovery System,  Tunnel Bat Culvert Vehicles and a host of
high tech radio frequency power supplies.

     The  Company's  E-Commerce  division  features  TTLOnline.com,  an internet
retail marketing  program and InterSource  HealthCare,  an internet  marketer of
medical equipment, supplies and pharmaceuticals.

     Results of 1998 (first full year)  Operations  - The  following  discussion
should be read in conjunction with the Company's  audited  financial  statements
for the years ended December 31, 1998 and 1997 which are included herein.  Sales
for 1998 were  $2,221,709,  an increase of  $1,877,546  or 560% from $344,149 in
1997. Gross profit for 1998 was $825,751 or 37% of revenues, which was down from
$141,460 or 41% of revenues for 1997.  The slight  decrease in gross profit as a
percentage of revenues in 1998 was the result of a profit margin of the in-house
manufactured BORS Lift during its product introduction.

     The  Company's  selling,  general  and  administrative  (SG&A)  expenses of
$5,985,169  were  comprised  of  development  expenses,   salaries,   consulting
services,  and other operating costs in 1998, up from $126,631 during 1997. As a
percentage of revenues, SG&A increased to 269% in 1998 up from 37% in 1997. SG&A
expenses  increased  in 1998 to  support  further  technology  development,  new
product introductions and future business expansion.

     The Company  attributes  69% or  $3,580,123  of its losses during 1998 to a
one-time  charge  against  earnings  relating to the issuance of common stock to
attract and retain key pesonnel, to acquire various license agreements,  to make
acquisitons  and for  other  develomental  needs.  The  Company  attributes  the
remaining 31% or  $1,593,908  of its losses to earnings at the full-year  ending
December 31, 1998 to first year  operational  losses incurred in the development
and market introduction of its various technologies. (See "Independent Auditor's
Report  and  accompanying   consolidated  balance  sheets  of  Toups  Technology
Licensing,  Incorporated  and subsidiaries as of December 31, 1998 and 1997, and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash  flows  for the  years  then  ended"  which  begin on Page F-1).

     For the year ended  December  31,  1998,  the Company  had total  assets of
$5,685,185 as compared with $275,611 for the period ending December 31, 1997 and
stockholders equity grew from $155,694 at December 31, 1997 to $3,733,143 at the
year ending December 31, 1998.

     The Company envisions growth during 1999 will be approximately 80% internal
and  20%  from  the  licensing/acquisitions  of new  technologies.  The  Company
estimates it will derive  revenues during 1999 from all current  divisions.  The
Company  intends to acquire  technologies  through  licensing,  joint  ventures,
acquisitions,  manufacturing rep agreements and other similar means. The Company
intends to  commercialize  its  technologies  through joint ventures;  strategic
alliances; sub-licenses;  providing services; and through the direct manufacture
and sale of products.

     Business Method - TTL enters  worldwide  exclusive  license  agreements for
developed technologies, which are at or near the market-entry stage. The Company
also makes acquisitions of existing companies,  which add to or compliment TTL's
technology  mix.  TTL  commercializes  the  technologies  by folding each into a
seasoned,   entrepreneurial-minded   corporate   infrastructure   housed   in  a
state-of-the-art  manufacturing  facility.  The combination results in a turnkey
process wherein  emerging  technologies  can mature into marketable  products or
services and the Company's  shareholders  can participate in a  multi-technology
approach at the development/market introduction stage.

     Management  - The  Company's  management  team is led by  President,  Chief
Executive  Officer and  Chairman of the Board,  Leon H. Toups.  Mr.  Toups' past
associations  include ten years serving as President and Chief Executive Officer
of  Chromalloy  American.  Prior to its sale and during the period of Mr. Toups'
association,  Chromalloy American was a 600 company  international  conglomerate
serving six major market  segments  with revenues of  approximately  $2 billion.
Co-founders of Toups Technology include Chief Executive Officer and Chairman Mr.
Leon Toups,  Executive  Vice  President  and  Director Mr. Mark Clancy and Chief
Financial  Officer and Director Mr. Michael Toups.  (See  "Directors,  Executive
Officers,  Promoters and Control  Persons;  Compliance with Section 16(a) of the
Exchange Act").

     Operating structure - In addition to the above named Officers, at the staff
level to support all technologies, the Company has a Safety Officer, Engineering
Coordinator,  Sales Manager,  Compliance/Quality Control Director and Purchasing
Coordinator.   At  the  line   level,   the   Company   typically   engages   an
industry-experienced  professional as Division Manager. This structure preserves
the  single-minded,  entrepreneurial  spirit of each  project  while  providing
managerial  support in matters  relating  to  operations,  sales and  marketing,
finance and business development.

     Operating  facilities  -  The  Company's   headquarters  and  manufacturing
facility occupies  approximately 50,000 (fifty thousand)  square-feet within the
96-acre Pinellas Science  Technology and Research Center ("STAR Center") located
at 7887 Bryan Diary Road, Largo,  Florida.  The Company also has leased a 10,000
(ten thousand)  square foot  stand-alone  building  within which is housed TTL's
Environmental  Solutions  Division.  The Company also maintains its Balanced Oil
Recovery  System (BORS) Lift  Engineering  office in Claremore,  Oklahoma.  (See
"Description of Property").

     Employees  - The  Company  provides  medical  insurance,  vacations,  stock
incentives and other,  similar employee benefit programs.  None of the Company's
employees are represented by collective bargaining  agreements.  At December 31,
1998,  the Company had 88  full-time  and 0 part-time  employees  engaged in the
following areas:

                                   Executive                          5
                                   Engineering/technical             11
                                   Manufacturing                     59
                                   Sales                              9
                                   Administrative                     4
                                   Total                             88
<PAGE>
     1999  capital  financing  programs.  During the first  quarter,  1999,  the
Company  completed  agreements  for the sale of $1,500,000  of its  Subordinated
Convertible  Notes (the " Notes")  and the sale of  $750,000  of its Series A 7%
Convertible Preferred Stock (the "Preferred").  Each transaction was done with a
domestic US fund. Both placements were conducted to provide for capital expenses
estimated to occur  throughout  1999. (See "Market for Common Equity and Related
Shareholder Matters").

Divisional Summary:

     Environmental  Solutions  Division - represents  the focus of the Company's
business purpose and encompasses proprietary  waste-to-energy equipment designed
to treat all hydrocarbon-based waste in a closed, non-polluting environment. The
equipment includes:

     i.  Pyrolytic Carbon Extraction(a),
     ii. Pyrolytic Tire Reclamation and the
     iii.Hot Plasma Destructive Distillation(a)

     In  addition,   the  Environmental   Solutions   division  features  three,
clean-burning alternative fuels including:

     i.  Phoenix 777(a);
     ii. AquaFuel(a), and;
     iii.Magnegas(a).

     Manufactured  Products  Division - supports the Company's  business purpose
through the fabrication and assembly of the environmental  equipment cited above
as well as acting as the  manufacturer  for the Company's  Balanced Oil Recovery
System Lift,  Tunnel Bat Culvert  Reclamation  Vehicles  and a complete  line of
high-tech radio frequency powered generators. The Manufactured Products Division
earns  revenues  through the sale of proprietary  manufactured  products for the
Company and as an  outsource  provider  for a host of  third-party  manufactured
parts and products.

     E-Commerce  Division - supports  the  Company's  business  purpose  through
conducting secured transactions through the internet for both the Company's line
of products as well as on a fee basis for third party merchants. At present, the
E-Commerce Division featuring InterSource HealthCare,  markets medical equipment
as well as a host of medical products and  pharmaceuticals.  TTLOnline.com  came
on-line  during  June,  1999 to  serve  as the  marketplace  for our  E-Commerce
Division  allowing  the Company to now stock our shelves with a host of products
which  will be  offered  for  sale on a  shared-revenue  basis.  The  E-Commerce
Division earns revenues  through the sale of both  proprietary  and  third-party
products on the internet.

     1998 into 1999.  During 1998,  the Company grew from 5 to 88 employees  and
from occupying 5,000  square-feet in a single location to now operating a 50,000
square foot manufacturing,  precision  micro-welding  facility,  a 10,000 square
foot off site location, a national engineering office in Claremore, Oklahoma.

     Also during 1998,  the Company  acquired  the rights to four  technologies,
made three  acquisitions  and increased  assets from  approximately  $275,611 to
$5,685,185.  The Company continues to operate with minimal debt and normal trade
payables and has seen meaningful  revenue growth from the last quarter,  1998 to
the first  quarter,  1999.  With the maturing of the Company's  three  divisions
coupled with the recently completed private  securities sale of $2,250,000,  the
Company is confident it can expand operations for the remainder of 1999.

     Research and development.  As a facilitator of  technologies,  a portion of
the  Company's  cash will be used to finance the  development  of its  products,
particularly  its Tunnel Bat  technologies.  The Company  also  estimates it may
incur  additional  research  and  development  costs in relation to  Alternative
Fuels.  As of this  writing,  the  Company  estimates  such  1999  research  and
development  costs would be  approximately:  Tunnel Bat  vehicles - $72,000 and;
potentially, Alternative Fuels - $300,000.

     The Company earns its revenues primarily through the sale and service of
the following product lines.

     Environmental Solutions:

         Equipment:

              Pyrolytic Carbon Extraction(a)(PCE) Processor
              Hot Plasma AquaFueler(a) 1500
              Pyrolytic Tire Reclamation Process

         Alternative Fuels:

              AquaFuel(a)
              Phoenix 777(a)
              Magnagas(a)

     Manufactured Products

         Balanced Oil Recovery System Lift
         Tunnel Bat Culvert Reclamation Vehicle
         Brounley Radio Frequency CO2 Lasers and Power Generators

     E-Commerce Division

         InterSource HealthCare
         TTLOnline.com



<PAGE>


                   Pyrolytic Carbon Extraction (PCE) Processor

     The Company's Pyrolytic Carbon Extraction Process or PCE treats both liquid
and solid  hydrocarbon-based  waste in a closed system without releasing harmful
emissions,  fluids  or  solids  into  the  environment.  The  industrial  system
transforms  about 40% of the waste into carbon black.  The  remainder  becomes a
clean-burning gas named Phoenix 777(a) which demonstrates exhaust and combustion
properties  superior to natural gas. The combustion of Phoenix 777(a) emits less
than half of the carbon dioxide of natural gas and virtually no carbon  monoxide
or  hydrocarbons,  is  lighter  than  air and has a  distinct  odor  which is an
important safety feature..

                                (Picture Omitted)


     The PCE refinery or  fuel-processing  unit provides for both mechanical and
electrical  output.  The unit operates on wastes ranging from household garbage,
tires,  vegetable matter, manure of all types, waste oils (fossil or vegetable),
animal fat and a host of other hydrocarbon-based waste.

     The PCE unit is a dual-fuel  unit. The PCE unit is designed to be activated
with propane and once in operation,  the dual-fuel capability allows the unit to
switch from propane to its own Phoenix  777(a).  The unit will consume about 20%
of the Phoenix 777(a) produced in the course of its operation.

System Features:

         Fuel:       Waste material such as paper, plastic, tires, animal fat,
                     used motor oil, cloth, bio-mass

         Power Plant:  4-cylinder internal combustion engine carbureted for
                       propane and Phoenix 777@ - (diesel or gasoline
                       configuration optional)

         Automatic operation  using embedded controller



System Benefits:

          o Produces drinking and potable water with optional  evaporator unit o
          Waste  disposal  solution  with  short-term  payback   capabilities  o
          Generation  of  electricity  when put in  series  with a  generator  o
          Environmentally clean - no emissions, no landfill waste o Carbon black
          extraction  affords additional revenue stream o Minimal global warming
          contribution o No fuel or electric costs for operation

Manufacturing:

The Company  fabricates  and assembles  the PCE equipment at its Largo,  Florida
based plant.



<PAGE>


                            Hot Plasma AquaFueler1500

     TTL's Hot  Plasma  AquaFueler  1500 is  designed  to  recycle a variety  of
materials  into a clean  burning,  combustible  fuel.  Some of the materials for
which this unit was designed to convert to a useful, combustible gas include:

   -   Chemical/hydrocarbon contaminated soil, PCP contaminated transformer oil,
       Water/land-based  oil spills,  Refinery  pit oil,  Antifreeze,  Solvents,
       Processing oils, Hazardous runoff water, Paint sludge,  Crankcase sludge,
       Bilge water,  Processing  oils,  Tank  bottoms,  Parts  washer  solvents,
       Chemical wash water

The AquaFueler

     The AquaFueler 1500 makes up to 3,000 cubic feet of clean-burning  AquaFuel
per hour for about five cents per cubic foot.  Three  one-by-twelve-inch  carbon
rods are automatically fed into the liquid-filled  AquaFuel  generation chamber.
Liquids  used in the  process  can range  from  salt  water to raw  sewage.  The
AquaFueler 1500 is the only safe, reliable and effective way to make AquaFuel.

                                (Picture Omitted)


Manufacturing:

     The Company  fabricates  and assembles  the AquaFuel 1500  equipment at its
Largo, Florida based plant.



<PAGE>


                    Pyrolytic Tire Reclamation (PTR) Process

     The  Company's  PTR Process  was  developed  to recover the oil,  steel and
carbon black used in the  manufacture of tires.  The process is  self-contained,
using scrap tires as the  feed-source,  fed in through  the PTR  equipment  as a
means to reduce the tires to their basic elements.  As a percent of weight,  the
by-products of each tire are 10% steel; 25% fuel gas; 25% Petro-chemicals,  and;
40% carbon black.  The PTR  technology  reclaims  these  products which are then
offered for sale.

     The PTR technology  differentiates  from  competition  because there are no
emissions  and,  therefore,  no residue from  combustion.  The PTR technology is
further  differentiated from competition in its modular design, which allows for
a tire "plant" to be a single unit up through a full-scale, multi-unit plant.

                                (Picture Omitted)


PTR Research  and  Development  - The final  commercial  development  of the PTR
equipment will take a two-pronged path through (i) the fabrication of the actual
PTR module and;  (ii) a detailed  analysis of materials  resulting  from the PTR
equipment including carbon black, oils and  Petro-chemicals.  The purpose of the
Company's  testing  program is to  determine  the quality and  character  of the
materials produced by the equipment such that a market demand  determination can
be made.

Manufacturing

     As a part of its  development  agreement  with a national heat rod company,
the Company intends to outsource  portions of the fabrication  aspect of its PTR
technology



<PAGE>


                                    AquaFuel

     AquaFuel is produced as a result of recycling  liquid waste.  AquaFuel is a
non-fossil,  combustible  gas that results from the  introduction of an electric
arc  under  water  in  the  presence  of  carbon.   The  resulting  fuel  is  so
clean-burning  that it gives off as much carbon monoxide in 24 years as the same
engine on gasoline does in 24 minutes.

     At present,  the only device able to manufacture  AquaFuel in  commercially
viable quantities is the AquaFueler 1500.

     AquaFuel can be used to power  everything  from cooking  stoves to electric
generators to replacing acetylene for metal cutting.

     The various studies  completed until now have identified the following main
characteristics:

   1)    AquaFuel is cost  competitive  even neglecting its free production as a
         byproduct of sewage  recycling,  it has dramatically less pollutants in
         the combustion exhaust,  and can be more easily and safely produced and
         stored than any other combustible gas, ;

   2)    In view of the above  characteristics,  AquaFuel  is clearly  among the
         best fuels available at this writing for automotive and other uses on a
         world wide basis, with particular  reference to consumer,  but also for
         municipal, industrial and military applications;

   3)    The AquaFuel  process  provides a basically  novel method for recycling
         liquid waste which produces  AquaFuel as a usable gas, water usable for
         irrigation and solids usable for fertilization;

4)   AquaFuel  is  an  excellent  gas  for  the   production   of   electricity,
     particularly  in the free form  obtained from the recycling of liquid waste
     from cities and municipalities.

   5)    Systematic  scientific  experimentation  and theoretical studies of the
         chemical and particulate behavior have identified a number of anomalies
         in AquaFuel which are applicable to all other gases,  thus permitting a
         new gas technology with implications and applications to the entire gas
         industry and consequentially vast, additional economic horizons.



<PAGE>


                                 Phoenix 777(a)


     Phoenix 777(a) is derived through the operation of the Company's  Pyrolytic
Carbon Extraction equipment.

     Phoenix 777(a)  demonstrates  unique properties with exhaust and combustion
properties superior to natural gas.

     Combustion  emits  less  carbon  dioxide  emissions  than  natural  gas and
virtually  no carbon  monoxide  (as  measured by  percentage  of  emissions)  or
unburned hydrocarbons (as measured by parts per million).

     It also contains a concentration of oxygen higher than 7% plus water vapor.
And, like natural gas (methane), it is lighter than air and has a distinct odor.

     Measurements to date reflect in combustion, Phoenix 777(a) emits:

         CO2        7%
         O2         9%
         CO         0.02%
         the balance of the emissions contain water vapor

     Phoenix  777(a) has also been found to  contain  approximately  800 Btu per
cubic foot.




<PAGE>


                         Manufactured Products Division

The Company's Manufactured Products Division is the manufacturing source of:

         Balanced Oil Recovery System Lift
         AquaFueler 1500
         Pyrolytic Carbon Extractor
         Pyrolytic Tire Reclamator
         Tunnel Bat Culvert Reclamation Vehicles
         Radio Frequency Plasma Generators and associated  proprietary  products
including:

     The Company's  manufacturing  division incorporates state of the art custom
metal fabrication and machining.  The Company's metal  fabrication  capabilities
allow TTL to build to print products for a wide range of industrial and business
needs. With its in-house  equipment,  TTL can fabricate a wide range of material
including stainless and carbon steel,  aluminum,  copper,  titanium and incanel.
TTL's machine stop is equipped to do prototype, customer or production work. TTL
has the  latest in CNC  technology  with A Hass Hl-4 30hp  Lathe and a Haas VF-4
vertical milling center.  The equipment is efficient for production runs and the
Company also has several  vertical mills,  tooling lathes and drill presses.  In
addition,  TTL's Manufactured  Products Division offers a total range of welding
capabilities  including  inert  gas or CO2,  plasma,  laser  and  electron  beam
welding.

1.     It is an excellent source of revenues;

2.     It  provides  for  increased  efficiencies  resulting  from  distributing
       overhead, operating costs and providing additional buying power;

3.     Exposure to potential business and strategic partners;

4.     Real-time   control  over  quality,   timing  and   workmanship  for  all
       proprietary   products.   New  inventions  often  require   one-of-a-kind
       specialty  parts.  Given  the  unique  nature  of many  TTL  manufactured
       products,  exact attention to  specifications  is assured while retaining
       flexibility mindful of changing designs and invention.

     The  manufacturing  facility  occupies  50,000  square feet in the Pinellas
Science  Technology and Research  Center.  Formerly  occupied by Lockheed Martin
Specialty  Components as a high-tech parts provider to the Department of Energy,
the 96-acre center has been converted to a home for private technology firms and
manufacturers.

     The following  highlights  the  Company's  Manufactured  Products  Division
market-ready product line.



<PAGE>


                  The Balanced Oil Recovery System (BORS) Lift

     The BORS Lift is a turnkey device that more economically  produces oil from
shallow,  low-volume  "stripper"  wells (10 barrels per day or less). By lifting
oil  rather  than  pumping,  the BORS Lift also  eliminates  conventional  rods,
tubing, downhole pumps or pumping units, and related maintenance costs. Standing
just 4 ft tall and 8 ft long, it is capable of producing  from a gas driven well
with a maximum fluid-balance level of 2,500 feet.

                                (Picture Omitted)

     The operating  concept is based on a balanced  technology of extracting oil
through a collection tube and dumping it into a collection tank without bringing
up water.  Using the BORS lift,  wells that were expelling 25 barrels or more of
salt water every day are now pulling up only oil, saving on salt water disposal.
Installations of the BORS lift have demonstrated an average 387 percent increase
in oil  production  and a decrease  in per barrel  electric  costs from $3.50 to
$0.035.

Manufacturing

     The  Company   manufactures   the  BORS  device  in-house  except  for  the
galvanizing process. The Company purchases the computers and motors for the BORS
device from national suppliers.  Based on current equipment and facilities,  the
Company is able to manufacture 125 BORS units per month on a single-shift  basis
and can manufacture up to 500 BORS units per month on a three-shift  basis.  The
Company currently maintains storage facilities in Claremore,  Oklahoma which can
inventory BORS units pending sale and delivery.



<PAGE>


                     Tunnel Bat Culvert Reclamation Vehicle

     The Tunnel Bat  technology  refers to a vehicle  specifically  designed  to
mobilize the removal of silt, debris, vegetation, soil, rock, and other types of
blockage  from inside a box  culvert.  Box  culverts  relate to a sewer or drain
running under a road or  embankment.  Invented by Dave  Richardson in 1994,  the
Tunnel Bat vehicle  represents  a solution  to the  growing  problem of removing
blockage from box culverts.  The unit is driven by a person,  moves both forward
and backward at about 3 to 5 mph with attachments are on both front and rear.

                                (Picture Omitted)

     The  Tunnel Bat  equipment  is able to turn a slow,  unpleasant  job into a
reliable,   thorough  professional  approach  to  desilting  box  culverts.  The
equipment is fully mobilized  allowing for the maximum removal of blockage while
providing a safe working  environment.  Toups Technology is unaware of any other
product on the market that is designed to address the  thousands of box culverts
throughout the United States.

   Before the Tunnel Bat           After The Tunnel Bat

(picture omitted)                      (picture ommitted)


     The  Company  has  now  completed  preliminary  production  designs  and is
ordering  parts  components  necessary  to construct  the first mass  production
Tunnel Bat vehicle.  The Tunnel Bat Licensor,  Mr. David Richardson,  operates a
Tunnel Bat service  company  within the State of Florida and  operates  with two
Tunnel Bat vehicles.

     Brounley  Engineering  &  Associates.  On September  30, 1998,  the Company
acquired Brounley Associates,  Inc. in an exchange of common shares in which TTL
issued 900,000 unregistered common shares in exchange for 100% of the issued and
outstanding common shares of Brounley. The Company agreed to register 125,000 of
the 900,000 common shares issued in the  acquisition of Brounley.  Brounley is a
wholly owned subsidiary of Toups Technology.

                                                        (PICTURE OMITTED)

     Brounley  Technology - Brounley is engaged in the design and manufacture of
RF (radio  frequency) and related  circuits,  particularly in the field of solid
state  power  generation.  Brounley's  integrated  and modular  design  concepts
competitively  differentiate their product line of high-powered RF generators in
small packages.  In 1993,  Brounley added  production  facilities to build a new
line of generators for Lasers and for the Plasma Etching & Sputtering  industry.
In addition to Integrated RF Generators, Brounley offers clients a full range of
services from original design to a final product.

                                                        (PICTURE OMITTED)

     Brounley  Product Line - Brounley offers a full line of RF Power Generators
for the laser and plasma  industries  which  includes a power  range from 50W to
10,000W.  In  addition,  Brounley  also offers solid state tuners for the plasma
industry.  Other  Brounley  products  include  power  supplies,  RF pre &  power
amplifiers and a variety of designs to support Military communications programs.

     Viperstrike RF Power Generators.  Brounley offers its own brand of RF power
generators  dubbed  Viperstrike.  The  Company's  Viperstrike  RF  Generators is
available in size from the PB300 laser  mounted  model with 300W output power up
through the 8X2 with 10,000W  output  power.  The  Viperstrike  line of RF power
generators  can be  controlled  by an existing  system or with the addition of a
Brounley digital or analog controller. The user can combine or divide the output
power from Viperstrike RF power generators using Brounley's line of RF combiners
and dividers.

     International  Organization  for  Standardization  (ISO) 9000.  Brounley is
currently  engaged in a top to bottom quality program designed to lead to an ISO
9000  Certification  during  the  fourth  quarter,  1999.  ISO  is  a  worldwide
federation of national standards bodies, from some 90 countries. It promotes the
development  of  standardization   and  related  activities  to  facilitate  the
international   exchange  of  goods  and  services,  and  develop  intellectual,
scientific, technological and economic cooperation. The ISO consists of some 170
technical committees, 640 subcommittees, 1800 working groups and 10 ad hoc study
groups.  These  represent the  viewpoints of  manufacturers,  vendors and users,
engineering  professions,  testing laboratories,  public services,  governments,
consumer groups and research organizations in each of the 90 member countries.

     As an ISO 9000 certified  manufacturing  facility,  Brounley's product line
achieves a heighten  level of client  receptivity  resulting  from a  verifiable
design, testing and manufacturing techniques.  The ISO 9000 is recognized as the
guidelines for selection and use of quality  management and assurance  standards
for both supplier and customer. ISO 9000 elaborates on the general philosophy of
quality systems standards, their characteristics,  the existing types, where and
when they are best used, and describes what elements  quality  assurance  models
should   incorporate.   It  also  deals  with  demonstration  and  documentation
requirements, pre-contract assessment and contract preparation.

     Brounley  Research and Development - Brounley's  engineering  department is
working to further  reduce the overall size of the  Company's  generators  while
preserving  and  increasing  the  power.  Brounley  is also  engaged in a Plasma
generator  design  which is slated  for  market  introduction  during the fourth
quarter,  1999  through  the  first  quarter,  2000.  As a part  of its  overall
development,  Brounley  is  evaluating  all aspects of its  operations  so as to
become an ISO 9000 certified manufacturing facility by the fourth quarter, 1999.

     InterSource  Health  Care.  On December  18,  1998,  the  Company  acquired
two-year  old  InterSource  Healthcare,  Inc. in an  exchange  of common  shares
agreement in which the Company issued  1,203,241  unregistered  common shares in
exchange for 100% of the issued and  outstanding  common shares of  InterSource.
The Company agreed to register  225,000 of the 1,203,241 common shares issued in
the course of the acquisition. InterSource is a wholly owned subsidiary of Toups
Technology

                                                        (PICTURE OMITTED)


     InterSource Business - InterSource seeks to match buyers and sellers of new
and used  (refurbished)  medical equipment and consumables  through its internet
site  located at  www.intersourcenet.com.  For the seller of new or  refurbished
medical equipment and/or consumables,  InterSource offers a secure internet site
coupled with a  professionally  staffed  in-house sales force.  For the buyer of
medical  equipment and/or  consumables,  InterSource  offers a one-stop means to
comparatively shop through the convenience of the internet.

     InterSource  Marketing -  InterSource  offers its  equipment  and  products
through a secure  internet  home page and  through  an  in-house,  direct  sales
program.  The staff of  InterSource's  direct sales program  includes a licensed
medical  doctor,  a registered  pharmacist,  a  registered  nurse and the former
principal of Alpha Laboratories Corporation.

     An  InterSource  Transaction - Contact is made with a prospective  customer
that  became  aware  of  available  equipment  and/or  products  either  through
InterSource's  internet  home-page or from direct  selling  efforts.  A detailed
investigation  is done to assure the supply of the proper  product at the proper
cost to meet an individual need of the customer.  Once  completed,  the customer
places an order.  InterSource  then  procures the needed  item(s),  receives and
inspects the  products,  and ships direct to the  customer.  Payment  terms vary
dependant  of the  product(s)  ordered,  however,  95% of the  payments are made
between  time of order and time of  delivery.  The other 5% are net 30-day terms
for  smaller  orders  of  consumable   products  to  credit  worthy   customers.
InterSource maintains a minimal inventory of items; most items are purchased for
direct  resale after an actual order is received  from a customer.  InterSource,
under the terms of a wholesale  broker  license can only broker  pharmaceuticals
and cannot  take  possession  of same.  All  pharmaceutical  sales are done on a
letter of credit basis payable at time of delivery.

     InterSource  Marketplace - The Company  estimates the  marketplace  for its
InterSource   division  is  the  general   medical   equipment   marketplace  of
approximately $100 billion annually.  InterSource also operates in a limited way
in the United States pharmaceutical  marketplace.  Both the new and used medical
equipment and pharmaceutical  industries are highly competitive.  The Company is
unaware  of other  entities  engaged in a  business  purpose  similar to that of
InterSource.  However,  given the size and scope of the  medical  industry,  the
Company  expects to encounter  competition  more than likely from companies with
greater financial and marketing resources than TTL.

Municipal Solid Waste

     The municipal  solid waste (MSW) industry has four  components:  recycling,
composting,  landfilling,  and  combustion.  The U.S.  Environmental  Protection
Agency  defines MSW to include  durable goods,  containers  and packaging,  food
wastes,  yard  wastes,  and  miscellaneous  inorganic  wastes from  residential,
commercial, institutional, and industrial sources. It excludes industrial waste,
agricultural  waste,  sewage  sludge,  and all  categories of hazardous  wastes,
including  batteries and medical  wastes.  More than 209 million tons of MSW was
generated in 1994.  Paper and  paperboard  accounted for 81.3 million tons (38.9
percent)  of the total  waste  stream,  yard  wastes  30.6  million  tons  (14.6
percent),  plastics  19.8 million tons (9.5  percent),  metals 15.8 million tons
(7.6  percent),  food 14.1 million tons (6.7  percent),  glass 13.3 million tons
(6.3 percent), and other 34.2 million tons (16.4 percent).

Type of Process and Capacity - Competitive answers to MSW

     Generally,  WTE facilities can be divided into two process types: mass burn
and refuse-derived fuel (RDF). Mass burn facilities process raw waste; it is not
shredded,  sized,  or  separated  before  combustion.  Very large  items such as
refrigerators  or stoves and  batteries/hazardous  waste  materials  are removed
before combustion. Noncombustible materials such as metals can be removed before
or after  combustion,  but they are usually separated from the ash with magnetic
separators.  The waste is usually deposited in a large pit and moved to furnaces
with overhead cranes.

     Combusting  waste usually reduces its volume by  approximately  90 percent.
The  remaining  ash is  buried  in  landfills.  The  ash  is  divided  into  two
categories: bottom ash and fly ash. Bottom ash is deposited at the bottom of the
grate or  furnace.  Fly ash is  composed  of small  particles  that rise  during
combustion  and are  removed  from  the  flue  gases  with  fabric  filters  and
scrubbers.   Fly  ash  is  usually   considered  to  be  the  more   significant
environmental problem.

     Waste is  preprocessed  at RDF  facilities.  Noncombustible  materials  are
removed,  increasing  the  energy  value  of  the  fuel.  The  extent  to  which
noncombustible  materials are removed  varies.  Most systems  remove metals with
magnetic  separators;  glass,  grit, and sand may be removed through  screening.
Some  systems  utilize air  classifiers,  trommel  screens,  or rotary  drums to
further refine the waste.

     Modular  facilities  are  small  mass  burn  facilities;  they are  usually
prefabricated  and shipped  fully  assembled  or in modules to the  construction
site. Mass burn waterwall facilities are usually custom-designed and constructed
at the  site.  Waterwall  furnaces  contain  closely  spaced  steel  tubes  that
circulate water through the sides of the combustion chamber. The energy from the
burning waste heats the water and produces steam. Some waterwall facilities also
use  rotary  combustors  to  rotate  the  waste,   resulting  in  more  complete
combustion.

     The overall majority of WTE facilities  employ mass burn processes.  Of the
101 facilities reporting the type of process employed in 1996, 86 were mass burn
facilities  and  15  were  RDF  facilities.  Two  of the  mass  burn  facilities
codisposed  their waste with sludge.  Although only 22 percent of the facilities
were of the smaller  modular type, 6 of the 13  facilities  located in the North
Central region were modular . Over half of the facilities were of the mass burn,
waterwall  type.  More than 40  percent  of the  facilities  are  located in the
Northeast and another one-third in the South. Only 22 percent are located in the
West and North Central regions, where landfill space is relatively less scarce.

     The average  capacity of U.S. WTE  facilities is almost 1,000 tons per day.
RDF  facilities,  on  average,  have more than twice the  capacity  of mass burn
facilities  (almost 1,900 tons per day versus 850 tons per day).  The facilities
in the Northeast and South regions have an average  capacity  greater than 1,000
tons per day. The average  capacity of the  facilities  in the North Central and
West regions is between 700 and 800 tons per day (Table 11). Modular  facilities
are by far the smallest, ranging from an average of 89 tons per day in the North
Central region to 256 tons per day in the Northeast.

Primary Energy Form

     Over 80 percent of the 102 facilities produce electricity. Twenty of the 84
facilities that produce electricity cogenerate steam and electricity. Only 18 of
the facilities  produce just steam; 12 of those facilities are modular.  None of
the RDF  facilities  produce  steam  only,  compared  with more than half of the
modular facilities, most of which are older facilities.

     In recent years most of the  installations  have generated  electric power.
The guaranteed  market for electricity  under PURPA minimizes the financial risk
for  facilities   generating   electricity.   This  condition  could  change  if
electricity  prices drop as a result of  restructuring  in the electric  utility
market.

Air Pollution Control Equipment

     Various  types and designs of air pollution  control  equipment are used by
most WTE facilities.  Dry scrubbers and baghouse filters used in combination are
more efficient than most electrostatic  precipitators in removing acid gases and
particulates from stack gases. Nitrogen oxide and mercury emissions must also be
controlled in most regions of the United States.  Modular  facilities  that have
exclusively used after-burn or two-chamber combustion systems can no longer rely
on those systems for adequate  pollution  prevention in many parts of the United
States. As a result, some have been retrofitted.  Others have permanently closed
down.

Participants

Waste-to-Energy Facilities

     As of the fall of 1996,  there were 102 WTE facilities  marketing energy in
the United States. The number of facilities has declined by more than 10 percent
during the past few years.  Most of the WTE  facilities in the United States are
located in the East,  where landfill space is the most scarce.  WTE capacity has
declined  by  approximately  2  percent  over the last year or so,  from  almost
101,000 tons per day to approximately 99,000 tons per day.

     Almost half (48) of the WTE  facilities  in the United States are privately
owned;  3 are joint  public/private  ventures;  and the  remainder  are publicly
owned.  Twenty-five of the facilities owned by the public sector are operated by
private sector.  Thus, 70 percent of all U.S. WTE facilities are operated by the
private sector.

Trends in Municipal Solid Waste Generation

     The  generation of MSW has increased  from 88 million tons in 1960 to 209.1
million tons in 1994.  During that time, per capita  generation of MSW increased
from 2.7 pounds per person per day to 4.4 pounds per person per day. Per capital
generation  is  expected  to  remain  constant  through  2000,  when  total  MSW
generation is expected to 223 million tons.

     In 1960,  approximately  30 percent (27 million  tons) of MSW generated was
incinerated,  most without energy recovery or air pollution controls. During the
next two decades, combustion declined steadily, to 13.7 million tons by 1980, as
old incinerators were closed. Less than 10 percent of the total MSW generated in
1980 was combusted. With the enactment of the Public Utility Regulatory Policies
Act of 1978, (PURPA) and the emergence of a guaranteed energy market, combustion
of MSW increased to 31.9 million tons or 16 percent of  generation by 1990.  All
of the major new  waste-to-energy  facilities  are designed  with air  pollution
controls and have energy recovery.  During the 1990s, the absolute amount of MSW
combusted and converted into energy remained fairly constant, although the share
declined slightly.  By the year 2000, the amount of MSW combusted is expected to
reach 34 million tons.

PCE differentiates from alternative MSW solutions

     At  present,  approximately  57% of  Municipal  Solid  Waste is  placed  in
landfills  while  16% is  used  in  combustion  and  27% is  recovered.  What is
important to note here is that of the  estimated 16% of MSW which burned or used
in  combustion,  produces  two  grades of ash  which  must then be buried at the
landfill.

                                (GRAPHIC OMITTED)


     The reasons for the  predominate  use of landfills is  understandable  when
considering the trend in tipping fees. Note the tipping fees for waste-to-energy
facilities  have  grown to in excess of $62 per ton while the  tipping  fees for
landfill  disposal of MSW have remained constant since 1994 at approximately $31
per ton.

                                (GRAPHIC OMITTED)


     The most  practical  entry into the MSW  marketplace,  as it relates to the
Company's  Environmental  Solution as delivered through TTL's Village Concept is
by focusing on the use of Landfill for municipal solid waste. This becomes clear
when  considering the large market share currently held by Landfill and the many
negative factors which accompany this type of MSW disposal.

                                (GRAPHIC OMITTED)

     MSW  contains  significant  portions of organic  materials  that  produce a
variety of gaseous  products  when dumped,  compacted  and covered in landfills.
Anaerobic  bacteria  thrive  on the  oxygen-free  environment  resulting  in the
degradation  of the organic  materials and the  production  of primarily  carbon
dioxide  and  methane.  Carbon  dioxide  is likely to leach out of the  landfill
because  it is  soluble  in water.  Methane,  on the other  hand,  which is less
soluble  in water  and  lighter  than air,  its  likely  to  migrate  out of the
landfill. Of interesting note is a type of gas called Landfill gas or LFG.

     In the United States,  there are 133 facilities  that convert  landfill gas
into energy at landfill sites that are either  operational  or temporarily  shut
down. The LFG-to-energy  facilities appear to be evenly  distributed  throughout
the regions of the country. The West region has the largest number,  followed by
the Northeast,  North Central and South.  Almost  on-third of all the facilities
are located in California and New York has the second largest number.  The first
LFG-to-energy  facilities began operations in 1979 and  approximately 70 percent
of the 133 facilities that are in existence  today began operation  during the 7
year period 1984 to 1990.

     To collect LFG,  wells are usually  drilled 30 to 100 feet into a landfill.
Key  characteristics  of a landfill  that  determine the amount of gas available
include the type and compactness of the refuse buried, the length of time is has
been burned and the amount of rainfall in the area.

     Historically,  LFG has been  collected  and flared at sites  because it was
uneconomical to convert to energy.  Energy application include the use of low to
medium Btu gas to generate  electricity or as a boiler fuel. The LFG can also be
upgraded for use in natural gas  pipelines and small amounts of LFG are used for
soil remediation or synthetic fuels.

     Most  LFG-to-energy  facilities  create  medium-Btu  gas by  filtering  out
particulate  matter and removing  water  vapor.  This gas has an energy value of
approximately 500 Btu per cubic foot. Pipeline-quality gas (100 percent methane)
can be created by further  refinement  to remove most of the carbon  dioxide and
other  contaminants.  However,  in recent  years the  percentage  of  facilities
producing  pipeline-quality  gas has  declined  as a result of low  natural  gas
prices.

     Approximately  75 percent  of the  LFG-to-energy  facilities  in the United
States produce  electricity.  Prices for the sale of electricity from LFG plants
in 1994 were  reported for 82 facilities  (existing  and  planned).  The average
prices (in cent per  kilowatthour)  were 6.81,  5,76, 4.98 and 4.39 in the West,
Northeast, South and North Central regions, respectively. Many of the facilities
receive peak and off-peak rates.

Item 2            Description of Property

     The   Company's    headquarters   and   manufacturing   facility   occupies
approximately  50,000  (fifty-thousand)  square-feet within the 96-acre Pinellas
Science  Technology and Research  Center ("STAR  Center")  located at 7887 Bryan
Diary Road, Largo, Florida.

     Formerly used by Lockheed Martin Specialty  Components,  Inc. as a provider
for the Department of Energy ("DOE"),  the STAR Center has been converted into a
technology incubator for engineering firms and specialty manufacturers. The STAR
Center is a 739,873 square-foot complex,  comprised of 17 separate buildings;  a
150,000 square-foot,  16-foot high bay manufacturing area, and approximately 100
separate areas, including laboratories, production space and offices.

     The Company also maintains a 10,000 square-foot  facility wherein is housed
its   AquaFuel(a)   division.   The  Company  also  maintains  an   engineering,
installation  and field  service  office in  Claremore,  Oklahoma.

     The Company  does not invest in real estate or real estate  mortgages,  nor
does the Company invest in the  securities of or interests in persons  primarily
engaged in real estate activities.

Item 3            Legal Proceedings

     The Company is not subject to any legal proceedings. The Company is unaware
of any governmental  authority that is contemplating  any procedure to which the
Company is a participant.

Item 4            Submission of Matters to a Vote of Security Holders

                  None.

                                     PART II

Item 5            Market for Common Equity and Related Stockholder Matters

     Since activation of operations in November,  1997, the Company has provided
for its venture funding  requirements  through sales of its securities at prices
ranging from $0.62 to $1.25 per share.  As a result of these sales,  the Company
issued  securities  to various  persons and firms and all such  securities  were
acquired  directly  from the Company in  transactions  not  involving any public
offering. All securities were sold in reliance on Section 4(2) of the Securities
Act of 1933. All purchasers  executed a Subscription  Agreement  indicating they
have such knowledge and experience in financial and business matters that either
alone or with a purchasers representative,  are capable of evaluating the merits
and risks of the investment.

     Since June 16, 1998, the date when the Company's shares began trading,  the
Company's  per share price has ranged from $0.68 to $3.00 and has  predominately
traded at an average of $2.00 per share.  Throughout this period from June, 1998
through  the date of this  filing,  the  Company's  has  traded  an  average  of
approximately 60,000 shares daily.

     As of  December  30,  1998,  Company had in excess of 700  Shareholders  of
Record.

     In order to allow for its  current  year  capital  needs,  during the first
quarter 1999, the Company  completed the sale of $1,500,000 of its  Subordinated
Convertible Notes to The Augustine Fund (the "Augustine  Notes") and the sale of
$750,000 of its Series A 7% Convertible  Preferred  Stock to The Shaar Fund (the
"Shaar  Preferred").  Both  placements  were  conducted  to provide  for capital
expenses estimated to occur throughout 1999.

     The Augustine Notes. On February 17, 1999, the Company executed a series of
agreements with Augustine Capital Group  ("Augustine")  relating to the purchase
by Augustine of $1,500,000 of TTL's Series 1999-A Eight Percent (8%)  Covertible
Notes (the  "Notes")  and the  issuance  of  Warrants  and  registration  rights
relating thereto. On that same date,  Augustine delivered $750,000 to TTL and is
obligated to deliver a second $750,000 30 days following the registration of the
shares underlying the Notes. There were no brokers,  promoters,  underwriters or
similar persons  associated with this transaction.  Closing fees of $10,000 were
paid (i) to Augustine  counsel and (ii) third party counsel whom acted as Escrow
Agent.  A more  detailed  summary  of  the  Series  1999-A  Eight  Percent  (8%)
Convertible Note due January 1, 2002 and the warrants and  registrations  rights
provided in connection therewith immediately follows

     The Shaar  Preferred.  On March 30, 1999, the Company  executed a series of
agreements  and amended its articles of  incorporation  in order to complete the
placement  of $750,000 of its Series A 7%  Preferred  Stock with The Shaar Fund.
Under the terms of the Series A Preferred  Stock, the holder may convert at 105%
of the closing price (the "Closing  Price" was fixed at $2.10 on March 30, 1999)
anytime up to 90 days after  issuance;  85% of the closing price anytime between
91 days and 119 days following closing; 80% of the closing price anytime between
120 and 149 days following closing, or; 75% anytime after 150 days following the
closing date. The Company also issued 93,750  warrants  exercisable at $2.40 per
share in  connection  with the  sale of  Preferred  Stock  and  granted  certain
registration rights. The Company paid a finders fee of 8% or $60,000 plus 50,000
Warrants  allowing for the purchase of the  Company's  securities at 120% of the
closing bid price at time of exercise. A more detailed summary of the Series A -
7%  Convertible  Preferred  Stock  and the  warrants  and  registrations  rights
provided in connection therewith immediately follows this section.



<PAGE>


Series 1999-A Eight Percent (8%) Convertible Note due January 1, 2002

     The  Company  shall repay to  Augustine  the  principal  sum of $750,000 on
January 1, 2002 (Maturity Date) and interest on the principal sum outstanding at
the rate of 8% per  annum  due  quarterly  in  arrears  on March  31,  June 30 ,
September 30 and December 31 of each year during the term of the Note. The first
such  interest  payment is due June 30, 1999.  The Notes may be  exchangable  in
amounts of $50,000  or  greater.  Conversions  of the Note must be  effected  in
increments of at least $10,000 of principal amount.

     Augustine  may convert  the face amount of the Note at any time  commencing
the earlier of (i) the date the  Registration  Statement  relating to the shares
underlying  the Note becomes  effective,  or; (ii) the date which is ninety (90)
days after February 17, 1999 (date of Note).  Accordingly,  the Conversion  date
would be approximately May 17, 1999.

     The per share price at which  Augustine  may convert the Note is the lesser
of:  (i) 100% of the  lowest  closing  bid price per share  during the five days
preceeding  the Closing Date (this price per share has been fixed at $1.78125 (1
& 25/32) per share.  Accordingly,  should  Augustine  select  method (i) for the
conversion  rate of their  principal  amount,  they would be entitled to 421,053
Toups Technology common shares); or (ii) 80% of the lowest closing bid price per
share during the five days preceeding the conversion date.

     The Company  may,  at its option,  redeem the Note at any time in an amount
equal to 125% of the face  amount  of the  portion  of the Note  remaining  plus
interest at the time of such redemption.

     In keeping  with the intent of the  parties,  the  Company  shall  register
421,053 common shares relating to the first closing and 421,053 common shares in
anticipation  of the second  closing.  At this  time,  the  estimated  number of
registered  common  shares  necessary  for the full  conversion of the principal
amount of the notes is 842,106 common shares.

Warrants in connection with the Augustine Notes

     As a part of sale the Augutine Notes, the Company provided 150,000 Warrants
wherein each such Warrant  entitles the holder thereof to purchase the Company's
common  stock at the rate of 110% of the closing bid price for the Common  Stock
on the date of such  Closing  (the  closing bid price for the  Company's  common
shares on February 17, 1999 was $2.00.  Accordingly,  the exercise price for the
Warrants  relating  to the first  Closing  is $2.20 per  share  making  the full
exercise price of the 125,000  Warrants  delivered in connection  with the first
Closing $275,000).

Registration Rights  in connection with the Augustine Notes

     As a  part  of  its  Augustine  agreements,  the  Company  granted  certain
registration  rights  which,  in  effect,  require  TTL  to  amend  its  current
pre-effective SB-2 Registration  Statement to include the total estimated number
of shares available for conversion of the Notes and exercise of the Warrants.



<PAGE>


Series A 7% Convertible Preferred Stock

On March 30, 1999,  the Company  executed a series of agreements and amended its
artciles of  incorporation in order to complete the placement of $750,000 of its
Series A 7% Preferred Stock with The Shaar Fund. Under the terms of the Series A
Preferred  Stock, the holder may convert at 105% of the closing price anytime up
to 90 days after issuance;  85% of the closing price anytime between 91 days and
119 days following closing; 80% of the closing price anytime between 120 and 149
days  following  closing,  or; 75% anytime after 150 days  following the closing
date. The Company also issued 93,750 warrants  exercisable at $2.40 per share in
connection  with the sale of Preferred  Stock and granted  certain  registration
rights.  The Company  paid a finders fee of 8% or $60,000  plus 50,000  Warrants
allowing for the purchase of the Company's securities at 120% of the closing bid
price at time of exercise.

Warrants issued in connection with the Series A 7% Convertible Preferred Stock

     As a part of the sale of its Series A 7% Convertible  Preferred  Stock, the
Company also issued  93,750  Warrants  providing the holder the right to acquire
the  Company's  common stock at a price equal to 120% of the market price on the
closing date.  The Warrants may be exercised  anytime up through March 30, 2004.
The exercise price of the warrants  issued in connection with the sale of Series
A 7% Convertible  Preferred  Shares is $2.40 per share. As a further part of the
sale of the  Series  A 7%  Convertible  Preferred  Shares,  the  Company  50,000
warrants as a part of a finders fee. The finder's  warrants are identical in all
respects  to the  warrants  issued to the holder of the Series A 7%  Convertible
Preferred Shares.

Registration  rights in connestion  with the Series A 7%  Convertible  Preferred
Stock

     As a part  of its  Shaar  Fund  agreements,  the  Company  granted  certain
registration  rights  which,  in  effect,  require  TTL  to  amend  its  current
pre-effective SB-2 Registration  Statement to include the total estimated number
of shares  available for  conversion of the Preferred  Stock and exercise of the
Warrants including those Warrants issued to the finder.

Other shareholder matters

     Holders of the  Company's  Common Stock are entitled to dividends  when, as
and if  declared  by the  Board of  Directors,  out of funds  legally  available
therefore.  The Company does not  anticipate  the  declaration or payment of any
dividends in the foreseeable future.

     The Company intends to retain earnings,  if any, to finance the development
and expansion of its  business.  Future  dividend  policy will be subject to the
discretion  of the  Board  of  Directors  and  will be  contingent  upon  future
earnings,  if any. Other factors  regarding the payment of dividends include the
Company's financial condition, capital requirements, general business conditions
and  other,  similar  matters.  Therefore,  there can be no  assurance  that any
dividends of any kind will ever be paid.

     The Company's  registrar and transfer agent is  Continental  Stock Transfer
&Trust Company.

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

           Results of Operations for the Year Ended December 31, 1998

     The following  discussion and analysis  should be read in conjunction  with
the financial  statements  and related  notes,  as well as the discussion in the
Form 10-KSB/A,  which provide  additional  information  concerning the Company's
financial activities and condition.

Overview:

     Toups Technology  Licensing,  Incorporated ("TTL" or "The Company) business
purpose is commercializing  late-stage technologies,  which are acquired through
license agreements and acquisitions. The Company's technologies and acquisitions
to date are in the energy, environmental, natural resource and healthcare market
segments.  At the end of 1998, the Company was comprised of nine divisions,  six
of which earned  revenues  during 1998.  During the second  quarter,  1999,  the
Company   consolidated   its  nine   divisions   into  three  major   divisions:
Environmental Solutions, Manufactured Products and E-Commerce.

Results of Operations

Fiscal Year Ended December 31, 1998,  Compared to Fiscal Year Ended December 31,
1997

     Sales for 1998 were  $2,221,709,  an  increase of  $1,877,560  or 546% from
$344,149 in 1997. The increase in revenues was attributable to the market launch
and  acceptance  of the Company's  BORS Lift units during the Fourth  Quarter of
1998,  as well as  sales  growth  in the TTL  Manufacturing  division,  formerly
Advanced  Micro-Welding,  Inc.  ("AMW").  AMW was  accounted for as a pooling of
interest by TTL during April 1998.  Since TTL did not commence  operations until
November 1997, figures for the year ended December 31, 1997, reflect less than a
full  year's  transactions  (the  subsidiary  accounted  for by the  pooling  of
interest method reflect the full year's transactions for the year ended December
31,  1997).  The  Company  made two other  acquisitions  during  1998:  Brounley
Engineering & Associates,  Inc.  ("Brounley") and InterSource  Health Care, Inc.
("InterSource"),  both of which were  accounted  for by the  purchase  method of
accounting for a business combination.  Accordingly, the accompanying statements
do not  reflect  revenues or expenses  related to the  acquisition  prior to the
closing dates of September 30, 1998 and November 30, 1998, respectively.

     Gross profit for 1998 was $825,751 or 37% of revenues,  which was down from
$141,460 or 41% of revenues for 1997.  The slight  decrease in gross profit as a
percentage  of  revenues  in 1998 was the  result  of the  profit  margin of the
in-house manufactured BORS Lift during its product introduction.

     The  Company's  selling,  general  and  administrative  (SG&A)  expenses of
$5,985,169  were  comprised  of  development  expenses,   salaries,   consulting
services,  and other operating costs in 1998, up from $126,631 during 1997. As a
percentage of revenues, SG&A increased to 269% in 1998 up from 37% in 1997. SG&A
expenses  increased  in 1998 to  support  further  technology  development,  new
product introductions and future business expansion.  In 1998, $3,580,123 or 60%
of SG&A expenses were  non-cash  expenses paid for through  capital stock issued
for services to further the Company's technologies. The Company used its capital
stock for 60% of total SG&A  expenses to further its  development  and  preserve
cash.
<PAGE>

     The Company incurred increased  personnel expenses and development costs to
build its infrastructure,  assembling a team of engineers,  scientists and other
professionals,  and prepare its  technologies  for market  applications.  During
1998,  the  Company  completed  its  independent  testing  for  AquaFuel  market
applications  and  scalability  results  including  its  first   production-unit
contract for the Dominican  Republic.  In addition,  the Company completed field
tests of BORS Lifts and began  full-scale  production  placing  100 units in the
field,  developed  applications  for  its  tire  recycling  process  technology,
completed  design for and began  production of Tunnel-Bat  units,  completed the
acquisition of AMW,  Brounley and  InterSource  and furthered  discussions  with
potential acquisition candidates,  as well as candidates for technology licenses
that fit with the Company's business purpose.

     As a result of these  activities,  the Company had a 1998 operating loss of
$5,159,418, a decrease from an operating profit of $14,829 for 1997.

     Net interest expense for 1998 was $14,613, up from ($543) in 1997. Interest
expense related to borrowings of wholly-owned subsidiaries.

Liquidity and Capital Resources

     Net cash used by operating  activities of $2,418,348  related  primarily to
the Company's  operating loss less the capital stock issued for services and the
increase in accounts  receivable  and  inventories  from BORS lifts sales in the
fourth quarter of 1998. The Company,  however, had a net working capital surplus
of $1,545,580 at year end, an increase of $1,447,469 from December 31, 1997. The
increase  in  working  capital  was  principally  the result of an  increase  in
accounts receivable  resulting from Fourth Quarter BORS Lift sales and financing
activities  through the issuance of $3.8 million in common stock through private
equity offerings.  At December 31, 1998 the Company had $5,685,185 in assets and
$3,733,143 in stockholders' equity up from $275,611 and $155,694 respectively at
December 31, 1997.

     As of December  31, 1998,  the Company had $49,574  drawn on a $50,000 bank
line  of  credit  for  InterSource  and  $388,237  in  capital  leases  for  TTL
Manufacturing. The Company had no other bank financing or other debt obligations
outstanding other than trade payables,  accrued expenses, and other expenses due
during the normal course of business.

     Through the  acquisitions of AMW,  Brounley and InterSource the Company has
significant production  capabilities available without the requirement for large
plant and equipment capital expenditures.  The InterSource  acquisition added in
excess of $2 million in fair market value of equipment purchased and refurbished
by  InterSource  under its  facility  lease.  The  equipment  remained  from the
facility's former tenant, a large defense  contractor,  and included  computers,
milling  equipment,  lathes,  shelving  and  storage  units,  precision  welding
equipment and other  production  machinery.  InterSource held this equipment for
resale  but  TTL  has  chosen  to  maximize  the  equipment   through   internal
utilization.  This equipment  combined with AMW's,  Brounley's and InterSource's
technical  resources  will  allow  TTL to  fully  utilize  its  development  and
production capabilities 1999.



<PAGE>


     The Company  has also  completed  agreements  for two  financing  offerings
subsequent to year end for a total of $2,250,000.  The financings are structured
as $1,500,000  subordinated  convertible Note and $750,000 convertible preferred
stock.  The proceeds of the sale of these  offerings  are  available for capital
expenditures  related to  technology  development  costs,  future  acquisitions,
working capital, and general corporate purposes.

     The Company believes its existing cash,  together with projected cash flows
from operations and the availability of future equity and/or offerings,  will be
sufficient to meet the Company's cash requirements in 1999.

     The Company recognizes revenues under the accrual basis of accounting where
revenues are recognized when earned. Revenues are considered earned when product
has been shipped. The Company accounts for all of its operating  subsidiaries in
this manner.

     At fiscal  year-end  12-31-98,  the  Company  had  $1,768,999  in  accounts
receivable  which  represents  80% of total  sales at that  time.  The  accounts
receivable were derived primarily from sales of our Balanced Oil Recovery System
Lift in the fourth  quarter of 1998.  For certain  BORS  customers,  the Company
carries 90-day terms. The Company considers all of its accounts receivable to be
collectible.  However, the Company has recorded a $79,237 write-off for doubtful
accounts for the year ending  December 31, 1998. The Company does not anticipate
this  condition to continue in future years for two reasons:  (i) the BORS was a
development  product for the first  three  quarters  of 1998.  For that  reason,
meaningful  sales did not begin  until the  fourth  quarter  and (ii) 1998 was a
development-stage  year for the Company and we are already  seeing a maturing of
our divisions and expect our accounts receivable to reflect this balance as a
percentage of total sales for this year.

     The Company did not consider segment  reporting to be either cost effective
or  practical  at year end 1998.  Up to this  point,  the  Company  has not used
segment  reporting  for  internal  use.  At the  close  of 1998,  the  Company's
"divisions" were aggregated with revenues  primarily derived from  manufacturing
operations. Further, those "division" which out of this realm (InterSource) were
not a part of the Company until the end of the year. The Company  intends to use
the  segment  accounting  approach  for its annual  audit for the period  ending
December 31, 1999.

     As a part of its joint-venture  project,  the Company is obligated to issue
2,000,000   of   its   unregistered   common   stock   to   the   President   of
AquaFuel-Dominicana and such shares shall become fully vested upon formalization
and initial  payments  relating to the Company's  joint-venture  agreement.  The
Company  anticipates these shares will all become fully vested during the course
of 1999.  When said shares  become fully  vested,  the Company shall account for
such shares  strictly  according to their fair market value at date of issuance.
"Fair market value" is an amount equal to 100% of the cash-price received by the
Company for any stock sales or 100% of the  average  closing  "bid" price of the
Company's shares for the thirty-days  immediately preceding the issuance/vesting
of such shares.

     Dominican Republic Joint-Venture Update Report. The Company entered a joint
venture agreement with parties in the Dominican Republic during December,  1998.
The folowing  summarizes the various  activities  surrounding  the joint venture
since that date.

December,  1998 TTL enters  joint-venture  with  Compania de Luz y Fuerza de las
Terrenas  to  construct  and operate  AquaFuel  production  plants and  AquaFuel
electric power generation  facilities in the Dominican  Republic.  Luz y Fuerza,
headquartered in Santo Domingo,  Dominican Republic, is a consortium of entities
organized to privatize the delivery of electric power throughout the country.

January 4, 1999  Announcement  of the  joint-venture  where TTL states the first
Dominican  AquaFuel  production  plant  will be built  according  to a  15-month
feasibility and development schedule.  The Company states design and engineering
has  begun  and the  first-ever  commercial  AquaFuel  production  unit  will be
completed by May,  1999. The unit is to be designed to produce up to 4,000 cubic
feet per hour of AquaFuel gas.

January 20, 1999  Equipment  contract  awarded.  TTL  announces the selection of
16-year old,  Alabama-based  Dixie Arc to design the first  AquaFuel  commercial
unit able to produce a minimum of 4,000  cubic  feet of  AquaFuel  per hour on a
continual basis. The device, called the Dixie Arc Clean Arc Furnace System, will
combined  the  proven  Dixie  Arc  furnace  technology  with a  pressurized  gas
production apparatus.

February 3, 1999 State-side Technology validation.  The following members of the
Dominican Republic government attend a TTL-sponsored three day visit to validate
the technology.  In attendance were Ing.  Ernesto Reyna,  Asesor  Ambiential del
Presidente  (equivalent  to the  director  of the  US  Environmental  Protection
Agency);  Ing.  Radhamas Lora,  Colonel,  General Director of Forestry;  Bolivar
Rodriguez,  Director of Industry.  Also in attendance  for the  validation  were
officers and directors of AquaFuel-Dominicana  including John Rivera,  President
of AFD and Isaias  Arbaje,  Vice-President  of AFD and former  sub-secretary  of
agriculture for the Dominican Republic.

     At the  conclusion  of the  validation  visit,  TTL  video-taped  all three
Dominican  Republic  officials  as they  enthusiastically  endorsed the AquaFuel
technology.

March 22-26, 1999 Dominican Republic-based technology validation. TTL executives
and technicians present the AquaFuel equipment and technology to a group of over
200  Dominican  Republic  dignitaries  including  members  of their  government,
academia and  industry.  The Company  held the  validation  presentation  at the
Universidad  Dominicana O & M, Av.  Independencia  200,  Centro de los Heroes de
Constanza, Santo Domingo, Republica Dominicana.

     The  Company's  technology  was further  validated  at this meeting for use
within the Dominican Republic.

April 27, 1999 What began as the Dixie Arc Clean Air Furnace  System  evolved in
our patent-pending  AquaFueler Auto 1500 which incorporates significant advances
over demonstration and prototype  equipment including the use of AC (alternative
current) and new voltage regulation techniques. The device also introduces a new
automated carbon rod management  system where three rods are applied to a common
electrode mantel using precise hydraulic computer control.

May 11 1999 Use of surfactant  increases output from 1500 to 3000 cubic feet per
hour.  The  Company's Hot Plasma  Destructive  Distillation  process  (using the
AquaFueler 1500) adds a non-ionic surfactant to the contaminant in a proprietary
mixture,  boosts AquaFuel's power as estimated by the Company to 1,000 btu/cubic
foot.

May 18,  1999 TTL is  notified  and  agrees  that the  "best  first  use" of the
alternative fuel technology would be in fulfillment of certain utility needs for
a planned  2,500  home  Public  Urban  Development  scheduled  for  construction
starting August, 1999.

June 16, 1999 TTL submits bid proposal to construct a 400-ton per day  pyrolytic
carbon extraction plant.

     The selection of our PCE technology verse our AquaFuel  technology for this
first plant is due in part to the out-dated  equipment  throughout the Dominican
Republic.  AquaFuel would require reconfiguration of existing Dominican Republic
equipment. However, as our Phoenix 777 is more similar to natural gas, it can be
engaged to operate the existing Dominican Republic equipment without significant
alternation  thus  allowing  TTL  to  meet  the  immediate  requirements  of the
Dominican Republic Public Urban Development.

     The Company  announced its  patent-pending  PCE equipment on June 21, 1999.
The PCE equipment  recycles all forms of liquid and solid hydrocarbon waste into
a high Btu gas dubbed Phoenix 777 and carbon black.

     Ground  Breaking The PUD is estimating to install the first  pre-fabricated
home during August 1999 and thereafter to assemble the pre-fab homes at the rate
of 10 per day through completion of 2,500 homes.

By  virtue  of  our  AquaFuel-Dominicana   joint-venture  agreement,  TTL  would
thereafter derive revenues:

(i)  From the design and construction of the PCE plant;
(ii) 49% of all  proceeds  derived  from the sale of the fuel either as a gas or
     through the sale of electricity.
(iii)Although not originally  planned, by virtue of the wide array of waste able
     to be processed  through our PCE equipment,  the Company will also earn 49%
     of all "tipping" fees associated with waste management.

Summary

     On January 4, 1999, the Company  estimated it would take  approximately  15
months for project development. Based on the immediacy of both our PCE equipment
and the needs of the Dominican Republic based Public Urban  Development,  we now
revise our estimations and believe we will be deriving  revenues starting in the
September - October, 1999 time frame. If successful, this would represent only 9
to 10 months  from  execution  of  agreement  to  revenues  versus the  previous
estimation of 15 months.

     As a part of its  joint-venture  agreement,  the Company  will  negotiate a
license agreement for the exclusive rights to commercialize  AquaFuel in certain
geographic  areas.  At this time,  the  Company  has not  negotiated  any of the
specific  terms  to  such an  exclusivity  and  cannot  estimate  what,  if any,
additional obligations would be incurred by either party.

     During 1998, the Company issued 5,602,697  unregistered,  restricted shares
of its stock to attract and retain key  employees,  to acquire  various  license
agreements, to make acquisitions and for other developmental needs. These shares
were valued at $728,351 ($.13 per share) based on restricted liquidity,  lack of
profitable   operations   and  unproven   marketability   of  several   licensed
technologies.  After  further  review,  it  has  been  determined  that  a  more
reasonable  value for these shares would be one in closer  proximity to sales to
others for similar shares,  reduced for a lack of liquidity  discount.  Based on
this approach the Company has  determined  that the shares should be recorded at
$.639 per share. This change in value requires an additional, non-cash charge to
1998 general and administrative  compensation of $2,851,772.  This increases the
Company's 1998 loss from $2,187,994  ($0.1798 per share) to $5,174,031  ($0.45
per share).

     Further,  the balance sheet impact of the additional non-cash  compensation
expenseand  the cvhange in  accounting fo rthe  Brounley  acquisition  increases
additional  paid-in capital from $5,484,590 to $8,892,522 and decreases Retained
Earnings (Deficit) from ($2,146,369) to ($5,181,596).  The overall change to the
Stockholders' Equity section of the balance sheet is an increase of $372,345.

     Additionally,  upon  review it has been  determined  that the  issuance  of
shares of the Company's common stock to certain officers and directors described
above  (since  rescinded,  see Note  19),  fails to meet the  standard  of being
routine or systematic in nature. Although the Company does not believe that such
issuances  were "in  contemplation"  of any  business  acquisition,  it has been
unable to sustain the burden  necessary to support that  belief.  As such,  they
constitute  an  alteration  of equity  interest  which  precludes the use by the
Company of pooling of interest  accounting for the acquisition of Brounley.  The
Company has therefore  restated its financial  statements to employ the purchase
method of accounting  for the  acquisition  (see Audited  Financial  Statements,
Notes 2 and 18).

     Of the 5,602,697 unregistered shares, 1,950,000 were issued to Officers and
Directors in lieu of compensation. In light of the higher valuation and inherent
tax consequences, the Company's officers and Directors have opted to convert the
issuance of these  shares to treasury  shares in exchange  for an option for the
purchase of these 1,950,000  unregistered shares. The option rights will provide
for the exercise of these options anytime during a three-year  period  following
the issuance of the option.

     Under the terms of the proposed options, the recipient would be entitled to
acquire unregisterd shares of the Company's common stock at a price equal to the
"fair market" price which, for these purposes,  is computed by taking an average
of the  closing  bid price  for the five days  preceeding  the  issuance  of the
options.  The  option  exercise  price  will  then be fixed at 100% of the "fair
market" price as described above on date of issuance.  As the Company intends to
issue the options at 100% of the fair market value without discount of any type,
in the event any of the options are  exercised,  there would be no  compensation
expense.

     Had the Company issued  options  versus the shares,  the Company would have
been  required to record the  issuance of only  3,652,697  shares at the rate of
$0.639 per share or a total  charge to  earnings of  $2,334,073,  an increase of
$1,605,722 above the previously  reported $728,351.  Therefore,  had the Company
been  allowed to value the  issuance of options  versus the  issuance of shares,
total losses for the year-ending  December 31, 1998 would have been ($3,927,981)
or ($0.34) per share on a weighted  average basis or ($0.177) per share based on
the number of shares outstanding at December 31, 1998.

Forward Looking Statements

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results of Operations contains certain  "forward-looking  statements" as defined
in the Private  Securities  Litigation  Reform Act of 1995.  Such statements are
based on management's  estimates,  assumptions,  and projections.  Major factors
that could cause results to differ  materially from those expected by management
include,  but are not  limited  to: the timing  and nature of  independent  test
results;  the nature of  changes in laws and  regulations  that  govern  various
aspects of the Company's business;  retention and productivity of key employees;
the  availability  of acquisition  candidates and  proprietary  technologies  at
purchase  prices the Company  believes to be a fair market;  the  direction  and
success of competitors; management retention; and unanticipated market changes.

Year 2000 Compliance

     The Company has completed a  prelimanary  assessment  concerning  Year 2000
issues and has determined that its  technologies,  manufacturing  factilites and
internal  operatins  will not be  impacted  or  affected.  The  Company  made no
material  expenditures  in 1998 with regard to Year 2000 issues and  anticipates
that  expenditures  in 1999  will have no  material  effect  to its  results  of
operations  and capital  resources.  In addition,  the Company's  stock transfer
agent,  Continental  Stock Transfer % Trust  Company,  has been certified as Y2K
compliant

               THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK



<PAGE>


Item 7            Financial Statements

                       TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1998 and 1997



                                                                      1997
                                                        1998        (Note 2)

                                     ASSETS


    Current assets:
      Cash                                            $772,080      $74,636
      Accounts receivable - trade (net of allowance
       of $74,237 and $5,000, respectively)          1,768,999       82,940
      Inventories                                      542,655            -
      Prepaid royalties                                 89,000       11,000
      Other current assets                               2,776            -

                   Total current assets              3,175,510      168,576

      Property, plant and equipment:
        Property, plant and equipment                2,170,072      136,460
        Less: Accumulated depreciation
         and amortization                              152,159       39,620

           Net property, plant and equipment         2,017,913       96,840

        Other assets:
         Goodwill, net of amortization of $19,597      372,345            -
         Security deposits                              31,932        5,000
         Related party receivables                      87,485             -
         Other assets                                        -         5,195

             Total other assets                        491,762        10,195

                   Total assets                       $5,685,185    $275,611


                 See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1998 and 1997



                                                                      1997
                                                       1998         (Note 2)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


          Current liabilities:
             Accounts payable and accrued expenses  $1,391,826      $ 46,141
             Royalties payable                          42,843             -
             Income taxes payable                       40,562             -
             Deposits                                   39,000             -
             Current portion of capital lease           66,125        24,324
          obligations
             Line of credit                             49,574              -

                   Total current liabilities         1,629,930         70,465

          Long-term debt:
             Capital lease obligation,
               net of current portion                  322,112         49,452

                  Total liabilities                  1,952,042        119,917


          Stockholders' equity:
             Capital stock                              22,217          9,130
             Additional paid-in capital              8,892,522        146,537
             Retained earnings (deficit)            (5,181,596)            27

                   Total stockholders' equity         3,733,143        155,694


          Total liabilities and
           stockholders' equity                       $5,685,185     $ 275,611



                 See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  For the year ended December 31, 1998 and 1997

                                                             1997
                                         1998               (Note 2)

Revenue                           $   2,221,709            $  344,149

Cost of goods sold                    1,395,958               202,689
                                      ---------               --------
Gross profit                            825,751               141,460

General and administrative expenses   5,985,169               126,631
                                      ---------               --------
Total operating earnings (deficit)   (5,159,418)               14,829

Other income (expense):
   Interest income                         6,621                  543
   Interest expense                      (21,234)                   -

         Total other income (expense)    (14,613)                 543
                                      -----------            --------
Net income (loss)                     $(5,174,031)           $ 15,372
                                      ===========            ========
Weighted average number of
   shares outstanding (Note 1)         11,492,162            8,881,751

Net income (loss) per share                 $(.45)              $.0017
                                            =====               ======


                See Notes to Consolidated Financial Statements.


                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the years ended December 31, 1998 and 1997



                                                                     1997
                                                          1998     (Note 2)

Cash flows from operating activities:
   Net income (loss)                                   $(5,174,031)    $15,372

   Adjustments to reconcile net income (loss) to net
      cash provided (used) by operating activities:
         (Gain) loss on sale of assets                           -          -
         Depreciation and amortization expense              96,219     10,709
         Bad debt expense                                   76,312      5,000
         Capital stock issued for services               3,580,123      8,470
         (Increase) decrease in accounts receivable     (1,492,893)   (64,537)
         (Increase) decrease in inventories               (365,147)         -
         (Increase) decrease in other current assets        (2,076)         -
         (Increase) decrease in security deposits          (26,932)     (5,000)
         (Increase) decrease in prepaid royalties          (78,000)    (11,000)
         (Increase) decrease in other assets                 5,195      (5,195)
         Increase (decrease) in accounts payable           570,102      45,952
         Increase (decrease) in royalties payable           42,843           -
         Increase (decrease) in accrued expenses           350,218          74
         Increase (decrease) in income taxes payable        (3,198)          -
         Increase (decrease) in other current liabilities    2,917           -

         Net cash provided (used) by operating activities(2,418,348)     (155)

Cash flows from investing activities:
   Acquisition of cash from investing                       14,610          -
   Acquisition of property, plant and equipment           (498,794)   (10,159)
   Proceeds from sale of equipment                               -          -
   Loans to related parties                                (18,428)         -
   Loans to subsidiary prior to acquisition               (164,297)         -

         Net cash used by investing activities            (666,909)   (10,159)

Cash flows from financing activities:
   Distributions to stockholders                            (7,592)   (41,527)
   Proceeds from the sale of capital stock               3,850,278    100,000
   Repayments on line of credit                             (4,600)         -
   Principal repayments on capital lease obligations       (55,385)    (4,197)
   Purchase of treasury stock                                    -          -

         Net cash provided by financing activities        3,782,701    54,276

Net increase in cash                                        697,444    43,962

Cash, beginning of year                                      74,636    30,674

Cash, end of year                                        $  772,080  $ 74,636

Supplemental Cash Flow Disclosures:
   Cash paid for interest                                 $   21,234  $ 1,903
   Cash paid for income taxes                             $    3,198  $    -

                See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the years ended December 31, 1998 and 1997


                                    Common    Additional    Retained
                         Number      Stock      Paid-In     Earnings
                        Of Shares   (At Par)   Capital      (Deficit)   Total


Balance,
December 31, 1996
(Note 2)                  500,000    $   500   $26,182       $46,697    73,379

Issuance of common stock
 upon inception         8,250,000      8,250         -             -     8,250

Stock issued for:
 Services                 100,000        100         -             -       100
 Cash                     160,000        160    99,840             -   100,000
 Rent                     120,000        120         -             -       120

Net income  for the year
 ended December 31, 1997        -           -         -       15,372    15,372

Distributions to shareholders   -           -         -      (41,527)  (41,527)

Balance,
 December 31, 1997
  (Note 2)              9,130,000       9,130    146,537           27  155,694

Stock issued for:
 Services               5,602,697       5,603  3,574,520            - 3,580,123
 Cash                   5,381,361       5,381  3,844,897            - 3,850,278
 Acquisitions           2,103,241       2,103  1,326,568            - 1,328,671

Net loss for the year
ended December 31, 1998        -            -         -  (5,174,031)(5,174,031)

Distributions to shareholders  -            -         -      (7,592)    (7,592)

Balance,
 December 31, 1998    22,217,299      $22,217  8,892,522 (5,181,596)  3,733,143

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

     The Company has never had any disagreement with its independent auditors or
its accountants.

                                    PART III

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

     The  following  Directors  and  Executive  Officers  have  served  in their
respective  capacities  since July 28, 1997 (date of  inception).  The Directors
were  re-elected  for the current  term at a Meeting of  Shareholders  conducted
January 5, 1998. All three  individuals have been nominated and have accepted to
serve as  Directors  for the coming  fiscal  year.  None of the  Directors  hold
similar positions in any other reporting company. The Company intends to conduct
its next election of Directors at its Annual Meeting of Shareholders.

     Chairman of the Board of Directors,  President and Chief Executive Officer:
Leon H. Toups (60). Mr. Toups' past professional  experiences include, from 1980
to present,  that of  President  and  Chairman of the Board of Directors of DMV,
Inc., Clearwater, Florida. Prior thereto, from 1973 to 1980, Mr. Toups served as
President and Chief Operating  Officer,  as a Member,  of the Board of Directors
and as a Member of the Executive Committee of Chromalloy  American  Corporation,
St. Louis,  Missouri,  and as President of Chromalloy Natural Resources Company,
Houma,  Louisiana.  Chromalloy  American was an international  conglomerate with
sales of approximately $2.0 billion,  which employed 45,000 people worldwide and
traded its capital  stock on the New York Stock  Exchange.  Mr.  Toups holds the
following  degrees:  MS  Aerospace  Engineering,  University  of  Florida;  M.S.
Mechanical Engineering,  Georgia Tech; BS Mechanical Engineering,  Georgia Tech.
From 1968 to 1969, Mr. Toups attended MIT on a NASA Hugh Dryden Fellowship.

     Director,  Corporate  Secretary and Executive Vice  President:  Mark Clancy
(43).  Mr.  Clancy's past business  experiences  include:  from 1993 to present:
Compliance Officer, DMV, Inc., Largo, Florida; 1996 to present: President, Total
Kids, Incorporated,  Tampa, Florida. Prior thereto, Mr. Clancy served as General
Sales Manager of WRCC FM Radio, Cape Coral,  Florida, and as Sales Consultant to
WIZD  FM  Radio,  West  Palm  Beach,  Florida.  Mr.  Clancy  holds  an  AA  from
Hillsborough  Community  College,  Tampa,  Florida  and  currently  attends  the
University of South Florida.

     Director,  Vice-President,  Finance,  Chief Financial  Officer:  Michael P.
Toups (33).  Mr.  Toups' past  professional  experiences  include,  from 1996 to
present:  a Director and  Vice-President,  Finance for InterSource  Health Care,
Inc., Clearwater, Florida; 1992 through the present: Vice-President, Finance and
Operations,  DMV, Inc., Clearwater,  Florida. Mr. Toups holds an MBA, University
of Notre Dame with  concentrations  in finance and  marketing and a BA degree in
Business Administration from Texas Christian University.

     The  Company's  Chief  Financial  Officer,  Vice  President,   Finance  and
Director,  Michael Toups, is the son of the Company's President, Chief Executive
Officer and Chairman of the Board of Directors, Leon H. Toups.

Item 10  Executive Compensation

     The following table sets forth information respecting the compensation paid
during the  Company's  last fiscal  year to the  President  and Chief  Executive
Officer (CEO) and to the other  executive  officers of the Company.  The Company
does not compensate its Directors for their services.

Compensation Table

                                          Annual         Long Term
                                       Compensation     Compensation
        (a)                   (b)      (c)       (d)       (e)
                                                        Restricted
                                                          Stock       Total
Name and Principal                   Salary     Bonus    award(s)  Compensation
Position                    Year      ($)        ($)       ($)         ($)
Leon H. Toups               1998    $63,666       $0       $0        $63,666
President
Chief Executive Officer

Mark Clancy                 1998    $62,997       $0       $0        $62,997
Executive Vice President
Corporate Secretary

Michael P. Toups            1998    $61,958        $0       $0       $61,958
Vice President, Finance
Chief Financial Officer

Jerry Kammerer              1998(f) $48,000        $0        $0      $48,000

(a)  All named  executive  Officers have served in their  respective  capacities
     since  formation  of the Company  during July 1997 except Mr.  Kammerer who
     served through August, 1998.
(b)  The  Company was  incorporated  during  July 1997.  The  Company  activated
     operations  on  November  1,  1997  and all  three  current  officers  were
     compensated  at the rate of $3,000 per month for the months of November and
     December, 1997.
(c)  Any increase in Officer  compensation  would be  predicated  on  prevailing
     industry standards and the existing financial situation of the Company. The
     Board of Directors  may  authorize an increase in the  compensation  of the
     Company's executive officers without a vote of Shareholders.
(d)  The Company did not make any bonus cash payments to its executive  officers
     since  inception  except a Christmas  bonus equal to one weeks salary which
     was also given to all of the Company's employees. However, the Company may,
     in the future, develop programs which may include bonus payments.
(e)  During 1998,  1,950,000  unregistered common shares were issued to Officers
     and Directors in lieu of compensation. The shares were originally valued at
     $0.13 and  subsequently  valued at $0.639 as more  fully  described  in the
     section herein marked Management's Discussion and Analysis. In light of the
     higher valuation and inherent tax consequences,  the Company's officers and
     Directors  have opted to convert the  issuance of these  shares to treasury
     shares  in  exchange  for an option  for the  purchase  of these  1,950,000
     unregistered  shares.  The option  rights will  provide for the exercise of
     these options anytime during a three-year  period following the issuance of
     the option. Under the terms of the proposed options, the recipient would be
     entitled to acquire  unregisterd  shares of the Company's common stock at a
     price  equal to the "fair  market"  price  which,  for these  purposes,  is
     computed  by taking an average of the  closing  bid price for the five days
     preceeding the issuance of the options. The option exercise price will then
     be fixed at 100% of the "fair market" price as described  above on the date
     of  issuance.  As the  Company  intends to issue the options at 100% of the
     fair market  value  without  discount of any type,  in the event any of the
     options are exercised, there would be no compensation expense.
(f)  Mr.  Kammerer  served as a Director and as the  Company's  Vice  President,
     Business Development from January through August, 1998.

Item 11           Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth  certain  information  with respect to the
beneficial  ownership of the Company's  Common stock by each person known by the
Company to be the beneficial owner of more than 5% of the outstanding  shares of
Common Stock, by each director,  by each of the executive  officers named in the
Summary Compensation Table, and by all directors as a group. 5% of the Company's
outstanding shares would be 1,110,865

                           (1)                   (2)
                        Name and              Amount and
                        Address of             Nature of
                       Beneficial              Beneficial            (3)
Title of Class           Owner                    Owner        Percent of Class

Common              Leon H. Toups                 3,356,680(5)        15%
                    418 Harbor View Lane
                    Largo, Florida 33770

Common              Mark Clancy                   1,733,340(5)        7.8%
                    417 Barrett Court
                    Tampa, Florida 33617

Common              Michael Toups                  1,733,340(5)        7.8%
                    400 Palm Drive
                    Largo, Florida 33770

Common              Errol J. Lasseigne               188,263(6)        0.8%
                    2364 Violet Place
                    Palm Harbor, Florida 34685

Common              Leslie D. Reagin, III            469,873(6)         2.1%
                    720 Bluffview Drive
                    Belleair, Florida 34640

Common              Officers and Directors         7,481,496            33.6%
                    (three persons)

Common               Jerry Kammerer              1,660,000(4)           7.4%
                     1421 Water View Drive
                     Largo, Florida 33771

(1)  Mr. L. Toups serves as the Company's President, Chief Executive Officer and
     Chairman of the Board of Directors.  Mr. Clancy serves as a Director and as
     the Corporate  Secretary and Executive Vice President.  Mr. M. Toups serves
     as a  Director  and as the  Company's  Chief  Financial  Officer  and  Vice
     President, Finance.
(2)  None of the named  persons  or Officer  and  Directors  are  holders of any
     options, warrants, right conversion privileges or similar items.
(3)  There are no  provisions  which allow for a change in control of the issuer
     beyond the annual  election  of  Directors.  The  Company is unaware of any
     voting trusts or similar agreements among its Shareholders.
(4)  Mr. Jerry Kammerer is a former  Director of the Company.  Mr.  Kammerer was
     terminated as an Officer and Director of the Company on August 20, 1998. As
     of January  19,  1999,  of the  1,750,000  shares  originally  owned by Mr.
     Kammerer, 180,000 were eligible for resale pursuant Rule 144.
(5)  As more fully described in the section marked  Management's  Discussion and
     Analysis and the Financial Statements which are a part hereof, during 1998,
     the Company  compensated  its  officers  and  directors in part through the
     issuance of unregistered  shares. At the year ending December,  1998, these
     shares  were  valued  at  $0.13.  Subsequently,   the  Company's  financial
     statements  were  restated to value these shares at $0.639 per share.  One
     result of this restatement would value the compensation received by each of
     the  three  officers  and  directors  at an  additional  taxable  income of
     $415,350. All three officers and directors opted to rescind their shares in
     exchange  for an option to  acquire  such  shares at a later  time.  In the
     interim,  the  1,950,000  shares are to be held in the  Company's  treasury
     account  pending  exercise of the  options.  In  essence,  the terms of the
     options  allow each of the three  officers and  directors to acquire  their
     shares  at 100% of the  market  value on the  date of  grant and shall be
     valued and be  considered  issued on that date.  Accordingly,  "fair market
     value"  shall be  deteremined  as the  closing  bid price of the  Company's
     securities  based on an average  closing "bid" price  recorded for the five
     days  preceeding  the issuance of the options.
(6)  Messrs.  Reagin and Lasseigne  both became  Directors of the Company at the
     annual meeting of shareholders held during May, 1999. Mr.Lasseigne acquired
     his shares during the Company's  initial  placement in November - December,
     1997. Mr. Reagin acquired his shares through participation in the Company's
     initial offering in 1997 and two subsequent  offerings.  Messrs. Reagin and
     Lasseigne  paid the same  cash  price as all other  investors  and were not
     afforded any special treatment.

Item 12           Certain Relationships and Related Transactions

     Mr. Michael Toups, who serves as the Company's Chief Financial  Officer and
as a Director,  is the son of the Company's President and Chairman of the Board,
Leon H. Toups.

Item 13           Exhibits and Reports on Form 8-K

During 1998 the Company filed three reports of Form 8-K:

Date of Filing    Event

         Acquisition of Brounley Engineering & Associates
         Acquisition of InterSource HealthCare
         Execution of AquaFuel(a) Joint-Venture Agreement

                                    Part F/S

 Harper, Van Scoik & Company, L. L. P.

                          INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders
Toups Technology Licensing, Incorporated
   and Subsidiaries
Largo, Florida

     We have  audited  the  accompanying  consolidated  balance  sheets of Toups
Technology  Licensing,   Incorporated  and  subsidiaries  (the  Company)  as  of
December-31,   1998  and  1997,  and  the  related  consolidated  statements  of
operations, stockholders' equity, and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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


February 2, 1999 (except for paragraphs 3, 4 and 7
   of Note 2 and Notes 17-20 as to which the date is June 21, 1999)

Harper, Van Scoik & Company, L. L. P.
A WORLDWlDE ORGANIZATION OF ACCOUNTlNG FlRMS AND BUSlNESS ADVlSORS


                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1998 and 1997



                                                                      1997
                                                        1998        (Note 2)

                                     ASSETS


    Current assets:
      Cash                                            $772,080      $74,636
      Accounts receivable - trade (net of allowance
       of $74,237 and $5,000, respectively)          1,768,999       82,940
      Inventories                                      542,655            -
      Prepaid royalties                                 89,000       11,000
      Other current assets                               2,776            -

                   Total current assets              3,175,510      168,576

      Property, plant and equipment:
        Property, plant and equipment                2,170,072      136,460
        Less: Accumulated depreciation
         and amortization                              152,159       39,620

           Net property, plant and equipment         2,017,913       96,840

        Other assets:
         Goodwill, net of amortization of $19,597      372,345            -
         Security deposits                              31,932        5,000
         Related party receivables                      87,485             -
         Other assets                                        -         5,195

             Total other assets                        491,762        10,195

                   Total assets                       $5,685,185    $275,611


                 See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1998 and 1997



                                                                      1997
                                                       1998         (Note 2)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


          Current liabilities:
             Accounts payable and accrued expenses  $1,391,826      $ 46,141
             Royalties payable                          42,843             -
             Income taxes payable                       40,562             -
             Deposits                                   39,000             -
             Current portion of capital lease           66,125        24,324
          obligations
             Line of credit                             49,574              -

                   Total current liabilities         1,629,930         70,465

          Long-term debt:
             Capital lease obligation,
               net of current portion                  322,112         49,452

                  Total liabilities                  1,952,042        119,917


          Stockholders' equity:
             Capital stock                              22,217          9,130
             Additional paid-in capital              8,892,522        146,537
             Retained earnings (deficit)            (5,181,596)            27

                   Total stockholders' equity         3,733,143        155,694


          Total liabilities and
           stockholders' equity                       $5,685,185     $ 275,611



                 See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  For the year ended December 31, 1998 and 1997

                                                             1997
                                         1998               (Note 2)

Revenue                           $   2,221,709            $  344,149

Cost of goods sold                    1,395,958               202,689
                                      ---------               --------
Gross profit                            825,751               141,460

General and administrative expenses   5,985,169               126,631
                                      ---------               --------
Total operating earnings (deficit)   (5,159,418)               14,829

Other income (expense):
   Interest income                         6,621                  543
   Interest expense                      (21,234)                   -

         Total other income (expense)    (14,613)                 543
                                      -----------            --------
Net income (loss)                     $(5,174,031)           $ 15,372
                                      ===========            ========
Weighted average number of
   shares outstanding (Note 1)         11,492,162            8,881,751

Net income (loss) per share                 $(.45)              $.0017
                                            =====               ======


                See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the years ended December 31, 1998 and 1997


                                    Common    Additional    Retained
                         Number      Stock      Paid-In     Earnings
                        Of Shares   (At Par)   Capital      (Deficit)   Total


Balance,
December 31, 1996
(Note 2)                  500,000    $   500   $26,182       $46,697    73,379

Issuance of common stock
 upon inception         8,250,000      8,250         -             -     8,250

Stock issued for:
 Services                 100,000        100         -             -       100
 Cash                     160,000        160    99,840             -   100,000
 Rent                     120,000        120         -             -       120

Net income  for the year
 ended December 31, 1997        -           -         -       15,372    15,372

Distributions to shareholders   -           -         -      (41,527)  (41,527)

Balance,
 December 31, 1997
  (Note 2)              9,130,000       9,130    146,537           27  155,694

Stock issued for:
 Services               5,602,697       5,603  3,574,520            - 3,580,123
 Cash                   5,381,361       5,381  3,844,897            - 3,850,278
 Acquisitions           2,103,241       2,103  1,326,568            - 1,328,671

Net loss for the year
ended December 31, 1998        -            -         -  (5,174,031)(5,174,031)

Distributions to shareholders  -            -         -      (7,592)    (7,592)

Balance,
 December 31, 1998    22,217,299      $22,217  8,892,522 (5,181,596)  3,733,143


                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the years ended December 31, 1998 and 1997



                                                                     1997
                                                          1998     (Note 2)

Cash flows from operating activities:
   Net income (loss)                                   $(5,174,031)    $15,372

   Adjustments to reconcile net income (loss) to net
      cash provided (used) by operating activities:
         (Gain) loss on sale of assets                           -          -
         Depreciation and amortization expense              96,219     10,709
         Bad debt expense                                   76,312      5,000
         Capital stock issued for services               3,580,123      8,470
         (Increase) decrease in accounts receivable     (1,492,893)   (64,537)
         (Increase) decrease in inventories               (365,147)         -
         (Increase) decrease in other current assets        (2,076)         -
         (Increase) decrease in security deposits          (26,932)     (5,000)
         (Increase) decrease in prepaid royalties          (78,000)    (11,000)
         (Increase) decrease in other assets                 5,195      (5,195)
         Increase (decrease) in accounts payable           570,102      45,952
         Increase (decrease) in royalties payable           42,843           -
         Increase (decrease) in accrued expenses           350,218          74
         Increase (decrease) in income taxes payable        (3,198)          -
         Increase (decrease) in other current liabilities    2,917           -

         Net cash provided (used) by operating activities(2,418,348)     (155)

Cash flows from investing activities:
   Acquisition of cash from investing                       14,610          -
   Acquisition of property, plant and equipment           (498,794)   (10,159)
   Proceeds from sale of equipment                               -          -
   Loans to related parties                                (18,428)         -
   Loans to subsidiary prior to acquisition               (164,297)         -

         Net cash used by investing activities            (666,909)   (10,159)

Cash flows from financing activities:
   Distributions to stockholders                            (7,592)   (41,527)
   Proceeds from the sale of capital stock               3,850,278    100,000
   Repayments on line of credit                             (4,600)         -
   Principal repayments on capital lease obligations       (55,385)    (4,197)
   Purchase of treasury stock                                    -          -

         Net cash provided by financing activities        3,782,701    54,276

Net increase in cash                                        697,444    43,962

Cash, beginning of year                                      74,636    30,674

Cash, end of year                                        $  772,080  $ 74,636

Supplemental Cash Flow Disclosures:
   Cash paid for interest                                 $   21,234  $ 1,903
   Cash paid for income taxes                             $    3,198  $    -

                See Notes to Consolidated Financial Statements.

                    TOUPS TECHNOLOGY LICENSING, INCORPORATED
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Summary of Significant Accounting Policies

     Company - Toups Technology  Licensing,  Incorporated  (Company),  a Florida
Corporation,  was formed on July 28, 1997, and activated its startup  operations
on November 1, 1997 to facilitate market  applications  through the licensing of
late-stage  technologies  primarily  in  the  energy,   environmental,   natural
resources  and  healthcare  market  segments.  The Company  selects  proprietary
products or devices within market  segments which  management  perceives are not
subject to rapid change and can be delivered to the  marketplace  within a three
to six month period. The consolidated  financial statements include the accounts
of the  Company  and the  following  wholly  owned  subsidiaries.  All  material
intercompany transactions have been eliminated.

Subsidiary's Name                          Business Activity
Advanced Micro Welding,
Inc(AMW)                     Advanced Micro Welding, Inc., a Florida
                             Corporation, was formed on February 3, 1992.  The
                             Company's primary operations consist of custom
                             metal fabrication and micro welding.

Brounley Associates, Inc.
(Brounley)                    Brounley Associates, Inc., a Florida Corporation,
                              was formed on February 23, 1994.  The Company is
                              engaged in the design, manufacture and sale of
                              radio frequency (RF) generators.

InterSource Healthcare, Inc.
(InterSource)                 InterSource Healthcare, Inc., a Florida
                              Corporation, was formed on November 9, 1996.  The
                              Company sells and refurbishes medical equipment,
                              provides services for medical facility
                              development, and sells pharmaceutical products.


     Basis of Accounting - The accompanying  consolidated  financial  statements
are prepared using the accrual basis of accounting where revenues are recognized
when earned and expenses are recognized when incurred.  This basis of accounting
conforms to general accepted accounting principles.

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

     Inventories - Inventories are stated at the lower of cost  (determined on a
first-in, first-our basis) or market. Work-in-process and finished goods include
material, labor and overhead.

     Comparability   of   Statements   -  Since  Toups   Technology   Licensing,
Incorporated did not commence  operations  until November 1997,  amounts for the
year ended  December  31,  1997,  reflect  less than a full year's  transactions
(subsidiaries  accounted for using the  pooling-of-interest  method  reflect the
full year ending  December 31, 1997) and are not directly  comparable  with 1998
figures.

     Advertising  -  Advertising  costs are  charged to  operations  in the year
incurred and totaled $66,756 and $1,522 for 1998 and 1997, respectively.

     Property,  Plant and  Equipment  - All  property,  plant and  equipment  is
recorded  at cost.  Depreciation,  which  includes  the  amortization  of assets
recorded under capital leases, is computed on the straight-line  method over the
estimated useful lives of the assets.  Repair and maintenance costs which do not
increase the useful life of the assets are charged to operations as incurred.

     Allowance for Doubtful Accounts - The Company  establishes an allowance for
uncollectible   trade  accounts   receivable  based  on  historical   collection
experience and management's evaluation of collectibility of outstanding accounts
receivable.  The  allowance  for doubtful  accounts was $74,237 and $5,000 as of
December 31, 1998 and 1997, respectively.

     Income  Taxes - Deferred  income  taxes are  reported  using the  liability
method.  Deferred tax assets are recognized for deductible temporary differences
and deferred tax liabilities are recognized for taxable  temporary  differences.
Temporary differences are differences between the reported amounts of assets and
liabilities and their tax bases.  Deferred tax assets are reduced by a valuation
allowance  when, in the opinion of  management,  it is more likely than not that
some portion or all of the  deferred  tax assets will not be realized.  Deferred
tax assets and  liabilities  are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

     Earnings (Loss) per Share - Earnings per share are computed by dividing net
income (loss) by the  weighted-average  number of shares issued and  outstanding
during the reporting period. Shares issued or purchased during the period affect
the amount of shares  outstanding and are weighted by the fraction of the period
they are outstanding.

2.  Acquisition of Businesses

                  Advanced Micro Welding, Inc.

     On April 1, 1998,  the Company  acquired  all the common  stock of Advanced
Micro  Welding,  Inc.  (AMW) in  exchange  for 500,000  shares of the  Company's
restricted  common  stock.  AMW is engaged  in micro  welding  and custom  metal
fabricating.  The  transaction  has been  accounted for as a pooling of interest
and, accordingly,  the consolidated  financial statements for 1998 and 1997 have
been  restated  to  include  all  accounts  and  operations  of  AMW  as if  the
acquisition had occurred at the beginning of the year presented.

     Unaudited net sales and net income of the separate companies for the period
prior to the acquisition were:
                                                         March-31,
                                                    1998             1997

     Net sales:
      Toups Technology Licensing, Incorporated(1)$      -          $      -
      AMW                                          109,154          344,149

                  Total                           $109,154         $
     Net income (loss):
      Toups Technology Licensing, Incorporated   $(215,096)        $(40,413
                  AMW                                7,246           55,785

                        Total                  $  (207,850)         $15,372


(1)Toups  Technology  Licensing,  Incorporated  was a development  stage company
     during all of 1997.

Brounley Associates, Inc.

     On October 1, 1998,  the Company  acquired all the common stock of Brounley
Associates,  Inc.  (Brounley)  in exchange for 900,000  shares of the  Company's
restricted common stock.  Brounley is engaged in the design manufacture and sale
of radio  frequency  generators  throughout  the United  States and abroad.  The
transaction  has been  accounted  for using the purchase  method of  accounting.
Accordingly,  the purchase price was allocated to the net assets  acquired based
upon their estimated fair market values.

     The follownig is a summary fo the assets  purchased and liabilitis  assumed
in the acquisition of Brounley:

Assets acquired:
Cash                     $10,895
Accounts receivable      168,602
Inventory                163,577
Property and equipment    28,588
Other                        700
Goodwill                 391,942
                         -------
                         764,304

Liabilties assumed:

Accounts payable
 and accrued liabilities  58,887
Notes payable              4,600
Customer deposits         18,057
Income taxes payable      43,760
                         -------
                         125,304

Purchase price          $639,000

     The Company  determined that there was no material  difference  between the
carrying values (on Brounley's  financial  records) and the fair market value of
the assets  acquired and  liabilities  assumed,  except for equipment  which was
valued at $28,588 an increase from its carrying values of $13,500.  The increase
in value was based on the Company's  review of the equipment's  age,  condition,
replacement cost and remaining use ful life. The excess of the purchse prie over
net assets acquired has been recorded as goodwill. The Company is amortizing the
goodwill on a straight-line basis over 5 years.

InterSource Healthcare, Inc.

     On  November  30,  1998,  the  Company  purchased  100%  of  the  stock  of
InterSource  Healthcare,  Inc.  (InterSource)  by  issuing  1,203,241  shares of
restricted and unrestricted common stock . InterSource  acquires and refurbishes
used medical equipment for resale,  sells  pharmaceutical  products and provides
services for medical  facility  development.  The  Company's  1998  consolidated
results include the operations of InterSource from the date of acquisition.

     The  acquisition was accounted for using the purchase method of accounting.
Accordingly,  the purchase price was allocated to the net assets  acquired based
upon their estimated fair market values.

     The following unaudited pro forma summary combines the consolidated results
of the Company,  InterSource and Brounley as if the acquisitions had occurred at
the  beginning  of 1998 and 1997  after  giving  effect  to  certain  pro  forma
adjustments, including, among other things, additional depreciation based on the
fair value of equipment acquired and the estimated related income tax effect.


                                            1998             1997

In thousands, (unaudited)
      Net sales                          $4,134,161       $1,046,932
      Net income (loss)                 $(5,408,294)        (182,325)

     This  pro  forma  financial  information  is  presented  for  informational
purposes  only and may not be  indicative  of the results of  operations as they
would  have been if the  Company,  InterSource  and  Brounley  had been a single
entity during 1998 and 1997, nor is it necessarily  indicative of the results of
operations which may occur in the future.

Joint Venture

     Effective  December 15, 1998,  the Company  entered into an agreement  with
Compania  DeLuz Y Fuerza  De Las  Terrenas,  C. por A.  (Utility),  a  Dominican
Republic  utility company,  to form the joint venture "Aqua  Fuel(a)-Dominicana,
SA".  The  ownership  of Aqua  Fuel-Dominicana  will be 49% to Toups  Technology
Licensing, Inc. (TTL) and 51% to the utility.

     The purpose of Aqua Fuel-Dominicana is the construction and operation of an
Aqua Fuel  production  facility which, at a minimum,  is able to generate 1.653
gigawatts of electric power during a twenty year period.

     The  agreement   outlines  a  three-step   approach  to   accomplish   Aqua
Fuel-Dominica's  purpose, 1) a feasibility study of an Aqua Fuel generator with
a capability  of at least 4,000 CF/hr to run a 1,000 KW  generator  successfully
and continuously for a period of two weeks and is scheduled to conclude no later
than sixty days after the Aqua Fuel  generator is  installed  in the  Dominican
Republic;  2) immediately  after the completion of the  Feasibility  Study,  the
development  of the  blueprints  and design for  construction  of the Aqua Fuel
production  facility  shall commence and will be completed no later than 60 days
thereafter; and 3) the construction of the plant shall commence immediately upon
receipt of the drawings and materials being available in the Dominican  Republic
and is scheduled for completion within six months.

     TTL's capital  contribution to Aqua Fuel-Dominicana will be the delivery of
the Aqua Fuel  technology and the equipment as required by the  agreement,  the
Utility  is  required  to fund all other  capital  needs of the  joint  venture.
Additionally, the Utility is to find investors who will invest at least $500,000
in TTL,  TTL is to issue  500,000 of its  shares to the  Utility  and  2,000,000
shares to the president of Aqua Fuel-Dominicana for services during 1999.

4.  Concentration of Credit Risk

     The Company  maintains cash deposits with a bank that include funds greater
than the federally insured limit of $100,000. The cash balances in excess of the
insured  amounts  were  $650,765 at December  31, 1998 and $-0- at December  31,
1997.  Management  believes the Company is not exposed to any significant credit
risk related to cash.

     The Company  grants  credit to its  customers  during the normal  course of
business and performs  ongoing credit  evaluations  of its customers'  financial
condition.  The Company  maintains  allowances for potential credit losses.  The
Company had sales to five  customers  that  totaled  approximately  83% of total
sales for the year  ended  December  31,  1998.  Additionally,  three  customers
comprise approximately 96% of the December 31, 1998 accounts receivable - trade.
The owners of the  entities  that  comprise  the three  customers  are  minority
shareholders of the Company.

5.  Inventories

    Inventories as of December 31, 1998 consisted of the following:

                                                         1998

               Raw materials                  $        455,357
               Work-in-process                          46,004
               Finished goods                           41,294

                        Total                  $       542,655


6.  Licensing Agreement Commitments

     The Company has entered into  licensing  agreements  with three  licensors.
Amounts relating to these agreements  recorded in the accompanying  consolidated
statements are as follows:

                                             Year ending December 31,
                                              1998             1997

               Prepaid royalties          $   89,000       $   11,000

               Royalties payable          $    42,843      $        -


     Royalty  expense for the year ended  December 31, 1998 and 1997 was $94,843
and $-0-, respectively.  In exchange for the rights under these agreements,  the
Company has committed to pay the following:

   Year ending
     1999            $96,000
     2000             96,000

   Total            $192,000

6.  Licensing Agreement Commitments (Continued)

     In addition to the above, if the Company  exercised its option to renew the
licenses it will have future minimum royalties as follows:

               Year ending
                    2001                                 $        200,000
                    2002                                 $        250,000
                    2003                                 $        300,000
                    2004, and every year thereafter      $        400,000


7.  Property, Plant and Equipment

     Property,   plant  and  equipment,   at  cost,   and  related   accumulated
depreciation and amortization as of December 31, 1998 and 1997 are summarized as
follows:

                                                     1998             1997

               Leasehold improvements              $ 96,999           $      -
               Office furniture and equipment       119,467                  -
               Machinery and equipment            1,505,517             58,487
               Equipment under capital leases       448,089             77,973

                                                   2,170,072           136,460
               Less: Accumulated depreciation
                and amortization                     152,159            39,620

                        Total                    $ 2,017,913           $96,840

8.  Related Party Transactions

     The  Company  has  the   following   receivables   from   officers   and/or
stockholders: 1998 Interest-free demand note - unsecured:  Shareholders $ 85,263
Officers 2,222

            Total    $87,485


     For  the  year  ending   December  31,  1998,  the  Company  had  sales  of
approximately $1.7 million to entities owned by certain minority shareholders of
the Company.

     The Company paid approximately  $22,632 for employee leasing,  $102,308 for
rent, and $21,000 for consulting fees to Intersource prior to acquisition.

9.  Capital Leases

     The following is an analysis of the equipment under capital leases by major
classes:

                                             1998             1997

  Machinery and equipment                 $448,089           $77,973
  Less: Accumulated depreciation            53,003             2,250

                        Total             $395,086           $75,723

     Amortization of leased  equipment is included in  depreciation  expense and
totaled  $50,753  and $2,250 for the year  ending  December  31,  1998 and 1997,
respectively.

     The following is a schedule by years of future minimum lease payments as of
December 31, 1998 and 1997.
                                    1998             1997

                  1998           $20,503            $    -
                  1999           111,359             20,503
                  2000           118,403             20,503
                  2001           115,817             20,503
                  2002           101,541             10,773
                  2003            61,549                  -

  Total minimum lease payments   508,669            92,785

  Less: Amount representing
   interest                      120,432            19,009

  Present value of net
   minimum lease payments      $ 388,237           $73,776

     The present  value of net  minimum  lease  payments  are  reflected  in the
balance sheet as:
                                 1997         1998

Current portion of capital
 lease obligations materials   $66,125       $24,324
Capital lease obligations,
 net of current portion        322,112        49,452
                             $ 388,237       $73,776

10.  Line of Credit

     InterSource  maintains a $50,000 bank line of credit with interest  payable
monthly at bank prime  (current  8.75%) plus 2%. At December  31, 1998 and 1997,
the amounts due were $49,574 and $-0-, respectively.  The line of credit matures
November 30, 1999.  The line is secured by inventory and the personal  guarantee
of certain stockholders.



11.  Capital Stock

Common

     In 1998, the Company amended its Articles of  Incorporation to authorize 50
million  shares of common stock with a par value of $0.001 (one,  one-thousandth
dollar) per share.  As of December 31, 1998 and 1997,  there were 22,217,299 and
9,130,000 shares issued and outstanding,  respectively. Of the 22,217,299 shares
issued and outstanding at December 31, 1998,  6,034,056  shares are unrestricted
and 16,183,243 shares are restricted as to the sale to other parties pursuant to
the resale  provisions  of Sec.  Rule 144. Of the  9,130,000  shares  issued and
outstanding at December 31, 1997,  170,000 shares are unrestricted and 8,960,000
shares are  restricted  as to the sale to other  parties  pursuant to the resale
provisions of SEC Rule 144.

Preferred

     The  Company is also  authorized  to issue 10 million  shares of  preferred
stock having a par value of $1 per share.  There were no preferred shares issued
or outstanding at either December 31, 1998 or 1997.

12.  Operating Leases

     The Company has leases for  buildings  which are  classified  as  operating
leases.  Total  rent  expense  for all  operating  leases  for 1998 and 1997 was
$117,154 and $-0-, respectively.

     Future  minimum lease payments under the  noncancellable  operating  leases
with initial or remaining terms of one year or more are as follows:

                  1999    $ 291,410
                  2000       63,718
                  2001      276,904
                  2002      265,414

                        $ 1,097,446

13.  Income Taxes

     The Company has cumulative net operating losses of approximately $2,300,000
and $40,413 at December 31, 1998 and 1997,  respectively,  which are expected to
provide future tax benefits of approximately $782,000 and $8,085,  respectively,
for both  Federal  and State  purposes.  A  valuation  allowance  for the entire
benefit has been  recognized as it is not  reasonable to estimate when or if the
benefit will be realized. These tax benefits expire beginning in 2012.

14.  Noncash Disclosures

     The following  transactions  were excluded from the statement of cash flows
because they were not cash transactions.

 .    At inception the Company issued 8,250,000  shares to its organizers.  These
     shares of stock were recorded at a total of $8,250.

 .    In  addition  to the  commitments  described  in the  "licensing  agreement
     commitment"  note. In 1997, the Company issued 165,000 shares of restricted
     stock to the licensors of the Company's  three  technologies.  These shares
     were recorded at a total of $165.

 .    In  1997,  the  Company  issued  125,000  shares  of  restricted  stock  to
     consultants and employees. These shares were recorded at $125.

 .    In 1997, the Company issued 120,000 shares of restricted  stock for the use
     of operating  facilities for one year.  These shares of stock were recorded
     at $120.

 .    In 1998,  the Company  acquired  assets of  $369,846  under  capital  lease
     agreements.

 .    In 1998, the Company issued  1,203,241  shares of restricted  stock for the
     acquisition of InterSouce Healthcare, Inc.

                            Assets acquired          $1,301,521
                           Liabilities acquired        $611,850

 .    In 1998, the Company issued 5,602,697 shares of restricted common stock for
     services. These shares were recorded at a total of $3,580,123.

 .    In 1998,  the Company  issued  900,000  shares of restricted  stock for the
     acquisition of Brounley Associates, Inc.

                            Assets acquired             $750,830
                           Liabilities acquired         $111,830

 .    In 1998,  the Company  issued  500,000  shares of restricted  stock for the
     acquisition of Advanced Micro Welding, Inc.

                            Assets acquired             $301,834
                           Liabilities acquired         $214,544

15.  Contingencies

     The Company is periodically involved in legal actions and claims that arise
in the  normal  course of  operations.  Management  believes  that the  ultimate
resolution  of any such actions will not have a material  adverse  effect on the
Company's financial position.

     The  year  2000  is  expected  to  create   computer   problems   for  many
organizations  because some computers and their programs only recognize the last
two digits in the year. For example, the year 1998 is recognized as 98. When the
year 2000 arrives some computers may not process  information  accurately or may
shut down.  Management is in the process of evaluating  their systems to correct
any problems  which may be created by the year 2000.  The Company  plans to have
all their  vital  internal  systems  compliant  before  the year  2000  arrives.
However,  it is not  possible  to  insure  that  outside  entities  will be 2000
compliant.

16.  Commitments

     The Company has entered into an agreement  to have  equipment  manufactured
for a cost of $500,000.  At December 31, 1998,  the first phase of the equipment
is complete and $72,100 has been recorded in property, plant and equipment.

17.  Subsequent Events

     In January 1999,  the Company  entered into a lease  agreement that will be
accounted for as a capital  lease.  The  equipment  has a cost of $341,200.  The
lease calls for an initial payment of $34,120 followed by sixty monthly payments
of $6,323.

     In January 1999,  the Company  issued  25,000  shares of restricted  common
stock at a price of $1.00 per share.

     On February 17,  1999,  the Company  sold  $750,000 of Series  1999-A Eight
Percent  (8%)  convertible  notes due  January  1,  2002.  Under the  securities
purchase  agreement,  the investor will purchase another $750,000 in convertible
notes within 30 days after the Company files a Registration Statement or at such
time as the parties mutually agree.

     The notes can be  converted  to common stock of the company at a conversion
price  (the  "Conversion  Price")  for each share of common  stock  equal to the
lesser of (x) one hundred percent (100%) of the lowest of the closing bid prices
for the Common Stock for the five (5) trading  days  immediately  preceding  the
Closing Date (defined as the date of this Note);  or (y) eighty percent (80%) of
the lowest of the  closing  bid  prices  for the  Common  Stock for the five (5)
trading  days  immediately  preceding  the  Conversion  Date as  reported on the
National Association of Securities Dealers OTC Bulletin Board Market.

     Additionally,  the investor was issued a warrant to purchase  75,000 shares
of the Company's stock at $2.3375 per share through February 17, 2002.

     Since the  investor  did not convert  the notes on the day of closing,  the
Company is required to recognize as interest  expense the beneficial  conversion
terms of the notes. This additional  interest of $187,500 will be amortized over
the period  between the closing date (February 17, 1999) and the first date (May
17, 1999) on which the notes can be converted.

     At such time as the investor  completes  the agreement and pays the Company
the balance of  $750,000,  the  investor  will  receive a three year  warrant to
purchase 75,000 shares at 110% of the market price on the date of closing.

     If the investor  does not convert the second  series of notes at the second
closing  date,  the  Company  will again be  required  to  recognize  additional
interest expense due to the beneficial  conversion terms of the notes.  Assuming
the market  price is  unchanged  as of the second  closing,  the  Company  would
amortize  $187,500 over the three months  beginning  with the date of the second
closing.

18.  Restatement of Financial Statements

     During 1998, the Company issued 5,602,697  unregistered,  restricted shares
of its stock to attract and retain key  employees,  to acquire  various  license
agreements, to make acquisitions and for other developmental needs. These shares
were valued at $728,351 ($.13 per share) based on restricted liquidity,  lack of
profitable   operations   and  unproven   marketability   of  several   licensed
technologies.  After  further  review,  it  has  been  determined  that  a  more
reasonable  value for these shares would be one in closer  proximity to sales to
others for similar shares,  reduced for a lack of liquidity  discount.  Based on
this approach the Company has  determined  that the shares should be recorded at
$.639 per share. This change in value requires an additional, non-cash charge to
1998 general and administrative  compensation of $2,851,772.  This increases the
Company's 1998 loss from $2,187,994  ($0.1798 per share) to $5,174,031  ($0.45
per share).

     Further,  the balance sheet impact of the additional non-cash  compensation
expense and the change in  accounting  for the Brounley  acquisition,  increases
additional  paid-in capital from $5,484,590 to $8,892,522 and decreases Retained
Earnings (Deficit) from ($2,146,369) to ($5,181,596).  The overall change to the
Stockholders' Equity section of the balance sheet is an increase of $372,345.

     Additionally,  upon  review it has been  determined  that the  issuance  of
shares of the Company's common stock to certain officers and directors described
above  (since  rescinded,  see Note  19),  fails to meet the  standard  of being
routine or systematic in nature. Although the Company does not believe that such
issuances  were "in  contemplation"  of any  business  acquisition,  it has been
unable to sustain the burden  necessary to support that  belief.  As such,  they
constitute  an  alteration  of equity  interest  which  precludes the use by the
Company of pooling of interest  accounting for the acquisition of Brounley.  The
Company has therefore  restated its financial  statements to employ the purchase
method of accounting for the acquisition (see Note 2).

19.  Recission of Stock

     Subsequent to year-end,  certain officers of the Company offered to rescind
1,950,000 shares of stock previously issued to them as compensation. The Company
has accepted the recission ofer to assist the officers in mitigating potentially
adverse personal icome tax consequences of the stock recieved as compensation in
1998. Under the terms of the recission,  the officers will receive stock options
to  purcahse  1,950,000  shares of the  Company's  stock at the  5-day  trailing
average of the market price at the date of grant and the options will extend for
a three year period.  The Company expects to complete the exchange of shares for
stock options during the third quarter of 1999.

     The Company  will  account  for the stock  options  when  issued  under the
provision of Accounting Principles Board pronouncement No. 25. Additinoally, the
reacquired shares will be treated by the Company as treasury stock. The treasury
stock  will be  recorded  at  $1,246,050  (the  copensation  value in 1998)  and
retained  earnings  will be  increase  dby the same  amount to reflec tthe stock
rescission.

20.  Issuance of Preferred Stock

     On March 30, 1999, the Company  executed a series of agreements and amended
its articles of  incorporation in order to complete the placement of $750,000 of
its Series A 7% Preferred Stock with an investor.  Under the terms of the Series
A Preferred  Stock,  the holder may convert at 105% of the closing price anytime
up to 90 days after  issuance;  85% of the closing price anytime between 91 days
and 119 days following closing; 80% of the closing price anytime between 120 and
149 days following closing,  or; 75% of the closing price anytime after 150 days
following  the closing  date  through  March 30,  2004.  The Company also issued
93,750  warrants  exercisable  at $2.40 per share to the investor in  connection
with the sale of the  Preferred  Stock.  As a part of a finders  fee the Company
issued 50,000  warrants  allowing for the purchase of a like number of shares of
the Company's stock at $2.40 per share through March-30, 2004.

                                   SIGNATURES


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

                               TOUPS TECHNOLOGY LICENSING, INC.



                          By: S/S LEON H. TOUPS
                              Leon H. Toups, Chief Executive Officer

Date:  July 21, 1999

                          By: S/S MICHAEL P. TOUPS
                              Michael P. Toups, Chief Financial Officer

Date:  July 21, 1999


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated:

Signature                  Capacity                               Date

s/s LEON H. TOUPS     Chairman of the Board of Directors,    July 21, 1999
-----------------     President and Chief Executive Officer,
                      co-founder

s/s MARK C. CLANCY    Director,                              July 21, 1999
------------------    Executive Vice President,
                      Corporate Secretary
                      co-founder

s/s MICHAEL P. TOUPS  Director,                               July 21, 1999
--------------------  Vice President Finance,
                      Chief Financial Officer,
                      co-founder

     The above represents the Board of Directors of Toups Technology  Licensing,
Inc. at December 31, 1998.