SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                FORM 10-KSB

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


               FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
                                         -----------------

                        COMMISSION FILE NO.: 0-26322


                      EAGLE BUILDING TECHNOLOGIES, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

               Nevada                                    88-0303769
   ---------------------------------                 -------------------
    (State or other jurisdiction                        (IRS Employer
   of incorporation or organization)                 Identification No.)


         225 N.E. Mizner Boulevard, Suite 502, Boca Raton, FL 33432
        ------------------------------------------------------------
        (Address of principal executive offices, including zip code)

                              (561) 672-4800
                        ---------------------------
                        (Issuer's telephone number)

               20283 State Road 7, Suite 213, Boca Raton, 33498
            -----------------------------------------------------
            (Former name, former address, and former Fiscal Year,
                        if changed since last report)

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

            None                                                None
    ---------------------                              ----------------------
    (Title of Each Class)                              (Name of Each Exchange
                                                         on which Registered)

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

                    Common Stock, par value $.001 per share
                    ---------------------------------------
                               (Title of Class)

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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be
contained, to the best of Issuer's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. (X)

State issuer's revenues for fiscal year ended December 31, 2001:
$3,402,915.

The aggregate market value of the Registrant's voting stock held by non-
affiliates, based upon the closing sales price for the common stock of
$2.49 per share as reported in the Pink Sheets LLC on June 30, 2002, was
approximately $9,439,316.  The shares of Common Stock held by each
officer and director and by each person known to the Company to own 5%
or more of the outstanding Common Stock have been excluded and such
persons may be deemed to be affiliates.  This determination of affiliate
status is not necessarily a conclusive determination for other purposes.

As of June 30, 2002, there were 7,963,980 shares of the Registrant's
Common Stock issued and outstanding after giving effect to a one-for-six
reverse stock split effective February 5, 2001.



<PAGE>


                EAGLE BUILDING TECHNOLOGIES, INC.



                        TABLE OF CONTENTS

                                                         Page
PART I
------

Item 1.  Business......................................... 3

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

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

Item 4.  Submission of Matters to a
           Vote of Security Holders....................... 17

PART II
-------

Item 5.  Market for Company's Common Equity
           And Related Stockholder Matters................ 17

Item 6.  Management's Discussion and
           Analysis or Plan of Operations................. 18

Item 7.  Financial Statements and Supplementary Data...... 21

Item 8.  Change in and Disagreements
           with Accountants on Accounting
           and Financial Disclosure....................... 21

PART III
--------

Item 9.  Directors, Executive Officers, Promoters
           and Control Persons; Compliance with
           Section 16(a) of the Exchange Act.............. 23

Item 10. Executive Compensation........................... 26

Item 11. Security Ownership of Certain
           Beneficial Owners and Management............... 27

Item 12. Certain Relationships and Related Transactions... 29

Item 13. Exhibits, Financial Statement
           Schedules and Reports on Form 8-K.............. 37

SIGNATURES


<PAGE>


                            PART I

                   Forward Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements.  The forward-looking
statements contained in this Form 10-KSB are subject to certain
assumptions, risks and uncertainties.  Actual results could differ
materially from current expectations.  Among the factors that could
affect the Company's actual results and could cause results to differ
from those contained in the forward-looking statements contained herein
is the Company's ability to implement its business strategy successfully,
which will depend on business, financial, and other factors beyond the
Company's control, including, among others, prevailing changes in
consumer preferences, access to sufficient quantities of raw materials,
availability of trained labor and changes in industry regulation.  There
can be no assurance that the Company will continue to be successful in
implementing its business strategy.  Other factors could also cause
actual results to vary materially from the future results covered in such
forward-looking statements.  Words used in this Form 10-KSB, such as
"expects", "believes", "estimates", and "anticipates" and variations of
such words and similar expressions are intended to identify such forward-
looking statements.

  On January 26, 2001, the Company's Board of Directors approved a 1-
for-6 reverse stock split for the Company's common stock effective
February 5, 2001.  All references to shares in this Report have been
adjusted to reflect such stock split.

ITEM 1.   BUSINESS
          --------

General

     Eagle Building Technologies, Inc. (the "Company") is a Nevada
corporation in the business of the manufacture and delivery of durable,
cost efficient, mortarless wall systems.  The Company's products and
delivery methodologies provide a competitive advantage where
environmental circumstances, infrastructure, a lack of skilled labor and
time sensitive delivery needs require special competence and expertise.
The mission of the Company is to provide quality housing in circumstances
where the existing factors of technology, infrastructure, environment and
economics, in any combination, reduce the probability of delivering
timely and cost effective human shelter.

     The Company has certain rights to market the Integrated Masonry
Systems, Inc. ("IMSI") patented technology and trademarks in China and


<PAGE>


Puerto Rico.  The Company is currently negotiating with IMSI for licenses
in other countries.  While the IMSI technology will be the preferred
source of wall technology, the Company may utilize other technologies
where project demands necessitate.  Royalty payments by the Company to
IMSI are based upon the aggregate dollar amount of gross revenues
generated from the use of the IMSI technology.  Because of the recent
disclosure by the former CEO of the Company that certain revenues were
overstated, IMSI received royalty payments based upon the fictitious
revenues.  The Company expects to receive credits toward licenses for
other countries.  While no formal agreement has been reached between the
Company and IMSI, the Company is attempting to negotiate a settlement
relative to licenses that Eagle wants to secure, applying the
overpayments to past and future royalties which may be due IMSI.  (See
Legal Proceedings - Threatened Litigation).

Product Lines

Mortarless Wall Systems

     The IMSI Wall System features insulated reinforced masonry that is
dry-stacked. IMSI blocks have cavities in which insulation is embedded
to provide thermal stability without sacrificing structural integrity.
Mortarless wall systems do not require mortar between the individual
blocks but rather use a system of interlocking materials and an internal
reinforcement grid of cement and rebar in combination with a surface-
bonding compound composed of cement, chopped fiberglass and other
materials to provide a weather resistant, structurally sound and
impermeable surface.  Other mortarless wall systems available to the
Company vary in some degree from the IMSI system with the primary
deviation being in the quality of thermal insulation.

     The advantages of the mortarless wall systems delivered by the
Company are:

      *   Cost competitive
      *   Airtight
      *   Engineered for seismic conditions
      *   Engineered for hurricane conditions
      *   Low maintenance costs
      *   Environmentally friendly
      *   Quick installation
      *   Ease of installation; semiskilled workers can be quickly and
          easily trained
      *   Flexibility of use; commercial, industrial, residential,
          institutional, and governmental construction



                              -4-
<PAGE>


Development of Markets

     The Company relies on management's ability to determine the
existence and extent of available markets for its products.  Company
management has considerable marketing background and devotes a
significant portion of its time to marketing related activities.  The
Company also utilizes the local marketing knowledge of its joint venture
partners and subsidiaries to network in the countries covered by the
Company's licensing agreements.

     The Company's business model is based on more than the technology
of mortarless wall systems.  Eagle's delivery system using mobile
production equipment and on-site assembly line methods adds a significant
competitive dimension to our offering.  The Company's business model is
very flexible, providing for revenue and profit opportunities at multiple
levels in the delivery process from the manufacture of building materials
through engineering, technology transfer, and the construction and
delivery of housing units to end users.

     The Company is developing established and emerging global markets
by utilizing its own comparative strengths in concert with those of its
technology partner, IMSI, and those of other selected strategic partners.
Current strategic relationships have been established in China and Puerto
Rico.  Any such strategic joint ventures and license arrangements that
involve the marketing and manufacturing of the IMSI Block System with any
other IMSI licensee may be subject to the crossover sales provision of
the IMSI licensing agreements.

     One of the greatest benefits of the Company's focus on creating
joint ventures in local markets is that it minimizes the Company's
exposure in terms of capital outlay while providing a tremendous
advantage for the Company in terms of the utilization of local labor and
materials.  This allows the Company to effectuate the transfer of
technology and training while gaining the political benefit of "keeping
it local" which reflects positively on the Company, our local partners,
and the local or foreign government of the jurisdiction in which the
contract is being fulfilled.

     Each of the Company's selected global partners and licensees
provides the Company with essential political and business relationships
with prominent local business and government entities.  Additionally,
those local relationships provide the Company with specific knowledge of
commercial opportunities and cultural, legal and business insights into
markets in which such knowledge and relationships are strategically
vital.



                              -5-
<PAGE>



     The two prime major market areas where the Company has established
operations are China and Puerto Rico.  In each operation, the Company has
a controlling interest.

Operations of Subsidiaries and Joint Ventures

Great Wall New Building Systems

     For centuries, the Chinese have built their homes and buildings with
brick made from red clay. The harvesting of this clay has destroyed
millions of acres of precious agricultural topsoil, putting additional
pressure on the government of the Peoples Republic of China (the "PRC")
to feed its 1.3 billion citizens.  In reaction, the Chinese government
has implemented a program to phase out the use of red clay brick for
residential construction in China.  The PRC has recognized that the IMSI
wall system offers environmental benefits, as well as advantages in terms
of energy saving and ease of construction.

     On that basis, and in the face of ongoing critical shortages of
quality housing, The Building Materials Bureau of Mi Yun has joint
ventured with the Company's subsidiary, Great Wall New Building Systems
("Great Wall") to promote the establishment of the wall system as a
standard construction method for China's housing market.  The Company is
current with all joint venture obligations.  Great Wall is fully
operational and has orders for conventional concrete block.
Additionally, Great Wall has been asked by the joint venture partner to
participate in specific new villa construction projects.  Demand for
cement block products in China substantially exceeds supply.  However,
in order for Eagle to fully realize the potential of Great Wall as a
contributor to Eagle's growth, Great Wall will require approximately
$600,000 of new capital to expand production capabilities to meet demand.

Eagle Building Technologies, Private Ltd. of India

     The Company formed a wholly-owned subsidiary under the corporate
laws of India, Eagle Building Technologies, Private Ltd. of India.  In
July of 2000, the Company reported that it had contracted with Jayant
Tipnis Consultants, PL (JTCPL) for an initial order of 750,000 units of
the patented IMSI[R] Block system valued at over $1.5 Million USD.
Production in Bombay allegedly began in the third quarter of 2000 and the
contract was completed in November of 2000. The Company then reported
that it received a Purchase Order from JTCPL for an additional 10 million
IMSI[R] Block of which the Company allegedly delivered 1 million IMSI[R] Block
in the 1st Quarter of 2001.

     In February 2002, the former CEO of the Company reported that all
of the revenues attributed to the Company's operations in India were



                              -6-
<PAGE>


falsified necessitating the restatement of the Company's Annual Report
on Form 10-KSB for the year ended December 31, 2000 as well as the
Reports on Form 10-QSB for the periods ended March 31, June 30, and
September 30, 2000 and 2001.  Currently, there are no operations in
India.  Eagle intends to dispose of all assets located in India and
conclude the Company's relationship with JTCPL.  The Company anticipates
that the disposal of remaining assets in India should generate funds
sufficient to pay any outstanding liabilities in India.

Business Dimensions, Inc.

     In August 2000, the Company acquired all of the assets of Business
Dimensions, Inc ("BDI"), a private Florida corporation, controlled by Don
Pollock ("Pollock"), an Officer and Director of the Company, whose major
asset is the license to sell and distribute products in North America
manufactured by Master srl, an Italian company that designs and
manufactures armored doors under the Master Door name.  (See Product
Lines.)  In May 2002, the Company assigned all of its interest in BDI
back to Pollock in settlement of claims arising from the BDI Purchase
Agreement between the Company and Pollock concerning reimbursed expenses
incurred in connection with the qualification of Master Door products in
the State of Florida.

Eagle-Fuller International, Inc.

     In December 2000, Eagle formed a wholly-owned subsidiary, Eagle-
Fuller International, Inc. ("Eagle-Fuller").  At the time of formation,
Company management announced that Eagle-Fuller was formed for the purpose
of developing large scale real estate projects.  Eagle-Fuller has no
operations and no assets.  However, certain investors have alleged that
the Company has liability for loans made by the investors to Eagle-
Fuller.  The Company has not accepted responsibility for Eagle-Fuller
obligations.  The Company's position concerning Eagle-Fuller liabilities
may spawn future litigation by the investors.  The Company will
vigorously defend against any attempts to impute liability to the Company
for Eagle-Fuller obligations.

Bullhide Corporation

     In March 2000, Eagle purchased a 44% interest in Bullhide
Corporation ("Bullhide"), a publicly traded Florida corporation (OTCBB:
BULH).  Bullhide owns the patent for the manufacture of a proprietary
polyurethane material inclusive of a designed  methodology for
application of the material which is used as a coating sealant.  Bullhide
manufactures two basic products marketed under the trademark Bullhide[R].
During the first quarter of 2002, Bullhide ceased operations.




                              -7-
<PAGE>


Fleming Manufacturing Company

     As of October 2000, the Company acquired all of the issued and
outstanding securities of Fleming Manufacturing Company, Inc. ("Fleming
Manufacturing"), a Missouri corporation located in Cuba, Missouri, from
William M. Fleming ("Fleming") for an aggregate purchase price of
$3,875,000.  The Company is financing the acquisition via a Note and
purchase money security interest in favor of Fleming.  The Company has
negotiated a restructure of the Fleming Note and is current concerning
same.

     Fleming Manufacturing has been in business for almost 60 years.  It
is the leader in the manufacture of mobile block equipment and related
products to the concrete products industry.  Fleming Manufacturing makes
a mobile block plant for the production of mortarless block and pavers
on site.  The Company is a major customer of Fleming Manufacturing.
Eagle has become more active in the day-to-day operations of Fleming
Manufacturing.

  Eagle Italia srl

     In October 2001, the Company organized under the corporate laws of
Italy, Eagle Italia srl, a wholly-owned subsidiary of the Company for the
sole purpose of acquiring all of the issued and outstanding shares of
Master srl, an Italian corporation and leading manufacturer of security
doors marketed under the name Master Door that are bullet-proof, fire-
explosion resistant, and contain special locks.  The Company agreed to
purchase Master srl for approximately $7,191,000 U.S., payable in
installments.  The Company paid $2,500,000 U.S. toward the purchase, but
the Company was unable to raise capital sufficient to complete the
purchase.  Rather than lose its substantial investment, Eagle was able
to arrange for an extension of the closing date to September 2002, and
assigned the acquisition rights to Don Pollock, an executive officer and
Director of the Company, in consideration of Mr. Pollock completing the
acquisition of Master srl.  The transaction is scheduled to close on or
before September 2002.  Upon the closing of the transaction, the Company
will either sell its interest in Eagle Italia srl to the purchaser, or
the Company will retain an interest and receive further cash and product
discount considerations.

  Eagle Building Technologies of Puerto Rico, Inc.

     Eagle Building Technologies of Puerto Rico, Inc. ("EPR") is a
wholly-owned subsidiary of the Company organized and existing under the
laws of the Commonwealth of Puerto Rico in January 2002, for the purpose
of producing the components of high quality advanced mortarless wall
systems and delivering on site erection of the wall systems.  EPR is
currently producing wall components under license from IMSI at a five (5)
acre facility located in Salinas, Puerto Rico.  The entire production of



                              -8-
<PAGE>


this facility will be dedicated to facilitating the Law 124[1] development
in Salinas that is contiguous to the production facility, and other
Company related construction projects currently in the planning stages.

  Salinas Developers Group, Inc.

     Salinas Developers Group, Inc. ("SDI"), is a Puerto Rican
corporation of which seventy-five percent (75%) is owned by the Company.
The Company agreed to purchase its seventy-five percent (75%) stock
position from existing shareholders in 2001 and finished paying for its
shares in the first quarter of 2002.

     SDI is authorized to build 189 Law 124 homes on real property it
owns in Salinas, Puerto Rico, and has plans to build approximately 200
more homes on property contiguous to, or near, the SDI site.  These homes
will sell for approximately $70,000 each.  SDI is currently negotiating
construction and permanent take-out financing with Doral Bank in Puerto
Rico.  SDI has contracted with American Builders, a well respected large
builder in Puerto Rico, to be the General Contractor for the project and
the Company anticipates that American Builders will be its general
contractor for subsequent projects.

     The Company has identified several projects in addition to the one
at Salinas and the Company has strong expressions of interest from Doral
Bank to provide the required financing for those projects.  The demand
for durable, cost efficient, low and moderate income housing in Puerto
Rico is very high and the government of Puerto Rico is committed to
increasing the supply of such housing with a goal of 60,000 units over
the next three years.  Eagle, through its Puerto Rican subsidiary, Eagle
Building Technologies of Puerto Rico, Inc., intends to be involved in the
delivery of 5,000 to 10,000 of those units.

Employees

     As of December 31, 2001, the Company, inclusive of subsidiaries and
joint ventures, had a total of 65 employees broken down as follows: 13
employees at the corporate headquarters, 2 employees for the China
subsidiary,, and 50 employees for Fleming Manufacturing Corp.


-------------------

[1]   Law 124 is a Puerto Rican housing program that subsidizes the down
      payment and financing of homes for low and moderate income families.
      Salinas is currently negotiating construction and permanent take-out
      financing with Doral Bank in Puerto Rico.  SDI has contracted with
      American Builders, a well respected large builder in Puerto Rico,
      to be the General Contractor for the project and the Company
      anticipates that American Builders will be its general contractor
      for subsequent projects.



                              -9-
<PAGE>


Competition

     The Company believes that IMSI Wall System is one of the best
mortarless wall systems considering the system's combination of
qualities.  However, the Company is aware of other construction
technology which will withstand environments prone to natural disasters
and extreme weather conditions that commonly occur in the countries in
which the Company has operations.  The major difference between the IMSI
Wall System and similar wall systems is the insulation factor.  With the
enormous demand for new construction technologies from developing
countries, the Company is focusing on using the mortarless wall systems
that best meet the requirements for each project.  However, with the
Company's addition of alternative mortarless wall systems which systems
include mobile production capability and assembly line like delivery of
block on site, the Company believes it is extending it's reach in the
markets in which the Company operates.

Government Regulation

     In 2000, the United States Congress passed a bill which granted PRC
permanent Most Favored trade status.  This will allow the local economy
of China to expand more rapidly and enable the Company to reach a wider
target audience with the IMSI patented block system.  The PRC joined the
World Trade Organization during 2001.  The Company is not aware of any
other foreign or domestic regulations or policies that would impact the
Company's operations.

ITEM 2.   PROPERTIES
          ----------

     The Company currently manufactures products at two (2) facilities,
leases two (2) separate facilities for administrative and manufacturing
purposes, and utilizes one (1) office maintained by joint venture
partners at no cost, as follows:

     Boca Raton, Florida - The Company maintains its principal
administrative offices via a sublease from M.A. Berman Company.  M.A.
Berman Company is owned and controlled by Meyer A. Berman, the Company's
Chairman and largest shareholder.  The sublease is based upon an oral
month-to-month understanding whereby the Company pays M.A. Berman Company
$20,000 per month for the space, telephone and internet connections,
office equipment, and the services of four (4) M.A. Berman Company staff
members for administrative support

     Salinas, Puerto Rico - Salinas Developers Group, Inc. owns twenty
(20) acres of developmental real property in Salinas, Puerto Rico.  The



                              -10-
<PAGE>


twenty (20) acres is subject to a note and purchase money mortgage in the
amount of $481,000.  The note has matured and the Company is currently
in negotiations to extend the maturity date.  Additionally, the twenty
(20) acres is subject to liens filed by general contractors for services
rendered in connection with improvements to the real property.

     Salinas, Puerto Rico - Eagle Building Technologies of Puerto Rico,
Inc. owns five (5) acres of real property in Salinas, Puerto Rico.  The
real property is free and clear of all liens and encumbrances.  The
property is improved and suitable to house EPR's administrative offices
and production facilities.

     Cuba, Missouri - The Company owns a 20,000 square foot manufacturing
and warehouse facility located in Cuba, Missouri (outside St. Louis).
The facility is approximately 35 years old and in good condition.  The
facility encompasses part of the manufacturing operation of Fleming
Manufacturing Company, a wholly-owned subsidiary of the Company.  The
facility is used to manufacture mobile block plants.  The facility has
no room for expansion as demand may necessitate; however, the Company
also leases an additional 32,000 square foot manufacturing facility
conveniently located adjacent to the owned facility at a cost of $4,000
per month.  The lease is for a ten (10) year term commencing January 1,
2001.  The Company has a right of first refusal to acquire the leased
premises and an option to purchase the leased premises during the initial
ten (10) year term of the lease for the appraised value of the premises.
The facilities leased by the Company are well maintained.  Both
facilities are adequately insured and in substantial compliance with
environmental laws and regulations.

     Mumbai, India - The Company's wholly-owned subsidiary, Eagle
Building Technologies Private Ltd. of India, maintains its principal
administrative offices in a facility provided by the subsidiary's
Managing Director at no expense to the subsidiary.

     Mi Yun, China - The Company's wholly-owned subsidiary, Great Wall
New Building Systems, maintains administrative offices in a facility
provided by the Company's Chinese joint venture partner, Building
Materials Bureau of Mi Yun (a government controlled entity) at no expense
to the subsidiary.  The offices are well maintained and suitable for
current operations.

ITEM 3.   LEGAL PROCEEDINGS
          -----------------

     From time to time,  the  Company may be  involved  in  litigation
that arises in the normal  course of  business  operations.

Securities and Exchange Commission

     SEC v. Eagle Building Technologies, Inc. and Anthony D'Amato (Civil
     ------------------------------------------------------------
Action No. 1:02CV397ESH D.D.C.)  The SEC and the Company agreed to settle
the lawsuit in May 2002.  The Court signed the settlement papers on or
about May 30, 2002, entering a permanent injunction against the Company
for any future violations of Sections 10(b), 13(a), 13(b)(2)(A), and
13(b)(2)(B) of the Securities Exchange Act of 1934, and Rules 10b-5, 12b-
20, 13a-1, 13a-13, and 13b2-1.  The Company made no admission or denial
of liability in connection with the settlement.



                              -11-
<PAGE>

Class Actions

     Kelso Capital et al. v. Eagle Building Technologies, Inc., Anthony
     ------------------------------------------------------------------
D'Amato, Paul-Emile Desrosiers and Tanner + Co. (Southern District of
-----------------------------------------------
Nevada, Civil Case No. CV-S-02-0367-PMP-PAL, filed March 15, 2002)


     Alan Davidson and Victor Kashner v. Eagle Building Technologies,
     ----------------------------------------------------------------
Inc. (United States District Court, Southern District of Florida, Case
----
No. 02-80323-CIV-RYSKAMP, filed March 26, 2002)


     Marc Newman, Kenneth Wait, Dr. Anthony Roberts and Dana Davis, et
     -----------------------------------------------------------------
al. v. Eagle Building Technologies, Inc., Anthony D'Amato, Dr. Ralph
--------------------------------------------------------------------
Thomson, Andros Savvides, Wilfred G. Mango, Jr., Donald Pollock, Robert
-----------------------------------------------------------------------
Kornahrens, Charles A. Gargano, Samuel Gejedson, Meyer A. Berman and
--------------------------------------------------------------------
Tanner + Co. (United States District Court, Souther District of Florida,
------------
Case No. 02-80294-CIV-RYSKAMP, filed April 5, 2002)


     Inglewood Holdings, Ltd. V. Eagle Building Technologies, Inc., and
     ------------------------------------------------------------------
Anthony D'Amato (United States District Court, Southern District of
---------------
Florida, Case No. 02-80340-CIV-MIDDLEBROOKS, filed April 16, 2002)


     David D. Pain v. Eagle Building Technologies, Inc. and Anthony
     --------------------------------------------------------------
D'Amato (United States District Court, Southern District of Florida, Case
-------
No. 02-80372-CIV-HURLEY, filed April 24, 2002)


     Jeff Gass v. Eagle Building Technologies, Inc., Anthony D'Amato,
     ----------------------------------------------------------------
Paul-Emile Desrosiers and Tanner + Co. (United States District Court,
--------------------------------------
District of Nevada, Case No. CV-S-02-0640-PMP-RJJ, filed May 6, 2002)


     Robert Gluck v. Eagle Building Technologies, Inc. et al. (United
     --------------------------------------------------------
States District Court, Southern District of Florida, Case No. 02-CV-
80302, filed April 8, 2002[2])


     Guerrilla IRA Partners, L.P. v. Eagle Building Technologies, Inc.
     -----------------------------------------------------------------
and Anthony D'Amato (United States District Court, Southern District of
-------------------
Florida, Case No. 02-CV-80403, filed May 3, 2002)


     All of the above complaints have been filed in the United States
District Courts for Florida and Nevada seeking class action certification
for alleged securities violations by Eagle pursuant generally to Section
10(b) and 20(a) of the Exchange Act and Sec Rule 10b-5 promulgated
thereunder.  The complaints generally alleges that Eagle intentionally
perpetrated a fraud upon the public by the dissemination of false and
misleading information.  Various law firms have filed motions to be


---------------------

[2]   On or about May 16, 2002, Plaintiff Gluck filed a motion pursuant
      to U.S.C. Sec. 1407 to consolidate and transfer all of the
      federal securities litigation matters to the Judicial Panel on
      Multidistrict Litigation ("MDL Panel").  Due to the transfer
      order issued by the Clerk of the United States District Court
      for the District of Nevada, however, Plaintiff Gluck has
      advised the MDL Panel in writing that he wishes to withdraw his
      motion.  The Company has entered a special appearance in the
      matter for the purpose of opposing the motion to transfer to
      the MDL Panel.  The Clerk of the MDL Panel issued an Order on
      June 4, 2002 deeming Plaintiff Bluck's motion moot.



                              -12-
<PAGE>


appointed lead counsel and to have their clients appointed as lead
plaintiffs.  We anticipate that lead plaintiffs' counsel, once appointed,
will file a consolidated Complaint.  No trial date has been set.  We are
unable to express an opinion regarding the outcome of this litigation or as
to any potential loss or range of loss to the Company in the event that
either a favorable or unfavorable outcome results.

Additional Securities Litigation
--------------------------------

     Anthony I. Bentley, James Bruce Whiting and Beverly D. Whiting v.
     -----------------------------------------------------------------
Eagle Building Technologies, Inc.  (Third Judicial District Court, Salt
---------------------------------
Lake City, Utah, Case No. CA 02-0901808).  The complaint alleges breach
of contract, unjust enrichment and conversion for failure to issue
securities to the Plaintiffs.

     Trust #191190MAN(A) v. Eagle Building Technologies, Inc. et al. (US
     ---------------------------------------------------------------
District Court, District of Utah, Central Division, Case No. 02-CV-202CV-
0502ST).  This is an action brought by a Trust whose agent is Clealon B.
Mann.  The Trust's sole cause of action is brought under RICO and alleges
that Eagle failed to remove the Rule 144 legend from 8,333 shares of
Eagle stock, claimed the shares were attached pursuant to a pending
lawsuit, and titling shares in the name of Clealon Mann.  Plaintiff's
claimed damages are the amount of the Eagle shares at the time it would
have sold them.  However, Plaintiff does not indicate when such a sale
would have occurred.  As with the McConkie lawsuit, GSTA and Iverna
Morgan, GSTA's president, were named as defendants and Eagle has agreed
to indemnify them.  The Company is defending this action based upon the
following grounds: (a) the shares were titled in the name of the trust,
and listed Mann only as trustee; (b) the shares were issued without
restriction in August 2000; and (c) at least two writs of execution were
issued in 2001, both of which specifically attached the Trust's shares
and prevented the sale of said shares. The Company has filed an answer
to the Complaint denying all allegations.

     Paul-Emile Desrosiers v. Eagle Building Technologies, Inc. (15th
     ----------------------------------------------------------
Judicial Circuit in and for Palm Beach County, Florida, Civil Case No.
CA 02-03431 AA).  This is an action filed against the Company on April
1, 2002, by the former President and Chief Executive Officer of the
Company seeking damages in excess of $15,000 for allegedly owed
compensation and reinstatement as an officer and director.  The Company
filed a motion to dismiss five of the six counts in the complaint; the
Court heard oral argument on June 28, 2002.  On July 25, 2002, the Court
dismissed without prejudice the counts seeking declaratory relief and
damages for retaliation, while dismissing with prejudice the counts
requesting injunctive relief.  The only count remaining at the time of
this Report is Desrosiers's claim for Breach of Contract.  Discovery  is
in its preliminary stages.  No trial date has been set.  We are unable
to express an opinion regarding the outcome of this litigation or as to
any potential loss or range of loss to the Company in the event that



                              -13-
<PAGE>


either a favorable or unfavorable outcome results.

     F. Briton McConkie and Stephen R. Fey v. Eagle Capital
     ------------------------------------------------------
International, and General Securities Transfer Agency, Inc. (United
-----------------------------------------------------------
States District Court for the Central Division of Utah, Civil Case No.
2:01-CV0-0950 ST).  This is an action brought by Brinton McConkie and
Stephen Fey on the grounds of breach of contract.   The plaintiffs allege
that Eagle wrongfully refused to transfer 200,000 shares, represented by
certificates number 432114 and 432119.  Plaintiffs have produced
affidavits of Doug Dent and Ralph Thompson, former members of the Eagle
Board of Directors, in which both men state that the shares were properly
issued.  The potential damages in this matter would likely be the value
of the shares in April 2001, when Plaintiffs initially requested the
shares transferred.  The Company's asserted defense is that the shares
in question were never properly issued and there was a lack or failure
of consideration.  Discovery has just begun.  Additionally, General
Securities Transfer Agency ("GSTA"), the agency handling Eagle's stock
certificates, was named as a defendant.  Eagle has agreed to indemnify
GSTA in this matter.

Other Litigation
----------------

     Eagle Capital International, Ltd. v. Lone Wolf Energy, (United
     -----------------------------------------------------
States District Court for the District of Utah, Civil No. 2:00CV988K).
This was an action brought by the Company to set aside an agreement and
settlement agreement on the grounds of fraud.  Lone Wolf also filed suit
in Oklahoma, Lone Wolf Energy, Inc. v. Eagle Capital International, LTD.,
United States District Court for the North District of Oklahoma, Civil
No. 00CV1040K (M) seeking to recover from Eagle the balance due on the
$1,000,000 note issued by Eagle in connection with the settlement
agreement.  This action was defended by John F. Fischer of the law firm
of Andrews Davis Legg Bixler Milstein & Price (405-272-9241) in Oklahoma
City.  In the Utah action, Lone Wolf successfully moved to dismiss on the
grounds that the action can only be tried in Oklahoma.  A judgment was
entered against Eagle in the Oklahoma action on August 27, 2001.  The
judgment was for $850,000, plus interest and damages for late charges in
the amount of $156,060.03.  However, we were informed that a settlement
was reached between the parties in the summer of 2001.  Fabian &
Clendenin was not provided a copy of the settlement agreement and has no
knowledge as to whether the judgment/settlement has been satisfied.  On
September 14, 2001, the Company entered into a settlement agreement with
Lone Wolf Energy wherein the Company paid Lone Wolf $480,000 in cash and
20,000 restricted shares of Eagle common stock.

     Polysolutions Corp. and Bullhide Liner of Broward County, Inc. v.
     -----------------------------------------------------------------
Eagle Capital International, Inc. (14th Judicial Circuit Court  in and for
---------------------------------
Palm Beach County, Florida, Civil Case No. CA-01-9017AB).  The complaint
was filed on September 4, 2001.  On or about April 23, 2002, Plaintiffs
sought to amend the complaint to name Anthony D'Amato, Ralph Thomson,
Richard Lahey, Andros Savvides, Wilfred Mango, Donald Pollack, Robert



                              -14-
<PAGE>


Kornahrens, Charles Gargano, Samuel Gejdenson, Meyer Berman, Howard Ash,
and Bruce Mauldin as individual defendants.  The Amended Complaint
alleges counts for breaches of contract, fraud in the inducement and
breach of fiduciary duty.  The Company is presently substituting the law
firm of Broad & Cassel, located in Fort Lauderdale, Florida, as counsel
in this matter.

     Actionable Intelligence Technologies, Inc. v. Eagle Building
     ------------------------------------------------------------
Technologies, Inc. (15th Judicial Circuit in and for Palm Beach County,
------------------
Florida, Civil Case No. CA 02-03197 AB).  A complaint was filed on March
12, 2002, by a company based in San Diego, California, arising out of the
Company's alleged breach of a contract between the parties, and seeking
damages in excess of $15,000.  The plaintiff claims that the Company owes
more than $820,000.00 for consulting services rendered, and up to
$5,000,000.00 for services that were to be performed in the future.  On
April 30, 2002, the Company filed an answer to the complaint denying
liability and asserting several affirmative defenses.  Discovery is in
its preliminary stages.  No trial date has been set.  We are unable to
express an opinion regarding the outcome of this litigation or as to any
potential loss or range of loss to the Company in the event that either
a favorable or unfavorable outcome results.

     J.C. Group Corp. and Jose A. Camacho v. Salinas Developers, Inc.,
  -----------------------------------------------------------------
Eagle Building Technologies (Civil No. G-CD2002-0109; Sala 302)
---------------------------
On April 18, 2002, Plaintiffs J.C. Group, Inc. ("J.C. Group") and
Jose A. Camacho ("Camacho") filed a complaint against Salinas Development
Group, Inc. ("SDG"), a Puerto Rico corporation controlled by the Company
and Eagle Building Technologies, of Puerto Rico, Inc. ("Eagle-PR"), a
wholly-owned subsidiary of the Company in the Federal District Court of
the Commonwealth of Puerto Rico claiming $1,260,299 plus damages and
legal fees.  SDG timely filed the Answer to the Complaint and a
Counterclaim.  SDG alleges in its Counterclaim that Plaintiffs owe
$4,110,000 to SDG on account of fund deviation, false and excessive
invoicing and damages.  Eagle-PR filed a motion for summary judgment
based on the fact that it is not liable for the acts of SDG and that
Eagle-PR is not the stockholder of SDG.  In addition, SDG filed a Third
Party Complaint against Camacho for $5,910,000 claiming: 1) poor
performance as project manager; 2) fund deviation; 3) false invoicing;
4) purchase of land in his own name with SDG funds; 5) breach of
fiduciary duty; 6) interference with SDG's business; and 7) failure to
make capital contributions.  On June 20, 2002, Plaintiffs filed an
Amended Complaint against SDG and Eagle-PR, and  increased the amount
claimed to $2,872,857.29, including the lost profits of Camacho.  As of
the date of this filing, because of the complex nature of the matters
involved, the outcome of this case cannot be predicted.



                              -15-
<PAGE>


     Jennifer Nina v. Eagle Building Technologies, Inc. (15th Judicial
     --------------------------------------------------
Circuit in and for Palm Beach County, Florida, Civil Case No. CA 02-
4297AE).  This complaint was filed April 10, 2002, alleging claims for
unlawful termination, retaliation, breach of contract and unpaid wages,
and seeking damages in excess of $15,000.00.  On or about May 6, 2002,
the Company filed a motion to dismiss certain claims, which alleged
retaliatory discharge.  The Court, by order entered June 26, 2002,
granted that motion, dismissing those claims without prejudice.
Discovery is in the preliminary stages.  No trial date has been set.  We
are unable to express an opinion regarding the outcome of this litigation
or as to any potential loss or range of loss to the Company in the event
that either a favorable or unfavorable outcome results.

     Mark Neuman v. Anthony D'Amato, et al. and Eagle Building
     ---------------------------------------------------------
Technologies, Inc. (as a nominal defendant) (15th Judicial Circuit in and
-------------------------------------------
for Palm Beach County, Florida, Case No. CA 02-05560-AG).  This complaint
was filed on May 9, 2002, as a shareholders derivative action alleging
breach of fiduciary duty, misappropriation of confidential information,
and contribution and indemnification.  The Plaintiff is seeking damages
in excess of $15,000.  Broad and Cassel represents the Company and all
of the named individuals except Anthony D'Amato.  The Company filed a
motion to dismiss the complaint on July 3, 2002.  The Court has not yet
issued a ruling on the motion.  No discovery has occurred and no trial
date has been set.  We are unable to express an opinion regarding the
outcome of this litigation or as to any potential loss or range of loss
to the Company in the event that either a favorable or unfavorable
outcome results.

     Julio Cruz, Jr. v Eagle Building Technologies, Inc. ((15th Judicial
     ---------------------------------------------------
Circuit in and for Palm Beach County, Florida, Civil Case No. CA 02-
005668-AF).  This is an action filed on May 15, 2002, by a former
employee of the Company seeking damages in excess of $15,000 for wrongful
termination, retaliation, unpaid wages, and breach of contract.  The
Company filed a motion to dismiss certain claims, which alleged
retaliatory discharge.  The Court has not yet ruled on that motion,
although Plaintiff's counsel has agreed to entry of an order dismissing
these claims without prejudice.  Discovery is in the preliminary stages.
No trial date has been set.  We are unable to express an opinion
regarding the outcome of this litigation or as to any potential loss or
range of loss to the Company in the event that either a favorable or
unfavorable outcome results.

     Gina Nicoleau v. Eagle Building Technologies, Inc. (15th Judicial
     --------------------------------------------------
Circuit in and for Palm Beach County, Florida, Civil Case No. CA-02-
05675-AH).  This complaint was filed on June 14, 2002, by a former
employee of the Company seeking damages in excess of $15,000 for wrongful
termination, retaliation, unpaid wages, and breach of contract.
Plaintiff's counsel has advised us that he intends to amend the complaint
to drop the retaliatory discharge claims.  Discovery is in the
preliminary stages.  No trial date has been set.  We are unable to



                              -16-
<PAGE>


express an opinion regarding the outcome of this litigation or as to any
potential loss or range of loss to the Company in the event that either
a favorable or unfavorable outcome results.

Threatened Litigation

     Claims by Cheryl Ray.  Ms. Ray is the surviving spouse of Herbert
     --------------------
Ray, a founding member of IMSI.  Upon Herbert's death, Ms. Ray received
2,000,000 IMSI shares.  In January 1999, Ms. Ray agreed to exchange her
IMSI shares for Eagle Shares.  Ms. Ray alleges that in June 2000, Anthony
D'Amato, then President and CEO of Eagle,  informed her that her original
IMSI shares were being cancelled and that there had been insufficient
consideration for the 1999 stock exchange.  According to Ms. Ray, she
then agreed to return all but 500,000 common shares.  Ms. Ray now alleges
that she was defrauded by Mr. D'Amato and Eagle.  In November 2001, she
issued a demand letter for $2,500,000, or the value of her original
shares.   In February 2002, Ms. Ray threatened legal action.

     Claims by IMSI.  On July 3, 2002, IMSI, Inc. notified Eagle that its
     --------------
license to use IMSI's patented products in Puerto Rico was being revoked.
IMSI warned that any future, unauthorized use by Eagle would be met with
legal action.

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

     On April 25, 2000, proxies were submitted by a majority of the
shareholders of Eagle Building Technologies, Inc. approving a change of
the Company name to Eagle Building Technologies, Ltd.  The name change
became effective in the second quarter of 2001.

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
          --------------------------------------------------------

     The Company's  common stock began trading on the National
Association for Securities Dealers, Inc.'s OTC Bulletin  Board in the
last quarter of 1996, and is currently trading under the symbol "EGBT".
Set forth below is the range of high and low bid information for the
Company's common stock for the two most recent  fiscal years.  This
information represents prices between dealers and does not reflect retail
mark-up or mark-down or commissions, and may not necessarily represent
actual market transactions.

<TABLE>
<CAPTION>

  Fiscal Period                      High Bid       Low Bid
  -------------                      --------       -------
<S>                                  <C>            <C>
  2000:
  First Quarter.....................  $ 2.43        $  .98
  Second Quarter....................    1.56           .75
  Third Quarter.....................    1.315          .37
  Fourth Quarter....................     .71           .25

</TABLE>



                              -17-
<PAGE>


<TABLE>
<CAPTION>

<S>                                  <C>            <C>

  2001:
  First Quarter..................... $ 5.58*        $ 1.68*
  Second Quarter....................   7.29*          2.50*
  Third Quarter.....................   8.59*          3.35*
  Fourth Quarter....................  12.10*          5.25*

  2002:
  First Quarter..................... $12.40         $ 1.38
  Second Quarter
    (through June 30, 2002)......... $ 3.95         $ 2.30

</TABLE>

  *  Adjusted for a 1-for-6 reverse stock split effected on
     February 9, 2001.

     As of June 30, 2002, there were approximately 519 record holders of
the Company's outstanding Common Stock.  Since additional shares of the
Company's Common Stock are held for stockholders at brokerage firms
and/or clearing houses, the Company was unable to determine the precise
number of beneficial owners of its Common Stock as of June 30, 2002.

     The Company has never declared or paid cash dividends on its capital
stock and the Company's Board of Directors intends to continue that
policy for the foreseeable future.  Earnings, if any, will be used to
finance the development and expansion of the Company's business.  Future
dividend policy will depend upon the Company's earnings, capital
requirements, financial condition and other factors considered relevant
by the Company's Board of Directors and will be subject to limitations
imposed under Delaware law.


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

     The analysis of the Company's financial condition, liquidity,
capital resources and results of operations should be viewed in
conjunction with the accompanying financial statements including the
notes thereto.

General

     The Company was incorporated in Nevada in 1994 under the name IAC,
Inc. In October, 1998, the Company changed its name to Eagle Building
Technologies, Inc. During 1998, the Company acquired the assets of IMSI
CapFund, Inc. ("CapFund").  CapFund utilized the IMSI[R] Block System which,
today, through licensing agreements between the Company and IMSI, is the
preferred technology of the Company.

     As of December 31, 2001, the Company controlled and operated
subsidiaries including the following consolidated subsidiaries, Great
Wall Building Systems, Inc., Fleming Manufacturing Company and Salinas
Development Corporation, and interests in the following unconsolidated
subsidiaries, Master Door, and Bullhide Corporation (see Business
Operations of Subsidiaries and Joint Ventures.)



                              -18-
<PAGE>


Financial Condition

      At December 31, 2001, the Company had total assets of $15,876,397
as compared to total assets of $15,193,432 at December 31, 2000; total
liabilities[3] of $18,954,253 as compared to  $10,572,225 in 2000; total
stockholders' equity (deficit) of $(4,246,604) as compared to $3,452,459
in 2000.  The decline in stockholders' equity during the year ended
December 31, 2001 was the result of operational losses in the year 2001,
the impairment of the value of certain tangible and intangible assets due
to changes in conditions and assumptions and settlement costs claims and
litigation. Impairment losses and settlement costs claims and litigation
recorded during the year ended December 31, 2001 were as follows:


   Impairment of goodwill related to the Company's
   investment in Great Wall Building Systems, Inc.       $ 1,696,309

   Impairment of Investment in Unconsolidated
   Subsidiaries:
      Master Door                                          3,581,183
      China Joint Venture                                    622,618

   Impairment of Property and Equipment                      399,600

   Settlement Costs Claims and Litigation                  4,012,427



Liquidity and Capital Resources

     As of December 31, 2001, the Company's cash totaled $174,686 as
compared to a net cash overdraft of $439 at December 31, 2000, an
increase of $175,125. Net cash used in operations was $6,523,129 compared
to $3,036,867 in 2000. During the year 2001 the Company did not generate
cash flow sufficient to meet operating requirements. The Company funded
this deficiency in 2001 primarily through proceeds from notes payable in
the approximate amount of $9,500,000 and cash proceeds from the sale of
common stock in the approximate amount of $4,181,000.

     On July 2, 2001, the Company raised $5,340,000 through the issuance
of convertible 10% notes payable due July 2, 2004 including $3,340,000
from Mr. Meyer Berman, a Director of the Company. In addition, Mr. Berman
made various short-term loans to the Company through-out 2001 which as
of December 31, 2001 totaled $1,380,000. The Company is currently in the
process of attempting to raise additional funding in order to complete


--------------------------


[3]  As a result of the Company's investigation in connection with the
     restatement of its 2000 and 2001 financials, the Company believes
     that there may be third parties to whom Anthony D'Amato, the
     Company's former Chairman and CEO, has obligated, or made
     representations purporting to obligate, the Company, or to issue
     equity in the Company without the knowledge or authorization of
     the Company's Board of Directors.  The Company will continue to
     investigate and determine the validity of any such third party
     claims on a case by case basis.  At the time of this filing,
     the Company cannot determine the financial impact, if any, to the
     Company as a result of Mr. D'Amato's actions.




                              -19-
<PAGE>


its current project of the development of a housing project in Puerto
Rico. It is currently estimated that an additional $6,500,000 in funding
will be necessary in order to complete the Puerto Rico project. In
addition, the Company will continue to seek out additional financing in
order to continue or expand its operations through-out the foreseeable
future.

Results of Operations

     REVENUES - Sales for the year ended December 31, 2001, were
$3,402,915 compared to sales of $857,347 in 2000. This increase was the
result of a full year of sales recognized during 2001 from the purchase
in 2000 of the Company's wholly-owned subsidiary, Fleming Manufacturing,
Inc as compared to only the final quarter of sales being recognized
during the year ended December 31, 2000.

     GROSS PROFIT - Gross profits for the year ended December 31, 2001
were $485,051 compared to gross profit of $292,179 for 2000. The increase
in gross profit is due to the reasons enumerated above under the caption
"REVENUES".

     DEPRECIATION AND AMORTIZATION - Due to the amortization of certain
intangible assets (primarily license rights) which began in 2000 and
depreciation of equipment which began in 2001, depreciation and
amortization for the year 2001 increased to $569,789 as compared to
$380,391 in 2000.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES - Selling, general and
administrative expenses were $11,251,560 for the year ended December 31,
2001, as compared to $4,640,604 for 2000. The increase in expenses is due
to increased start-up costs and expansion of the Company.

     IMPAIRMENT COSTS AND SETTLEMENT COSTS AND LITIGATION - Impairment
costs for the year ended December 31, 2001 totaled $6,299,710 as
compared to $2,565,750 for 2000. Details related to the 2001 and 2000
impairment losses are as follows:

<TABLE>
<CAPTION>
                                                   2001                2000
                                               ------------       ------------
<S>                                            <C>                <C>
Impairment of Goodwill related to the
following:
  CT India and CT Mexico                                          $  1,714,387
  Great Wall New Building Systems, Inc.        $  1,696,309

Impairment of Investment in
Unconsolidated Subsidiaries
As follows:
  Bullhide Corporation                                                 851,363
  Master Door                                     3,581,183
  China Joint Venture                               622,618

Impairment of Property and
  Equipment                                         399,600

</TABLE>



                              -20-
<PAGE>



    In addition the Company during 2001 recorded settlement
costs claims and litigation in the amount of $4,012,427 related primarily
to the accrual for estimated amounts the Company may owe and the write-
down of assets as the result of anticipated future settlements.

     OTHER INCOME (EXPENSE) - Other expenses are broken down into the
following three (3) areas for 2001 and 2000: interest expense, loss on
sales of securities, and other. The losses were ($3,036,034), ($52,282)
and ($5,275), respectively in 2000. Interest expense in 2000 was
primarily the result of the issuance of common stock for accrued interest
and due to beneficial conversion features on debt and warrants.

     The 2001 amounts were ($1,106,142), $318,500 and $462,272,
respectively.  Interest expense in 2001 included ($660,429) as the result
of the issuance of common stock for accrued interest.

     The Company experienced a net loss of $21,404,016 in 2001 compared
to a net loss of $10,112,219 in 2000.  As stated above, the net losses
incurred included total impairment costs of $6,299,710 and $2,565,750
in 2001 and 2000, respectfully.


ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
          -------------------------------------------

     The financial statements required pursuant to this Item 7 are
included in this Form 10-KSB as a separate section commencing on page F-1
and are hereby incorporated by reference into this Item 7.


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

     In May, 2000, the Company changed accountants beginning with the
audit of the financial statements for the fiscal year ended December 31,
1999, from Jones, Jensen & Company, Certified Public Accountants ("JJC")
to Christensen & Duncan, Certified Public Accountants. JJC resigned as
the Company's accountant in or about May 2000 (see Item 13 concerning
filing of Form 8-K in connection with change of accountants).

     The report of JJC on the Company's financial statements for the
fiscal year ended December 31, 1998 did not contain an adverse opinion
or disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles, except for a going
concern uncertainty.

     In connection with the audit of the Company's financial statements
for the fiscal year ended December 31, 1998, and in the subsequent
interim period, there were no disagreements, disputes, or differences of
opinion with JJC on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures, which,
if not resolved to the satisfaction of JJC would have caused JJC to make



                              -21-
<PAGE>


reference to the matter in its report.

     In November, 2000, the Company again changed accountants beginning
with the audit of the financial statements for the fiscal year ended
December 31, 2000, from Christensen & Duncan, CPA's LC ("C&D") to Tanner
+ Co., certified public accountants.  C&D resigned as the Company's
independent auditor on November 28, 2000 without disagreement (see Item
13 concerning filing of Form 8-K in connection with change of
accountants).

     The report of C&D on the Company's financial statements for the
fiscal year ended December 31, 1999 did not contain an adverse opinion
or disclosure of opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles, except for a going
concern uncertainty.

     In connection with the audit of the Company's financial statements
for the fiscal year ended December 31, 1999, and in the subsequent
interim period, there were no disagreements, disputes, or differences of
opinion with C&D on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures, which,
if not resolved to the satisfaction of C&D would have caused C&D to make
reference to the matter in its report.

     The accounting firm of Tanner + Co. has audited the Company's
financial statements for the Company's fiscal years ended December 31,
2000 and December 31, 2001 (see Item 7 above).



                              -22-
<PAGE>


                            PART III

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

     (a)  CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY AS OF THE
          DATE OF THIS REPORT

<TABLE>
<CAPTION>

Name                     Age       Position
----                     ---       --------
<S>                      <C>       <C>

Meyer A. Berman          68        Chairman of the Board and
                                   Director

Dan Curlee               62        Chief Executive Officer, Chief
                                   Operating Officer and
                                   Director

Donald Pollock           57        Senior Vice President of
                                   Manufacturing, Secretary,
                                   Treasurer and Director

Samuel Gejdenson         52        Director

Howard Ash               43        Director

Bruce P. Mauldin         59        Director

Paul-Emile Desrosiers    45        Director

</TABLE>


     MEYER A. BERMAN joined the Company in February, 2001, as a Director
and in April 2002, assumed the position of Chairman of the Board.  Mr.
Berman founded M.A. Berman Co., a registered securities broker-dealer in
1981.  Mr. Berman is regularly consulted for his stock market expertise,
and has been quoted and referenced in financial publications such as The
Wall Street Journal and Barron's as well as appearances on CNBC.  Mr.
Berman is also the Chairman of the Board of BioSterile Technology, Inc.,
a privately held company.  Mr. Berman has attended the University of
Illinois, University of Connecticut, and City College of New York.

     DAN H. CURLEE, joined the Company on January 21, 2002, as Chief
Operating Officer.  In February, 2002, Mr. Curlee assumed the position
of President and Chief Executive Officer of the Company.  Since 1993, Mr.
Curlee has served as an independent strategic business consultant.  From
December 1989 to January 1993, Mr. Curlee served as Chief Executive
Officer of Wilson Hill Associates, Inc.  From January 1974 to December
1979, he practiced law and consulted with businesses focusing on business
development, organization and management of profit and not-for-profit
corporations.  He also consulted with the U.S. Department of Education
on legislative, regulatory and procurement issues.  Prior to 1974, Mr.
Curlee served as legislative counsel to the International Brotherhood of



                              -23-
<PAGE>


Teamsters and had a private law practice in Dallas/Fort Worth, Texas.
Mr. Curlee earned a Bachelor of Arts degree from the University of Texas,
Arlington in 1963, and a Juris Doctor degree from the University of
Texas, Austin in 1966.

     DONALD POLLOCK joined the Company as Treasurer, Chief Financial
Officer and a director in April, 2000.  Mr. Pollock was promoted in
January, 2002 from CFO to Senior Vice President of Manufacturing and also
assumed the duties of the Company's Secretary.  Mr Pollock has owned his
own consulting company since early 1999.  Previously, Mr. Pollock was
with JM Family Enterprises, Inc., whose subsidiaries include Southeast
Toyota Distributions, Inc. and World Omni Financial Corp. During his 15-
year tenure with JM, Mr. Pollock was the Vice President of The Dealer
Development Group, Inc., a dealer investment program that he developed
from inception. In addition to overseeing the investments of the various
dealerships, his duties included establishing operating and financial
controls. While with JM, Mr. Pollock was also the Director of Business
Management for Southeast Toyota Distributors, Inc., and held numerous
other executive positions with World Omni Financial Corp. Mr. Pollock
also has an extensive background with Ford Motor Credit Corporation. Mr.
Pollock earned a Bachelor of Science Degree in Economics in 1966 from
Jacksonville University.

     HON. SAMUEL GEJDENSON, former United States Congressman who
represented Connecticut's 2nd Congressional District, joined the Company
in February, 2001, as a Director and will serve the Company as Vice-
President of Governmental Affairs.  Mr. Gejdenson served in the United
States House of Representatives for 20 years ending his congressional
career as the ranking Democrat on the House Committee on International
Relations, a committee promoting U.S. exports upon which he served for
18 years.  Mr. Gejdenson was the author of several major pieces of
legislation including Jobs Through Exports Act enacted into law in 1992
and the Jobs Through Trade Expansion Act enacted into law in 1994.  Mr.
Gejdenson received an A.S. degree from Mitchell College in New London,
Connecticut in 1968 and a B.A. from the University of Connecticut in
Storrs, Connecticut in 1970.

     HOWARD ASH joined the Company as a Director in April, 2002.  From
2000 to present, Mr. Ash has been the Chairman of Claridge Management.
Prior to Claridge Management, he served as the Chief Financial Officer
of Ives Motors Corporation.  From 1997 to present, Mr. Ash has been a
board member and Chief Operating Officer of  BioCard Corporation.  Mr.
Ash also serves as a Director to Tudog Consulting and Computhelp (Compaq
JV).  Since 1992, Mr. Ash has served as a Chief Executive Officer, Chief
Operating Officer and Chief Financial Officer to a variety of
prestigious, international companies, including Israel Export Development
and CITAmericas.  Mr. Ash earned his Bachelor of Commerce with Honors in
Accounting in 1982 from the University of Witwatersrand, Johannesburg,
South Africa.




                              -24-
<PAGE>


     BRUCE P. MAULDIN joined the Company as a Director in April, 2002.
Mr. Mauldin founded Texas Airways, Inc., a Texas holding company and
consulting group in 1988, and currently serves as its President.  From
May 1994 to September 1995, Mr. Mauldin was the Director of Strategic
Planning at Dalfort Aviation.  From October 1992 to October 1993, he was
the Managing Director and Chief Executive Officer of SunAire Express, a
commuter airline operating in the Caribbean.  Mr. Mauldin has served over
thirty-five years in commercial and Army aviation in leadership
positions.  Since founding Texas Airways, Mr. Mauldin has served as a
consultant to the senior management of a number of major companies
including Aerospatiale, Federal Express, Air France, Office General de
l'Air, AOM French Airlines, TAT European Airlines, Heli-Union and
Offshore Logistics.  Mr. Mauldin currently provides consulting services
to Allied Energy Corporation and is a director of Allied Energy Columbia.
He also serves on the advisory board of directors of Viking Capital
Group, a public company, and is a director of Pathway Ventures, Inc.  Mr.
Mauldin graduated with Honors from Auburn University with a Bachelor of
Science in Engineering with a concentration in Aviation Management in
1973.  In addition, Mr Mauldin obtained his Masters in Political Science
(Soviet Policy) from Auburn University in 1977.  Mr. Mauldin is also an
Honor Graduate of the U.S. Naval War College.

  PAUL-EMILE DESROSIERS[4] joined the Corporation in December 2000 as
Vice President of Operations and Government Relations.  In August, 2001,
Mr. Desrosiers was appointed President and Chief Executive Officer of the
Company.  From 1976 to 1980, Mr. Desrosiers was recruited and trained in
a government program (Extra-ordinary/Plenipotentiary) for the furtherance
of US foreign policy goals and international law enforcement globally.
From 1980 to 1991, Mr. Desrosiers served on the Los Angeles Police
Department, and in that capacity, he completed P.O.S.T. certification and
had various roles from training, investigations, supervisory, and
planning to hostage and crisis negotiator during the 1984 Olympic Games.
Mr. Desrosiers has operated his own consulting firm and served as a
charter member of the US Department of State's CIVPOL Operations.  As a
CIVPOL member, Mr. Desrosiers held the position of Charg'e de Mission,
and was assigned to work internationally, with diplomatic immunity under
the authority of the United Nations.  This program and projects are
coordinated via a private, Department of Defense Contractor, DynCorp
Aerospace Operations (U.K.), which is responsible for the recruitment,
selection, operations and administration of US CIVPOLs worldwide.

     There  are  no  other  significant  employees.   There  are  no
family relationships between the above listed persons, nor is there any
involvement in certain  legal  proceedings.  The Company's directors
serve for a term of one year, or until their successors shall have been
elected and qualified.


----------------------------

[4]   The biographical information contained in this report concerning
      Mr. Desrosiers was derived from information provided by Mr.
      Desrosiers to the Company.  The Company is currently engaged in
      litigation with Mr. Desrosiers.  The Company has reason to be
      concerned about the accuracy of the information contained in Mr.
      Desrosiers' biography.



                              -25-
<PAGE>

     (b)    CHANGES IN OFFICERS AND DIRECTORS FROM JANUARY 1, 2001
            THROUGH PRESENT

     ANTHONY D'AMATO joined the Company in April 1999 as a Director and
served as Chairman from May 1999 to February 2002.  From June 1, 1999 to
February 2002, Mr. D'Amato served as President and CEO of the Company.
In February 2002, Mr. D'Amato resigned as an officer and director of the
Company.

     DR. RALPH THOMSON joined the Company as a Director in November 1998,
and was later named Corporate Secretary.  Dr. Thomson resigned without
disagreement as an officer and director of the Company in January 2002.

     ANDROS S. SAVVIDES joined the Company as a Director in November
1999, and resigned without disagreement in October 2001.

     ROBERT P. KORNAHRENS joined the Company as a Director in April 2000,
and resigned without disagreement in February 2002.

     CHARLES A. GARGANO joined the Company as a Director in June 2000,
and resigned without disagreement in October 2001.

     WILFRED G. MANGO, JR. joined the Company in August 2000 as Chief
Operating Officer and Director.  Mr. Mango resigned without disagreement
as an officer and Director of the Company in October 2001.

     PAUL-EMILE DESROSIERS joined the Company in December 2000 as Vice
President of Operations and Government Relations.  In August 2001, Mr.
Desrosiers was appointed President, Chief Executive Officer and a
Director.  In January 2002, Mr. Desrosiers was terminated as an executive
officer of the Company but remains a Director.

     RON G. LAKEY joined the Company as Treasurer and Chief Financial
Officer in January 2002.  In February 2002, Mr. Lakey resigned as an
officer of the Company.

     DR. MARTIN SHUBICK joined the Company as a director in April, 2002
and resigned without disagreement in June, 2002.


ITEM 10.  EXECUTIVE COMPENSATION
          ----------------------

The following table sets forth summary compensation information with
respect to compensation paid by the Company to the Chief Executive
Officer of the Company ("CEO") and the Company's four most highly
compensated executive officers or key employees other than the CEO, who
were serving as executive officers during the Company's fiscal year ended
December 31, 2001.



                              -26-
<PAGE>

<TABLE>
<CAPTION>

                        SUMMARY COMPENSATION TABLE
                        --------------------------

               Annual Compensation                                                Long Term Compensation
               -------------------                                      --------------------------------------
                                                                               Awards             Payments
                                                                        -----------------------     ----------
                                                                        Restricted   Securities
Name of Individual                                    Other Annual        Stock       Underlying/     LTIP        All Other
and Principal Position   Year   Salary      Bonus     Compensation(1)    Award(s)    Options/SARs    Payouts     Compensation
----------------------   ----   ------      -----     ---------------    --------    ------------    -------     ------------
<S>                      <C>    <C>         <C>       <C>                <C>         <C>             <C>         <C>
Anthony D'Amato          2001   $ 33,000(1) $-0-           -0-              -0-           -0-          -0-            -0-
President//CEO           2000   $  -0-      $-0-         107,667(2)         -0-           -0-          -0-            -0-

Paul-Emile Desrosiers    2001   $625,000(3) $-0-           -0-            128,668(4)      -0-          -0-            -0-
President/CEO

Wilfred G. Mango, Jr.    2001   $130,500    $-0-           -0-              -0-           -0-          -0-            -0-
Chief Operating Officer

Gerry Christensen        2001   $ 90,000    $-0-           -0-             25,000(5)      -0-          -0-            -0-
Comptroller

Susan J. Fleming         2001   $186,684(6) $-0-           -0-              -0-           -0-          -0-            -0-

</TABLE>

(1)  The Company and Mr. D'Amato dispute amounts paid to Mr. D'Amato which
     amounts may be in excess of $2,000,000, and the amount of compensation
     paid by the Company cannot be accurately determined at this time.

(2)  Pursuant to an Employment Agreement, Anthony D'Amato received 107,667
     shares of the Company's restricted common stock in 2000 valued at
     $310,000  ($2.88 per share), and 112,500 shares of restricted common
     stock in 1999 valued at $168,750 ($1.50 per share).  The issuance of
     shares to Mr. D'Amato have been adjusted to reflect the 1:6 reverse stock
     split.  The Company and Mr. D'Amato dispute amounts paid to Mr. D'Amato,
     and the ultimate amount of compensation paid by the Company to Mr.
     D'Amato cannot be accurately determined at this time.

(3)  The Company and Mr. Desrosiers dispute amounts paid to Mr. Desrosiers
     which amounts may be greater than $625,000.

(4)  Pursuant to an Employment Agreement, Mr. Desrosiers received 128,668
     shares of the Company's restricted common stock valued at $386,004 ($3.00
     per share).

(5)  Pursuant to an Employment Agreement, Mr. Christensen received 25,000
     shares of the Company's restricted common stock in 2001 valued at
     $108,501 ($4.34 per share).

(6)  Pursuant to a Stock Purchase Agreement between the Company and William
     Fleming, the spouse of Mr. Fleming, Susan J. Fleming, was retained as an
     administrative sales coordinator at Fleming Manufacturing Co.



                              -27-
<PAGE>


ITEM 11.  SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT
          -------------------------------------------------------------


The following table sets forth, as of the date of this report, certain
information concerning beneficial ownership of the Company's Common Stock by
(i) each person known to the Company to own 5% or more of the Company's
outstanding Common Stock, (ii) all directors of the Company and (iii) all
directors and officers of the Company as a group:


<TABLE>
<CAPTION>

                                                           Shares Beneficially  Percentage
Name & Address                    Position with Company          Owned(1)        of Shares
--------------                   ------------------------  -------------------  -----------
<S>                              <C>                       <C>                  <C>

Anthony D'Amato
c/o John Dowd, Esq.
Akin, Gump, Strauss, et al.
Robert S. Strauss Building
1333 New Hampshire Avenue, N.W.
Washington, D.C. 20036           Shareholder                     724,493(2)          9.1%

Donald Pollock
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,       Treasurer, Chief
Suite 502                        Financial Officer and
Boca Raton, FL 33432             Director                        101,000             1.3%

Paul-Emile Desrosiers
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,
Suite 502
Boca Raton, FL 33432             Director                        132,667             1.7%

Dan Curlee
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,       President, Chief
Suite 502                        Executive Officer
Boca Raton, FL 33432             and Director                      -0-               -0-

Howard Ash
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,
Suite 502
Boca Raton, FL 33432             Director                            800             0.0%

Bruce Mauldin
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,
Suite 502
Boca Raton, FL 33432             Director                            770             0.0%

Meyer Berman
c/o Eagle Building
Technologies, Inc.
225 N.E. Mizner Boulevard,
Suite 502
Boca Raton, FL 33432             Director                      2,689,266(3)         33.8%

The "Urbina" Group (4)           Shareholders                    524,094             6.6%

____________________________________________

All Officers and Directors
  as a Group (6)                                               2,924,503            36.7%

</TABLE>

(1)   As used herein, the term beneficial ownership with respect to a
      security is defined by Rule 13d-3 under the Securities Exchange Act of
      1934 as consisting of sole or shared voting power (including the power
      to vote or direct the vote) and/or sole or shared investment power
      (including the power to dispose or direct the disposition of) with



                              -28-
<PAGE>


      respect to the security through any contract, arrangement,
      understanding, relationship or otherwise, including a right to acquire
      such power(s) during the next 60 days.  Unless otherwise noted,
      beneficial ownership consists of sole ownership, voting and investment
      rights.

(2)   Includes 621,667 shares held in Mr. D'Amato's name and an additional
      102,826 shares over which Mr. D'Amato maintains control.

(3)   Includes (i) 62,267 shares of Common Stock owned by Meyer A. Berman,
      individually, (ii) 1,064,583 shares of Common Stock owned by M.A.
      Berman Co., (iii) 860,983 shares of Common Stock owned by M.A. Berman
      Partners, LP, (iv) 646,433 shares of Common Stock owned by Meyer A.
      Berman, Individual Retirement Account and (v) 55,500 shares of Common
      Stock owned by Katia Christine, spouse of Meyer A. Berman.

(4)   The Company considers the "Urbina" group to be acting in concert for
      purposes of this Report.  The "Urbina" group consists of the following
      individuals/entities (with shares in parenthesis): ARH Family
      Partnership, Ltd. (32,738); Ray L. Hart Living Trust (537); Corey L.
      Hart (10,000); JDCAN3 Holdings, LP (43,363); John R. and Terry E.
      McLaughlin (72,544); Jun Ming Trading, Ltd. (66,340); Ken Taylor
      (13,170); Last Time Around, L.P. (58,035); Michael Kenoyer (112,252);
      La Patrona Ltd. (61,896); Hill-McVey Family Ltd. Partnership (20,029);
      Paul Faulkner (2,000); Pamposh Zutshi (16,667); Guadalupe & Ignacio
      Lozano (466); Intime LP (10,000); Pricilla, Steven & Havilal Maya
      (1,000); and Martin Slagter (3,056).


COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's officers and directors, and persons who own more
than ten percent of a registered class of the Company's equity securities
(collectively the "Reporting Persons") to file reports and changes in
ownership of such securities with the Securities and Exchange Commission
and the Company. Based solely upon a review of (i) Forms 3 and 4 and
amendments thereto furnished to the Company pursuant to Rule 16a-3(e),
promulgated under the Exchange Act, during the Company's fiscal year ended
December 31, 2000, and (ii) Forms 5 and any amendments thereto and/or
written representations furnished to the Company by any Reporting Persons
stating that such person was not required to file a Form 5 during the
Company's fiscal year ended December 31, 2000, it has been determined that
Directors Howard Ash, Meyer Berman and Paul-Emile Desrosiers were delinquent
with respect to such person's reporting obligations set forth in Section
16(a) of the Exchange Act.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
          ----------------------------------------------------

     The Company operates in China while holding additional licenses for
Mexico and Europe pursuant to five (5) licensing agreements with
Integrated Masonry Systems International, Inc.  The Company owns thirty-
eight percent (38%) of the issued and outstanding shares of IMSI.

     During the period commencing October 2000 to July 2001, Mr. D'Amato
converted loans in the amount of $2,397,416 to the Company into 789,879
shares of restricted common stock.

     On January 26, 2001, the Company's Board of Directors approved a 1-
for-6 reverse stock split of the Company's common stock effective
February 5, 2001.

     During the period ending December 31, 2001, primarily in July 2001,
affiliates of Meyer A. Berman, Chairman of the Board of Directors, loaned
the Company a total of $3,875,000.

     During the period ending December 31, 2001, the Company had
unsecured advanced receivables[5] in the aggregate amount of $934,645 from
its former Chairman and CEO, Anthony D'Amato.

     During the period commencing January 1, 2002 through June 30, 2002,
Meyer A. Berman and affiliates of Mr. Berman loaned the Company a total
of $4,198,000.

     In February 2002, Andy Berman and Abby Berman, children of Meyer A.
Berman, loaned the Company a total of $190,000.

     In February 2002, Don Pollock, an executive officer and director
loaned the Company $40,000.

----------------------

[5]  As a result of the Company's investigation in connection with its
     2000 and 2001 financials, the Company cannot determine all monies
     that may be owed to the Company by Mr. D'Amato.



                              -29-
<PAGE>


     In April 2002, Martin Shubik, a former director, loaned the Company
$30,000.

     In May 2002, the Company assigned all of its interest in Business
Dimensions, Inc. to Don Pollock, an officer and director of the Company.

     As a result of the Company's investigation in connection with the
restatement of its 2000 and 2001 financials, the Company believes that
there may be third parties to whom Anthony D'Amato, the Company's former
Chairman and CEO, has obligated, or made representations purporting to
obligate, the Company, or to issue equity in the Company without the
knowledge or authorization of the Company's Board of Directors. The
Company will continue to investigate and determine the validity of any
such third party claims on a case by case basis.  At the time of this
filing, the Company cannot determine the financial impact, if any, to the
Company as a result of Mr. D'Amato's actions.



                              -30-
<PAGE>


ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
          FORM 8-K


EXHIBIT NO.
-----------

3.1         Certificate of Incorporation & Certificates of Amendment
            Thereto of Registrant*

3.2         By-Laws of Registrant*

10.1(a)     Anthony D'Amato Employment Agreement (May 15, 1999 - May 14,
            2001) *

10.1(b)     Anthony D'Amato Employment Agreement (May 15, 1999 - May 14,
            2001)*

10.2        Wilfred C. Mango, Jr. Employment Agreement (August 1, 2000 -
            July 31, 2002) *

10.3        Wilfred C. Mango, Jr. Consulting Agreement (August 1, 2000 -
            July 31, 2002)*

10.4        Ralph Thompson Employment Agreement (May 15, 1999 - May 14,
            2001) *

16.1        Letter of No Disagreement from Christensen & Duncan, CPA's
            LC.*

*  Filed with December 31, 2000 Form 10-KSB


REPORTS ON FORM 8-K
-------------------

     During the fourth quarter ended December 31, 2000, and through the
date of the filing of this Form 10-KSB, the Company filed reports of Form
8-K as follows:

  (1)  On or about November 30, 2000, the Company filed a Report on
       Form 8-K announcing that Christensen & Duncan, CPA's LC
       resigned as the Company's independent accountants.

  (2)  On or about December 4, 2000, the Company filed a Report on
       Form 8-K announcing that the Company had engaged Tanner + Co.
       as the Company's new independent accountants.

  (3)  On or about January 9, 2001, the Company filed a Report on
       Form 8-K/A amending the Forms 8-K filed on or about November
       30, 2000 and December 4, 2000.

  (4)  On or about January 10, 2001, the Company filed a Report on



                              -31-
<PAGE>


       Form 8-K announcing the acquisition of Fleming Manufacturing
       Co., a privately held Missouri corporation that manufacturers
       mobile block pants for the production of mortarless block and
       pavers.

  (5)  On or about January 26, 2001, the Company filed a Report on
       Form 8-K announcing a one-for-six (1:6) reverse stock split of
       the Company's Common Stock effective February 5, 2001.

  (6)  On or about February 9, 2001, the Company filed a Report on
       Form 8-K announcing the appointment of Samuel Gejdenson and
       Meyer A. Berman to the Company's Board of Directors.

  (7)  On or about April 16, 2001, the Company filed a Report on Form
       8-K announcing the acquisition of eighty-five percent (85%) of
       the issued and outstanding securities of Master Srl
       ("Master"), an Italian corporation located in Piacenza, Italy.

  (8)  On or about May 1, 2001, the Company filed a Report on Form 8-
       K announcing the acquisition of eighty-five percent (85%) of
       the issued and outstanding securities of Master srl
       ("Master"), an Italian corporation located in Piacenza, Italy,
       subject to completion of due diligence and a final audit.

  (9)  On or about May 10, 2001, the Company filed a Report on Form
       8-K announcing the Company's name change to Eagle Building
       Technologies, Inc. and the new trading symbol to "EGBT".

  (10) On or about May 18, 2001, an Amendment to the January 10, 2001
       Form 8-K was filed providing the audited financials of Fleming
       Manufacturing Company, Inc. ("Fleming"), a wholly owned
       subsidiary of the Company, for the fiscal year ended December
       31, 2000, and the Company's unaudited consolidated Proforma
       Financial Statement for the fiscal year ended December 31,
       2000, inclusive of Fleming.

  (11) On or about August 2, 2001, the Company filed a Report on Form
       8-K announcing the Company entered into an agreement with
       Aquila Ventures Corporation ("Aquila") to form a Joint Venture
       entity, Aquila Squared Building Corporation (the "Joint
       Venture"), to develop large scale social housing in Mexico.

  (12) On or about August 9, 2001, the Company filed a Report on Form
       8-K announcing that the proposed acquisition of eighty-five
       percent (85%) of the issued and outstanding securities of
       Master srl ("Master"), had not as yet been completed because



                              -32-
<PAGE>


       the final audit of Master's sales revenues has not been
       finalized to the satisfaction of the Company.

  (13) On or about December 12, 2001, the Company filed a Report on
       Form 8-K announcing that the Company had filed a complaint in
       the Circuit Court for Palm Beach County, Florida, against an
       unidentified defendant known as "Spadeboy" who the Company
       alleged posted false defamatory, and libelous information
       about the Company on the internet website known as Raging
       Bull.

  (14) On or about January 22, 2002, the Company filed a Report on
       Form 8-K announcing the appointment of Dan H. Curlee as Chief
       Operating Officer and Ron G. Lakey as Treasurer and Chief
       Financial Officer.

  (15) On or about February 14, 2002, the Company filed a Report on
       Form 8-K announcing that the Company had contacted the
       Securities and Exchange Commission and has requested that
       trading in the Company's common stock be suspended because the
       Company believes that its financial statements will have to be
       restated for at least the past two (2) years.

  (16) On or about March 1, 2002, the Company filed a Report on Form
       8-K announcing the following:

       (a)  Eagle Building Technologies, Inc. ("EGBT") has consented
            to the entry of a preliminary injunction lawsuit brought
            against it by the Securities and Exchange Commission
            ("SEC") in the U.S. District Court for the District of
            Columbia. The Complaint alleges violations of certain
            provisions of the Securities Exchange Act of 1934 and
            certain rules and regulations thereunder, resulting from
            the company's annual and quarterly reports filed for the
            periods from December 31, 2000 to September 30, 2001 and
            certain press releases issued during the fall of 2001.

       (b)  On February 14, 2002 the SEC entered an order directing
            private investigation and designating officers to take
            testimony in connection with the company's foreign
            operations and certain post-September 11th security
            measures marketed by EGBT, including an airport security
            system, mail sterilization technology and money
            laundering detection software. The company has been
            cooperating with the SEC in its investigation.

       (c)  Effective February 27, 2002, EGBT's President, Chief



                              -33-
<PAGE>


            Executive Officer, and Chairman of the Board of
            Directors, Anthony M. Damato, resigned his officer and
            board positions. In addition, on February 18, 2002,
            EGBT's outside auditors, Tanner & Co., withdrew their
            report on the December 31, 2000 financial statements and
            any assurances rendered associated with the financial
            statements filed in 2001 and 2001.

       (d)  EGBT has recently discovered that its earnings from
            operations in India for the years 2000-2001 were
            intentionally fabricated by Mr. Damato. Preliminary
            indications are that no earnings from such operations
            existed. In addition, it appears that certain press
            releases issued by EGBT in the fall of 2001 regarding
            post-September 11th security measures marketed by EGBT
            may have been false and misleading. "The company is
            taking appropriate steps to address these issues and
            will take whatever future action is necessary based on
            the results of a comprehensive investigation," according
            to EGBT Board member Meyer Berman.

       (e)  EGBT has retained the law firm of Fulbright & Jaworski
            L.L.P., which has engaged the services of Deloitte &
            Touche LLP to conduct an investigation of business
            practices and financial accounting controls and identify
            opportunities for improvement in EGBT's accounting
            practices.

       (f)  EGBT is currently in discussions with potential
            investors to provide additional financing for the
            company.

  (17) On or about March 18, 2002, the Company filed a Report on Form
       8-K announcing the following changes to the make-up of its
       board of directors: Charles Gargano, Robert Kornahrens and
       Ralph Thomson have resigned and Howard Ash and Bruce P.
       Mauldin have been added to the board. Mr. Ash is the Chairman
       of Claridge Management and a former Chief Financial Officer of
       Ives Motors Corporation and Chief Operating Officer of BioCard
       Corporation. Mr. Mauldin is the President and Chief Executive
       Officer of Texas Airways, Inc., a Texas holding company and
       consulting group. EGBT also announced that its board of
       directors has made the following appointments: board member
       Meyer Berman has been named Acting Chairman of the Board,
       board member and Chief Operating Officer Dan Curlee has been
       named to the additional position of President, and board
       member and Secretary Don Pollock has been named to the
       additional position of Treasurer. In addition, Ron Lakey has



                              -34-
<PAGE>


       resigned as Chief Financial Officer. Finally, EGBT announced
       that it is proceeding with the development of residential
       housing in Puerto Rico using the IMSI building system.

  (18) On or about April 26, 2002, the Company filed a Report on Form
       8-K announcing several class action complaints have recently
       been filed against Eagle Building Technologies, Inc. ("Eagle")
       in federal court alleging violations of certain provisions of
       the Securities Exchange Act of 1934 and certain rules and
       regulations thereunder.  The suits arise from the company's
       financial statements filed for the periods December 31, 2000
       to September 30, 2001 and certain press releases issued during
       the fall of 2001. Eagle has requested an extension of time to
       respond to the lawsuit filed against it by the Securities and
       Exchange Commission ("SEC") based on its settlement
       discussions with the SEC.  Eagle is continuing to work with
       its outside auditors, Tanner + Co., to restate the above-
       referenced financial statements and to complete Eagle's
       financial statement for the period ending December 31, 2001.
       Eagle recently named Dr. Martin Shubik to its board of
       directors. Dr. Shubik has a Ph.D. in mathematical economics
       from Princeton University and has held the Seymour H. Knox
       Professorship in institutional economics at Yale University
       since 1975.

  (19) On or about May 30, 2002, the Company filed a Report on Form
       8-K announcing that it has settled the action brought against
       it by the Securities and Exchange Commission ("SEC") without
       admitting or denying the allegations contained in the SEC's
       complaint. As part of the settlement, Eagle has consented to
       the entry of a final judgment of permanent injunction against
       it enjoining it from violating the anti-fraud, periodic
       reporting, and recordkeeping provisions of the federal
       securities laws.




                              -35-
<PAGE>


                           SIGNATURES

In accordance with the requirements of Section 13 and 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                   EAGLE BUILDING TECHNOLOGIES, INC.

Dated: July 26, 2002               By:/s/ Dan Curlee
                                   --------------------------------------
                                   Dan Curlee, President and CEO


In accordance with the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

Signature                       Capacity                Date
---------                       --------                ----
<S>                             <C>                     <C>

/s/ Meyer A. Berman             Chairman and            July 19, 2002
------------------------        Director
Meyer A. Berman


/s/ Dan Curlee                  President, CEO,         July 26, 2002
------------------------        COO and Director
Dan Curlee


/s/ Donald Pollock              Senior Vice President   July 29, 2002
------------------------        of Manufacturing,
Donald Pollock                  Secretary, Treasurer,
                                and Director

/s/ Samuel Gejedenson           Director                July 29, 2002
------------------------
Samuel Gejedenson


/s/ Howard Ash                  Director                July 30, 2002
------------------------
Howard Ash


/s/ Bruce P. Mauldin            Director                July 19, 2002
------------------------
Bruce P. Mauldin


------------------------        Director                ________, 2002
Paul-Emile Desrosiers[6]

</TABLE>


--------------------

[6]   The Company has provided Mr. Desrosiers with an opportunity to
      review information contained in this Report.  As of the date
      of filing of this Report, Mr. Desrosiers has not signed the
      report.

                              -36-
<PAGE>


             CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                PURSUANT TO 18 U.S.C. SECTION 1350

     In connection with the accompanying Annual Report on Form 10-KSB of
Eagle Building Technologies, Inc.. for the period ended December 31,
2001, Dan Curlee, President and Chief Executive Officer, and Don Pollock,
Senior Vice President of Manufacturing, Secretary, Treasurer, and
Director of Eagle Building Technologies, Inc.  hereby certify pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

       (a)  such Annual Report on Form 10-KSB for the period ended December
            31, 2000, fully complies with the requirements of section 13(a)
            or 15(d) of the Securities Exchange Act of 1934; and

       (b)  the information contained in such Annual Report on Form 10-KSB
            for the period ended December 31, 2000, fairly presents, in all
            material respects, the financial condition and results of
            operations of Eagle Building Technologies, Inc.

                                    EAGLE BUILDING TECHNOLOGIES, INC.


Dated: July 26, 2002                By:/s/ Dan Curlee
                                       -----------------------------------
                                       Dan Curlee, President and CEO


Dated: August 7, 2002               By:/s/ Don Pollock
                                       -----------------------------------
                                       Don Pollock, Treasurer



                              -37-
<PAGE>





EAGLE BUILDING TECHNOLOGIES, INC.
Consolidated Financial Statements
December 31, 2001 and 2000


<PAGE>


                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Index to Consolidated Financial Statements
------------------------------------------------------------------------------




                                                                        Page
                                                                        ----

Report of Tanner + Co.                                                   F-1


Consolidated balance Sheet                                               F-2


Consolidated statement of operations                                     F-3


Consolidated statement of stockholders' equity                           F-4


Consolidated statement of cash flows                                     F-6


Notes to consolidated financial statements                               F-9


<PAGE>


                          [TANNER + CO. LETTERHEAD]



                                                 INDEPENDENT AUDITORS' REPORT





To The Board of Directors and Stockholders of
Eagle Building Technologies, Inc. and Subsidiaries


We have audited the consolidated balance sheet of Eagle Building Technologies,
Inc. and Subsidiaries (Formerly Eagle Capital International,  Ltd.) as of
December 31, 2001 and 2000, 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 auditing standards generally
accepted in the United States of America.  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 Eagle Building Technologies, Inc. and Subsidiaries as of December 31, 2001
and 2000, and the results of their operations and their cash flows for the
years then ended, in conformity with auditing standards generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from
operations, negative working capital, a deficit in net equity and has
significant litigation and other uncertainties, which raise substantial doubt
about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 2. The  financial
statements do not include any adjustments that might result from the outcome
of these uncertainties.


                               /s/Tanner + Co.

Salt Lake City, Utah
July 23, 2002
<PAGE>

                                            EAGLE BUILDING TECHNOLOGIES, INC.
                                            Consolidated Balance Sheet

                                                                 December 31,
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                             2001             2000
                                                                       -------------------------------
        Assets
        ------
<S>                                                                    <C>              <C>
Current assets:

  Cash                                                                 $      174,686   $            -
  Accounts receivable, net                                                    758,365          559,415
  Inventories                                                               1,525,131        1,348,518
  Receivable from officer                                                           -          688,271
  Other current assets                                                         25,152          236,232
                                                                       -------------------------------

                 Total current assets                                       2,483,334        2,832,436

Property and equipment, net                                                 2,946,754        3,174,811
Intangible assets, net                                                      7,430,350        8,482,920
Investment in unconsolidated subsidiaries                                     386,820                -
Deferred development costs                                                  2,629,139                -
Investment in joint venture                                                         -          583,119
Deposits and other assets                                                           -          120,146
                                                                       -------------------------------

                                                                       $   15,876,397   $   15,193,432
                                                                       -------------------------------

------------------------------------------------------------------------------------------------------

        Liabilities and Stockholders' Equity
        ------------------------------------

Current liabilities:
  Cash overdraft                                                       $            -   $          439
  Notes payable                                                             5,334,673        6,933,373
  Accounts payable                                                          2,461,942        2,194,490
  Accrued liabilities                                                       1,224,969        1,319,255
  Accrued settlement costs                                                  3,000,000                -
  Deposits                                                                    550,485                -
  Current maturities of long-term debt                                         29,335           73,893
                                                                       -------------------------------

                 Total current liabilities                                 12,601,404       10,521,450

Long-term debt                                                              6,340,000           23,223
Other                                                                          12,849           27,552
                                                                       -------------------------------

                 Total liabilities                                         18,954,253       10,572,225
                                                                       -------------------------------

Commitment and contingencies                                                        -                -

Redeemable common stock - 155,834 shares issued and outstanding             1,168,748        1,168,748
                                                                       -------------------------------

Stockholders' equity:
  Common stock $.001 par value, 11,666,667 shares authorized;
   7,015,271 and 4,034,243 shares outstanding, respectively                     7,015            4,034
  Additional paid-in capital                                               31,399,870       17,697,898
  Accumulated deficit                                                     (35,653,489)     (14,249,473)
                                                                       -------------------------------

                 Total stockholders' (deficit) equity                      (4,246,604)       3,452,459
                                                                       -------------------------------

                                                                       $   15,876,397   $   15,193,432
                                                                       -------------------------------


------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                       F-2
</TABLE>
<PAGE>

                                            EAGLE BUILDING TECHNOLOGIES, INC.
                                         Consolidated Statement of Operations

                                                     Years Ended December 31,
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                            2001             2000
                                                                       -------------------------------

<S>                                                                    <C>              <C>
Sales                                                                  $    3,402,915   $      857,347
Cost of sales                                                               2,917,864          565,168
                                                                       -------------------------------

                 Gross profit                                                 485,051          292,179
                                                                       -------------------------------

Selling, general and administrative expenses                               11,251,560        4,640,604
Impairment of investment in unconsolidated subsidiaries                     4,203,801          851,363
Settlement costs, claims and litigation                                     4,012,427                -
Impairment of goodwill                                                      1,696,309        1,714,387
Impairment of property and equipment                                          399,600                -
Equity in loss of joint venture                                                     -          104,453
                                                                       -------------------------------

                 Total operating expenses                                  21,563,697        7,310,807
                                                                       -------------------------------

                 Loss from operations                                     (21,078,646)      (7,018,628)

Other income (expense):
  Interest expense                                                         (1,106,142)      (3,036,034)
  Gain (loss) on sale of securities                                           318,500          (52,282)
  Other                                                                       462,272           (5,275)
                                                                       -------------------------------

                 Total other income (expenses)                               (325,370)      (3,093,591)
                                                                       -------------------------------

                 Net loss before income taxes                             (21,404,016)     (10,112,219)

Provision for income taxes                                                          -                -
                                                                       -------------------------------

                 Net loss                                              $  (21,404,016)  $  (10,112,219)
                                                                       -------------------------------

Weighted average number of common shares outstanding

  Basic and diluted                                                         5,963,000        1,695,000
                                                                       -------------------------------

Loss per common share

  Basic and diluted                                                    $        (3.59)  $        (5.97)
                                                                       -------------------------------

------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                       F-3
</TABLE>
<PAGE>


                                            EAGLE BUILDING TECHNOLOGIES, INC.
                     Consolidated Statements of Stockholders' Equity (Deficit)

                                       Years Ended December 31, 2001 and 2000
------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                               Preferred Stock     Preferred Stock
                                   Class A            Class B           Common Stock       Additional                    Total
                               ---------------------------------------------------------   Paid-In      Accumulated   Stockholders'
                                Shares   Amount   Shares   Amount    Shares    Amount      Capital       Deficit        Equity
                               ----------------------------------------------------------------------------------------------------

<S>                            <C>       <C>     <C>       <C>     <C>        <C>       <C>            <C>             <C>
Balance, January 1, 2000        180,100  $  180   142,670  $  143  1,183,870  $  1,184  $  13,210,288  $  (4,137,254) $  9,074,541

Issuance of common stock for:
  Cash                                -       -         -       -    179,167       179        447,321              -       447,500

  Investment in subsidiary            -       -         -       -     56,946        57         85,362              -        85,419

  Services                            -       -         -       -    244,750       245        515,380              -       515,625

  Payment of debt                     -       -         -       -    439,526       440      1,399,560              -     1,400,000

  Payments of interest                -       -         -       -    170,284       170        255,255              -       255,425

Issuance of preferred class
  B stock for additional
  investment in subsidiary            -       -     4,911       5          -         -         73,663              -        73,668

Conversion of Preferred A
  stock to Common Stock        (180,100)   (180)        -       -    450,250       450           (270)             -             -

Conversion of Preferred B
  stock to Common Stock               -       -  (147,581)   (148) 1,309,450     1,309         (1,161)             -             -

Interest expense on
  warrants issued in
  connection with debt                -       -         -       -          -         -        658,750              -       658,750

Interest expense from
  beneficial conversion
  feature on debt                     -       -         -       -          -         -        991,250              -       991,250

----------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                                     F-4
</TABLE>
<PAGE>


                                            EAGLE BUILDING TECHNOLOGIES, INC.
                    Consolidated Statements of Stockholders' Equity (Deficit)
                                                                    Continued

                                       Years Ended December 31, 2001 and 2000
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                               Preferred Stock     Preferred Stock
                                   Class A            Class B           Common Stock       Additional                    Total
                               ---------------------------------------------------------   Paid-In      Accumulated   Stockholders'
                                Shares   Amount   Shares   Amount    Shares    Amount      Capital       Deficit        Equity
                               ----------------------------------------------------------------------------------------------------

<S>                            <C>       <C>     <C>       <C>     <C>        <C>       <C>            <C>             <C>
Capital contribution                  -       -         -       -          -         -         62,500              -        62,500

Net loss                              -       -         -       -          -         -              -    (10,112,219)  (10,112,219)
                               ----------------------------------------------------------------------------------------------------

Balance, December 31, 2000            -       -         -       -  4,034,243     4,034     17,697,898    (14,249,473)    3,452,459

Issuance of common stock for:
  Cash                                -       -         -       -  1,198,388     1,198      4,230,222              -     4,231,420

  Services                            -       -         -       -    792,002       792      5,573,412              -     5,574,204

  Payment of debt                     -       -         -       -    672,472       672      2,016,744              -     2,017,416

  Payment of interest                 -       -         -       -    106,667       107        660,322              -       660,429

  Payment of accrued
    liabilities                       -       -         -       -     51,499        51        101,433              -       101,484

  Purchase of subsidiary              -       -         -       -    166,667       167      1,169,833              -     1,170,000

Purchase and cancellation of
  treasury stock                      -       -         -       -     (6,667)       (6)       (49,994)             -       (50,000)

Net loss                              -       -         -       -          -         -              -    (21,404,016)  (21,404,016)
                               ----------------------------------------------------------------------------------------------------


Balance, December 31, 2001            -  $    -         -  $    -  7,015,271   $ 7,015  $  31,399,870  $ (35,653,489) $ (4,246,604)
                               ----------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                                                     F-5
</TABLE>
<PAGE>


                                            EAGLE BUILDING TECHNOLOGIES, INC.
                                        Consolidated Statements of Cash Flows

                                                     Years Ended December 31,
-----------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                             2001            2000
                                                                       -------------------------------
<S>                                                                    <C>              <C>
Cash flows from operating activities:
  Net loss                                                             $  (21,404,016)  $  (10,112,219)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
     Impairment of goodwill                                                 1,696,309        1,714,387
     Impairment of property and equipment                                     399,600                -
     Settlement costs claims and litigation                                 4,012,427                -
     Settlement of debt                                                      (230,000)               -
     Amortization and depreciation                                            569,789          380,391
     Impairment of investment in unconsolidated
      subsidiaries                                                          4,203,801          851,363
     Stock issued for services                                              5,574,204          515,625
     Stock issued as payments of interest                                     660,429        3,074,173
     Equity in loss of unconsolidated subsidiaries                                  -          104,453
     Changes in operating assets and liabilities:
       Accounts receivable                                                   (721,427)               -
       Inventories                                                           (176,613)          66,552
       Prepaid and other current assets                                       221,680          (92,472)
       Accounts payable                                                    (1,331,942)          41,589
       Accrued liabilities                                                      2,630          419,291
                                                                       -------------------------------

                 Net cash used in
                 operating activities                                      (6,523,129)      (3,036,867)
                                                                       -------------------------------

Cash flows from investing activities:
  Net cash acquired (used) in acquisition                                    (653,254)           8,828
  Investment in and advances to unconsolidated subsidiaries                (2,737,503)        (626,803)
  (Investment) reduction in license rights                                     10,000          (15,000)
  Receivable from officer                                                     384,645         (652,259)
  Purchase of property, plant and equipment                                  (278,691)        (758,619)
  Deposits                                                                    467,985         (100,000)
                                                                       -------------------------------

                 Net cash used in
                 investing activities                                      (2,806,818)      (2,143,853)
                                                                       -------------------------------

Cash flows from financing activities:
  Proceeds from notes payable                                               9,531,093        5,823,850
  Payments on notes payable                                                (4,207,441)      (1,111,395)
  Proceeds from issuance and retirement of common stock                     4,181,420          447,500
  Cash overdraft                                                                 (439)             439
                                                                       -------------------------------

                 Net cash provided by
                 financing activities                                       9,504,633        5,160,394
                                                                       -------------------------------

                 Net change in cash                                           174,686          (20,326)

Cash, beginning of year                                                             -           20,326
                                                                       -------------------------------

Cash, end of year                                                      $      174,686   $            -
                                                                       -------------------------------


------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.                                       F-6
</TABLE>
<PAGE>


                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                         Consolidated Statements of Cash Flows
                                                                     Continued

------------------------------------------------------------------------------

Supplemental Disclosure of Cash Flow Information

<TABLE>
<CAPTION>
                                                              December 31,
                                                   -----------------------------
                                                       2001             2000
                                                   -----------------------------
<S>                                                <C>             <C>
Cash paid during the year for


                  Interest                          $  173,029     $       -
                                                   -----------------------------

                  Income taxes                      $        -     $       -
                                                   -----------------------------
</TABLE>

Supplemental Disclosure of Non-Cash Transactions

2001
----

       o    During the year ended  December 31, 2001,  the Company  acquired a
            75% interest in Salinas Developers Group, Inc. (A Puerto Rico land
            development  company) in exchange  for cash of $312,500 and a note
            payable in the amount of $945,000.  In connection  therewith,  the
            Company recorded the following:

            Prepaid expenses                                   $      10,600
            Capitalized development costs                          2,629,139
            Goodwill                                               1,096,234
            Short-term notes payable                              (1,396,257)
            Accounts and advances payable                         (2,019,394)
            Accrued expenses                                          (4,568)
            Deposits                                                 (82,500)
                                                               --------------

            Net cash used (net of $79,246 cash acquired)       $      233,254
                                                               --------------


       o    During the year ended December 31, 2001, the Company issued common
            stock valued as follows in consideration for the following:

            Payment of notes payable                           $    2,017,416
            Payment of accrued liabilities                            101,484
            Purchase of unconsolidated subsidiary                   1,170,000

------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-7

<PAGE>


                                              EAGLE BUILDING TECHNOLOGIES, INC.
                                         Consolidated Statements of Cash Flows
                                                                     Continued

------------------------------------------------------------------------------

2000
----

       o    During the year ended  December 31, 2000 the Company  acquired the
            assets  and  liabilities  of  Fleming  Manufacturing  Company in a
            purchase  transaction.  The  transaction  required the payments of
            $1,250,000 and the issuance of a note payable of $483,418, and the
            issuance of a convertible note payable of $2,125,000.  The Company
            recorded the following:

            Accounts receivable                                $      559,415
            Prepaids                                                   22,206
            Inventory                                               1,415,070
            Intangibles                                             1,272,622
            Property, plant and equipment                           2,059,137
            Accounts payable                                         (253,728)
            Accrued liabilities                                      (778,016)
            Debt                                                     (447,116)
            Equity                                                 (3,858,418)
                                                               ---------------

            Net cash acquired                                  $       (8,828)
                                                               ---------------

       o    The  Company  reclassified  an  investment  in  an  unconsolidated
            subsidiary of  $1,884,787 to goodwill upon the Company  increasing
            its  investment in the  subsidiary to 100% by issuing 4,911 shares
            of  preferred B stock and 13,613  shares of common stock valued at
            $73,668 and $20,419, respectively.

       o    The Company  issued  439,526  shares of common stock as payment of
            $1,400,000 of debt.

       o    Deposits of $300,000 were used to acquire property and equipment.

       o    The  Company  converted  180,100  shares of  preferred  A stock to
            450,250 shares of common stock.

       o    The  Company  converted  147,581  shares of  preferred  B stock to
            1,309,450 shares of common stock.

       o    The Company  increased  its  investment  in joint  venture for the
            contribution of $130,000 of equipment.

       o    The Company acquired 100% of a subsidiary  through the issuance of
            43,333  shares of Company stock valued at $65,000 and a payable of
            $585,000. As of December 31, 2000, the value of the subsidiary was
            written off.

------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-8

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000
------------------------------------------------------------------------------


1.  Organization      Organization and Principles of Consolidation
    and               The  consolidated   financial   statements  include  the
    Summary of        accounts of Eagle Building Technologies,  Inc. (formerly
    Significant       Eagle  Capital  International,   LTD)  (Eagle)  and  its
    Accounting        wholly-owned subsidiaries.  All significant intercompany
    Policies          account balances and  transactions  have been eliminated
                      in consolidation.

                      During 2001 the Company had operations in four principal
                      business  segments:  manufacture  and sale of block  and
                      wall  systems,  manufacture  and  sale of  mobile  block
                      equipment  through its wholly owned  subsidiary  Fleming
                      Manufacturing  Company, real estate development and home
                      sales, and manufacture and sale of doors.

                      Principles of Consolidation
                      The  consolidated   financial   statements  include  the
                      accounts of the  Company and its 100% owned  subsidiary.
                      All significant  intercompany  balances and transactions
                      have been eliminated in consolidation.

                      Cash Equivalents
                      The  Company   considers  all  highly  liquid  temporary
                      investments with an original maturity of three months or
                      less to be cash equivalents.

                      Inventories
                      Inventories are recorded at the lower of cost or market,
                      cost being  determined on the first-in  first-out (FIFO)
                      method.

                      Property and Equipment
                      Property  and  equipment  are  recorded  at  cost,  less
                      accumulated depreciation.  Depreciation and amortization
                      on  capital   leases  and  property  and   equipment  is
                      determined  using  the  straight-line  method  over  the
                      estimated  useful  lives of the  assets  or terms of the
                      lease.  Expenditures  of  maintenance  and  repairs  are
                      expensed when incurred and betterments are  capitalized.
                      Gains and losses on sale of property and  equipment  are
                      reflected in operations.

                      Intangible Assets
                      Intangible  assets  consist of license rights to certain
                      production  processes and goodwill.  License  rights and
                      goodwill are amortized on the straight-line  method over
                      a twenty year period.

------------------------------------------------------------------------------
                                                                           F-9

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


1.  Organization      Impairment of Long-Lived Assets
    and               The Company reviews its long-lived assets for impairment
    Summary of        whenever  events or  changes in  circumstances  indicate
    Significant       that  the  carrying  amount  of the  assets  may  not be
    Accounting        recoverable through undiscounted future cash flows, such
    Policies          loss is recognized in the statement of operations.
    Continued
                      Revenue Recognition
                      The Company  recognizes  revenue from  manufacturing and
                      related   activities   when  evidence   exists  that  an
                      arrangement   exists   between   the   Company  and  its
                      customers,   delivery  of  the  Company's   product  has
                      occurred,  the Company's  selling price to its customers
                      is fixed, and collectibility is reasonably assured.

                      Sales   revenues   and  profits   from  land  sales  and
                      homebuilding  activities  are recognized at closing only
                      when   sufficient  down  payments  have  been  obtained,
                      possession  and other  attributes of ownership have been
                      transferred  to  the  buyer,  and  the  Company  has  no
                      significant continuing involvement.

                      The cost of acquiring and  developing  land and the cost
                      of  homebuilding  construction  are  allocated  to these
                      assets  and  charged  to cost of  sales  as the  related
                      inventories   are  sold.   Interest   costs  related  to
                      homebulding  and  land  assets  are  allocated  to these
                      assets  based on their  development  stage and  relative
                      book value.  The portion of interest  allocated to land,
                      building,  lots  under  development,   and  homebuilding
                      construction  during the  development  and  construction
                      period  is  capitalized  to  the  extent  of  qualifying
                      assets.   Remaining  interest  costs  are  expensed.  No
                      interest has been capitalized  during 2001 and 2000. The
                      Company carries land, development and homebuilding costs
                      at the lower of cost or net realizable value.

                      Deferred Development Costs
                      Pre-construction  costs are  capitalized  as long as the
                      asset  is  under   development.   Upon   completion   of
                      construction,  the  deferred  charges are  included as a
                      component  of  real  estate  inventory.  Deferred  costs
                      determined to be unrecoverable are written off.

                      Income (Loss) Per Share
                      The  computation of basic loss per common share is based
                      on the  weighted  average  number of shares  outstanding
                      during each year.

------------------------------------------------------------------------------
                                                                          F-10

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------

1.  Organization      Income (Loss) Per Share - Continued
    and               The computation of diluted  earnings per common share is
    Summary of        based  on  the   weighted   average   number  of  shares
    Significant       outstanding  during  the  year,  plus the  common  stock
    Accounting        equivalents  that would arise from the exercise of stock
    Policies          options and  warrants  outstanding,  using the  treasury
    Continued         stock  method  and the  average  market  price per share
                      during the year.  Options to purchase  208,333 shares of
                      common  stock at prices  ranging  from $12.00 to $18.00,
                      per share were  outstanding  at  December  31,  2001 and
                      2000,  but were not  included  in the  diluted  earnings
                      (loss) per share  calculation  because the effect  would
                      have been antidilutive.

                      Income Taxes
                      Income taxes are recorded  using the asset and liability
                      method.   Deferred  tax  assets  and   liabilities   are
                      recognized for the future tax consequences  attributable
                      to differences  between the financial statement carrying
                      amounts of  existing  assets and  liabilities  and their
                      respective  tax bases and operating  loss and tax credit
                      carryforwards.  Deferred tax assets and  liabilities are
                      measured  using  enacted tax rates  expected to apply to
                      taxable  income  in the years in which  those  temporary
                      differences are expected to be recovered or settled. The
                      effect on  deferred  tax  assets  and  liabilities  of a
                      change  in tax  rates is  recognized  in  income  in the
                      period that includes the enactment date.

                      Concentration of Credit Risk
                      Financial  instruments  which  potentially  subject  the
                      Company  to   concentration   of  credit  risk   consist
                      primarily  of  receivables.  In  the  normal  course  of
                      business,  the  Company  provides  credit  terms  to its
                      customers.  Accordingly,  the Company  performs  ongoing
                      credit   evaluations  of  its  customers  and  maintains
                      allowances  for possible  losses which,  when  realized,
                      have been within the range of management's expectations.

                      The Company  maintains its cash in bank deposit accounts
                      which, at times,  may exceed  federally  insured limits.
                      The  Company  has not  experienced  any  losses  in such
                      accounts   and   believes  it  is  not  exposed  to  any
                      significant credit risk on cash and cash equivalents.

------------------------------------------------------------------------------
                                                                          F-11

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------

1.  Organization      Use  of  Estimates  in  the   Preparation  of  Financial
    and               Statements
    Summary of        The  preparation  of financial  statements in conformity
    Significant       with generally accepted  accounting  principles requires
    Accounting        management to make estimates and assumptions that affect
    Policies          the  reported  amounts  of assets  and  liabilities  and
    Continued         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.

                      Impact of New Accounting Pronouncements
                      In June 2001, the Financial  Accounting  Standards Board
                      ("FASB")  issued   Statement  of  Financial   Accounting
                      Standards  ("SFAS") 142,  "Goodwill and Other Intangible
                      Assets".  The  provisions of this statement are required
                      to be applied by the Company  starting with fiscal 2002.
                      This statement is required to be applied to all goodwill
                      and other intangible  assets recognized in the Company's
                      financial  statements  at the date of adoption.  At that
                      time, goodwill will no longer be amortized,  but will be
                      tested for impairment annually.

                      In June 2001, the FASB issued SFAS 143,  "Accounting For
                      Asset Retirement Obligations".  This statement addresses
                      financial   accounting  and  reporting  for  obligations
                      associated  asset  retirement   costs.  The  Company  is
                      required to adopt the  provisions of SFAS No. 143 at the
                      beginning  of fiscal  2003.  The Company has  determined
                      that  the  adoption  of this  statement  will not have a
                      material impact on its financial  position or results of
                      operations.

                      In August  2001,  the FASB issued SFAS 144,  "Accounting
                      for the  Impairment or Disposal of  Long-Lived  Assets".
                      This  statement  requires that one  accounting  model be
                      used for  long-lived  assets to be  disposed of by sale,
                      whether previously held and used or newly acquired. This
                      statement also broadens the presentation of discontinued
                      operations  to include more disposal  transactions.  The
                      provisions of this  statement are required to be adopted
                      by the  Company at the  beginning  of fiscal  2002.  The
                      Company is currently assessing the impact this statement
                      will have on its financial statements.

                      Reclassifications
                      Certain  reclassifications  have  been made to the prior
                      year's financial  statements in order to conform them to
                      the classifications used for the current year.

------------------------------------------------------------------------------
                                                                          F-12

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------

2.  Going             The financial  statements  have been  prepared  assuming
    Concern           that the Company will continue as a going concern. As of
                      December  31,  2001 the Company had a deficit in working
                      capital,   and  had  incurred  significant  losses  from
                      operations since it's inception. As further described in
                      Note 15 the  Company  has  been  named  in a  number  of
                      significant  lawsuits  and other  disputes  which  could
                      result in  significant  additional  claims  against  the
                      Company's  limited assets and limit its ability to offer
                      the  products  and  services  currently  offered  by the
                      Company.  Management is currently  attempting to resolve
                      the litigation and other disputes and to seek additional
                      equity  financing.  Since a  significant  portion of the
                      Company's  losses have been a result of businesses which
                      have been  abandoned or  discontinued  and the result of
                      actions of the Company's  former  President and Chairman
                      of the Board of  Directors,  management  is hopeful that
                      its equipment  manufacturing and real estate development
                      operations will generate  sufficient profits in order to
                      allow the Company to become profitable.  However,  there
                      are no assurances these operations will result in profit
                      for the Company.

<TABLE>
<CAPTION>

3.  Detail of                                               December 31,
    Certain                                          ---------------------------
    Balance                                               2001          2000
    Accounts                                         ---------------------------
<S>                     <C>                          <C>            <C>
                        Receivables:
                          Trade receivables          $  858,365     $  712,415
                          Less allowance for
                           doubtful accounts           (100,000)      (153,000)
                                                     ---------------------------

                                                     $  758,365     $  559,415
                                                     ---------------------------

                        Inventories:
                          Finished goods/purchased
                            parts                    $  644,549     $   6,850
                          Work-in-process               139,361        568,742
                          Raw materials                 741,221        772,926
                                                     --- -----------------------

                                                     $1,525,131     $1,348,518
                                                     ---------------------------
</TABLE>
------------------------------------------------------------------------------
                                                                          F-13

<PAGE>
                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------

<TABLE>
<CAPTION>
4.  Property and      Property and equipment consist of the following:
    Equipment

                                                               December 31,
                                                     ---------------------------
                                                          2001          2000
                                                     ---------------------------
<S>                     <C>                          <C>            <C>
                        Equipment                    $  4,317,646   $ 4,013,098
                        Furniture and fixtures            165,489       149,056
                        Leasehold improvements            124,507       124,507
                        Transportation equipment           61,069        61,069
                                                     ---------------------------

                                                        4,668,711     4,347,730

                        Less accumulated
                          depreciation
                          and amortization             (1,721,957)   (1,172,919)
                                                     ---------------------------

                                                     $  2,946,754   $ 3,174,811
                                                     ---------------------------
</TABLE>

                      During  the year ended  December  31,  2001 the  Company
                      recorded  impairment  of  equipment  in  the  amount  of
                      $399,600. The equipment was purchased in connection with
                      the  acquisition of CT India.  These  acquisitions  were
                      made to use in the production  process in India.  During
                      2001,  the  Company  was  unable to  successfully  begin
                      operations  in India and has been  unable to provide the
                      resources  necessary  to  make  India  successful.  As a
                      result,  the  Company  determined  the  equipment  to be
                      impaired and recorded the impairment loss.


5.  Acquisitions      Fleming Manufacturing Company
                      On October 1, 2000 the Company  acquired the outstanding
                      common stock of Fleming  Manufacturing  Company, a maker
                      of cement block  production  equipment.  The acquisition
                      was accounted for as a purchase  and,  accordingly,  the
                      financial  statements  reflect the results of operations
                      of  Fleming  Manufacturing  Company  since  the  date of
                      acquisition. The purchase price of $3,858,418,  financed
                      through  short-term  debt,  has  been  allocated  to the
                      assets of the Company based upon their  respective  fair
                      market values. The excess of the purchase price over the
                      assets acquired has been recorded as goodwill.


------------------------------------------------------------------------------
                                                                          F-14

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


5.  Acquisitions      Bullhide Corporation
    Continued         During the year ended  December  31,  2000,  the Company
                      acquired forty-four percent of Bullhide  Corporation,  a
                      manufacturer  of  patented  truck bed  liners  and other
                      protective   coating   technologies  and  methods,   for
                      $201,363.

                      As  a  result  of  continuing   losses  and  significant
                      accumulated deficits,  management believed the Company's
                      investment in Bullhide  Corporation  was  impaired,  and
                      therefore,  recorded  an  impairment  loss  of  $201,363
                      during the year ended December 31, 2000.

                      Bullhide   Liner   of   Broward    County,    Inc.   and
                      PolySolutions, Inc.
                      In March  2000,  the Company  acquired  100% of Bullhide
                      Liner of Broward County,  Inc. and  PolySolutions,  Inc.
                      from these  Company's  common owner for  $650,000.  As a
                      result of the Company not  continuing  to operate  these
                      entities,  management  believed  the value of the assets
                      associated  with these two companies  was impaired,  and
                      therefore,  recorded  an  impairment  loss  of  $650,000
                      during 2000.

                      Business Dimensions, Inc. and Master SRL
                      In August 2000,  the Company  acquired all of the assets
                      of Business  Dimensions,  Inc., whose major asset is the
                      license  to sell and  distribute  to the North  American
                      market   security  doors   manufactured  by  Master  SRL
                      (Master)  (an Italian  door  manufacturer).  The Company
                      paid  no  consideration  in  the  acquisition,  but  was
                      required to make certain payments in the future based on
                      specific  events.  During  the year ended  December  31,
                      2001,  the  Company  issued  166,667  shares  valued  at
                      $1,170,000  as  consideration.   This  amount  has  been
                      included  as part of the  total  consideration  paid for
                      Master,  (see  below).  The  results  of  operations  of
                      Business  Dimensions,  Inc. were not significant for the
                      year ended December 31, 2000.

                      During October 2001, the Company entered into agreements
                      to purchase 100% of the outstanding shares of Master for
                      approximately   $8,931,000   cash  from  the  individual
                      shareholders  of  Master.   As  of  December  31,  2001,
                      $6,280,780  was due under these  agreements  to complete
                      the  acquisition.  Since the Company has  determined  it
                      does not have the  resources  to complete  the  purchase
                      agreements  it has  decided to forfeit  its  deposit for
                      purchase  of shares  not fully  paid for and  attempt to
                      facilitate  purchase  of the  balance  of the  shares by
                      another  party which could require the Company to reduce
                      its current ownership of Master.


------------------------------------------------------------------------------
                                                                          F-15

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


5.  Acquisitions      Business Dimensions, Inc. and Master SRL - Continued
    Continued         The  Company  has  written  down its net  investment  in
                      Master to 21% of the  recorded  book  value of Master or
                      $386,820.  This write down of  $3,581,183 is included in
                      the  accompanying  statement  of  operations  under  the
                      caption  "Impairment  of  investment  in  unconsolidated
                      subsidiaries".  As the Company  does not control  Master
                      and  anticipates  its  investment  will decrease to less
                      than 20%, the  investment  has been  accounted for using
                      the cost basis of accounting until future events dictate
                      a change in the Company's current plans.

                      During the year ended  December  31,  2001,  the Company
                      incurred  the  following  costs in  connection  with its
                      evaluation and eventual purchase of 21% of Master.

                      Purchase of 21% of Master                $   1,677,845

                      Non-refundable deposit towards the
                        purchase of the remaining 79%
                        of Master                                    971,942

                      Issuance of 166,667 shares for
                        North American license rights
                        (see above under Business
                        Dimensions, Inc.)                          1,170,000

                      Other costs including travel,
                        consultation and accounting
                        fees                                         148,216
                                                               -------------

                      Total paid                               $   3,968,003

                      Impairment                                  (3,581,183)
                                                               -------------

                      Net investment                           $     386,820
                                                               -------------


------------------------------------------------------------------------------
                                                                          F-16

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


5.  Acquisitions      Salinas Developers Group, Inc.
    Continued         During  October,  2001, the Company  acquired 75% of the
                      common stock of Salinas Developers Group, Inc. (Salinas)
                      (a Puerto Rico land development company) in exchange for
                      cash of  $312,500  and a note  payable  in the amount of
                      $945,000. In connection therewith,  the Company recorded
                      the following:

                      Prepaid expenses                         $      10,600
                      Deferred development costs                   2,629,139
                      Goodwill                                     1,096,234
                      Short-term notes payable                    (1,396,257)
                      Accounts and advances payable               (2,019,394)
                      Accrued expenses                                (4,568)
                      Deposits                                       (82,500)
                                                               -------------

                      Net cash paid (net of cash
                       acquired of $79,246)                    $     233,254
                                                              --------------


                      Pro forma  results of operations as if the Companies had
                      been  combined  for the full  fiscal  year have not been
                      presented since they would not differ significantly from
                      those presented.


6.  Intangible        Intangible assets consist of the following:
    Assets

<TABLE>
<CAPTION>
                                                           December 31,
                                                     -------------------------
                                                        2001           2000
                                                     -------------------------
<S>                     <C>                          <C>            <C>
                        Goodwill                     $2,368,856     $3,157,409
                        License rights                5,695,000      5,705,000
                        Accumulated amortization       (633,506)      (379,489)
                                                     -------------------------

                                                     $7,430,350     $8,482,920
                                                     -------------------------
</TABLE>

                      Amortization  expense was  $462,535 and $379,489 for the
                      years ended December 31, 2001 and 2000, respectively.

------------------------------------------------------------------------------
                                                                          F-17

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


6.  Intangible        During  the year ended  December  31,  2001 the  Company
    Assets            recorded  additional  goodwill  due to its  purchase  of
    Continued         Salinas in the amount of $1,096,234 and also recorded an
                      impairment   loss  due  to  the  write-off  of  goodwill
                      purchased in connection  with the  acquisition  of Great
                      Wall New  Building  Systems in the amount of  $1,696,309
                      ($1,884,787 less accumulated  amortization of $188,478).
                      This  acquisition  was made to obtain  license rights to
                      the  Company's   production   process  in  The  People's
                      Republic of China.  In 2000,  these  rights  allowed the
                      Company  to enter into a joint  venture in The  People's
                      Republic of China which was also  written off in 2001 as
                      an  impairment  loss in the  amount of  $622,619  and is
                      included  in  the   accompanying   2001   statement   of
                      operations under the caption,  "Impairment of Investment
                      in  Unconsolidated  Subsidiaries"  (see Note 7).  During
                      2001, the Company, through the joint venture, was unable
                      to successfully begin operations, and has been unable to
                      provide the  resources  necessary to make Great Wall New
                      Building Systems and the joint venture successful.  As a
                      result,  the Company  determined  the  goodwill in Great
                      Wall New Building  Systems and the  corresponding  joint
                      venture is impaired and has recorded  impairment  losses
                      in the amount of $1,696,309 and $622,619, respectively.

                      During  the year ended  December  31,  2000 the  Company
                      recorded   impairment  of  goodwill  in  the  amount  of
                      $1,714,387.  The  goodwill was  purchased in  connection
                      with the  acquisition  of CT Mexico and CT India.  These
                      acquisitions  were  made to obtain  license  rights to a
                      Company's   production  process  in  Mexico  and  India.
                      Subsequent  to  such,  the  current  management  of  the
                      Company   discovered   that  such   licenses   were  not
                      perfected,  which  forced the  Company  to  acquire  the
                      license  rights   directly  under  an  agreement   which
                      requires  the Company to pay a 4.5% royalty on all sales
                      with a minimum royalty required. It also became apparent
                      that the  former  management  groups of CT Mexico and CT
                      India had not  entered  into  relationships  which would
                      result in sales through  subsidiaries.  As a result, the
                      Company  determined  the  goodwill  in CT Mexico  and CT
                      India is impaired and has recorded an  impairment in the
                      amount of $1,714,387  during the year ended December 31,
                      2000.


------------------------------------------------------------------------------
                                                                          F-18

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


7.  Joint Venture     During the year ended  December  31,  2000,  the Company
                      entered into a joint venture in the People's Republic of
                      China for the primary  purpose of producing  and selling
                      cement building blocks, bonding cement, polystyrene foam
                      insulation,  and related technical services. The Company
                      has a fifty-five  percent interest in the joint venture,
                      however,  due to the nature of the business  environment
                      in China,  the Company is not  considered for accounting
                      purposes  to exert  significant  control  and the  joint
                      venture has been accounted for under the equity method.

                      During  the year  ended  December  31,  2001,  the joint
                      venture  was not  successful  in  beginning  significant
                      operations,   or  in  generating  significant  revenues.
                      Additionally,  the Company has been unable to devote the
                      needed resources to the joint venture.  As a result, the
                      Company  determined  its investment in the joint venture
                      to be impaired  and has  recorded an  impairment  in the
                      amount of $622,619.


8.  Notes Payable     Notes payable consist of the following:

<TABLE>
<CAPTION>
                                                                                 2001           2000
                                                                           ------------------------------
                        <S>                                                <C>               <C>

                        Bank line of credit agreement which allows
                        the Company to borrow a maximum amount of
                        $350,000 at an interest rate equal to the
                        bank's prime rate plus 1.5% (6.25% at
                        December 31, 2001).  The line of credit is
                        secured by accounts receivable, inventory,
                        furniture, fixtures and equipment                  $       350,000   $    350,000

                        Notes payable to individuals and or
                        entities, due in 2001 with interest at 15%,
                        secured by Company stock                                         -      2,225,000

                        Note payable to an individual, due December
                        31, 2001, with interest at 6.20% secured by
                        property and equipment (related to purchase
                        of Fleming)                                              2,125,000      2,125,000

</TABLE>

------------------------------------------------------------------------------
                                                                          F-19

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------
<TABLE>

<S>                     <C>                                                <C>               <C>
8.  Notes Payable       Note payable pursuant to a settlement
    Continued           agreement to an entity in monthly
                        installments including interest at 13.5%,
                        unsecured                                                        -        850,000

                        Note payable to an individual in monthly
                        installments including interest at 6.2%,
                        secured by property and equipment (related
                        to the purchase of Fleming)                                283,418        483,418

                        Note payable to bank, due on demand with
                        interest at prime plus 100 basis points
                        (approximately 6% at December 31, 2001)
                        secured by real property.                                  451,255              -

                        Note payable to an entity, due January 2001
                        with interest at 18%, secured by Company
                        stock                                                            -         99,955

                        Note payable to the Company's chairman of
                        the board of directors, due October 2001
                        with interest at 10%                                       380,000              -

                        Obligation payable to an individual, due on
                        demand with no stated interest rate,
                        secured by equipment                                       230,000              -

                        Convertible note payable to an individual,
                        due September 2001 with interest at 10%,
                        secured by property and equipment                          200,000        450,000

                        Convertible note payable to an entity, due
                        August 2001 with interest at 4%, unsecured                 350,000        350,000

                        Advance payable to an employee and
                        shareholder, due on demand with no stated
                        interest rate                                               20,000              -

</TABLE>

------------------------------------------------------------------------------
                                                                          F-20

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------
<TABLE>

<S>                     <C>                                                <C>               <C>


8.  Notes Payable       Note payable to individual for purchase of
    Continued           Salinas due on demand with no stated
                        interest rate                                              945,000              -
                                                                           ------------------------------

                        Total notes payable                                $     5,334,673   $  6,933,373
                                                                           ------------------------------

</TABLE>

<TABLE>
<CAPTION>

9.  Long-Term           Long-term debt consists of the following:
    Debt
                                                                                 2001           2000
                                                                           ------------------------------
<S>                     <C>                                                <C>               <C>

                        Notes payable convertible into common stock
                        at $10 per share, to the Company's
                        chairman, due July 2, 2004, with interest
                        at 10%, secured by Company stock                         3,340,000              -

                        Notes payable convertible into common stock
                        at $10 per share, to organizations and
                        individuals, due July 2, 2004, with
                        interest at 10%, secured by Company stock                2,000,000              -

                        Convertible note payable to an individual,
                        due October 2004 with interest at 10%,
                        unsecured                                                1,000,000              -

                        Capital lease obligation                                    29,335         97,116
                                                                           ------------------------------

                                                                                 6,369,335         97,116

                        Less current portion                                       (29,335)       (73,893)
                                                                           ------------------------------

                        Long-term debt                                     $     6,340,000   $     23,223
                                                                           ------------------------------

</TABLE>


10. Accrued           During  February 2002, the Company became aware that its
    Settlement        Chairman of the Board of Directors and former  President
    Costs             had prepared  fraudulent  documents to misrepresent  the
                      revenues,  costs  and cash  associated  with  operations
                      conducted  by  a  subsidiary  in  India  and  concerning
                      certain loans and stock  transactions.  This resulted in
                      the Company's financial  statements being restated as of
                      December 31, 2000.


------------------------------------------------------------------------------
                                                                          F-21

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


10. Accrued           As a  result,  the  Company  recorded  settlement  costs
    Settlement        claims  and  litigation  during  2001 in the  amount  of
    Costs             $4,012,427   related   primarily   to  the  accrual  for
    Continued         estimated amounts the Company may owe and the write-down
                      of  assets  as  the   result   of   anticipated   future
                      settlements.


11. Income Taxes      The  provision for income taxes differs from the amounts
                      which  would  be  provided  by  applying  the  statutory
                      federal income tax rate to net loss before provision for
                      income taxes for the following reasons:

<TABLE>
<CAPTION>
                                                               Year Ended
                                                              December 31,
                                                      --------------------------
                                                          2001          2000
                                                      --------------------------
                        <S>                           <C>           <C>
                        Federal income tax
                          benefit at statutory rate   $ 8,027,000   $ 3,794,000
                        Valuation allowance            (8,027,000)   (3,794,000)
                                                      --------------------------
                                                      $         -   $         -
                                                      --------------------------
</TABLE>


                        Deferred tax assets  (liabilities)  at December 31, 2001
                        and 2000 are comprised of the following:


<TABLE>
<CAPTION>
                                                         2001         2000
                                                      --------------------------
                        <S>                           <C>           <C>

                        Net operating loss carry
                          forward                     $10,085,000   $ 4,317,000
                        Depreciation and amortization     (84,000)      (42,000)
                        Goodwill impairment             1,236,000       643,000
                        Investment impairment           1,896,000       319,000
                        Property and equipment
                          impairment                      150,000             -
                        Allowance for doubtful
                          accounts                         38,000        57,000
                                                      --------------------------

                                                       13,321,000     5,294,000

                        Less valuation allowance      (13,321,000)   (5,294,000)
                                                      --------------------------

                                                      $        -    $         -
                                                      --------------------------
</TABLE>

------------------------------------------------------------------------------
                                                                          F-22

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


11. Income Taxes      A valuation  allowance  has been  recorded  for the full
    Continued         amount  of the  deferred  tax asset  because  it is more
                      likely than not that the  deferred tax asset will not be
                      realized.

                      At December  31,  2001,  the  Company has  approximately
                      $26,894,000  of  net  operating  loss  carryforwards  to
                      offset future taxable income.  These carryforwards begin
                      to expire in 2019.


12. Stock Options     A summary of the stock options are as follows:
    and Stock-
    Based
    Compensation

<TABLE>
<CAPTION>
                                                              Year Ended
                                                              December 31,
                                                     --------------------------
                                                        2001          2000
                                                     --------------------------
                        <S>                          <C>        <C>
                        Outstanding at January 1,
                        2000                         $       -   $           -
                           Granted                     208,333     12.00 - 18.00

                        Outstanding at December 31,
                        2000                           208,333   $ 12.00 - 18.00
                           Granted                           -               -
                           Exercised                         -               -
                           Expired                           -               -
                                                     ---------------------------

                        Outstanding at December 31,
                        2001                           208,333   $ 12.00 - 18.00
                                                     ---------------------------

</TABLE>

                        The Company has adopted the  disclosure-only  provisions
                        of Statement of Financial  Accounting  Standards  (SFAS)
                        No.  123,   Accounting  for  Stock-Based   Compensation.
                        Accordingly, no compensation cost has been recognized in
                        the financial  statements  for stock options  granted to
                        employees. Had compensation cost for the Company's stock
                        option plans been determined  based on the fair value at
                        the grant date  consistent  with the  provisions of SFAS
                        No. 123, the Company's net loss and loss per share would
                        have been as indicated below:

<TABLE>
<CAPTION>

                                                             Year Ended
                                                             December 31,
                                                      --------------------------
                                                          2001         2000
                                                      --------------------------
                      <S>                             <C>        <C>
                       Net loss - as reported         $(21,404,016) $(10,112,219)
                       Net loss - pro forma           $(21,404,016) $(10,807,754)
                       Loss per share - as reported   $      (3.59) $      (5.97)
                       Loss per share - pro forma     $      (3.59) $      (6.38)
</TABLE>


------------------------------------------------------------------------------
                                                                          F-23

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------

12. Stock Options     The  fair  value  of each  option  granted  in 2000  was
    and Stock-        estimated  on the date of grant using the  Black-Scholes
    Based             option pricing model with the following assumptions:
    Compensation
    Continued         Expected dividend yield                     $        -
                      Expected stock price volatility                     61%
                      Risk-free interest rate                            6.0%
                      Expected life of options                      3-5 years


                      The following table summarizes  information  about stock
                      options outstanding at December 31, 2001:

<TABLE>
<CAPTION>
               Options Outstanding                   Options Exercisable
               -----------------------------------------------------------------
                          Weighted
                           Average
                          Remaining    Weighted
Range of                 Contractual   Average                     Weighted
Exercise      Number        Life       Exercise       Number        Average
Prices      Outstanding    (Years)      Price       Exercisable  Exercise Price
--------------------------------------------------------------------------------
<S>         <C>          <C>           <C>          <C>          <C>
$ 12.00         141,667       1.19      $  12.00         141,667      $   12.00
  18.00          66,666       3.82         18.00          66,666          18.00
--------------------------------------------------------------------------------

$12.00 - 18.00  208,333       2.03      $  13.92         208,333      $   13.92
--------------------------------------------------------------------------------
</TABLE>


13. Redeemable        In  connection  with the  issuance  of debt the  Company
    Common            issued  155,834   shares  of  common  stock.   The  debt
    Stock             agreement allows the holder of the shares to require the
                      Company to repurchase  those shares for $7.50 per share.
                      Consequently,  at December 31, 2000 the Company recorded
                      a liability for these shares equal to the estimated fair
                      value of  $1,168,748.  At December 31, 2000,  the option
                      price of the shares  exceeded  the  market  price of the
                      Company  stock and at December 31, 2001 it was less than
                      the market price of the Company's stock.


------------------------------------------------------------------------------
                                                                          F-24

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


14. Commitments       Royalty Agreements
    and               During  the year ended  December  31,  2000 the  Company
    Contingencies     settled  litigation  with an entity  concerning  certain
                      license  rights.  Under the terms of the  settlement the
                      entity agreed to ratify licenses  previously  granted to
                      the Company  for China,  India and Mexico for a one time
                      license fee of $25,000  each.  In  addition,  the entity
                      agreed to issue  the  Company  a  license  for  Southern
                      Europe for a license fee of $50,000,  and to recognize a
                      previous  license  for  Romania  granted  to  a  Company
                      investee.  The settlement agreement requires the Company
                      to pay a royalty of 4.5% of gross revenues from licensed
                      products.  During  2001,  the  Company  entered  into  a
                      license agreement for Puerto Rico.  Approximate  minimum
                      royalties are as follows:

                             Year Ending December 31,               Amount
                             ------------------------               ------

                                  2002                            $  380,750
                                  2003                            $  532,500
                                  2004                            $  570,000
                                  2005                            $  570,000
                                  2006                            $  570,000

                      During  2001 and  2000 the  Company  paid  $451,410  and
                      $206,714   respectively  under  these  agreements.   The
                      Company has also asserted a claim for a credit or refund
                      of  approximately  $290,124 for overpayment of royalties
                      in 2001.  The Company has also  established  a valuation
                      allowance   for  this   claim  due  to  an   uncertainty
                      concerning the ultimate realization of those amounts.

15. Litigation        Securities and Exchange Commission
                      SEC v. Eagle  Building  Technologies,  Inc.  and Anthony
                      D'Amato (Civil Action No.  1:02CV397ESH  D.D.C.) The SEC
                      and the  Company  agreed to settle  the  lawsuit  in May
                      2002. The Court signed the settlement papers on or about
                      May 30, 2002,  entering a permanent  injunction  against
                      the  Company  for any future  violations  of Sections 10
                      (b), 13 (a),  13 (b) (2) (A),  and 13 (b) (2) (B) of the
                      Securities  Exchange  Act  of  1934,  and  Rules  10b-5,
                      12b-20,  13a-1,  13a-13, and 13b2-1. The Company made no
                      admission or denial of liability in connection  with the
                      settlement.


------------------------------------------------------------------------------
                                                                          F-25

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


15. Litigation        Class Actions
    Continued         Kelso  Capital  et al. v. Eagle  Building  Technologies,
                      Inc., Anthony D'Amato,  Paul-Emile Desrosiers and Tanner
                      + Co.  (Southern  District  of  Nevada,  Civil  Case No.
                      CV-S-02-0367-PMP-PAL, filed March 15, 2002)

                      Marc Newman,  Kenneth Wait, Dr. Anthony Roberts and Dana
                      Davis,  et al. v.  Eagle  Building  Technologies,  Inc.,
                      Anthony  D'Amato,  Dr. Ralph Thomson,  Andros  Savvides,
                      Wilfred  G.   Mango,   Jr.,   Donald   Pollock,   Robert
                      Kornahrens,  Charles A. Gargano, Samuel Gejedson,  Meyer
                      A.  Berman  and  Tanner + Co.  (United  States  District
                      Court,   Southern   District   of   Florida,   Case  No.
                      02-80294-CIV-RYSKAMP, filed April 5, 2002)

                      Inglewood Holdings, Ltd. v. Eagle Building Technologies,
                      Inc. and Anthony  D'Amato (United States District Court,
                      Southern     District    of     Florida,     Case    No.
                      02-80340-CIV-MIDDLEBROOKS, filed April 16, 2002)

                      David D.  Pain v.  Eagle  Building  Technologies,  Inc.,
                      Anthony D'Amato,  Paul-Emile Desrosiers and Tanner + Co.
                      (United States District Court,  District of Nevada, Case
                      No. CV-S-02-0640-PMP-RJJ, filed May 6, 2002)

                      Jeff Gass v. Eagle Building Technologies,  Inc., Anthony
                      D'Amato,  Paul-Emile Desrosiers and Tanner + Co. (United
                      States  District  Court,  District  of Nevada,  Case No.
                      CV-S-02-0640-PMP-RJJ, filed May 6, 2002)

                      Robert Gluck v. Eagle Building Technologies, Inc. et al.
                      (United  States  District  Court,  Southern  District of
                      Florida, Case No. 02-CV-80302, filed April 8, 2002)

                      Guerrilla   IRA   Partners,   L.P.  v.  Eagle   Building
                      Technologies,  Inc. and Anthony  D'Amato  (United States
                      District Court,  Southern District of Florida,  Case No.
                      02-CV-80403, filed May 3, 2002)

                      Alan  Davidson  and Victor  Kashner  v.  Eagle  Building
                      Technologies,   Inc.   (United  States  District  Court,
                      Southern District of Florida,  Case No. 02-80323,  filed
                      March 26, 2002)

------------------------------------------------------------------------------
                                                                          F-26

<PAGE>

                                            EAGLE BUILDING TECHNOLOGIES, INC.
                                   Notes to Consolidated Financial Statements
                                                                    Continued

------------------------------------------------------------------------------


15. Litigation        Class Actions - Continued
    Continued         All of the  above  complaints  have  been  filed  in the
                      United  States  District  Courts for  Florida and Nevada
                      seeking   class   action   certification   for   alleged
                      securities  violations  by Eagle  pursuant  generally to
                      Section  10 (b) and 20 (a) of the  Exchange  Act and Sec
                      Rule  10b-5  promulgated   thereunder.   The  complaints
                      generally allege that Eagle intentionally  perpetrated a
                      fraud upon the public by the  dissemination of false and
                      misleading information.

                      Plaintiffs  Kelso  Capital  and Gass  stipulated  to the
                      transfer  of their  respective  actions to the  Southern
                      District  of Florida  for  consolidation  with the other
                      pending  securities  actions  filed  there.  The  United
                      States  District Court for the District of Nevada signed
                      the transfer  orders on May 22,  2002.  The Clerk of the
                      United States  District Court for the District of Nevada
                      began  processing the transfer on or about May 24, 2002.
                      The  Company  anticipates  that  these  actions  will be
                      consolidated in the Southern District of Florida,  after
                      which  time,  it will  proceed  with  responding  to the
                      Complaints.

                      Additional Securities Litigation
                      Anthony I.  Bentley,  James Bruce Whiting and Beverly D.
                      Whiting  v. Eagle  Building  Technologies,  Inc.  (Third
                      Judicial  District  Court,  Salt Lake  City,  Case No. CA
                      02-0901808).  The complaint  alleges breach of contract,
                      unjust  enrichment  and  conversion for failure to issue
                      securities to the Plaintiffs.

------------------------------------------------------------------------------
                                                                          F-27

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


15. Litigation        Additional Securities Litigation - Continued
    Continued         Trust  #191190MAN  (A) v. Eagle  Building  Technologies,
                      Inc.  et al.  (US  District  Court,  District  of  Utah,
                      Central Division, Case No. 02-CV-202CV-0502ST).  This is
                      an action  brought by a Trust  whose agent is Clealon B.
                      Mann.  The Trust's sole cause of action is brought under
                      RICO and  alleges  that Eagle  failed to remove the Rule
                      144 legend from 8,333 shares of Eagle stock, claimed the
                      shares were attached pursuant to a pending lawsuit,  and
                      titling shares in the name of Clealon Mann.  Plaintiff's
                      claimed  damages  are the amount of the Eagle  shares at
                      the time it would  have sold  them.  However,  Plaintiff
                      does not indicate when such a sale would have  occurred.
                      General  Securities  Transfer  Agency  (GSTA) and Iverna
                      Morgan,  GSTA's president,  were named as defendants and
                      Eagle has agreed to indemnify  them. The Company intends
                      to defend this action based upon the following  grounds:
                      (a) the shares were titled in the name of the trust, and
                      listed Mann only as trustee;  (b) the shares were issued
                      without restriction in August 2000; and (c) at least two
                      writs of  execution  were issued in 2001,  both of which
                      specifically  attached the Trust's  shares and prevented
                      the  sale  of  said  shares.  The  Company  has  not yet
                      responded to this Complaint.

                      Polysolutions   Corp.  and  Bullhide  Liner  of  Broward
                      County, Inc. v. Eagle Building International, Inc. (14th
                      Judicial  Circuit  Court in and for Palm  Beach  County,
                      Florida, Civil Case No. CA-01-9017AB). The complaint was
                      filed on September 4, 2001.  On or about April 23, 2002,
                      Plaintiffs sought to amend the complaint to name Anthony
                      D'Amato, Ralph Thomson,  Richard Lahey, Andros Savvides,
                      Wilfred  Mango,   Donald  Pollack,   Robert  Kornahrens,
                      Charles Gargano, Samuel Gejdenson,  Meyer Berman, Howard
                      Ash, and Bruce  Mauldin as  individual  defendants.  The
                      Amended   Complaint   alleges  counts  for  breaches  of
                      contract,   fraud  in  the   inducement  and  breach  of
                      fiduciary  duty.  The Company is presently  substituting
                      the  law  firm  of  Broad  &  Cassel,  located  in  Fort
                      Lauderdale, Florida, as counsel in this matter.

                      Paul-Emile  Desrosiers v. Eagle  Building  Technologies,
                      Inc.  (15th  Judicial  Circuit  in and  for  Palm  Beach
                      County,  Florida,  Civil Case No. CA 02-03431  AA). This
                      complaint   was  filed  on  March  20,   2002,   seeking
                      declaratory and injunctive  relief for alleged  wrongful
                      removal as a Director,  President,  and Chief  Executive
                      Officer of the Company,  and alleging  claims for breach
                      of contract and retaliation.  The Company filed a Motion
                      to Dismiss  the  complaint,  which  motion the Court has
                      taken under advisement.

------------------------------------------------------------------------------
                                                                          F-28

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


15. Litigation        Additional Securities Litigation - Continued
    Continued         F. Briton  McConkie and Stephen R. Fey v. Eagle  Capital
                      International,  and General Securities  Transfer Agency,
                      Inc.  (United  States  District  Court  for the  Central
                      Division of Utah, Civil Case No. 2:01-CV0-0950 ST). This
                      is an action brought by Briton  McConkie and Stephen Fey
                      on the  grounds of breach of  contract.  The  plaintiffs
                      allege that Eagle wrongfully refused to transfer 200,000
                      shares,  represented by  certificates  number 432114 and
                      432119. Plaintiffs have produced affidavits of Doug Dent
                      and Ralph Thompson, former members of the Eagle Board of
                      Directors,  in which both men state that the shares were
                      properly  issued.  The potential  damages in this matter
                      would  likely be the value of the shares in April  2001,
                      when   Plaintiffs   initially   requested   the   shares
                      transferred.  The Company's asserted defense is that the
                      shares in question were never properly  issued and there
                      was a lack or failure of  consideration.  Discovery  has
                      just begun.  Additionally,  General Securities  Transfer
                      Agency  ("GSTA"),  the  agency  handling  Eagle's  stock
                      certificates, was named as a defendant. Eagle has agreed
                      to indemnify GSTA in this matter.

                      Other Litigation
                      Eagle  Capital  International,  Ltd v. Lone Wolf Energy,
                      (United States  District Court for the District of Utah,
                      Civil No. 2:00CV988K). This was an action brought by the
                      Company  to  set  aside  an  agreement  and   settlement
                      agreement on the grounds of fraud.  Lone Wolf also filed
                      suit in  Oklahoma,  Lone  Wolf  Energy,  Inc.  v.  Eagle
                      Capital  International,  Ltd.,  United  States  District
                      Court  for the North  District  of  Oklahoma,  Civil No.
                      00CV1040K  (M) seeking to recover from Eagle the balance
                      due on the $1,000,000 note issued by Eagle in connection
                      with the settlement agreement.  This action was defended
                      by John F. Fischer of the law firm of Andrews Davis Legg
                      Bixler Milstein & Price (405-272-9241) in Oklahoma City.
                      In the Utah  action,  Lone  Wolf  successfully  moved to
                      dismiss on the grounds that the action can only be tried
                      in Oklahoma. A judgment was entered against Eagle in the
                      Oklahoma action on August 27, 2001. The judgment was for
                      $850,000,  plus interest and damages for late charges in
                      the amount of  $156,060.03.  However,  we were  informed
                      that a settlement was reached between the parties in the
                      summer of 2001.  Fabian & Clendenin  was not  provided a
                      copy of the settlement agreement and has no knowledge as
                      to whether the judgment  /settlement has been satisfied.
                      On  September  14,  2001,  the  Company  entered  into a
                      settlement  agreement  with Lone Wolf Energy wherein the
                      Company  paid  Lone  Wolf  $480,000  in cash and  20,000
                      restricted shares of Eagle common stock.

------------------------------------------------------------------------------
                                                                          F-29

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


15. Litigation        Other Litigation - Continued
    Continued         Actionable  Intelligence  Technologies,  Inc.  v.  Eagle
                      Building  Technologies,  Inc. (15th Judicial  Circuit in
                      and for Palm Beach  County,  Florida,  Civil Case No. CA
                      02-03197 AB).  This  complaint was filed on February 22,
                      2002,  alleging  claims for monies owed on open  account
                      and  breach of  contract.  On May 2, 2002,  the  Company
                      filed its Answer and Affirmative Defenses.

                      J.C.   Group  Corp.  and  Jose  A.  Camacho  v.  Salinas
                      Developers  Group,  Inc.,  Eagle  Building  Technologies
                      (Civil No. G-CD2002-0109;  Sala 302). On April 18, 2002,
                      Plaintiffs J.C. Group,  Inc. ("J.C.  Group") and Jose A.
                      Camacho  ("Camacho")  filed a complaint  against Salinas
                      Developers   Group,   Inc.   ("SDG"),   a  Puerto   Rico
                      corporation controlled by the Company and Eagle Building
                      Technologies,  of  Puerto  Rico,  Inc.  ("Eagle-PR"),  a
                      wholly-owned  subsidiary  of the  Company in the Federal
                      District  Court  of  the  Commonwealth  of  Puerto  Rico
                      claiming  $1,260,299  plus  damages and legal fees.  SDG
                      timely  filed  the  Answer  to  the   Complaint   and  a
                      Counterclaim.  SDG  alleges  in  its  Counterclaim  that
                      Plaintiffs  owe  $4,110,000  to SDG on  account  of fund
                      deviation,  false and  excessive  invoicing and damages.
                      Eagle-PR  filed a motion for summary  judgment  based on
                      the fact that it is not  liable  for the acts of SDG and
                      that  Eagle-PR  is  not  the   stockholder  of  SDG.  In
                      addition,  SDG  filed a Third  Party  Complaint  against
                      Camacho for $5,910,000 claiming:  1) poor performance as
                      project manager; 2) fund deviation;  3) false invoicing;
                      4) purchase  of land in his own name with SDG funds;  5)
                      breach of fiduciary  duty;  6)  interference  with SDG's
                      business;  and 7) failure to make capital contributions.
                      On June 20, 2002,  Plaintiffs filed an Amended Complaint
                      against  SDG and  Eagle-PR,  and  increased  the  amount
                      claimed to $2,872,857.29,  including the lost profits of
                      Camacho.  As of the date of this filing,  because of the
                      complex nature of the matters  involved,  the outcome of
                      this case cannot be predicted.

                      Jennifer Nina v. Eagle Building Technologies, Inc. (15th
                      Judicial Circuit in and for Palm Beach County,  Florida,
                      Case No. CA  02-4297AE).  This complaint was filed April
                      10,  2002,  alleging  claims for  unlawful  termination,
                      retaliation,  breach of contract and unpaid  wages.  The
                      Company  filed a Motion to Dismiss the  complaint on May
                      6, 2002.

------------------------------------------------------------------------------
                                                                          F-30

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


15. Litigation        Other Litigation - Continued
    Continued         Mark  Neuman  v.  Anthony  D'Amato,  et  al.  and  Eagle
                      Building  Technologies,  Inc.  (as a nominal  defendant)
                      (15th  Judicial  Circuit in and for Palm  Beach  County,
                      Florida,  Case No. CA  02-05560-AG).  This complaint was
                      filed  on  May 9,  2002,  as a  shareholders  derivative
                      action    alleging    breach    of    fiduciary    duty,
                      misappropriation   of  confidential   information,   and
                      contribution and indemnification.

                      Julio Cruz,  Jr. v. Eagle  Building  Technologies,  Inc.
                      (15th  Judicial  Circuit in and for Palm  Beach  County,
                      Florida, Civil Case No. CA 02-05675-AH).  This complaint
                      was filed on May 13, 2002,  alleging claims for wrongful
                      termination,  retaliation,  upaid  wages,  and breach of
                      contract.

                      Gina Nicoleau v. Eagle Building Technologies, Inc. (15th
                      Judicial Circuit in and for Palm Beach County,  Florida,
                      Civil Case No. CA-02-05675-AH). This complaint was filed
                      on  May  13,   2002,   alleging   claims  for   wrongful
                      termination,  retaliation,  unpaid wages,  and breach of
                      contract.

                      Threatened Litigation
                      Claims by Cheryl Ray. Ms. Ray is the surviving spouse of
                      Herbert Ray, a founding  member of IMSI.  Upon Herbert's
                      death,  Ms.  Ray  received  2,000,000  IMSI  shares.  In
                      January 1999, Ms. Ray agreed to exchange her IMSI shares
                      for Eagle  Shares.  Ms. Ray  alleges  that in June 2000,
                      Anthony  D'Amato,  then  President  and  CEO  of  Eagle,
                      informed  her that her  original  IMSI shares were being
                      cancelled   and  that   there   had  been   insufficient
                      consideration for the 1999 stock exchange.  According to
                      Ms.  Ray,  she then  agreed  to return  all but  500,000
                      common  shares.   Ms.  Ray  now  alleges  that  she  was
                      defrauded by Mr.  D'Amato and Eagle.  In November  2001,
                      she issued a demand letter for $2,500,000,  or the value
                      of her  original  shares.  In  February  2002,  Ms.  Ray
                      threatened legal action.

                      Claims by IMSI.  On July 3, 2002,  IMSI,  Inc.  notified
                      Eagle that its license to use IMSI's  patented  products
                      in Puerto Rico was being  revoked.  IMSI warned that any
                      future,  unauthorized  use by  Eagle  would  be met with
                      legal action.

------------------------------------------------------------------------------
                                                                          F-31

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued
------------------------------------------------------------------------------


16. Related Party     During the years ended  December 31, 2001 and 2000,  the
    Transactions      Company  issued  532,472  and  223,407  shares of common
                      stock to its president and chief  executive  officer for
                      services and or payment on notes payable, respectively.

                      The  Company  operates  in  Puerto  Rico  while  holding
                      additional  licenses  for India,  China,  Mexico,  South
                      America  and  Europe   pursuant  to  six  (6)  licensing
                      agreements    with     Integrated     Masonry    Systems
                      International,    Inc.   (IMSI).    The   Company   owns
                      thirty-eight percent (38%) of the issued and outstanding
                      shares of IMSI.

                      During the  period  commencing  September  2000 to April
                      2001 the Company's Chief Executive Officer and President
                      converted  loans to the  Company  to  restricted  common
                      stock  valued at $3.00 per  share.  As of  December  31,
                      2000, the Company also had unsecured advances receivable
                      from its President of $688,271.


17. Fair Value        The  Company's  financial  instruments  consist of cash,
    of                receivables,  payables and notes  payable.  The carrying
    Financial         amount of cash,  receivables  and  payable  approximates
    Instruments       fair  value  because of the  short-term  nature of these
                      items.   The  carrying   amount  of  the  notes  payable
                      approximates  fair  value as the  individual  borrowings
                      bear  interest  at  floating  market  interest  rates in
                      aggregate.


------------------------------------------------------------------------------
                                                                          F-32

<PAGE>

                                             EAGLE BUILDING TECHNOLOGIES, INC.
                                    Notes to Consolidated Financial Statements
                                                                     Continued

------------------------------------------------------------------------------


18. Segment           The Company operates in the following business segments:
    Reporting         block and wall  systems,  block  equipment,  real estate
                      development, and security doors.

<TABLE>
<CAPTION>

                           Year Ended December 31, 2001
                           ---------------------------------------------------------------------------
                           Block & Wall     Block        Real Estate     Security
                              Systems     Equipment      Development       Doors              Total
                           ---------------------------------------------------------------------------

<S>                        <C>           <C>             <C>           <C>              <C>
Revenues                   $     13,948  $ 3,388,967     $         -   $          -     $    3,402,915
Cost of sales                         -    2,917,864               -              -          2,917,864
Selling, general and
  administrative             10,172,396    1,079,164               -              -         11,251,560
Impairments                   2,718,527            -               -      3,581,183          6,299,710
Loss before taxes           (17,449,017)    (373,816)              -     (3,581,183)       (21,404,016)
Identifiable assets           6,151,303    5,523,055       3,815,219        386,820         15,876,397
Capital expenditures            209,515       69,176               -              -            278,691

</TABLE>

<TABLE>
<CAPTION>
                                     Year Ended December 31, 2000
                          ------------------------------------------------------
                            Block & Wall
                              Systems     Block Equipment           Total
                          ------------------------------------------------------

<S>                        <C>           <C>             <C>           <C>              <C>
Revenues                  $           -   $       857,347    $         857,347
Cost of sales                         -           565,168              565,168
Selling, general and
  administrative              3,584,635         1,055,969            4,640,604
Impairments                   2,565,750                 -            2,565,750
Loss before taxes           (10,084,369)          (27,850)         (10,112,219)
Identifiable assets          12,900,415         2,293,017           15,193,432
Capital expenditures            758,619                 -              758,619

</TABLE>

------------------------------------------------------------------------------
                                                                          F-33

<PAGE>