<PAGE>
                     U.S. 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 JUNE 30, 2002
                         COMMISSION FILE NUMBER: 0-17493


                                OMNI U.S.A., INC.
                              (Name of Registrant)


                  NEVADA                                  88-0237223
                  ------                                  ----------
        (State of Incorporation)              (IRS Employer Identification No.)


                      7502 MESA ROAD, HOUSTON, TEXAS 77028
                    (Address of principal executive offices)


                    Issuer's telephone number: (713) 635-6331
           Securities registered pursuant to Section 12(g) of the Act:


                         COMMON STOCK $.004995 PAR VALUE


         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(g) of the Securities Exchange Act of 1934 during the past 12
months, and (2) has been subject to such filing requirements for the past 90
days.

                                YES [X]   NO [ ]


         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulations S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form, 10-KSB. [ ]

         Issuer's revenues for its most recent fiscal year were $18,051,928.

         The aggregate market value of the voting stock held by non-affiliates
of the Registrant as of September 30, 2002 was approximately $1,445,894 based on
quoted sales on NASDAQ on such date.

         The number of shares of the Registrant's common stock outstanding as of
September 30, 2002 was 1,204,912.



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PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         Overview

         History of the Company. Omni U.S.A., Inc. (the "Company"), a Nevada
corporation, through its wholly-owned subsidiary, Omni U.S.A., Inc., a
Washington corporation ("Omni-Washington") and Omni-Washington's wholly-owned
subsidiary, Omni Resources, Ltd., a Hong Kong company ("Omni Resources"),
through its wholly-owned manufacturing facility, Shanghai Omni Gear Co., Ltd.
("Shanghai Omni Gear"), designs, develops, manufactures and distributes power
transmissions (also known as "gearboxes" or "enclosed geardrives") for use in
agricultural, industrial, "off-highway" and construction equipment. The Company,
through another wholly-owned subsidiary, Butler Products Corporation, designs,
develops, manufactures and distributes trailer and implement jacks and couplers,
which include light and heavy-duty jacks and couplers used in a variety of
trailers. The Company's products are distributed to original equipment
manufacturers and distributors in North America and in several foreign countries
including Argentina, Australia, Brazil, Canada, France, Mexico, New Zealand,
South Africa and Thailand. The Company began procuring the manufacture of its
products by Chinese manufacturers in China in 1980, and since 1986 substantially
all of its geardrives have been manufactured in China; 30% of its trailer and
implement products are manufactured in China and approximately 70% of its
trailer and implement products are manufactured in the United States.

         Omni-Washington, the Company's primary operating subsidiary, was
incorporated in 1961 and in 1974, began distributing power transmissions in the
U.S., and later established Omni Resources to distribute its products in certain
foreign markets. In 1988, Omni-Washington acquired the outstanding minority
ownership interest in Omni Resources and thereafter operated it as a wholly
owned subsidiary.

         Effective July 1, 1988, Ed Daniel, the sole shareholder, exchanged all
of the outstanding stock of Omni-Washington for 6,650,000 shares of voting
Common Stock of Triste Corporation, a Nevada corporation incorporated in 1988
("Triste"), giving him a 42.5% interest in Triste. Triste thereafter changed its
name to Omni U.S.A., Inc. ("Omni" or the "Company"). Omni's Common Stock began
trading on the over-the-counter market on November 1, 1988, and since August 13,
1991, Omni's Common Stock has been listed on the NASDAQ SmallCap Market.

         In December 1994, Omni Resources formed Shanghai Omni Gear, a
Cooperative Joint Venture Limited Liability Company (the "Joint Venture"), with
a Chinese manufacturing company that owns a multi-building manufacturing complex
in Shanghai for the purpose of manufacturing planetary and industrial
geardrives.

         The Articles of Association of the Joint Venture provide that each
joint venturer's liability for the obligations of the Joint Venture is limited
to such joint venturer's investment. The Joint Venture has a thirty-year term,
which can be extended for an additional ten years by consent of the joint
venturers. The Joint Venture may be liquidated in the event of either party's
failure to perform its obligations under the Joint Venture Agreement. Shanghai
Omni Gear manufactures the Company's planetary and helical geardrive product
lines. The facility is being used for assembly of planetary drives, helical
geardrives and inspection of drives produced in other Chinese manufacturing
facilities.

         Shanghai Omni Gear was formed in accordance with the Law of the
People's Republic of China on Cooperative Joint Ventures, and its activities are
governed by all laws, decrees, rules and regulations of the People's Republic of
China, including, but not limited to, labor and employment, tax, foreign
exchange and insurance laws and regulations. Shanghai Omni Gear is obligated to
contribute five percent of its after-tax profits per year, up to a maximum of
50% of the registered capital of the Company (or $1,312,500) to a reserve
enterprise development and welfare fund for staff and workers.

         The Chinese manufacturer contributed to the Joint Venture the use of
land and factory space in its manufacturing complex under a 30-year facilities
lease; Omni Resources agreed to contribute an aggregate of $2,625,000 in working
capital, leasehold improvements, machinery and other assets required to
establish a fully operational manufacturing facility, and, as of the date
hereof, has contributed approximately $3,270,000 to the Joint Venture. Omni
Resources controls Shanghai Omni Gear, as it appoints a majority of Shanghai
Omni Gear's Board of Directors and also appoints the General Manager of the
Joint Venture. The Chinese manufacturer has a single representative on Shanghai
Omni Gear's Board of Directors and does not participate in the profits of
Shanghai Omni Gear; its only return from Shanghai Omni Gear being a rental fee
from the facilities lease.


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         On October 1, 1996, the Company acquired 100% of the common stock of
Butler Products Corporation ("Butler"). Consideration paid to the shareholders
of Butler included $225,000 in cash, $500,000 in junior subordinated notes due
in quarterly payments commencing in 2001 with a final payment in 2003, and
50,000 shares of Omni Common Stock. Located in Butler, Kentucky, Butler is a
long-standing manufacturer of jack and trailer products typically sold to
manufacturers and distributors of heavy-duty trailers.

         Commencing July 1, 1997, all towing products designed, developed,
manufactured and sold by the Company are marketed under the "Butler" name and
associated trademarks; all power transmission products designed, developed,
manufactured and sold by the Company are marketed under the "Omni Gear" name and
associated trademarks.

         On July 16, 1999, Butler acquired the assets of Piecemaker, Inc.
("Piecemaker"), a manufacturer of horse, agricultural and utility trailer
components located in Madill, Oklahoma. Subsequent to the Piecemaker
acquisition, Butler consolidated its small jack and coupler manufacturing
facilities with that of Piecemaker in Madill, OK.

         On June 14, 2001, the Company effected a reduction in the number of
authorized shares of common stock and a corresponding one-for-three reverse
stock split of its common stock at a special meeting of the Board of Directors.
In addition, all holders of options or warrants to purchase future shares of the
Company's common stock were reduced on an equal basis of three to one. The par
value of the common stock was unchanged. The move was initiated to raise the
Company's share price above the $1.00 minimum level, which would enable Omni's
stock to meet the requirements and continue to trade on the NADSAQ SmallCap
Market.

         Since the Company began selling power transmission products in 1974, it
has achieved a number of competitive advantages including:

         (i)      Strong customer relationships and a reputation for quality
                  products at a good value;
         (ii)     Recognition as the low cost producer in the industry resulting
                  from the Company's extensive Chinese manufacturing capability
                  with Chinese contract manufacturers and with Shanghai Omni
                  Gear;
         (iii)    Substantial market penetration in the agricultural implement
                  market with right-angle gear boxes;
         (iv)     Reputation for responsive customer service;
         (v)      Recognition for design innovation in response to customers
                  needs; and
         (vi)     The accumulation of a substantial body of technical and
                  industry specific knowledge.

         The Company plans to build on this base of strategic advantages in its
attempt to achieve growth in both sales and profits in the power transmission
segment. To achieve this objective the Company has developed a growth strategy
encompassing the following:

         (i)      Expand market share in the planetary and industrial markets
                  for power transmission components;
         (ii)     Continued improvement in operating efficiencies in Shanghai
                  Omni Gear;
         (iii)    New product innovation and development; and
         (iv)     Evaluate new business opportunities, asset acquisitions and
                  potential sales that maximize shareholder value and benefit
                  the Company.

         Products

         OMNI GEAR

         Power Transmission Components. Power transmissions (also known as
"enclosed geardrives" or "gearboxes") are configurations of gears enclosed in a
housing or casing that transfer or transmit power from one point to another.
Omni Gear currently distributes a standard product line of over 300,000 gearbox
configurations. As a percentage of revenues, Omni Gear's power transmission
components are its most significant product, representing 79% and 80% of the
Company's revenues in fiscal years 2002 and 2001.

         Although Omni Gear distributes power transmissions for numerous
applications and purposes, the majority of its sales revenues are derived from
sales of power transmission components manufactured for three distinct
applications:


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         Agricultural equipment. Omni Gear distributes power transmissions for
         tractor powered implements with capacities ranging from 3 to 300
         horsepower for use in agricultural equipment, including post hole
         diggers, which are accessories attached to tractors used to dig post
         holes for fencing and tree planting; rotary cutters, which are large,
         heavy-duty mowers for use in agriculture and highway right-of-way and
         recreational area maintenance; grain augers, which convey grain to the
         top of grain silos; and geardrives for fertilizer spreader and
         roto-tiller applications.

         Irrigation systems. Omni Gear distributes right-angle gearboxes for
         vertical turbine pumps and electro-mechanical drivetrain components for
         mechanized irrigation. Omni Gear supplies both helical gear and worm
         gear primary drive units, some of which are integrated with electric
         motors, as well as worm gear and planetary gear final drives.

         Construction, mobile off-highway, industrial and utility equipment.
         Omni Gear distributes planetary drive power transmissions for use in
         construction, mobile off-highway (which includes a wide variety of
         equipment designed for use in rugged terrain, construction sites, or
         undeveloped areas), industrial, and utility equipment, such as
         four-wheel drive forklifts, skid steer loaders, telephone and power
         cable installation and replacement equipment, road rollers and dirt
         compactors. Planetary geardrives utilize more complex configurations of
         gears and are used in applications where transmission of high torque at
         low speeds is needed. Omni Gear believes that it can expand its share
         of the market of planetary drives, and Omni Gear's goal of increased
         production of these products was a primary factor in the Company's
         decision to establish a manufacturing facility in China.

         BUTLER

         Trailer and Implement Components. Butler manufactures a wide variety of
jacks with capacities ranging from 1,000 lbs. to 220,000 lbs. These jacks are
used to level and lift various trailers, agricultural implements and equipment
for recreational, utility, construction, agricultural and trucking industries as
well as for military applications. Butler's products include heavy-duty
implement jacks, spring return jacks, stabilizing jacks and wheel chocks for
semi-trailers, a series of high density polyethylene lubricating plates for the
trucking industry and a complete line of bumper-pull and gooseneck couplers for
trailers with gross weights up to 30,000 lbs. Butler's Oklahoma facility
manufactures component parts for horse, livestock and utility trailers. Their
products include greaseable gate and hinge sleeves, back gate handles and
extensions, roller pin assemblies, spring loaded latches, butt bars and plates,
hinge assemblies and roof bows. As a percentage of revenues, trailer and
implement component sales represented 21% and 20% of the Company's net sales in
fiscal years 2002 and 2001.

         New Products. The Company continues to improve its products and expand
product application. Currently, the Company is designing gearboxes to expand its
agricultural, universal, bevel, irrigation, planetary, commercial turf and
mobile utility geardrive product lines and Butler product lines.

         Product Manufacturing

         Current Manufacturing Arrangements. A majority of the Company's
geardrives are assembled incorporating raw materials and components manufactured
or produced in China by four manufacturers, some of whom the Company has been
doing business with since 1980. The Company believes that these manufacturers
can be relied upon to provide a reliable source of quality manufactured goods
for the foreseeable future. The Company and certain manufacturers have from time
to time memorialized their working relationships in written memoranda. In the
Company's experience, business relationships in China are not established and
are not governed by written agreements of contract, and the Chinese legal system
is not sufficiently developed to provide for the enforcement of contracts or
remedies to an aggrieved party in the event of a breach of contract. Rather,
business in China is conducted primarily upon the basis of personal
relationships among the parties, and commercial disputes are resolved almost
entirely through negotiation. The Company believes that it has established solid
working relationships with these factories, which relationships are and will
continue to be critical to the Company's ability to obtain quality manufactured
products on acceptable terms.

         The Company owns a 35,000 square foot facility in Butler, Kentucky
where all jacks from 10,000 lbs. to 220,000 lbs. capacities are manufactured.
The light-duty jacks and bumper pull and gooseneck couplers are manufactured in
China in accordance with Butler's quality specifications, as are certain
components of its coupler line which are assembled at Butler's 20,000 sq. ft.
leased facility in Madill, OK.

         Availability of Raw Materials and Components. Product components and
raw materials are currently purchased from


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numerous suppliers in the U.S. and China, selected by the Company on the basis
of available production capacity, reputation for quality, and relative costs.
The Company believes that there are sufficient supplies of raw materials and
components in China to meet its needs for the foreseeable future, and the
Company's suppliers have generally been able to meet the Company's
specifications and schedules. However, in the few instances in which resources
of sufficient quality have not been available in China, the Company has
generally encountered little difficulty in locating substitutes outside China
and importing them for production. Based on the number of potential suppliers in
China, the Company does not believe that the loss of any supplier would have a
material adverse effect on the Company.

         Manufacturing Capacity. At this time, the Company has the ability to
expand its Shanghai Omni Gear facility to accommodate customer demand. The
contract manufacturers it currently employs possess sufficient excess capacity
to meet the Company's production requirements for the foreseeable future. Based
on the number of potential manufacturers in China and excess capacity of
manufacturers currently used, the Company does not believe that the loss of
services of any single manufacturer would have a material adverse effect on the
Company.

         Distribution, Sales and Marketing

         Distribution. The Company distributes its products primarily to
original equipment manufacturers and distributors. Customers with limited
requirements, and most of the Company's North American customers, typically
purchase Omni Gear product from inventories. Omni Resources, including Shanghai
Omni Gear, on the other hand, ships parallel shaft and planetary geardrive
products, marketed under Omni Gear, directly from the factory to U.S. customers
and foreign customers located primarily in Australia, Europe, South America and
Japan, or to other customers that purchase entire containers or production runs
of Omni Gear products. Butler distributes its products to after-market
distributors, trailer OEMs and export brokers. All products are shipped from
Butler's manufacturing facility in Butler, Kentucky or from Butler's facility in
Madill, Oklahoma. Sales are divided between Omni Gear, Omni Resources, and
Butler based on product line, location of the customer and size of the orders,
with the majority of the sales to customers in the United States.

         On October 3, 1994, the Company and its subsidiaries signed an
exclusive ten-year distribution agreement (the "Distribution Agreement") with
the Braden Winch division of PACCAR Inc. ("PACCAR"), an international
manufacturer, marketer and distribution of winches and planetary geardrives
located in Broken Arrow, Oklahoma. The Distribution Agreement was modified and
amended on September 9, 1999. The amendment extended the Distribution Agreement
to 2014. Under the terms of the Distribution Agreement, PACCAR will market and
distribute throughout the world (except Japan and China) planetary drives, parts
and accessories designed and manufactured by the Company. The drives and parts
will be marketed by PACCAR under the "Braden" trademark and trade name owned by
PACCAR. The Company retained the rights to sell its products in Japan and China,
and also retained the right to market its planetary drives under its own name to
certain original equipment manufacturers that it now services and to all current
and potential pivot irrigation makers or after-market resellers for products
designed exclusively for the irrigation market. By agreement dated April 30,
2001, the distribution agreement was modified to allow the Company to distribute
planetary drives, parts and accessories designed and manufactured by the Company
in the world market. PACCAR may continue to represent the Company on an
exclusive customer basis at the Company's option.

         Sales. The Company's sales are influenced by a variety of seasonal,
economic and climatic factors affecting its customers, many of which are
difficult to predict. Since a large proportion of the Company's products are
utilized in the agriculture industry, the Company's sales are lower during the
fall and winter months while farming and ranching activity is slower. Drought,
flooding, commodity prices, government subsidies and U.S. Agricultural
Department policies that affect farmers also impact demand for the Company's
products. The Company believes that the seasonality in its sales will become
less pronounced as it increases its market share in the construction,
off-highway and utility equipment markets.

         The Company does not currently hold any government contracts, nor does
it sell more than an insignificant portion of its products to any governmental
agency. Accordingly, none of its contracts and subcontracts or purchase orders
are subject to governmental re-negotiation or cancellation.

         Marketing. The Company distributes product catalogs to prospects, as
well as soliciting sales directly from new customers. From time to time, the
Company has also acquired customer lists which it uses as a basis for
solicitation of new customers, as well as solicited sales by manufacturer's
representatives, distributors, direct marketing and trade shows. Sales to new
customers are rarely an effort by a salesperson alone and Company engineers are
often required to consult with prospective customers, assist in identifying,
designing and developing products that fulfill a new customer's particular
requirements. After a


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sale is made, Company engineers continue to consult with the customer on product
improvements and modifications. Power transmissions are usually manufactured
according to a customer's specific applications and specification. Because
incorporating a power transmission manufactured by a different supplier may
require changes in product design or expensive retooling, customers often do not
replace a current supplier's product with a standard product of another
manufacturer and therefore do not frequently change suppliers of power
transmissions. Accordingly, while the Company regularly solicits additional
sales from new customers, a large portion of its sales are made to existing
customers with minimal marketing effort.

         Inventories, Firm Orders and Backlogs. The Company maintains
approximately $2,100,000 in inventory at the Houston, Texas facility,
approximately $347,000 at the Butler, Kentucky facility, approximately
$1,037,000 at the Madill, Oklahoma facility, approximately $615,000 at the
Shanghai, China facility, and approximately $70,000 in transit. Additionally,
the Company has access to inventory located in bonded warehouses and vendor
facilities. The Company forecasts sales 12 months in advance, and maintains a
three month rolling production schedule, which permits the Company to maintain
sufficient inventories to meet projected requirements of its customers yet
avoids excessive investments in inventory. Inventory levels have increased
during the fourth quarter due to decreased customer demand, however the Company
expects that current inventory and reduced production levels in the next fiscal
year will adequately supply product to fulfill the Company's backlog of orders.

         As of June 30, 2002, the Company's backlog was approximately
$9,900,000. The Company determines the amount of backlog by estimating purchases
to be made by established customers with blanket purchase orders with the
Company. Average delivery time for the Company's power transmission equipment
varies depending upon the product. The Company can often fill and ship an order
from inventory in twenty-four hours; orders for products that require minimal
modification to an existing product can often be shipped in a few days; and
custom products requiring extensive design and retooling for production can
require a six month production schedule. The Company believes that virtually its
entire backlog is shippable in the next fiscal year.

         Competition. The power transmission market is supplied by numerous
American and foreign manufacturers, ranging from conglomerates that distribute
broad product lines to customers around the world, to small manufacturers that
produce a limited number of products for specific applications to limited
markets. Accordingly, the market for power transmissions is difficult to define.
The Company identifies its competition according to power transmission and
trailer and implement components.

         Power Transmission Components. In sales of power transmissions for 1)
rotary cutter, 2) tractor-powered implement and 3) universal geardrive product
lines, Omni Gear competes with a number of U.S. and foreign companies, including
Comer S.p.A. and Bondioli & Pavesi, each of which are Italian companies, and
Curtis Machine, Inc., Superior Gearbox Mfg., Inc., Hub City and Durst (both
divisions of Regal-Beloit Corporation), and ITG, all of which are American
companies, together with geardrives which are self-produced by certain OEM's.
Published statistics of the size of the market are not readily available.

         In sales of the irrigation geardrive market, Omni Gear's most
significant competitors in the marketplace are Durst and Ohio Gear (both
divisions of Regal-Beloit Corporation), U.S. Motors (a division of Emerson
Electric), and Universal Motion Components, together with irrigation geardrives
which are self-produced by certain OEM's.

         The Company estimates that the North American market for planetary
gearboxes with torque capacities up to 120,000 lbs. that Omni Gear can currently
supply is approximately $150,000,000 in sales per year, and that this market is
currently dominated by Auburn Gear, Fairfield Manufacturing and Eskridge
Manufacturing, all American companies. Other companies which supply planetary
geardrives in these rated torque capacities as a part of their overall planetary
products include Gear Products (a division of Blount), DP Manufacturing, Tulsa
Winch (a division of Dover), all American companies, and Brevini, Bosch Rexroth
AG, KYB, Carraro, Regiana & Riddutori, Teijin Seiki, and Trasmital Bonfiglioli,
all foreign companies. Omni Gear believes that it can increase its share in this
market in the future in spite of weak demand for construction and off-highway
equipment by providing quality product at reduced prices.

         Trailer and Implement Components. In sales of Butler light duty product
lines, Butler competes with a number of U.S. and foreign companies, including
Atwood, Fulton and Hammerblow. Butler's heavy-duty product lines compete with a
number of U.S. and foreign companies, including Kaiser Austin Westran, Jost,
Holland/Binkley, and Sudisa.

         The Company's most important competitive advantage is its competitive
pricing afforded by inexpensive Chinese labor and manufacturing costs. The
Company believes that it is competitive in its industry with respect to warranty
and return matters, payment terms, and product quality.


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         Other

         Employment. The Company currently employs approximately one hundred
eighty-five persons worldwide; (i) one hundred-thirty by Shanghai Omni Gear,
(ii) sixteen at the Company's Houston, Texas facility, (iii) twenty-seven at the
Company's facilities in Butler, Kentucky, and (iv) thirteen at the Company's
facility in Madill, OK. Twenty-one of Butler's forty employees are unionized. No
other Company employees are unionized or attempting to unionize. Management
believes its relations with its employees, union and non-union, are good.

         Research and Development. The Company currently employs five full-time
engineers who design products to meet new customer specification or applications
and to make refinements in product manufacturing processes and product quality.
Research and development expenses, unless otherwise specified, are reflected in
the Company's financial statements as part of operating expenses.

         Intangible Properties. The Company manufactures, advertises and sells
its products under numerous trademarks. Omni(R), Omni USA(R), Omni Gear(R), and
Butler(TM) trademarks are the primary marks under which the Company's products
are sold. The Company also owns other trademarks under which gearbox products
are sold such as RC-20(R), RC-30(R), RC-51(R), RC-61(R), RC-61T(R), RC-65T(R),
RC-71(R), RC-81(R), RC-91(R), RC-110(R), RCD-101(R), PHD-26HD(R), PHD-50A(R),
PHD-75(R), IR-15(R), IR-50(R), OFD-50(R), RC-130(TM), RC-25(TM), Irri-Torq(TM),
Voyager(R), Galaxy(TM), Enforcer(TM), Enforcer II(TM), Slick Disc(TM), and
Slider(R). Management believes that the Company's trademarks are well known in
its markets, are valuable and that their value is increasing with the
development of its business. The Company is not dependent on any one such
trademark. The Company vigorously protects its trademarks against infringement.
The Company has registered its trademarks in the appropriate jurisdictions.

         Environmental Matters. The Company is not a party to any legal or
regulatory proceedings seeking to impose liability or responsibility for any
environmental damages or violations of any environmental laws or regulations,
nor is it aware of any circumstances in which its activities in China or in the
United States have created any basis for any environmental liability or
responsibility for damages.

         Government Regulation. The Company is not subject to governmental
regulations other than those that typically apply to businesses importing
foreign manufactured goods into the United States and other countries, such as
customs laws and regulations. The Joint Venture is subject to certain Chinese
laws and regulations governing labor and employment, taxation, insurance,
foreign exchange, and other business matters, but the Company does not regard
these laws and regulations as significantly different in form or effect as those
that apply to the Company generally.


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ITEM 2.  DESCRIPTION OF PROPERTY

         The Company currently leases facilities located in Houston, Texas;
Madill, Oklahoma; and China, and owns a 35,000 square foot manufacturing
facility in Butler, Kentucky.

         The Houston facility is a combination office/warehouse facility of
approximately 40,000 square feet, which the Company uses as its headquarters and
as an Omni Gear assembly center, inventory warehouse, warranty repair, quality
control, testing and inspection, and distribution center. The Houston facility
is leased from Phenix Investment Company, a real estate investment company
located in Houston, Texas under a long-term lease expiring June 2003, at a rate
of $8,500 per month.

         Butler owns a 35,000 sq. ft. manufacturing facility in Butler, Kentucky
and leases a combination office/warehouse of approximately 20,000 sq. ft. in
Madill, Oklahoma under a long-term lease expiring July 2004, at a rate of $6,000
per month.

         Shanghai Omni Gear leases buildings in a manufacturing complex
containing approximately 130,000 square feet pursuant to a 30-year lease at a
rate of approximately $10,000 per month. The existing space is sufficient for
the activities currently conducted there, however, Shanghai Omni Gear has the
ability to acquire additional space in the complex if needed to expand future
operations.

         The Company believes that its facilities are adequate for its needs in
the foreseeable future. In the event that any of the facilities became
unavailable for use by the Company for any reason, the Company believes that
alternative facilities are available on terms and conditions acceptable to the
Company.

ITEM 3.  LEGAL PROCEEDINGS

         As discussed in the footnotes to the financial statements, the Company
is involved in litigation with a former distributor and with a former customer.
In addition, the Company, from time to time, is a party to various legal
proceedings that constitute ordinary routine litigation incidental to the
Company's business. In the opinion of management, all such matters are either
adequately covered by insurance or are not expected to have a material adverse
effect on the Company.


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

         No matters were submitted to a vote of the security holders of the
Company during the quarter or fiscal year ended June 30, 2002.


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                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS


         The Company's Common Stock trades on the NASDAQ Small-Cap Market tier
of the NASDAQ Stock Market under the symbol "OUSA".

         The following table sets forth in the periods indicated the range of
low and high sales prices per share of the Company's Common Stock traded as
reported by the NASDAQ Stock Market (amounts have been restated to account for
the reverse stock split):

                  Quarter Ending         Low               High
                  --------------         ---               ----

                  06/30/00               3.37              5.34

                  09/30/00               1.87              3.56

                  12/31/00               1.87              3.00

                  03/31/01               1.50              2.81

                  06/30/01               0.84              1.98

                  09/30/01               1.00              1.73

                  12/31/01               0.78              1.12

                  03/31/02               0.75              0.97

                  06/30/02               0.86              1.16

         On June 7, 2002, June 19, 2002 and September 10, 2002, the Company
received notification from NASDAQ that the Company's stock would be removed from
the NASDAQ listing as Omni's share price had fallen below the minimum required
ask price of $1.00 per share and as the Company's Minimum Value of Publicly Held
Securities had fallen below the minimum of $1,000,000. On September 10, 2002,
The Board of Directors approved a stock repurchase plan to repurchase up to
500,000 shares of Omni stock in efforts to improve its stock price in response
to the notification received from NASDAQ noted above and in consideration that
the Company's common stock represents and unusual value given the Company's
overall business and value.

         As of September 30, 2002, the closing price of the Company's Common
Stock was $1.20 per share. As of June 30, 2002, there were approximately 665
holders of record of the Company's Common Stock.

         The Company has never paid cash dividends on its Common Stock. As a
result of net losses in the current and prior fiscal years, the Company has a
cumulative retained deficit of $2,755,870 as of June 30, 2002; accordingly, the
Company may be prohibited by legal restrictions on capital from paying cash
dividends for the foreseeable future. In addition, the Company's revolving line
of credit facility prohibits the payment of dividends. While any determination
as to the payment of cash dividends will depend upon the Company's earnings,
general financial condition, capital needs, and other factors, the Company
presently intends to retain any earnings to finance working capital needs and
expand its business, and therefore does not expect to pay cash dividends in the
foreseeable future.


                                       9
<PAGE>

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

         Liquidity and Capital Resources

         The Company's primary capital requirements are for routine working
capital needs that are generally met through a combination of internally
generated funds, revolving line of credit facilities and credit terms from
suppliers. The Company's line of credit facilities had an outstanding balance of
$2,850,270 at June 30, 2002. The Company had working capital of $1,632,585 as of
June 30, 2002 and $1,862,151 as of June 30, 2001; a decrease of $229,566 during
the fiscal year ended June 30, 2002. The change in working capital was due
primarily to decreases in inventory in response to reduced business, the
increased borrowings on the Company's line of credit facilities and increases in
the current portion of long term debt in the fiscal year ended June 30, 2002.

         The Company's had positive cash flow of $162,443 which resulted in a
cash balance of $821,544 at the year ended June 30, 2002, compared to the June
30, 2001 cash balance of $659,101. The positive cash flow was generated by a
decrease in inventory levels and additional borrowings on long-term debt and
lines of credit. These changes were offset by increases in accounts receivable.

         The inventory balance as of June 30, 2002 was $4,168,526; a decrease of
$817,384 compared to the June 30, 2001 inventory of $4,985,910. Inventories have
decreased from the prior year end in response to the reduction in the Company's
volume of business.

         The Company's cash used in investing activities for the year ended June
30, 2002 of $50,956 consisted entirely of capital expenditures compared to
$218,123 for the year ended June 30, 2001. The Company believes that its present
facilities and planned capital expenditures are sufficient to provide adequate
capacity for operations in the next fiscal year.

         Net cash provided by financing activities for the year ended June 30,
2002 of $155,782 consisted of net borrowings on the revolving line of credit of
$79,109 and net borrowings on new long-term debt of $76,673.

         The Company's current ratio was 1.23 as of June 30, 2002, which is a 2%
decrease when compared to the June 30, 2001 current ratio of 1.25.

         The Company believes that between its access to the line of credit
facilities and its anticipated ability to generate funds internally, it has
adequate capital resources to meet its working capital requirements for the next
fiscal year, given its current working capital requirements, known obligations,
and assuming current levels of operations. If however, operations do not remain
at current levels and the Company is unable to access or renew its line of
credit facilities or service its long term debt facilities, the Company will be
required to reduce its operations accordingly which may have a negative impact
on the Company to meet the needs of it customers, suppliers and credit
providers. In addition, the Company believes that it has the ability to raise
additional financing in the form of debt to fund additional capital
expenditures, if required. The Company is in violation of its minimum six-month
earnings requirement of $225,000 with its domestic revolving line of credit.
Preliminary results indicate that the Company has already cured the
noncompliance of its debt covenants through normal results of operations in the
first quarter of fiscal year 2003.


                                       10
<PAGE>

         Results of Operations

         Fiscal year ended June 30, 2002, compared to fiscal year ended June 30,
2001. The Company's business is cyclical and dependent on industrial spending
levels and is impacted by the strength of the economy and other factors. The
economic slowdown that began in the second quarter 2000 and became an economic
recession in 2001 was the most significant factor in our reduced performance in
the fiscal year ended June 30, 2002. The Company had net sales of $18,051,928
for the year ended June 30, 2002. This represents a decrease of 15% compared to
the year ended June 30, 2001 net sales of $21,339,294. The following table
indicates the Company's net sales comparison and percentage of change for the
years ended June 30, 2002 and 2001:

         <Table>
         <Caption>
                                                 YEAR ENDED        %      YEAR ENDED      %          DOLLAR        %
         NET SALES                                 6/30/02     OF TOTAL     6/30/01    OF TOTAL     CHANGE      CHANGE
         --------------------------------------------------------------------------------------------------------------
         <S>                                   <C>                <C>     <C>            <C>     <C>              <C>

         --------------------------------------------------------------------------------------------------------------
         Power Transmission Components          $ 14,236,785       79%    $17,029,168     80%    $ (2,792,383)    (16%)
         --------------------------------------------------------------------------------------------------------------
         Trailer and Implement Components          3,815,143       21%      4,310,126     20%        (494,983)    (11%)
         --------------------------------------------------------------------------------------------------------------

         --------------------------------------------------------------------------------------------------------------
         Consolidated                           $ 18,051,928      100%    $21,339,294    100%    $ (3,287,366)    (15%)
         ==============================================================================================================
         </Table>

         The decrease was primarily due to reduced sales volumes as a result of
the economic recession that has affected both operating segments.

         Gross profit for the year ended June 30, 2002 decreased $1,033,327 to
$3,331,582, compared to gross profit for the year ended June 30, 2001 of
$4,364,909. The decrease in gross profit is due primarily to the decrease in
sales. Gross profit as a percentage of net sales was 18% for the year ended June
30, 2002, compared with 20% for the year ended June 30, 2001. This change in
gross margin percentage is attributable to the product mix of sales for the
periods and bulk purchase pricing incentives.

         Selling, general and administrative expenses decreased $676,748 to
$3,475,463 in the year ended June 30, 2002 from $4,152,211 in the year ended
June 30, 2001. Selling, general and administrative expenses as a percentage of
sales were 19% and 20% for the years ended June 30, 2002 and 2001, respectively.

         Income (loss) from operations for the Company decreased $356,579 to
($143,881) for the year ended June 30, 2002, compared to $212,698 for the year
ended June 30, 2001. This decrease is primarily the result of reduced sales
volumes in the year ended June 30, 2002.

         Interest expense decreased $72,218, to $393,010 for the year ended June
30, 2002 from $465,228 for the year ended June 30, 2001. The decrease resulted
from declining interest rates and favorable terms on new and refinanced debt.

         Other income (expense) was income of $69,009 for the year ended June
30, 2002 compared to an expense of $44,186 for the year ended June 30, 2001. The
change was mostly attributable to the VAT refund in the Shanghai manufacturing
facility.

         The Company's net loss increased $228,262 to ($460,720), or ($0.38) per
share, for the year ended June 30, 2002 compared to ($232,458), or ($0.19) per
share, for the year ended June 30, 2001.


                                       11
<PAGE>

Cautionary Statement. This Annual Report on Form 10-KSB contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. The words "believes," "anticipates," "plans," "expects," and other similar
expressions are intended to identify forward-looking statements. Investors are
cautioned that such forward-looking statements are based on the current
expectations of management and are inherently subject to a number of risks and
uncertainties that could cause the actual results of the Company to differ
materially from such forward-looking statements. Forward-looking statements
involve risks and uncertainties, including, but not limited to, continued
acceptance of the Company's products in the marketplace, competitive factors,
new products and technological changes, the Company's dependence upon
third-party suppliers, political and economic circumstances in China, ability to
access or renew credit facilities and service long term debt facilities and
other risks detailed from time to time in the Company's periodic report filings
with the Securities and Exchange Commission. Investors are directed to the
Company's periodic reports filed with the Securities and Exchange Commission.
The Company is not obligated to update or revise the aforementioned statements
for those new developments.


                                       12
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS



                       OMNI U.S.A., INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2002 AND 2001




                                       13
<PAGE>
                            Harper & Pearson Company
                            One Riverway, Suite 1000
                              Houston, Texas 77056



                          INDEPENDENT AUDITOR'S REPORT


To the Stockholders and
Board of Directors of
Omni U.S.A., Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Omni U.S.A.,
Inc. and Subsidiaries as of June 30, 2002 and 2001, and the related consolidated
statements of operations and comprehensive loss, changes in stockholders' equity
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States. 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
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 financial position of Omni U.S.A., Inc.
and Subsidiaries at June 30, 2002 and 2001, and the results of their operations
and their cash flows for the years then ended, in conformity with generally
accepted accounting principles in the United States.



s/s                                      HARPER & PEARSON COMPANY


Houston, Texas
September 20, 2002



                                       14
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             JUNE 30, 2002 AND 2001



<Table>
<Caption>
                                     ASSETS

                                                       2002             2001
                                                   ------------     ------------
<S>                                                <C>              <C>
CURRENT ASSETS
   Cash                                            $    821,544     $    659,101
   Accounts receivable, trade, net                    3,440,402        3,269,586
   Accounts receivable, related parties                  28,063           43,654
   Inventories, net                                   4,168,526        4,985,910
   Notes receivable                                      89,138          208,671
   Prepaid expenses                                     114,912          108,224
   Deferred tax assets                                   40,393           40,393
                                                   ------------     ------------
               TOTAL CURRENT ASSETS                   8,702,978        9,315,539
                                                   ------------     ------------
PROPERTY AND EQUIPMENT, net of
   accumulated depreciation and amortization          1,812,007        2,112,551
                                                   ------------     ------------
OTHER ASSETS - primarily intangible assets, net         204,265          206,790
                                                   ------------     ------------
TOTAL ASSETS                                       $ 10,719,250     $ 11,634,880
                                                   ============     ============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                $  3,001,120     $  3,584,118
   Revolving line of credit                           2,850,270        2,771,161
   Accrued expenses                                     217,154          244,220
   Current portion of notes payable                   1,001,849          853,889
                                                   ------------     ------------
               TOTAL CURRENT LIABILITIES              7,070,393        7,453,388
                                                   ------------     ------------
NOTES PAYABLE                                           986,604        1,057,891
                                                   ------------     ------------

STOCKHOLDERS' EQUITY
   Common stock (1,227,079 shares issued
     and 1,207,912 outstanding)                           6,129            6,129
   Additional paid-in capital                         5,372,815        5,372,815
   Treasury stock (19,167 shares)                       (57,141)         (57,141)
   Retained deficit                                  (2,755,870)      (2,295,150)
   Foreign currency translation adjustment               96,320           96,948
                                                   ------------     ------------
               TOTAL STOCKHOLDERS' EQUITY             2,662,253        3,123,601
                                                   ------------     ------------
TOTAL LIABILITIES & STOCKHOLDERS'  EQUITY          $ 10,719,250     $ 11,634,880
                                                   ============     ============
</Table>

See accompanying notes.



                                       15
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001


<Table>
<Caption>
                                                        2002             2001
                                                   ------------     ------------
<S>                                                <C>              <C>
NET SALES                                          $ 18,051,928     $ 21,339,294

COST OF SALES                                        14,720,346       16,974,385
                                                   ------------     ------------
      Gross Profit                                    3,331,582        4,364,909
                                                   ------------     ------------
OPERATING EXPENSES
   Selling, general and administrative                3,475,463        4,152,211
                                                   ------------     ------------
      Operating (loss) income                          (143,881)         212,698

OTHER INCOME (EXPENSE)
   Commission income, net                                 7,162           24,864
   Interest expense                                    (393,010)        (465,228)
   Other, net                                            69,009          (44,186)
                                                   ------------     ------------

LOSS BEFORE INCOME TAXES                               (460,720)        (271,852)
                                                   ------------     ------------

INCOME TAX BENEFIT                                           --           39,394
                                                   ------------     ------------

NET LOSS                                               (460,720)        (232,458)
                                                   ------------     ------------

Loss on foreign currency translation adjustment            (628)          (1,083)
                                                   ------------     ------------
COMPREHENSIVE LOSS                                 $   (461,348)    $   (233,541)
                                                   ============     ============
BASIC LOSS PER SHARE                               $      (0.38)    $      (0.19)
                                                   ============     ============
DILUTED LOSS PER SHARE                             $      (0.38)    $      (0.19)
                                                   ============     ============
</Table>

See accompanying notes.



                                       16
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

<TABLE>
<CAPTION>
                                           Common Stock
                                    ------------------------
                                       Number                  Additional                                   Foreign
                                     Of Shares                   Paid-in      Treasury       Retained       Currency
                                    Outstanding      Amount      Capital       Stock         Deficit       Adjustment       Total
                                    ------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>        <C>            <C>          <C>              <C>         <C>
Balance, June 30, 2000                1,207,912     $ 6,129    $ 5,372,815    $(57,141)    $ (2,062,692)    $98,031     $ 3,357,142

Net Loss                                                                                       (232,458)                   (232,458)

Unrealized loss on foreign
  currency translation adjustment                                                                            (1,083)         (1,083)
                                    ------------------------------------------------------------------------------------------------
Balance, June 30, 2001                1,207,912       6,129      5,372,815     (57,141)      (2,295,150)     96,948       3,123,601

Net Loss                                                                                       (460,720)                   (460,720)

Loss on foreign
  currency translation adjustment                                                                              (628)           (628)
                                    ------------------------------------------------------------------------------------------------
Balance, June 30, 2002                1,207,912     $ 6,129    $ 5,372,815    $(57,141)    $ (2,755,870)    $96,320     $ 2,662,253
                                    ================================================================================================

</TABLE>


See accompanying note.


                                       17
<PAGE>

                       OMNI U.S.A., INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30, 2002 AND 2001

<TABLE>
<CAPTION>
                                                                           2002                2001
                                                                      ------------        ------------
<S>                                                                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                                            $   (460,720)       $   (232,458)
                                                                      ------------        ------------
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
        Depreciation and Amortization                                      350,514             419,678
        Deferred tax benefit                                                    --             (40,393)
        Loss on disposal of assets                                           3,511              52,108
        Changes in operating assets and liabilities:
              Accounts/Notes receivable                                    (35,692)           (343,207)
              Inventories                                                  817,384            (882,070)
              Prepaid expenses                                              (6,688)            (56,259)
              Accounts payable and accrued expenses                       (610,064)          1,458,565
              Other assets                                                      --             (10,421)
                                                                      ------------        ------------
                Total adjustments                                          518,965             598,001
                                                                      ------------        ------------
                Net cash provided by operating
                  activities                                                58,245             365,543
                                                                      ------------        ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                       (50,956)           (218,123)
                                                                      ------------        ------------

                Net cash used by investing activities                      (50,956)           (218,123)
                                                                      ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings on line of credit                                          13,678,044          14,329,966
  Payments on line of credit                                           (13,598,935)        (14,185,262)
  Borrowings on notes payable                                              253,727                  --
  Payments on notes payable                                               (177,054)           (218,984)
                                                                      ------------        ------------

                Net cash provided (used) by financing
                  activities                                               155,782             (74,280)
                                                                      ------------        ------------

Loss on foreign currency translation adjustment                               (628)             (1,083)
                                                                      ------------        ------------

NET INCREASE IN CASH                                                       162,443              72,057

CASH AT BEGINNING OF PERIOD                                                659,101             587,044
                                                                      ------------        ------------

CASH AT END OF PERIOD                                                 $    821,544        $    659,101
                                                                      ============        ============
</Table>

See accompanying notes.



                                       18
<PAGE>

NOTE 1        BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
              POLICIES

              Principles of Consolidation - Omni U.S.A., Inc. (the Company) is
              incorporated in the state of Nevada. The Company's consolidated
              financial statements include the accounts of the Company and its
              wholly-owned subsidiaries Omni U.S.A., Inc. (a Washington
              Company), Omni Resources, Ltd. (a Hong Kong Corporation) and
              Butler Products Corporation (a Kentucky Corporation). The
              financial statements of Omni Resources, Ltd. include the activity
              of Shanghai Omni Gear Co., Ltd. located in Shanghai, China. All
              material inter-company transactions and balances have been
              eliminated in consolidation.

              Organization and Business - The Company designs, develops,
              manufactures and distributes power transmission components and
              trailer and implement components, used primarily for agricultural,
              material handling, mobile off-highway and industrial purposes, to
              original equipment manufacturers and distributors worldwide. The
              Company's manufacturing and distribution system involves locating
              qualified domestic or foreign manufacturers of products, (in the
              case of contract manufacturing) contracting with such
              manufacturers, and distribution to an ultimate third party
              customer. The Company also self-produces products using both
              domestic and foreign components. Since 1986, the Company's power
              transmission products have been manufactured primarily in China
              and approximately 70% of the Company's towing products are
              manufactured in the United States.

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

              Revenue Recognition - The Company adopted The Securities and
              Exchange Commission Staff Accounting Bulletin (SAB) 101 in the
              fourth quarter of the fiscal year ended June 30, 2001 and the
              Company's revenue recognition policies are in compliance with SAB
              101. The Company's acceptance provisions, as some products are
              manufactured to customer specifications, are that customers must
              approve engineered drawings in advance, place a firm purchase
              order with the Company for manufacture of the products and
              initially approve a representative sample prior to manufacture.
              Costs of shipping and handling for the Company are generally
              accounted for as a component of cost of sales with revenues
              recorded gross. The Company recognizes revenues upon shipment to
              the customer.

              Warranties - The Company's policy for warranties is that Omni
              Gear's products and Butler Products' products are warranted to be
              free of defects in material and workmanship and to meet Omni
              Gear's and Butler Products' specifications at the time of sale.
              The Company accounts for warranties by accruing a liability for
              warranty provision based on the Company's historical analysis of
              warranty costs. To date, however, actual return rates have been
              very low and incremental costs associated with those returns have
              been historically immaterial to the Company. The Company has a
              policy for sales returns, whereby the customer may apply for and
              be granted the right to return product for warranty consideration.
              Once returned, the product is inspected for warranty qualification
              and, if granted, warranty work is performed and the product
              generally returned to the customer.

              Concentration of Credit Risk - Financial instruments which
              potentially subject the Company to concentrations of credit risk
              consist principally of trade receivables and cash. The Company
              places its cash with high credit quality financial institutions.
              Cash in financial institutions located abroad totaled $130,548 and
              $390,645 in 2002 and 2001, respectively.



                                       19
<PAGE>

NOTE 1        BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
              POLICIES   (Continued)

              Trade accounts receivable consist of receivables from both
              domestic and foreign customers in various industries and
              geographic regions worldwide, with more than one half of
              consolidated sales being to customers in the Southern and Central
              United States. Generally, no collateral or other security is
              required to support customer receivables. An allowance for
              doubtful accounts is established as needed based upon factors
              surrounding the credit risk of specific customers, historical
              trends and other information.

              As of June 30, 2002 one customer accounted for 19% of consolidated
              receivables. As of June 30, 2001 two customers accounted for 18%
              and 14% of consolidated receivables.

              Notes receivable result from sales made with extended credit terms
              and are payable in monthly installments and carry interest.

              The Company has inventory located in China of approximately
              $615,680 and $480,000 at June 30, 2002 and 2001, respectively.

              Inventories - Inventories are stated at the lower of cost or
              market using the weighted average cost for inventories on hand and
              the specific identification method for any other inventory. The
              Company records inventory and any related obligation at the time
              title to the goods passes to the Company based on the specific
              terms of the transaction.

              Property, Equipment, Depreciation and Amortization - Property and
              equipment are stated at cost. Depreciation and amortization are
              computed over the estimated useful lives of the assets using the
              straight-line method for financial reporting purposes as follows:

<TABLE>
<CAPTION>
                                                                               Estimated useful
                                                                                 lives (years)
                                                                               ----------------
<S>                                                                               <C>
              Warehouse, manufacturing and office equipment                        3 to 10
              Leasehold improvements                                               5 to 10
              Tooling costs                                                        5 to 10
</TABLE>

              The costs of repairs and maintenance are charged to operations
              when incurred. Major renewals or improvements are capitalized.
              When properties are sold or retired, the cost and related
              accumulated depreciation and amortization are removed from the
              accounts and any resulting gain or loss is included in the results
              of operations.

              Intangible Assets and Organizational Costs - Intangible assets
              consist of goodwill from the Butler Products acquisition,
              engineering plans, designs, trademarks and patents. Amortization
              is provided on a straight-line basis over five to fifteen year
              periods. The Company adopted SFAS No. 142 effective July 1, 2001.
              At June 30, 2002 and 2001, the Company had $168,000 in intangible
              goodwill that will no longer be amortized under this statement.
              Management believes that there is no impairment to goodwill at
              June 30, 2002 and 2001.



                                       20
<PAGE>

NOTE 1        BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
              POLICIES   (Continued)

              Foreign Currency Translation - There are significant operations in
              Mainland China; however, the functional exchange rate for those
              operations is the U.S. dollar. The foreign currency translation
              adjustment primarily arises from the translation of amounts from
              operations in Hong Kong and Japan in which the functional currency
              is that of the foreign location. Income and expense amounts are
              translated at the average rates of exchange for the periods. These
              translation adjustments are reported separately as a component of
              stockholders' equity. Current year changes are included in
              comprehensive income.

              Earnings Per Share - Basic earnings per share (EPS) is computed by
              dividing consolidated net income available to common shareholders
              by the weighted-average number of common shares outstanding for
              the year. Diluted EPS reflects the potential dilution that could
              occur if dilutive securities and other contracts to issue common
              stock were exercised or converted into common stock or resulted in
              the issuance of common stock that then shared in the consolidated
              net income of the Company. Amounts have been calculated as if the
              reverse split described in Note 2 had occurred at the beginning of
              all periods presented.

              Fair Value of Financial Instruments - The fair values of financial
              instruments approximate their reported carrying amounts at June
              30, 2002 and 2001 due to their relative short lives for current
              assets and liabilities and long-term liabilities are at interest
              rates comparable to current market rates. As of June 30, 2002 and
              2001, the Company does not have any derivatives and has
              experienced no impact from adoption of SFAS No. 133.

              New Accounting Pronouncements -

              SFAS No. 143, "Accounting for Asset Retirement Obligations",
              addresses financial reporting for obligations associated with the
              retirement of long-lived assets that result from the acquisition,
              construction, development and (or) the normal operation of a
              long-lived asset (except for certain obligations of lessees) and
              is effective for financial statements issued for fiscal years
              beginning after June 15, 2002. The implementation of this standard
              is not anticipated to have a material impact on the financial
              statements of the Company.

              SFAS No. 144, "Accounting for the Impairment or Disposal of
              Long-Lived Assets", addresses financial accounting and reporting
              for the impairment or disposal of long-lived assets, as well as
              expands the qualifications of discontinued operations and is
              effective for financial statements issued for fiscal years
              beginning after December 15, 2001. The implementation of this
              standard does not represent a significant change from prior
              Generally Accepted Accounting Principles and is not anticipated to
              have a material impact on the financial statements of the Company.

              SFAS No. 145, "Rescission of FASB Statements No. 4, 44,and 64,
              Amendment of FASB Statement No. 13, and Technical Corrections",
              rescinds SFAS No.'s 4, and 64 related to reporting gains and
              losses from debt extinguishments and also rescinds SFAS No. 44
              related to accounting for intangible assets of motor carriers. It
              amends SFAS No. 13 to eliminate the inconsistencies between
              sales-lease back transactions and certain lease modifications with
              economic benefits that are similar to sales-lease back
              modifications. This Statement also amends other existing
              authoritative pronouncements to make various technical
              corrections, clarify meanings, or describe their applicability
              under changed conditions and is effective for fiscal years
              beginning after May 15, 2002. The implementation of this standard
              is not anticipated to have a material impact on the financial
              statements of the Company.



                                       21
<PAGE>

NOTE 1        BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
              POLICIES   (Continued)

              Continuing operations - The Company has incurred additional losses
              in the current year. Management has also recorded write offs of
              $214,000 in inventory in the fourth quarter. Management believes
              that these losses were largely due to software conversions of one
              of its foreign subsidiaries in the second quarter of the year that
              were not discovered until the fourth quarter. As further discussed
              in Note 7, the Company is in violation of its minimum six-month
              earnings requirement of $225,000 with its domestic revolving line
              of credit.

              The Company believes that it will still have adequate access to
              the line of credit facilities and its anticipated ability to
              generate funds internally to remain in business. Preliminary
              results indicate that the Company has already cured the
              noncompliance of its debt covenants through normal results of
              operations in the first quarter of fiscal year 2003. Management
              believes the anticipated improvement in operating results are due
              to some fourth quarter purchase orders not filled until after June
              30, 2002 and an improved outlook for demand in a previously
              hesitant market.

              Therefore, management believes that it will continue to have
              adequate capital resources to meet its working capital
              requirements for the next year, given its current working capital
              requirements, known obligations, and assuming current levels of
              operations. In addition, the Company believes that it has the
              ability to raise additional financing in the form of debt to fund
              additional capital expenditures, if required. If however,
              operations do not remain at current levels and the Company is
              unable to continue to access or renew its line of credit
              facilities and service its long term debt, the Company will be
              required to reduce its operations accordingly which may have a
              negative impact on the Company to meet the needs of it customers,
              suppliers and credit providers.

NOTE 2        At a special meeting on June 14, 2001, the Company's Board of
              Directors approved a reduction in the number of authorized shares
              of common stock of the Company and a corresponding three to one
              reverse stock split of its common stock. In addition, options or
              warrants to purchase future shares of the Company's common stock
              were also reduced on an equal basis of three to one. The effect of
              the reverse split was to reduce the Company's issued and
              outstanding shares from 3,623,094 shares to 1,227,079 shares. The
              par value of the common stock was unchanged. Accordingly, the
              Company has presented all equity information as if the reverse
              stock split had occurred effective July 1, 2000.


NOTE 3        ACCOUNTS  RECEIVABLE

              Accounts receivable at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                          2002                 2001
                                                       ----------           ----------
<S>                                                    <C>                  <C>
              Accounts receivable, trade               $3,579,109           $3,387,090
              Allowance for doubtful accounts            (138,707)            (117,504)
                                                       ----------           ----------
                                                       $3,440,402           $3,269,586
                                                       ==========           ==========
</TABLE>


                                       22
<PAGE>


NOTE 4        INVENTORIES

              Inventories at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                                                     2002              2001
                                                                                 -----------       -----------
<S>                                                                              <C>               <C>
              Raw materials                                                      $   279,384       $   576,236
              Work in process                                                        113,457            37,627
              Finished goods                                                       3,825,685         4,440,047
              Reserve for obsolete inventory                                         (50,000)          (68,000)
                                                                                 -----------       -----------
                                                                                 $ 4,168,526       $ 4,985,910
                                                                                 ===========       ===========
</TABLE>

NOTE 5        PROPERTY AND EQUIPMENT

              Property and equipment at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                                                     2002              2001
                                                                                 -----------       -----------
<S>                                                                              <C>               <C>
              Warehouse, manufacturing and
                office equipment                                                 $ 3,443,144       $ 3,400,047
              Land, buildings & leasehold improvements                               613,252           608,682
              Tooling costs                                                          521,206           521,206
                                                                                 -----------       -----------
                                                                                   4,577,602         4,529,935
              Accumulated depreciation and amortization                           (2,765,595)       (2,417,384)
                                                                                 -----------       -----------
                                                                                 $ 1,812,007       $ 2,112,551
                                                                                 ===========       ===========
</TABLE>

NOTE 6        OTHER ASSETS

              Other assets at June 30 consisted of the following:

<TABLE>
<CAPTION>
                                                                                     2002              2001
                                                                                 -----------       -----------
<S>                                                                              <C>               <C>
              Intangible assets                                                  $   801,640       $   801,640
              Cash surrender value of life insurance                                  10,420            10,420
                                                                                 -----------       -----------
                                                                                 $   812,060       $   812,060
              Accumulated amortization                                               607,795           605,270
                                                                                 -----------       -----------
                                                                                 $   204,265       $   206,790
                                                                                 ===========       ===========
</TABLE>

NOTE 7        REVOLVING LINES OF CREDIT

              The Company has a revolving line of credit with a financing
              company which provides for maximum borrowings of $4,000,000 as
              determined by a formula based on trade accounts receivable and
              inventory. The line of credit matures June 2003, bears interest at
              prime plus 1%-2%, depending upon certain financial ratios,
              requires the maintenance of certain levels of income and tangible
              net worth and is secured by essentially all of the U.S. assets of
              the Company. As of June 30, 2002, the Company did not meet its
              minimum level of required six-month earnings before interest,
              taxes and depreciation and amortization (EBITDA) required by the
              financing company of $225,000.

              During the fiscal year ended June 30, 2002, the Company obtained
              an additional line of credit with a foreign financial institution
              which provides for maximum borrowings of $1,000,000 based on the
              creditworthiness of the Company's customers serviced by the
              Company's foreign subsidiary. Outstanding borrowings amounted to
              $187,325 at June 30, 2002. The line of credit matures November 30,
              2002 and bears interest at 6.625 %.



                                       23
<PAGE>

NOTE 8          NOTES PAYABLE

                Notes payable at June 30 consisted of the following:
                <Table>
                <Caption>
                                                                                                     2002                 2001
                                                                                             ------------         ------------
                <S>                                                                          <C>                  <C>
                Notes payable to banks/finance companies, due in aggregate monthly           $      4,998         $     12,100
                installments of $356 including interest ranging from 1.9% to 7.7%,
                maturing at various dates through 2003, secured by vehicles

                Note payable to equipment manufacturer, due in monthly                            275,400              299,507
                installments of $5,800 including interest at 8% through 2007,
                secured by equipment. Management has classified these balances
                and payments based upon management's plan to repay the debt over
                a 60 month period commencing
                April 2002

                Butler Products Corporation Industrial Bonds due in monthly                        24,018               54,544
                installments of $2,730 including interest at 5.5% through March
                2003, secured by equipment

                Note payable to finance company to finance the assets acquired from                99,875              140,922
                Piecemaker  Inc., due in monthly installments of $4,250 including
                interest at prime plus 2% through 2004

                Note payable to PACCAR, Inc. due in minimum monthly payments of $18,300           860,435              904,707
                including principle and interest of approximately 11% commencing for a
                period of 5 years commencing in May 2002, unsecured

                Note payable to foreign third party of Rmb 2,100,000 principle                    253,727                    -
                due in one payment January 27, 2003, interest at .54% due
                monthly and secured by certain machinery and equipment of
                Shanghai Omni Gear.


                Junior Subordinated Notes to Butler Products Corporation former                   470,000              500,000
                owners at 8% annual interest with variable payments based upon
                margins earned on certain Butler product sales and from proceeds
                of any Butler assets sold in the future, if any. The former
                owners have the right to further amend and accelerate the
                repayment terms if repayment of principle is not deemed adequate
                by the former owners under the above repayment plan.
                Classification of current and long term portions are
                based upon management's best estimate of future repayments.
                                                                                             ------------         ------------
                                                                                                1,988,453            1,911,780
                Less current portion                                                            1,001,849              853,889
                                                                                             ------------         ------------
                Long term portion                                                            $    986,604         $  1,057,891
                                                                                             ============         ============

                Future maturities of long-term debt by fiscal year are as
                follows:

                2003                                                                         $  1,001,849
                2004                                                                              264,519
                2005                                                                              242,385
                2006                                                                              269,717
                2007                                                                              209,983
                                                                                             ------------
                                                                                             $  1,988,453
                                                                                             ============
                </TABLE>



                                       24
<PAGE>

NOTE 9        COMMON STOCK

              The Company has authorized 50,000,000 shares of common stock with
              a par value of $.004995 per share (see Note 2). At June 30, 2002
              and 2001, the Company had issued 1,227,079 shares with 1,207,912
              shares outstanding and 19,167 treasury shares. The Company has
              never paid cash dividends on its Common Stock. As a result of net
              losses in the current and prior fiscal years, the Company has a
              cumulative retained deficit of $2,755,870 as of June 30, 2002;
              accordingly, the Company may be prohibited by legal restrictions
              on capital from paying cash dividends for the foreseeable future.
              In addition, the Company's revolving line of credit facility
              prohibits the payment of dividends.

NOTE 10       WARRANTS TO PURCHASE COMMON STOCK

              The Company has Class B Warrants that entitle the holder to
              purchase shares of common stock as follows:

              <TABLE>
              <CAPTION>
                                                                                                          Number of
                                                                                            Per Share     Warrants
                                                                        Expiration Date       Price       Issued
                                                                        ----------------    ---------     ----------
              <S>                                                       <C>                 <C>            <C>
              Class B Series 2 (PACCAR, Inc.)                           July 1, 2009          6.00         166,667
              </TABLE>

              On March 15, 2001, all Class B Series 1 Warrants expired by
              operation of the Class B Warrant Agreement. No Class B Series 1
              Warrants were exercised.

              On September 23, 1999, the Company entered into a $1,000,000 loan
              agreement with PACCAR Inc. (PACCAR). Under the terms of the loan,
              PACCAR received 166,667 warrants to purchase shares of the
              Company's common stock. The warrants may be exercised through July
              2009 at $6.00 per share. The warrants to purchase stock may be
              reduced to 116,667 upon the occurrence of certain subsequent
              events.





                                       25
<PAGE>


NOTE 11       STOCK OPTION PLANS

              The Company maintains a Non-Qualified Stock Option Plan (the
              "NQSOP") and a 1996 Incentive Stock Option Plan (the "1996 ISOP").
              The NQSOP covers 200,000 shares of Common Stock and the 1996 ISOP
              covers 300,000 shares of Common Stock. The purpose of the NQSOP
              and 1996 ISOP, under the discretion of the Company's Board of
              Directors, is to offer eligible employees of the Company and its
              subsidiaries an opportunity to acquire or increase their
              proprietary interests in the Company and provide additional
              incentive to contribute to its performance and growth.

              The Board of Directors has reserved 500,000 shares under the
               Plans.

              <Table>
              <Caption>
              --------------------------------------------------------------------------------------------------------------------
                                                                                                                      Weighted-
                                             Total #   $12.00    $3.00    $4.875    $6.75      $3.564    $3.1875       Average
              Stock Option Summary          of Shares  Options   Options  Options   Options    Options    Options   Exercise Price
              --------------------------------------------------------------------------------------------------------------------
              <S>                           <C>        <C>      <C>       <C>        <C>       <C>       <C>        <C>
              Options Outstanding at June
              30, 2000                        411,667   23,333   343,333   10,000      5,000     20,000     10,000        3.63
              Options Granted                       0        0         0        0          0          0          0           0
              Options Canceled                      0        0         0        0          0          0          0           0

              Options Outstanding at June
              30, 2001                        411,667   23,333   343,333   10,000      5,000     20,000     10,000        3.63
              Options Granted                       0        0         0        0          0          0          0           0
              Options Canceled                      0        0         0        0          0          0          0           0
              Options Forfeited               (66,000)           (46,000)                       (10,000)   (10,000)       3.37
              Options Outstanding at June
              30, 2002                        345,667   23,333   297,333   10,000      5,000     10,000          0        3.63

              Exercisable at June 30, 2002    297,333   23,333   297,333   10,000          0          0          0        3.87
              Exercisable at June 30, 2001    263,333   23,333   343,333   10,000          0          0          0        3.87

              Available for future grant at
              June 30, 2002                   154,333
              --------------------------------------------------------------------------------------------------------------------
              Weighted-average remaining
              contractual life in years           4.7        2       4.5        7          7        7.5          0
              --------------------------------------------------------------------------------------------------------------------
              </Table>


              SFAS No. 123, "Accounting for Stock-Based Compensation,"
              encourages, but does not require, companies to record compensation
              costs for stock-based employee compensation plans at fair value.
              The Company has chosen to continue to account for stock-based
              compensation using the intrinsic value method prescribed in
              Accounting Principles Board Opinion No. 25, "Accounting for Stock
              Issued to Employees," and related Interpretations. Accordingly,
              compensation costs for stock options is measured as the excess, if
              any, of the quoted market price of the Company's stock at the date
              of the grant over the amount an employee must pay to acquire the
              stock. No options were granted in the fiscal years ended June 30,
              2002 and 2001. The pro forma effects had stock options issued to
              employees been recorded under SFAS 123 is as follows:

              <Table>
              <Caption>

                                                                                        2002                    2001
                                                                                    ------------            -------------
              <S>                                                                   <C>                     <C>
              Additional compensation expense                                       $          -            $     (25,000)
              Pro forma net loss                                                        (460,720)                (257,458)
              Pro forma basic loss per share                                        $      (0.38)           $       (0.21)
                                                                                    ============            =============
              </Table>


              The Company utilized the Black Scholes option value pricing model
              to estimate the value of the options granted. Assumptions utilized
              in the Black Scholes model include a risk free interest rate of
              6.5% for 2001, an expected life of 10 years, a volatility of .71
              for 2001 and no expected dividends.




                                       26
<PAGE>
NOTE 12       EARNINGS PER SHARE

              The following sets forth the computation of basic and diluted
              earnings per share at June 30, 2002 and 2001.

              <Table>
              <CAPTION>
                                                                                              2002                       2001
                                                                                  ----------------        -------------------
              <S>                                                                 <C>                     <C>
              Numerator
                 Net loss                                                         $       (460,720)       $          (232,458)
                                                                                  ================        ===================
              Denominator
                 Denominator for basic earnings per share -
                 weighted average common shares outstanding                              1,207,912                  1,207,912

                  Effect of dilutive securities:
                      Conversion of dilutive stock options                                       -                          -
                                                                                  ----------------        -------------------

                  Denominator for dilutive earnings per share -
                  adjusted weighted average shares and assumed conversion                1,207,912                  1,207,912
                                                                                  ================        ===================
              Basic Earnings Per Share                                            $          (0.38)       $             (0.19)
                                                                                  ================        ===================
              Diluted Net Earnings Per Share                                      $          (0.38)       $             (0.19)
                                                                                  ================        ===================
              </TABLE>

              Stock options at June 30, 2002 and 2001 are antidilutive due to
              the Company's net loss.

NOTE 13       INCOME TAXES

              Income tax benefit (expense) is comprised of the following:

              <TABLE>
              <CAPTION>
                                                                                           2002                 2001
                                                                                  -------------           ----------
              <S>                                                                 <C>                      <C>
              Current -state                                                      $           -           $   (1,000)
              Deferred - Current                                                          6,100               43,794
              Deferred - Long-term                                                       (6,100)              (3,400)
                                                                                  -------------           ----------
                                                                                  $           -           $   39,394
                                                                                  =============           ==========
              </TABLE>

              Deferred income taxes result from timing differences in reporting
              income and expenses for financial statement and income tax
              purposes. The primary sources of deferred income taxes result
              from: (1) the use of different methods of depreciation for income
              tax and financial statement purposes, (2) the uniform
              capitalization of inventory for income tax purposes, (3) inventory
              obsolescence reserves, (4) direct write-off of bad debts for
              income tax purposes and (5) foreign losses.




                                       27
<PAGE>


NOTE 13       INCOME TAXES (continued)

              The components of the Company's deferred tax assets and
              liabilities at June 30 are as follows:

              <TABLE>
              <CAPTION>
                                                                                             2002                2001
                                                                                       ----------           ---------
              <S>                                                                      <C>                  <C>
              Current deferred tax assets:
                Accounts receivable                                                    $   45,000           $  40,000
                Inventory                                                                  39,000              47,900
                Domestic net operating loss carry-forwards                                 59,000             134,000
                Foreign subsidiary net operating loss carry-forwards                      737,000             504,000
                                                                                       ----------           ---------
                Deferred tax assets                                                       880,000             725,900

              Non-current deferred tax liabilities:
                Depreciation                                                              (83,500)            (77,400)
                                                                                       ----------           ---------
              Net deferred income tax assets                                              796,500             648,500
              Valuation allowance                                                        (756,107)           (608,107)
                                                                                       ----------           ---------
              Net deferred income taxes                                                $   40,393           $  40,393
                                                                                       ==========           =========
              </TABLE>

              The valuation allowance increased $148,000 and $68,906 during 2002
              and 2001, respectively due to losses. At June 30, 2002 the Company
              had $174,000 of domestic net operating losses, which expire in
              2021.

              The Company has not provided for income taxes on the undistributed
              earnings of its foreign subsidiaries because it intends to
              reinvest these earnings in the continuing operations of these
              subsidiaries. In determining the value of deferred tax assets,
              management considers whether it is more likely than not that some
              portion or all of the deferred tax assets will not be realized.
              Management considers the scheduled reversals of deferred tax
              assets and liabilities, projected future taxable income, if any,
              and the tax planning strategies in determining this value.
              Management believes it is more likely than not that the Company
              will realize the benefits of its deferred tax assets, net of
              existing valuation allowances at June 30, 2002. The cumulative
              amount of undistributed losses of its foreign subsidiaries is
              approximately $2,100,000 at June 30, 2002.

              The difference between the effective rate of income tax expense at
              June 30, 2002 and 2001 and the amounts which would be determined
              by applying the statutory U.S. income tax rate of 34% to income
              before income tax expense, are explained below according to the
              tax implications of various items of income or expense.

              <TABLE>
              <CAPTION>

                                                                                             2002                2001
                                                                                      -----------          ----------
              <S>                                                                     <C>                  <C>
              Provision for income tax benefit/(expense) at
                U.S. statutory rates                                                  $   156,645          $   92,400
              Change in income tax benefit resulting from:
                State income taxes                                                              -              (1,000)
                Non-deductible expense                                                     (3,531)             (2,700)
              Deferred tax assets not previously recognized                                     -              26,700
                Other                                                                      (5,114)             (7,100)
              Change in valuation reserve                                                (148,000)            (68,906)
                                                                                      -----------          ----------
              Income tax benefit                                                      $         -          $   39,394
                                                                                      ===========          ==========
              </TABLE>





                                       28
<PAGE>



NOTE 14       COMMITMENTS AND CONTINGENCIES

              Operating Leases - The Company leases equipment and office,
              warehouse and manufacturing space in Houston, TX; Madill, OK; and
              Shanghai, China. The Houston lease is $8,500 per month through
              2003. The Madill, Oklahoma leases are $6,000 per month through
              2004. The Shanghai lease began in 1996 and has a thirty-year term
              at approximately $10,000 per month. At June 30, 2002, the future
              minimum rental payments required under operating leases were
              approximately:

              2003                                         $  291,649
              2004                                            287,963
              2005                                            204,565
              2006                                            105,134
              2007                                             96,634
              Thereafter                                    1,932,679
                                                           ----------
              Total                                        $2,918,624
                                                           ==========

              Rent expense was approximately $252,600 and $301,000, net of
              sublease income on the Shanghai facility of approximately $ 25,000
              and $-0- during the years ended June 30, 2002 and 2001,
              respectively.

              Insurance Coverage - The Company is self-insured against product
              liability and completed operations. This development, while not
              unique to the Company or its industry, may subject the Company to
              some future liability. The Company maintains in force and effect,
              product liability, with coverage up to $1,000,000 per occurrence
              and in aggregate, as well as completed operations insurance held
              by Butler Products Corporation at the time of acquisition.

              Employment - Eleven percent of the Company's employees,
              (specifically, twenty-one of forty Butler employees) are unionized
              and are covered by a collective bargaining agreement. The
              collective bargaining agreement expires June 12, 2003. Management
              believes that expiration of the agreement will not impact future
              operations.

              Employee Benefits - The Company maintains a 401(k) plan, which
              covers substantially all employees. Contributions by the Company
              are discretionary. During the years ended June 30, 2002 and 2001,
              the Company made no contributions to the plan.

              Letters of Credit - The Company has $250,000 unused letters of
              credit outstanding at both June 30, 2002 and 2001.

              Litigation - The Company continues to aggressively protect its
              trademarks. The Company is currently a plaintiff in such a case
              for infringement and has other similar infringement cases
              contemplated. Historically, the Company has been successful in
              preventing others from using Omni's trademarks or in seeking other
              relief. In addition, the Company is involved in litigation with a
              distributor surrounding the dissolution of a distributor
              agreement. The distributor has filed suit against the Company
              for breach of contract, misrepresentation and copyright
              infringement. The Company has counterclaimed against the
              distributor for fraud, misrepresentation, breach of contract and
              failure to pay on a promissory note due to the Company. It is
              the opinion of management of the Company that the suit by the
              former customer is frivolous and groundless and the Company will
              continue to successfully defend itself and collect the monies
              owed to it by the former customer. The Company is not expected
              to experience any material impact on future operations or
              financial position of the Company as a result of any pending
              litigation.





                                       29
<PAGE>




NOTE 15       MAJOR CUSTOMERS AND SUPPLIERS

              The Company and its subsidiaries had consolidated sales in its
              power transmission component segment of $3,783,000 and $4,096,000
              to two customers representing 21% and 19% of total consolidated
              sales in fiscal 2002 and 2001, respectively.

              Approximately 57% and 60% of the Company's products were purchased
              from two companies in China in 2002 and 2001, respectively.

NOTE 16       SUPPLEMENTAL CASH FLOW INFORMATION

              Due to net operating losses and net operating loss carryforwards,
              the Company was not required to pay any income taxes in 2002 and
              2001, respectively.

              During 2001, the Company financed $243,159 of capital expenditures
              with debt.

              The Company paid interest of $401,230 and $464,146 during the
              fiscal years ended June 30, 2002 and 2001 respectively.

NOTE 17       SEGMENT INFORMATION

              Selected financial information by business segment with respect to
              these activities for the years ended June 30 is as follows:

              <Table>
              <Caption>
                                                                                               2002                       2001
                                                                              ---------------------      ---------------------
              <S>                                                             <C>                        <C>
              Net Sales
                Power Transmission Components                                 $          14,236,785      $          17,029,168
                Trailer and Implement Components                                          3,815,143                  4,310,126
                                                                              ---------------------      ---------------------
                Total Omni U.S.A., Inc.                                       $          18,051,928      $          21,339,294
                                                                              =====================      =====================

              Income from Operations
                Power Transmission Components                                 $              86,492      $             (12,973)
                Trailer and Implement Components                                           (240,373)                   225,671
                                                                              ---------------------      ---------------------
                Total Omni U.S.A., Inc.                                       $            (143,881)     $             212,698
                                                                              =====================      =====================

              Net Income (Loss)
                Power Transmission Components                                 $            (121,588)     $            (453,529)
                Trailer and Implement Components                                           (339,132)                   221,071
                                                                              ---------------------      ---------------------
                Total Omni U.S.A., Inc.                                       $            (460,720)     $            (232,458)
                                                                              =====================      =====================
              </TABLE>





                                       30
<PAGE>


NOTE 17       SEGMENT INFORMATION (continued)

              <Table>
              <S>                                                             <C>                        <C>
              Identifiable Assets
                Power Transmission Components                                 $           7,360,696      $           8,402,194
                Trailer and Implement Components                                          3,358,554                  3,232,686
                                                                              ---------------------      ---------------------
                Total Omni U.S.A., Inc.                                       $          10,719,250      $          11,634,880
                                                                              =====================      =====================
              Revenues
                Domestic Customers                                            $          15,645,638      $          20,343,413
                Foreign Customers                                                         2,406,290                    995,881
                                                                              ---------------------      ---------------------
                Total Revenues                                                $          18,051,928      $          21,339,294
                                                                              =====================      =====================
              Property and Equipment (net)
                Domestic                                                      $             595,551      $             724,230
                Foreign                                                                   1,216,456                  1,388,321
                                                                              ---------------------      ---------------------
                Total Property and Equipment                                  $           1,812,007      $           2,112,551
                                                                              =====================      =====================
              Depreciation and amortization
                Power Transmission Components                                 $             229,572      $             363,576
                Trailer and Implement Components                                            118,694                     56,102
                                                                              ---------------------      ---------------------
                Total Omni U.S.A., Inc.                                       $             348,266      $             419,678
                                                                              =====================      =====================
              </TABLE>


NOTE 18       SUBSEQUENT EVENTS

              On June 7, 2002, June 19, 2002 and September 10, 2002, the Company
              received notification from NASDAQ that the Company's stock would
              be removed from the NASDAQ listing as Omni's share price had
              fallen below the minimum required ask price of $1.00 per share and
              as the Company's Minimum Value of Publicly Held Securities had
              fallen below the minimum of $1,000,000. The Company has filed for
              a hearing based on written submission and NASDAQ has set a hearing
              date of October 17, 2002 to determine if the Company has
              established compliance. Subsequent to the hearing, NASDAQ will
              issue its determination. The Company has submitted to NASDAQ a
              plan that should bring the Company within compliance; however,
              there is no assurance that such a plan will be approved by NASDAQ.
              As a result, Omni stock could be removed from listing on the Small
              Cap Market and thereafter be listed on OTC bulletin boards.

              On September 10, 2002, The Board of Directors approved a stock
              repurchase plan to repurchase up to 500,000 shares of Omni stock
              in efforts to improve its stock price in response to the
              notification received from NASDAQ noted above and in consideration
              that the Company's common stock represents and unusual value given
              the Company's overall business and value.





                                       31
<PAGE>


ITEM 8.       CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE None.


                                    PART III

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

         The directors, executive officers, promoters and control persons of the
Company are set forth below. All directors hold office for a term of one year or
until their successors are duly elected and qualified. Each executive officer of
the Company is appointed by the Board of Directors at each annual meeting and
serves until a successor is duly elected and qualified.

<Table>
<Caption>

Name                                    Age                 Position
----                                    ----                --------
<S>                                    <C>                  <C>
Jeffrey K. Daniel                       41                  President, Chief Executive Officer and Director

Craig L. Daniel                         42                  Vice President-Manufacturing and Director

Kevin Guan                              44                  Director

Didi Duan                               55                  Director
</Table>

Jeffrey K. Daniel has been an employee of Omni since 1985 and is currently the
Chief Executive Officer and President of the Company. He has a Bachelors degree
in Business Administration from the University of Colorado. He was Vice
President from 1987 until May 1994, when he was elected Chief Executive Officer
and President. Jeffrey K. Daniel is the brother of Craig L. Daniel. Jeffrey K.
Daniel has served as a director of the Company since January 1988.

Craig L. Daniel has been a full time employee of Omni since April, 1989, and is
currently Vice President-Manufacturing for the Company, Managing Director of
Omni Resources, Ltd. and General Manager of Shanghai Omni Gear Co., Ltd. Craig
L. Daniel is the brother of Jeffrey K. Daniel. Craig L. Daniel has served as a
director of the Company since December 1993.

Kevin Guan is currently the Managing Director of SIIC Real Estate Co., a
commercial real estate developer of projects in Hong Kong and China, (a
subsidiary of Shanghai Industrial Investment Corp.). From February 1993 through
February 1995, Mr. Guan was the General Manager, Shanghai Wai Gao Qiao
Development Corp, in the PuDong development zone of Shanghai. Mr. Guan is a
graduate of Shanghai Jiao Tong University, and received his MBA from Shanghai
University.

Didi Duan is currently the Chief Financial Officer and Director of Jiao Tong
University's Ang Li Science and Technology Co., Ltd., a specialty pharmaceutical
processor in the Chinese and East Asian markets. From January 1986 to February
1997, Ms. Duan was the Chief Financial Officer of Dong Feng Automotive Truck
manufacturing Division, vertically manufacturing 15-40 ton trucks for the
Chinese market. Ms. Duan graduated from Wuhan University in Hubei, and is an
accountant in Shanghai, under the accounting rules in China.






                                       32

<PAGE>



ITEM 10.  EXECUTIVE COMPENSATION

         The following table sets forth certain information regarding
compensation paid to the Company's executive officers in each of the three most
recent fiscal years:

<Table>
<Caption>
                                       Annual Compensation                    Long Term Compensation
                              ---------------------------------------------------------------------------------
                                                                                 Awards              Payouts
                                                                     ------------------------------------------
                                                                     Restricted    Securities
Name and                                              Other Annual      Stock      Underlying                     All Other
Position                Year      Salary      Bonus   Compensation     Awards     Options/SARs        Payouts   Compensation
-------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>        <C>       <C>       <C>           <C>          <C>                  <C>       <C>

Jeffrey K. Daniel
President & CEO          2000      $ 130,000    -           -             -            -                 -            -
                         2001        130,000    -           -             -            -                 -            -
                         2002        115,000    -           -             -            -                 -            -

Craig L. Daniel
Vice President-          2000         85,000    -           -             -            -                 -            -
Manufacturing            2001         85,000    -           -             -            -                 -            -
                         2002         85,000    -           -             -            -                 -            -

</Table>

No other executive officer's salary or bonus exceeded $100,000 for the three
most recent fiscal years ended June 30, 2001.
---------------------------

         None of the executive officers are employed by the Company pursuant to
any employment contract or other agreement, and there are no arrangements or
understandings for the payment of bonuses or other payments upon a termination
of employment, or otherwise.





                                       33
<PAGE>


         STOCK OPTION PLANS AND STOCK OPTIONS

         The Company maintains a 1994 Non-Qualified Stock Option Plan (the "1994
NQSOP") and a 1996 Incentive Stock Option Plan (the "1996 ISOP"). The NQSOP
covers 200,000 shares of Common Stock and the 1996 ISOP covers 300,000 shares of
Common Stock after the reverse split (See Note 2). The purpose of the NQSOP and
1996 ISOP, under the discretion of the Company's Board of Directors, is to offer
eligible employees of the Company and its subsidiaries an opportunity to acquire
or increase their proprietary interests in the Company and provide additional
incentive to contribute to its performance and growth. The options have been
disclosed effective the reverse stock split as discussed in Note 2 of the
footnotes to the financial statements.

         On June 6, 1997, the Board, upon recommendation from the Compensation
Committee, repriced all options granted and existing to current Company
employees under the 1996 ISOP and NQSOP from $12.00 per share to $3.00 per
share. The repriced options vest 50% twelve (12) months from date of grant and
50% twenty-four (24) months from date of grant.

          On June 6, 1997, the Board, upon recommendation of the Compensation
Committee, granted options to purchase 45,333 shares of Common Stock at $3.00
per share to each Jeffrey K. Daniel and Craig L Daniel, and granted options to
purchase 22,667 shares of Common Stock at $3.00 per share to Michael A. Zahorik,
all such options to vest three (3) years from date of grant.

         On January 25, 1999, the Board, under the NQSOP, granted 3,333 options
to purchase Company Common Stock at $4.875 per share to James L. Davis, John F.
Lillicrop, and W. Wayne Patterson. All director options were immediately vested.

         On January 3, 2000, the Board, under the NQSOP, granted 3,333 options
to purchase Company Common Stock at $3.564 per share to James L. Davis, John F.
Lillicrop, and W. Wayne Patterson. All director options were immediately vested.

         On March 8, 1999, under the 1996 ISOP, David M. Sallean was granted
options to purchase 10,000 shares of Common Stock at an exercise price of
$3.564, vesting 100% three (3) years from date of grant.

         On February 24, 2000, under the 1996 ISOP, David M. Sallean was granted
options to purchase 10,000 shares of Common Stock at an exercise price of
$3.1875, vesting 100% three (3) years from date of grant.

         Effective October 1, 2001, Michael A. Zahorik was terminated as an
employee of Omni USA, Inc. By operation of the ISOP Agreement, Mr. Zahorik's
options were not exercised, and accordingly all 46,000 options were cancelled.

         Effective October 24, 2001, David M. Sallean resigned as an employee of
Omni USA, Inc. By operation of the ISOP Agreement, Mr. Sallean's options were
not exercised, and accordingly all 20,000 options were cancelled.



                                       34
<PAGE>

         The following table provides repricing information for options held by
the Company's five most highly compensated executive officers. The repricing was
implemented in 1997 on the recommendation of the Compensation Committee to
conform the options to prevailing market prices and provide an incentive for
which the options were designed.

<TABLE>
<CAPTION>
                         Ten-Year Options/SAR Repricings

                                  Number of                                                       Length
                                  Securities      Market            Exercise                      of Original
                                  Underlying      Price of Stock    Price of Stock                Option Term
                                  Options/SARs    at Time of        at Time of         New        Remaining at
                                  Repriced or     Repricing or      Repricing or       Exercise   Date of
Name                       Date   Amended         Amendment         Amendment          Price      Repricing
----                       ----   -----------     ---------         -----------      ---------  ------------
<S>                        <C>     <C>               <C>               <C>              <C>         <C>
Jeffrey K. Daniel          6/6/97    53,334          $2.25             $12.00             $3.00     9 years
Craig L. Daniel            6/6/97    53,334          $2.25             $12.00             $3.00     9 years
</TABLE>








                                       35
<PAGE>


         Under the 1996 ISOP, options for 318,334 shares had been granted as of
June 30, 2002. Under the 1994 NQSOP, options for 93,333 shares had been granted
as of June 30, 2002. The following table shows how the 1996 ISOP options are
distributed to groups within the Company based on the dollar value of
exercisable options in effect during fiscal year 2002 based on the closing price
of Common Stock at June 30, 2002 of $0.95:

<Table>
<Caption>
                                                                    1994 NQSOP and 1996 ISOP
                                             ------------------------------------ ---------------------------
                                                                                       Total Number of Shares
   Name and Position                         Dollar Value / Shares Exercisable         Represented by Options
   -----------------                         ----------------------------------        ----------------------
<S>                                          <C>                                      <C>
Jeffrey K. Daniel
   President and CEO                                      $0/98,667                            98,667

Craig L. Daniel
   Vice President-Manufacturing                           $0/98,667                            98,667

Executive Officer Group                                  $0/197,334                            197,334

Non-Executive Officer Employee Group                      $0/71,666                            71,666

Total                                                    $0/269,000                            269,000
</Table>

              Aggregated Option/SAR Exercises in Last Fiscal Year
                          and FY-End Option/SAR Values

<TABLE>
<CAPTION>

                                                                                               Value of Unexercised
                                                              Number of Unexercised            in-the-money Options/
                             Shares Acquired    Value         Options/SARs at FY-End              SARs at FY-End (2)
Name                           on Exercise      Realized    (1) Exercisable/Unexercisable     Exercisable/Unexercisable
----                         ----------------   ---------   -----------------------------     --------------------------
<S>                         <C>                 <C>           <C>                             <C>

Jeffrey K. Daniel
President & CEO                   N/A           N/A                  98,667                               $0
                                                                     ------                               --
                                                                     98,667/0                            $0/$0
Craig L. Daniel
Vice President-
   Manufacturing                  N/A           N/A                  98,667                               $0
                                                                     ------                               --
                                                                     98,667/0                            $0/$0
</TABLE>
------------------------

N/A Not applicable. No options were exercised during the fiscal year ended June
30, 2002.

(1) Indicates number of options exercisable and unexercisable as of
    June 30, 2002.

(2) Based upon closing price of Common stock at June 30, 2002 of
    $0.95.

         OTHER COMPENSATION

         The Company has paid no bonuses to its executive officers. The Company
has a group medical plan which provides medical and hospital benefits and term
life insurance to its officers and employees, at no cost. Jeffrey K. Daniel and
Craig L. Daniel are not compensated as directors.





                                       36
<PAGE>



ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

EQUITY COMPENSATION

          The following table sets forth information relating to compensation
plans under which equity securities of the Company are authorized for issuance:

  <Table>
  <Caption>
                                                                                                     Number of securities
                                                                                                    remaining available for
                                   Number of securities to be                                    future issuance under equity
                                    issued upon exercise of        Weighted-average exercise          compensation plans
                                  outstanding option, warrants   price of outstanding options,       (excluding securities
                                           and rights                 warrants and rights          reflected in column (a))
------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>                            <C>
                                              (a)                             (b)                             (c)
------------------------------------------------------------------------------------------------------------------------------
  Equity compensation plans                 345,667                          $3.63                          154,333
  approved by security holders
------------------------------------------------------------------------------------------------------------------------------
  Equity compensation plans
  not approved by security
  holders                                      -                               -                               -
------------------------------------------------------------------------------------------------------------------------------
  Total                                     345,667                          $3.63                          154,333
------------------------------------------------------------------------------------------------------------------------------
  </Table>



CAPITALIZATION

         The Company's currently authorized equity securities are as follows:
(i) 50,000,000 shares of Common Stock, par value $.004995 per share (see Note
2), (ii) 454,258 Class B Common Stock Purchase Warrants ("Class B Warrants"). As
of September 30, 2002, the Company had outstanding 1,204,912 shares of Common
Stock, and Class B Warrants to purchase 166,667 shares of Common Stock.

         Class B Warrants. There are 166,667 Class B Warrants to purchase Common
Stock. The Class B Series 1 Warrants, which were exercisable by the holder
thereof at any time between 90 days after issuance and March 15, 2001, at $6.00
per share, expired on March 15, 2001. None of these Class B Warrants were
exercised. The 166,667 Class B Series 2 Warrants issued to PACCAR, Inc. may be
exercised at any time and expire July 1, 2009 (see Note 10 in the footnotes to
the financial statements).





                                       37
<PAGE>


         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of the close of business on June 30,
2002, by each person who is known to the Company to be a beneficial owner of 5%
or more of the Common Stock, by each current and Nominee director, and by all
directors and executive officers as a group.

<TABLE>
<CAPTION>

                                                                     Amount and Nature
                                                                       Of Beneficial
Name and Address of Beneficial Owner                                   Ownership            Percent of Class(1)
------------------------------------                                 -----------------      -------------------
<S>                                                                  <C>                    <C>
Edward L. Daniel (3)                                                     175,689                    14.5%
Joan J. Daniel (3)                                                       175,689                    14.5%
PACCAR, Inc. (6)                                                         166,667                    13.8%
Craig L. Daniel (2)(5)                                                   134,837                    11.2%
Jeffrey K. Daniel (2)(4)                                                 116,561                     9.6%
Executive Officers and Directors as a Group                              251,398                    20.8%
</TABLE>?

(1)      Based upon 1,207,912 shares of Common Stock outstanding as of
         June 30, 2002.
(2)      The address for all officers is 7502 Mesa Road, Houston, Texas 77028.
(3)      Includes 125,000 shares each subject to certain conditions and
         limitations set forth in the Registration Rights Agreement (see Exhibit
         10.11). The address for such beneficial owner is 2476 Bolsover, #626,
         Houston, Texas 77005.
(4)      Includes 98,667 shares purchasable under options at $3.00 per share and
         1,255 shares held in street name and 257 shares held of record by the
         Jeffrey K. Daniel Individual Retirement Account, a self-directed IRA
         and 4,129 shares purchased through the Company's 401(k) plan.
(5)      Includes 98,667 shares purchasable under options exercisable at $3.00
         per share and 2,267 shares held of record by the Craig L. Daniel
         Individual Retirement Account, a self-directed IRA.
(6)      Includes 166,667 shares purchasable under Class B Warrants exercisable
         at $6.00 per share and expire July 1, 2009. The address of such
         beneficial owner is 777 106th Avenue NE, Bellevue, WA 98004.





                                       38
<PAGE>


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         None.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

         None.







                                       39
<PAGE>



                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 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.


                                        OMNI U.S.A., INC.





                                        BY: /s/ JEFFREY K. DANIEL
                                            ------------------------------------
                                            JEFFREY K. DANIEL
                                            CHIEF EXECUTIVE OFFICER
                                            AND PRESIDENT


PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1934, THIS REPORT HAS BEEN
SIGNED BY THE FOLLOWING PERSONS ON BEHALF OF THE COMPANY AND IN THE CAPACITIES
AND ON THE DATE INDICATED.

<TABLE>
<CAPTION>
         SIGNATURE                                            TITLE                                       DATE
         ---------                                            -----                                       ----
<S>                                               <C>                                               <C>
/s/ JEFFREY K. DANIEL                                CHIEF EXECUTIVE OFFICER & PRESIDENT            OCTOBER 14, 2002
----------------------
JEFFREY K. DANIEL
</TABLE>





                                       40

<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual report of Omni U.S.A., Inc. (the "Company") on
Form 10-KSB for the period ending June 30, 2002, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I (We), Jeffrey K.
Daniel of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.



<TABLE>
<S>                                                 <C>                                        <C>
/s/ JEFFREY K. DANIEL                                CHIEF EXECUTIVE OFFICER & PRESIDENT       OCTOBER 14, 2002
------------------------------------
JEFFREY K. DANIEL
</TABLE>








                                       41
<PAGE>



                                INDEX OF EXHIBITS


   Exhibit No.                   Name of Exhibit
   -----------                   ---------------

      3.1         Amended and Restated Articles of the Company, as amended
                  November 30, 1994. Incorporated by reference from the
                  Company's Amendment No. 1 to Registration Statement on Form
                  SB-2 filed with the Commission on December 22, 1994.

      3.2         Certificate of Designation of Series A Redeemable Convertible
                  Preferred Stock. Incorporated by reference from the Company's
                  Registration Statement on Form SB-2 filed with the Commission
                  on October 12, 1994.

      3.3         Certificate of Designation of Series B Convertible and Series
                  C Convertible Preferred Stock. Incorporated by reference from
                  the Company's Registration Statement on Form SB-2 filed with
                  the Commission on October 12, 1994.

      3.4         By-laws of the Company.  Incorporated by reference from the
                  Company's Registration Statement on Form SB-2 filed with the
                  Commission on October 12, 1994.

      4.1         Certificate of Designation of Series A Redeemable Convertible
                  Preferred Stock. Incorporated by reference from the Company's
                  Registration Statement on Form SB-2 filed with the Commission
                  on October 12, 1994.

      4.2         Certificate of Designation of Series B Convertible and Series
                  C Convertible Preferred Stock. Incorporated by reference from
                  the Company's Registration Statement on Form SB-2 filed with
                  the Commission on October 12, 1994.

      4.3         Form of Class A Common Stock Purchase Warrant.  Incorporated
                  by reference from the Company's Registration Statement on Form
                  SB-2 filed with the Commission on October 12, 1994.

      4.4         Form of Class B Common Stock Purchase Warrant.  Incorporated
                  by reference from the Company's Registration Statement on Form
                  SB-2 filed with the Commission on October 12, 1994.

      4.5         Equity Contract Note dated as of June 30, 1994 issued to
                  Edward L. Daniel in the original principal amount of $918,304.
                  Incorporated by reference from the Company's Amendment No. 1
                  to Registration Statement on Form SB-2 filed with the
                  Commission on December 22, 1994.

      4.6         Equity Contract Note dated as of November 29, 1991 issued to
                  Edward L. Daniel in the principal amount of $1,000,000.
                  Incorporated by reference from the Company's Amendment No. 2
                  to Registration Statement on Form SB-2 filed with the
                  Commission on January 30, 1995.

      4.7         Corrected Registered Equity Contract Note dated as of June 30,
                  1993 issued to Edward L. Daniel in the original principal
                  amount of $1,968,304.02. Incorporated by reference from the
                  Company's Amendment No. 2 to Registration Statement on Form
                  SB-2 filed with the Commission on January 30, 1995.

     10.1         Settlement Agreement dated as of June 30, 1994 by and among
                  the Company, Edward L. Daniel, Joan J. Daniel, and Daniel
                  Development Corporation. Incorporated by reference from the
                  Company's Registration Statement on Form SB-2 filed with the
                  Commission on October 12, 1994.

     10.2         1994 Qualified Stock Option Plan.  Incorporated by reference
                  from the Company's Registration Statement on Form SB-2 filed
                  with the Commission on October 12, 1994.

     10.3         1994 Non-Qualified Stock Option Plan. Incorporated by
                  reference from the Company's Registration Statement on Form
                  SB-2 filed with the Commission on October 12, 1994.

     10.4         Stock Option Grant to Jeffrey Daniel.  Incorporated by
                  reference from the Company's Registration Statement on Form
                  SB-2 filed with the Commission on October 12, 1994.





                                       42
<PAGE>

     10.5         Stock Option Grant to Craig Daniel.  Incorporated by reference
                  from the Company's Registration Statement on Form SB-2 filed
                  with the Commission on October 12, 1994.

     10.6         Letter Agreement dated November 1, 1994 between the Company,
                  Edward L. Daniel, and LaPlante Compressor Limited.
                  Incorporated by reference from the Company's Amendment No. 1
                  to Registration Statement on Form SB-2 filed with the
                  Commission on December 22, 1994.

     10.7         Articles of Association for Omni Gear Shanghai Ltd. dated
                  December 21, 1994 between the Company and Shanghai Shengang
                  Metallurgical Industry Company. Incorporated by reference from
                  the Company's Amendment No. 6 to Registration Statement on
                  Form SB-2 filed with the Commission on April 17, 1995.

     10.8         Cooperative Joint Venture Contract for the Formation and
                  Operation of Shanghai Omni Gear Co., Ltd. dated December 12,
                  1994 between Omni Resources (H.G.) Limited and Shanghai
                  Shengang Metallurgical Industry Company. Incorporated by
                  reference from the Company's Amendment No. 6 to Registration
                  Statement on Form SB-2 filed with the Commission on April 17,
                  1995.

     10.9         Butler Products Corporation Share Purchase Agreement dated
                  October 1, 1996, together with exhibits. Incorporated by
                  reference from the Company's Form 8-K filed on October 18,
                  1996 and from the Company's Amended Form 8-K filed on December
                  11, 1996.

     10.10        Mutual Release and Settlement Agreement between Edward L.
                  Daniel, Joan J. Daniel and their affiliates effective June 30,
                  1997. Incorporated by reference from the Company's Form 8-K
                  filed on September 10, 1997.

     10.11        Registration Rights Agreement between Edward L. Daniel, Joan
                  J. Daniel and their affiliates effective June 30, 1997.
                  Incorporated by reference from the Company's Form 8-K filed on
                  September 10, 1997.

     10.12        Amendment to Lease Agreement dated August 1, 1997.
                  Incorporated by reference from the Company's Form 8-K filed on
                  September 10, 1997.

     10.13        Assignment Agreement between Edward L. Daniel, Joan J. Daniel
                  and their affiliates dated August 15, 1997. Incorporated by
                  reference from the Company's Form 8-K filed on September 10,
                  1997.

     21.1         Subsidiaries of the Registrant. Incorporated by reference from
                  the Company's Registration Statement on Form SB-2 filed with
                  the Commission on October 12, 1994.


     99.1         Press Release dated September 10, 1997. Incorporated by
                  reference from the Company's Form 8-K filed on September 10,
                  1997.






                                       43