UNITED STATES
                       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 August 31, 2000

                           Commission File No. 0-24506


                         DELTA-OMEGA TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

                Colorado                                  84-1100774
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification Number)

              119 Ida Road
          Broussard, Louisiana                              70518
(Address of principal executive offices)                  (Zip code)

                                 (337) 837-3011
              (Registrant's telephone number, including area code)

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

           Securities registered pursuant to Section 12(g) of the Act:
                          $.001 par value common stock

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

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

Company's revenues for its most recent fiscal year. $1,303,335

As of September 30, 2000, 18,747,210 shares of common stock, $.001 par value,
were outstanding, and the aggregate market value of the common stock held by
non-affiliates of Delta-Omega Technologies, Inc. was approximately $2,040,079 on
that date.

Documents incorporated by reference:
The definitive proxy statement for the annual meeting of shareholders which will
be filed with the Commission within 120 days after the close of the fiscal year
is incorporated by reference into Part III.

Please see item 13 for the exhibit index.

<PAGE>


                                     PART I.
Item 1. Business
----------------

GENERAL
-------

Delta-Omega Technologies, Inc. (Delta-Omega) was organized under the laws of the
state of Colorado on December 22, 1988 as Barclay's West, Inc. In November 1989,
the Company acquired, via a share exchange agreement, all of the outstanding
securities of Delta-Omega Technologies, Ltd. and on December 22, 1989, changed
its name from Barclay's West, Inc. to Delta-Omega Technologies, Inc. to reflect
the acquisition.

Prior to fiscal 1993, Delta-Omega was a development stage company whose main
objective was to conduct research and development commencing in fiscal 1993. The
Company had essentially completed a majority of the research, development and
testing of its primary products and commenced its marketing efforts. The Company
continues to incur research and development costs to further develop its primary
products into different markets.

SPECIALTY CHEMICALS
-------------------

Delta-Omega Technologies, Ltd. is engaged in the development, manufacture and
marketing of environmentally safe specialty chemicals for use in a variety of
consumer, industrial and military applications. These products are deemed to be
environmentally safe because they are water-based, non-toxic and biodegradable.
These products replace hazardous, flammable, toxic and ozone depleting chemicals
in a broad range of cleaning and emergency response applications. Delta-Omega is
developing proprietary products and processes that address large markets where
there is limited environmentally safe competition or few or no existing products
that provide effective performance.

     SafeScience
     -----------

     On September 1, 1999, the Company and SafeScience entered into an exclusive
     License Agreement concerning certain proprietary formulations developed by
     the Company and produced exclusively for SafeScience. Terms of the License
     Agreement provide for SafeScience to provide confidential access to these
     formulations to third party manufacturers for the purpose of manufacturing
     large volumes of finished goods for resale. This arrangement allows
     SafeSciecne to outsource much greater product blending capacities than the
     Company can provide with its existing facilities. A provision of the
     License Agreement grants a royalty to the Company based upon net sales of
     SafeScience products. Through this channel, the Company has developed a
     consumer market for All Purpose, Bathroom, Floor, and Window Cleaners and a
     dish washing liquid.

     The SafeScience mission is to "Make Chemical Safety a Lifestyle Choice." To
     achieve this goal, SafeScience leverages technology to comprehensively
     address the issue of health and chemical safety, with safe and efficacious
     commercial and consumer products. SafeScience commercial are the first
     cleaning products that combine high performance with chemical safety, at
     competitive prices.

     SafeScience cleaners offer effective, non-hazardous alternatives to
     petroleum-distillate based, chlorinated, caustic and high-VOC content
     products. Products benefits include non-hazardous for worker and client
     safety, environmentally benign and biodegradable, non-flammable, generate
     less wastewater and require no special disposal procedures.

                                       1
<PAGE>


     Oilfield Products
     -----------------

     The Company recently introduced a line of products to serve the needs of
     the oil, gas exploration and production industries. This line of products
     includes degreasers, paraffin cutters, downhole tubing and casing cleaners
     and marine transportation storage vessel cleaning compounds. The
     multi-functional properties of these products allow the customer greater
     flexibility by reducing cleaning time, minimizing storage requirements,
     enhancing worker safety and lessening environmental liabilities.

     Solvent Replacement Products
     ----------------------------

     DOT 111/113(TM) is a water-based, non-toxic, biodegradable, patented
     cleaning solution for use on metal and other hard surfaces. The product can
     replace chlorinated solvents scheduled for elimination under the U.S. Clean
     Air Act and other environmentally objectionable cleaning solvents in
     specific cleaning applications. It is used to remove hydrocarbon and other
     organic residue as well as inorganic material from surfaces and is
     non-corrosive to a wide array of metals, plastics, rubber and other
     materials. DOT 111/113(TM) conforms to the requirements of MIL-PRF-87937C,
     Type II which establishes the requirements for environmentally safe
     cleaning for aircraft and aerospace equipment for the U.S. Air Force. It
     conforms to NASA test protocol for use in cleaning liquid oxygen systems
     and is accepted by the U.S. Navy as a pre-cleaner for oxygen systems. It is
     also used to clean outer surfaces of aircraft and bare metal prior to
     painting among many other general uses.

     ATTAR(TM) is a series of water-based products designed to address the needs
     of the metalworking and the aviation industries for a heavy-duty,
     biodegradable, environmentally safe cleaner/degreaser. This product is
     designed to complement the light to medium duty cleaner, DOT 111/113(TM),
     and is designed to be a safe alternative to ozone-depleting chemicals and
     flammable, hazardous solvents used to remove heavy baked-on oils, synthetic
     lubricants and carbon deposits. The product is non-corrosive to a wide
     variety of metals, metal alloys, painted surfaces, plastics and other
     similar materials. The base formulation is highly versatile and can be
     modified to meet specific cleaning requirements.

     Omni-Clean(TM)Renew is a product developed for cleaning concrete and marble
     monuments, statues and building edifices. Omni-Clean(TM)Renew works like
     the petroleum based or acid based products that it is designed to replace,
     but is safe for use by cleaning personnel and is biodegradable. Early
     indications from customers in the cemetery maintenance business are
     positive and the Company expects this niche market to develop with more
     exposure to this specialized cleaning segment. No revenue estimates are
     possible at this stage of initial introduction.

     Institutional and Industrial Products
     -------------------------------------

     Omni-Clean(TM)SD is a multi-use product that is water-based, non-toxic and
     biodegradable and designed to address the specific needs of the
     institutional and industrial markets. It creates no adverse health effects
     for users. Its uses include cleaning pots and pans, floors, laundry as well
     as general purpose cleaning. Omni-Clean(TM)SD can reduce chemical use
     hazards (including associated liability) and increase safety and efficiency
     while reducing costs. This product has been USDA accepted for certain uses
     and is presently being sold to hotels, restaurants, fast food chains,
     laundry services, oilfield and janitorial service companies.

                                       2
<PAGE>


     Omni-Clean(TM)SD is also used by the barge and tank industry to clean
     various residuals from storage vessels. It significantly reduces the amount
     of washwater used in the cleaning process. Its unique cleaning properties
     displace the contaminant from the vessel wall and phase separate them
     allowing the waste to be skimmed from the surface and the product to be
     reused. This product has no constituents reportable under federal
     guidelines.

     DOT Degreaser was developed to compete with low-end oilfield cleaners and
     degreasers. DOT Degreaser contains no reportable quantities of regulated
     chemicals and does not produce oily residues that dissolve into water,
     creating potential discharge problems. It is biodegradable, non-flammable
     and has a high tolerance for metals usually found in oilfield production
     water. It is clean-rinsing and is not harmful to personnel or equipment
     (painted or unpainted). DOT Degreaser can be applied in a broad spectrum of
     oilfield and maritime uses, including removal of API modified pipe dope
     used in drilling operations.

     Firefighting and Spill Response
     -------------------------------

     Vulcan(TM) is a foam concentrate product line used to combat flammable
     liquid and petroleum fires. These products are non-toxic and non-corrosive
     and are successful in mitigating the threat of fire and explosion while
     introducing no new contaminants to the local environment. This is
     accomplished through the formation of a lasting, stable, heat resistant
     foam blanket which excludes oxygen from the burning flammable liquids. The
     products have a low surface tension, which allows them to penetrate into
     cracks and crevices and cling to surfaces, forming a thick foam blanket on
     vertical, curved and horizontal surfaces. These products can be used
     effectively on petroleum, alcohol, and other flammable liquid fires. Many,
     if not all, of the commercially available firefighting foams dissolve
     significant amounts of hydrocarbons into water, thereby enhancing the
     spread of contaminants into the local environment, which must then be
     remediated at significant costs. Vulcan(TM) foams encapsulate hydrocarbons
     thus preventing their spread. Most of the fire fighting foams currently
     used today contain chemicals which are reportable under federal guidelines,
     while the Vulcan(TM) products do not. Two (2) Vulcan(TM) firefighting foam
     concentrates earned Underwriters Laboratories (UL) listings in December of
     1995. In May of 1998, the Company earned UL listings for six (6) more
     products in the Vulcan(TM) line. With the issuance of the new listings, the
     Company now offers a complete selection of firefighting foam concentrates
     to the emergency response community.

     HazClean(TM)-ER is a patented formulation listed on the U.S. Environmental
     Protection Agency's National Contingency Plan. It is accepted for use by
     the Louisiana Department of Environmental Quality in responding to
     hydrocarbon spills and contamination. The product mixes with hydrocarbons
     when applied with water and suppresses dangerous vapors thus mitigating the
     threat of fire and explosion. HazClean(TM)-ER enhances the bioremediation
     of contacted hydrocarbon contaminants; which is generally the most cost
     effective remediation practice for the low levels of hydrocarbons typically
     encountered in post spill scenarios. The use of emergency response agents
     such as HazClean(TM)-ER introduce no new contamination while promoting the
     natural biological decay of hydrocarbons which lowers cleanup costs.

     Soil Remediation Chemicals
     --------------------------

     CreoSolv(TM) is a product designed to remove polynuclear aromatic
     hydrocarbons (like creosote) and other similar hydrocarbons from most
     surfaces, especially soil, and is used in conjunction with a mechanical

                                       3
<PAGE>


     soil washing process. The CreoSolv(TM) solution is mixed with the
     contaminated soil which solubilizes the contaminant into the liquid
     solution. The liquid is separated from the soil and the contaminant is
     recovered from the liquid solution by chemical and physical means for
     disposal or in some cases recycling. The cleaned soil can be returned to
     the site.

     HazClean(TM)-SR can be used in conjunction with a mechanical soil washing
     process or in land farming techniques. Currently, efforts to remediate
     hydrocarbon contamination from soil include, among others, removal of
     polluted materials to a "less sensitive" location and/or incineration.
     These methods do not always eliminate pollution permanently, may not be
     cost effective and may result in undesirable side effects and potential
     future liability.

     HazClean(TM)-SR can be applied directly to the ground or tilled soil. The
     product encapsulates the hydrocarbons thus preventing their spread. The
     product contains nutrients that enhance natural biodegradation. The
     Company's process is designed for remediation of hydrocarbon contamination
     from soil, limestone, gravel or other materials used in parking lots,
     access roads and storage yards.

SPECIAL SERVICES
----------------

The Company supplies Petroleum Chemicals, Inc. (P.C.I.), a Gulf coast oil
industry supply company, with custom blending and packaging services. A
relationship that began in fiscal year 1999 is currently generating over
$150,000 in revenues annually. Management feels that P.C.I. will continue to
expand its presence in the active drilling areas of coastal Louisiana and Texas,
resulting in increased sales.

MARKET SEGMENT DATA
-------------------

Total product sales for the year ended August 31, 2000 were $1,303,335 as
compared with total product sales for the year ended August 31, 1999 of
$1,451,754.

<TABLE>
<CAPTION>
              Product Sales For the Fiscal Years Ended August, 1996 through 2000

                                   2000         1999         1998         1997         1996
                                  ------       ------       ------       ------       ------
<S>                             <C>          <C>          <C>          <C>          <C>
Solvents & Cleaners             $  407,391   $  633,921   $  569,085   $1,243,657   $  738,909
Firefighting & Spill Response      398,187      385,022      279,779      203,276      106,688
Oilfield Products                  196,036      254,857      328,641        9,589        1,594
SafeScience                        301,721      177,954         --           --           --
                                ----------   ----------   ----------   ----------   ----------
Total                           $1,303,335   $1,451,754   $1,177,505   $1,456,522   $  847,191
                                ==========   ==========   ==========   ==========   ==========
</TABLE>


MARKETS
-------

     Specialty Chemicals
     -------------------

     The Company's products are marketed as safe and economical replacements for
     hazardous chemicals. Industries targeted are aviation, electronics,
     automotive, marine, metal fabrication, food processing, janitorial,
     oilfield, barge and tank cleaning, firefighting, hazardous spill response
     and soil remediation.

                                       4
<PAGE>


     The Company markets its products through regional or nationally recognized
     distribution organizations, via private label arrangements and through
     direct customer contact with its own sales force.

     The Company prices its products competitively and, in some cases, below the
     price of existing products and methods. The products are also promoted as
     cost savers through the reduction of current and future environmental
     liabilities and reducing, or in some cases eliminating the health hazards
     to employees.

     The Company's products have been gaining acceptance in markets where
     governmental policy, public safety and economics are mandating changes from
     presently used products and services. By gaining regulatory agency
     acceptance for the use of the Company's products in specialized fields
     where available products and technology are limited and sometimes costly,
     the Company's products and their uses are becoming more attractive to
     end-users and to distributors for sales to end-users.

     SafeScience
     -----------

     On September 1, 1999, the Company and SafeScience entered into an exclusive
     License Agreement concerning certain proprietary formulations developed by
     the Company and produced exclusively for SafeScience. Under this agreement,
     the Company has been contracted to furnish to SafeScience products for the
     Industrial and Institutional and household goods markets. Terms of the
     License Agreement provide for SafeScience to provide confidential access to
     these formulations to third party manufacturers for the purpose of
     manufacturing large volumes of finished goods for resale. This arrangement
     allows SafeScience to outsource much greater product blending capacities
     than the Company can provide with its existing facilities. A provision of
     the License Agreement grants a royalty to the Company based upon net sales
     of SafeScience products. Through this channel, the Company has developed a
     consumer market for All Purpose, Bathroom, Floor, and Window Cleaners and a
     dish washing liquid.

     Oilfield Products
     -----------------

     The Company recently introduced a line of products to serve the needs of
     the oil, gas exploration and production industries. This line of products
     includes degreasers, paraffin cutters, downhole tubing and casing cleaners
     and marine transportation storage vessel cleaning compounds. The
     multi-functional properties of these products allow the customer greater
     flexibility by reducing cleaning time, minimizing storage requirements,
     enhancing worker safety and lessening environmental liabilities.

     The Company furnishes specialized cleaning and treatment chemicals to
     Environmental Concepts, Inc. (E.C.I.), a company that provides cleaning
     equipment, products and services to the oil and gas industry. Initial sales
     of the Company's products totaling approximately $100,000 have been made to
     E.C.I.

     Drilling Mud Recycling Process (MRP)
     ------------------------------------

     The Company has successfully field tested a unique technology for
     recovering barite and oil from spent drilling muds. The mud recycling
     process (MRP) offers significant cost savings over current management

                                       5
<PAGE>


     practices involving spent drilling muds. The market value of the recovered
     barite and oils is expected to more than offset processing costs. The
     Company, working on location in Colombia with M-I Drilling Fluids, L.L.C.,
     has successfully completed the first phase of a version of its MRP process,
     Base Fluid Upgrade (BFU). The process was able to retrieve high purity
     diesel, 99.5% pure based on laboratory analysis, from spent oil based muds.
     Conditions prevalent in the oil and gas industry have caused delays in the
     implementation of advanced management practices involving spent drilling
     muds. The Company anticipates additional business in South America and
     other active drilling locations. No estimate of revenues is possible at
     this stage of development because long term results of this technology have
     yet to be commercially determined.

     Industrial and Institutional Markets
     ------------------------------------

     The Company continues to expand its industrial and institutional cleaning
     market. Specifically, the Company has entered the fleet maintenance market
     and is now supplying products to Ryder-ATE, Houston Metro, Nalco Fleet
     Lines and TexGas. Also the Company entered the concrete cleaning and stone
     restoration markets. These products have been accepted by FMB Property
     Management Company, the Texas Medical Center and several cemetery
     organizations. These materials are also being evaluated by other property
     management companies as well as several international organizations and
     cemetery conglomerates. The Company's materials offer safe, effective
     alternatives to the solvent, caustic and acid based materials currently
     being utilized in the marketplace.

RAW MATERIALS
-------------

Basic raw materials used by the Company in the formulation of finished products
include a wide variety of surfactants, acids, alkalines, salts and solvents.
Approximately sixty compounds are purchased from manufacturers or distributors
that supply the chemical industry. All raw materials used by the Company are
available on a worldwide basis and are not subject to shortage. Raw materials
and finished products are typically transported via truck and rail.

BLENDING FACILITIES
-------------------

The Company's blending facilities are located in a dedicated building, housing
raw material storage and blending tanks used in the mixing process. The blending
vessels are vats where the raw materials are pumped at the proper weights to
complete a blended compound. The Company presently has three blending units with
electric motor driven paddles. The largest unit is capable of blending 1,100
gallons at one time, and the other two are 660 gallon capacity. The blending
units and associated piping are common sizes used by many industries and are
relatively inexpensive to procure, install and operate. The Company performs
100% of its product blending, and no use of outside manufacturing service is
contemplated.

MAJOR CUSTOMERS
---------------

During fiscal years 2000 and 1999, one customer, SafeScience, Inc., accounted
for twenty-four percent (24%) and sixteen (16%) percent of the Company's net
sales, respectively. In addition, Petroleum Chemicals, Inc. accounted for ten
percent (10%) of the Company's 2000 net sales and the U.S. Air Force, accounted
for twenty-four percent (24%) percent of the Company's fiscal 1999 net sales.

                                       6
<PAGE>


GOVERNMENT APPROVAL OF PRINCIPAL PRODUCTS
-----------------------------------------

Any required government or military approvals related to principal products have
been submitted and obtained in accordance with written protocols.

PATENTS, TRADEMARKS AND LICENSES
--------------------------------

The Company owns all rights to HazClean(TM)-EFFF for which U.S. Patent No.
5,061,383 was granted in October 1991. The Company owns all rights to DOT
111/113(TM)for which U.S. Patent No. 5,308,550 was granted in May 1994.

The Company has filed two patents with the United States Patent and Trademark
Office, a base fluid upgrading (BFU) application (Serial No. 918,597) and a mud
recycling process (MRP) (Serial No. 788,993). Both patent pending applications
are for treating drilling fluids used in the oil and gas industry.

The Company is also in the process of filing two more patents, a wellbore
chemical cleaner and a continuation-in-part of co-pending MRP application Serial
No. 788,993.

There are no ongoing royalty requirements borne by the Company in the
exploitation of its patents.

The Company maintains the formulations for its various products as a trade
secret and no one has access to the formulations who is not subject to a trade
secret and non-disclosure agreement.

REGULATION
----------

Many chemicals used as solvents, cleaners and degreasers as well as firefighting
foams and spill response agents have been considered hazardous to the
environment by new federal and state guidelines. Regulations fueled by a public
awareness of the environment and the resulting political involvement are causing
most of these chemicals to be phased out.

The Company's chemical products are biodegradable, non-hazardous, and therefore,
non-reportable. Should the guidelines be amended to affect the Company's
products, Management believes the Company has the capability to substitute the
affected constituent. While this may temporarily affect the "environmentally
safe" marketing aspect of the affected product, Management does not believe it
will have any long term impact.

COMPETITION
-----------

Competition in the specialty chemical industry is provided by numerous
companies. Most of these companies have substantially greater resources and
marketing capabilities than Delta-Omega. As a result, the Company's strategy is
not to compete directly in the marketplace against these large companies, but to
do so through distributors with large established markets. Other competitive
factors include price, performance and safety in use with which the Company can
effectively compete.

                                       7
<PAGE>


RESEARCH AND DEVELOPMENT
------------------------

During fiscal year 1999 and 2000 the Company expended $187,528 and $115,629 on
research and development expenses, respectively. The reduction principally
resulted from the Company's decision to limit additional expenses related to
oilfield products until it has concluded binding agreements with potential
customers.

In fiscal year 2000, the Company focused primarily on the development of a line
of products for SafeScience, Inc. The selection of household cleaning products
chosen by SAFS for introduction to the U.S. consumer market was identified,
products were custom formulated, performance testing was accomplished by
accepted testing labs and product safety was verified by toxicological experts.
This line of efficacious consumer products has been marketed on a regional basis
with positive results and consumer response indicates that the safe,
ready-to-use cleaners will achieve nationwide acceptance.

The Company also worked on development of an Institutional and Industrial (I&I)
product line for itself and SAFS. The heavy-duty cleaners and degreasers
designed for use by commercial industries and municipal government agencies have
attained initial success on a regional basis as evidenced by re-orders.

EMPLOYEES
---------

The Company currently has 6 full-time non-union employees at the corporate
headquarters in Broussard, Louisiana. The Company periodically retains the
services of qualified consultants relative to marketing projects, technical
support and product development.

ENVIRONMENTAL COMPLIANCE AND ENVIRONMENTAL MATTERS
--------------------------------------------------

The Company's chemical business is subject to federal and state requirements
regulating the discharge of materials into the open environment. These
regulations affect the Company's competition as well. Few of the Company's raw
materials and none of the Company's finished products are reportable under
federal or state guidelines. The cost of compliance with these regulations is
not considered material and no capital expenditures are anticipated for
compliance with regulations.

The soil washing and MRP operations, in most cases, require sub-contract
services to separate contaminants from soil or drilling mud and do not provide
for the disposal of those contaminants. The Company is therefore not exposed to
liabilities with respect to hazardous waste handling or disposal. Hazardous
waste handling is usually handled by the prime contractor.

Item 2. Properties
------------------

The Company's consolidated executive office, blending and warehouse facilities
are located at 119 Ida Road, Broussard, Louisiana 70518. The Company leases
approximately 16,000 square feet under a non-cancelable five year lease from
Crossroads Investments, L.L.C. at $6,000 per month with an option to renew for
an additional five years at an increase of $1,200 per month.

                                       8
<PAGE>


Item 3. Legal Proceedings.
--------------------------

There is no material, pending litigation significant to the business to which
the Company is a party or against any of its Officers or Directors as a result
of their capacities with the Corporation.

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

No matters were submitted to a vote of security holders of the Company during
the quarter ending August 31, 2000. Annual meetings of the shareholders of the
Company are held in accordance with Colorado law.








                                       9
<PAGE>


                                     PART II

Item 5. Market for Company's Common Equity and Related Stockholder Matters.
---------------------------------------------------------------------------

PRINCIPAL MARKET OR MARKETS
---------------------------

The Company's common stock is quoted in the "OTC Bulletin Board" maintained by
National Quotation Bureau, Inc. On September 30, 2000, there were 15 market
makers in the Company's securities and the closing bid quotation was $.110. The
following table sets forth the high and low bid quotations for the Company's
Shares, as reported in the "OTC Bulletin Board."

                                                      BID
             QUARTER                        -----------------------
              ENDED                           LOW            HIGH
              -----                           ---            ----

         August 31, 1998                     $ .25          $ .51
         November 30, 1998                   $ .25          $ .4375
         February 29, 1999                   $ .18          $ .25
         May 31, 1999                        $ .29          $ .23
         August 31, 1999                     $ .24          $ .31
         November 30, 1999                   $ .052         $ .20
         February 28, 2000                   $ .08          $ .25
         May 31, 2000                        $ .13          $ .40
         August 31, 2000                     $ .11          $ .135


These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions and may not represent actual transactions.

APPROXIMATE NUMBER OF HOLDERS OF THE COMPANY'S SECURITIES
---------------------------------------------------------

On September 30, 2000, there were 246 registered holders and approximately 1,100
beneficial owners of the Company's common stock held in street name at brokerage
houses. As of September 30, 2000, there were 16 holders of the Company's series
B preferred stock and 22 holders of the Company's series C preferred stock.

DIVIDENDS
---------

Holders of common stock are entitled to receive dividends declared by the
Company's Board of Directors. The Company has not yet paid any dividends on the
Company's common stock and the Board of Directors of the Company presently
intend to pursue a policy of retaining earnings, if any, for use in the
Company's operations and to finance expansion of its business.

Holders of the Company's series B preferred stock are entitled to a dividend of
$.07 per share payable in cash or the Company's common stock payable on June 30
of each year until June 30, 2001.

Holders of the Company's series C preferred stock are entitled to a dividend of
$.0525 per share payable in cash or the Company's common stock payable on June
30 of each year until June 30, 2001.

                                       10
<PAGE>


RECENT SALES OF SECURITIES
--------------------------

During March of 1998, the Company sold 1,019,747 shares of its stock at a price
of $.75 per share raising a total of $764,810.25. The Company relied on an
exemption from registration provided by Regulation D Rule 506. No general
solicitation was made and all securities were sold to accredited, qualified
investors as restricted.

During March and April of 2000, the Company sold an additional 1,555,625
restricted shares at an average sales price of $.16 per share raising a total of
$248,900. The Company relied on an exemption from registration provided by
Regulation D Rule 506 as no general solicitation was made and sales were made
solely to accredited and sophisticated investors pursuant to the exemption.

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

This Annual Report on Form 10-KSB includes certain statements that may be deemed
to be "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All statements, other than statements of historical
facts, included in this Form 10-KSB that address activities, events or
developments that the Company expects, believes or anticipates will or may occur
in the future, including such matters as future capital, research and
development expenditures (including the amount and nature thereof), repayment of
debt, business strategies, expansion and growth to the Company's operations and
other such matters are forward-looking statements. These statements are based on
certain assumptions and analyses made, by the Company in light of its experience
and its perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
including general economic and business opportunities (or lack thereof) that may
be presented to and pursued by the Company, the ability of the Company to fund
continuing operations from cash flow or funds raised through loans or equity
financings, changes in laws or regulations and other factors, many of which are
beyond the control of the Company. Readers are cautioned that any such
statements are not guarantees of future performance and that actual results or
developments may differ materially from those projected in the forward-looking
statements.

RESULTS OF OPERATIONS
---------------------

Fiscal 2000 Compared to Fiscal 1999
-----------------------------------

Net sales decreased $148,419 or 11%, from $1,451,745 to $1,303,335. The decrease
was due primarily to a decrease in solvent replacement and cleaning product
sales relative to the U.S. Air Force contract. The U.S. Air Force contract
expired in June 1999. Since then, the Company submitted a formal bid package to
the U.S. air Force for a new three year aircraft cleaning supply contract, but
was unsuccessful in the awarding of the contract.

Net sales generated from the Company's oilfield line of products decreased to
$196,035 from $254,857 due to the expiration in fiscal 1999 of a private
labeling contract to furnish oilfield degreasers. However, during the last
quarter of fiscal 1999, the Company negotiated a private labeling contract with
Petroleum Chemicals, Inc. to furnish a line of degreasers that caters to the
oilfield. Current sales generated from this line of degreasers total over
$150,000 annually.

                                       11
<PAGE>


Net sales of firefighting and spill response agents increased 4% to $398,187
from $385,022. The increase is sales is directly related to the introduction of
the Company's U.L. listed environmentally safe fire foam products to
distribution networks in the eastern United States.

Net sales to SafeScience, Inc. increased from $177,954 to $301,721. The increase
was due to the introduction of the products into the industrial and
institutional markets. The Company anticipates a steady increase in the amount
of revenues generated from the I&I market as SafeScience focuses on
strengthening its current position in these markets.

Cost of sales decreased $104,896 or 11%, from $1,007,964 to $903,068. The
decrease in cost of sales relates directly to the decrease in the amount of net
sales generated by the Company's products. As a percentage of sales, cost of
sales remained constant at 70%. Management expects as sales volume increase,
cost of sales as a percentage of sales will decrease as a result of raw material
bulk pricing and full capacity of the blending facility is approached.

Selling, General and Administrative expenses decreased from $866,927 to
$848,036, or 3%. Selling, General and Administrative expenses decreased due to
eliminating outside consultants and management's efforts to limit sales related
expenses.

Research and Development costs decreased from $187,528 to $115,629. In fiscal
year 2000, the Company focused its efforts and funds on the development of a
line of products for SafeScience, Inc. All chemical development costs were borne
by the Company's technical staff, therefore no outside consultants, travel or
related expenses were necessary.

Net loss for fiscal 2000 was $733,641, an increase of $87,554 from the net loss
of $646,087 incurred during fiscal 1999. The increase net loss was due primarily
to the increase in interest expense related to the factoring of Accounts
Receivable and the asset impairment of $47,974 that resulted from the write-off
of the research and development heat process equipment.

CAPITAL RESOURCES AND LIQUIDITY
-------------------------------

The Company considers cash and cash equivalents as its principal measure of
liquidity. At August 31, 2000, the Company had an overdraft cash balance of
$1,881. The Company's short term debt totals $589,772 with total debt being
$641,341. The Company's primary cash requirements are for operating expenses,
particularly Research and Development expenses, raw material purchases and
capital expenditures. Since the Company commenced operations, it has incurred
recurring losses and negative cash flows from operations. The Company did not
have sufficient working capital available as of August 31, 2000, to maintain
operations at their current levels. These factors raise substantial doubt about
the Company's ability to continue as a going concern. The Company's ability to
continue as a going concern is dependent upon obtaining additional capital
investments or generation of adequate sales revenue and profitability from
operations.

To obtain additional capital, the Company commenced as private offering in March
2000 to raise approximately $550,000 solely to accredited and sophisticated
investors. As of September 30, 2000, the Company has received funds totaling
$248,900 related to this offering. The Company also has the option to sell 1
million common shares at an undetermined price per share to obtain additional
capital. These shares are remaining from 2 million shares authorized for sale to
accredited and sophisticated investors by the Company's board of directors in
January 1998. As of September 30, 2000, the Company had a cash balance of
$4,562.

                                       12
<PAGE>


During the last three years, the Company invested funds in a unique technology
for recovering barite and oil from spent drilling mud. The Company, working on
location in Colombia with M-I Overseas Limited, successfully completed the first
phase of its oil based mud processing application. "Base Fluid Destruction"
(BFD) is a version of MRP, a proprietary process for recovering barite and oil
from spent drilling muds. BFD was demonstrated for a major oil exploration and
production company. Based upon the success of this application, the Company was
requested to expand its process to include the treatment of the water/solids
phase that remains after initial processing. Expenditures related to the BFD
project incurred to date total $414,616. The Company does not plan to expend any
more resources for this technology prior to engaging in a definitive agreement
with a potential client. No estimate of revenues is possible at this stage of
development because the results of this technology have to be commercially
explored.

The Company's current acquisition of six (6) additional UL listings for its fire
foam products gives the Company an opportunity to gain a significant market
share in the municipal fire sector and airport fire fighting markets. The
Company also developed a Class "A" foam used for extinguishing wildland and
structural fires. The Company plans to obtain approval for use in the forestry
service market.

In July 1999, the Company has been contracted to furnish products to a
corporation, SafeScience, Inc., that has entered the Industrial and
Institutional and household goods markets. The SafeScience product line
encompasses over twenty (20) products for use in both marketplaces. Since
inception (May 1998 through August 2000), net sales generated as a result of
this contract total $479,675. The Company anticipates a steady increase in the
amount of revenues generated by this contract as SafeScience, Inc. enters the
industrial market in a focused manner, while continuing to develop and expand
existing consumer product distribution accounts.

On September 1, 1999, the Company and SafeScience entered into an exclusive
License Agreement concerning certain proprietary formulations for the household
goods market developed by the Company and produced exclusively for SafeScience.
Terms of the License Agreement provide for SafeScience to provide confidential
access to these formulations to third party manufacturers for the purpose of
manufacturing large volumes of finished goods for resale. This arrangement
allows SafeScience to outsource much greater product blending capacities than
the Company can provide with its existing facilities. A provision of the License
Agreement grants a royalty to the Company based upon net sales of SafeScience
products. Royalties to date (September 1999 through August 2000) as a result of
the License Agreement total $33,880.

Management believes that the sources of funds and anticipated increases in sales
volume discussed above will enable the Company to sustain its current operations
and meet its short term obligations in fiscal 2000. As sales volumes of the
Company's fire foam product line and industrial chemicals increase, the Company
expects cash flow from operations in fiscal 2000 to improve, although no
assurances can be made.

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

The financial statements and schedules are filed as part of this annual report
beginning on page F-1.

                                       13
<PAGE>


Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
-----------------------------------------------------------------------

On November 8,1999, Delta-Omega Technologies, Ltd. (the "Company")engaged
Broussard, Poche, Lewis & Breaux, L.L.P. to replace Arthur Andersen LLP ("Arthur
Andersen") as the Company's independent accountants to audit the Company's
consolidated financial statements. Arthur Andersen was dismissed as the
Company's independent accountants on the same date. The Company's Board of
Directors approved the change in the Company's independent accountants.

In connection with its audits for the two most recent fiscal years ended August
31, 2000 and 1999 and through October 5, 2000, there have been no disagreements
with Broussard, Poche', Lewis & Breaux, L.L.P. on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of
Broussard, Poche' Lewis & Breaux, L.L.P., would have caused them to make
reference thereto in their report on the financial statements for the years
ended August 31, 2000 and 1999.

During the Company's two most recent fiscal years ended August 31, 2000 and 1999
and through October 5, 2000, there have been no "reportable events" (as defined
in Regulation S-K Item 304(a)(1)(v)).


                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons of the
Company
---------------------------------------------------------------------------

Information concerning the Directors and Executive Officers of the Company is
hereby incorporated by reference to the Company's definitive proxy statement
which will be filed with the Commission within 120 days after the close of the
fiscal year.

Item 10. Executive Compensation
-------------------------------

Information concerning management remuneration is hereby incorporated by
reference to the Company's definitive proxy statement which will be filed with
the Commission within 120 days after the close of the fiscal year.

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

Information concerning security ownership of certain beneficial owners and
management is hereby incorporated by reference to the Company's definitive proxy
statement which will be filed with the Commission within 120 days after the
close of the fiscal year.

Item 12. Certain Relationships and Related Party Transactions
-------------------------------------------------------------

Information concerning certain relationships and related party transactions is
hereby incorporated by reference to the Company's definitive proxy statement
which will be filed with the Commission within 120 days after the close of the
fiscal year.

                                       14
<PAGE>


                                     PART IV

Item 13. Exhibits
-----------------

(a)  The following documents are filed as part of this report:

     1.   Financial Statements

          The consolidated financial statements filed as part of this report are
          as listed in the Index to Financial Statements on page F-1 which
          immediately precedes such statements.

     2.   Listing of Exhibits.

          Exhibit
            No.          Description                      Location
            ---          -----------                      --------

             3     Articles of Incorporation        Incorporated by
                   and Bylaws                       reference to Exhibit
                                                    No. 3 to the Company's
                                                    Registration Statement
                                                    (No. 0-24506)

             4.1   Designation of Series B          Incorporated by Reference
                   Convertible Preferred Stock      Ex. 4.2 to Registration
                                                    Statement S-2 (no. 33-90604)

             4.2   Designation of Series C          Incorporated by Reference
                   Convertible Preferred Stock      Ex. 10 to 10KSB Fiscal
                                                    Year 1999

            10.0   SafeScience License Agreement    Incorporated by Reference
                                                    Ex. 10 to 10KSB Fiscal
                                                    Year 1999

            27.1   Financial Data Schedule          Filed here with

(b)  No Reports on Form 8-K were filed during the last quarter of the period
     covered by this Report.



                                       15
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Index to Consolidated Financial Statements



Independent Auditors' Report.............................................  F-2

Consolidated Balance Sheet, August 31, 2000..............................  F-3

Consolidated Statements of Operations for the years
ended August 31, 2000 and 1999...........................................  F-4

Consolidated Statements of Changes in
Shareholders' Equity for the years ended
August 31,2000 and 1999..................................................  F-5

Consolidated Statements of Cash Flows for the years
ended August 31, 2000 and 1999...........................................  F-6

Notes to Consolidated Financial Statements...............................  F-7













                                       F-1
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders of Delta-Omega Technologies, Inc.:

We have audited the balance sheet of Delta-Omega Technologies, Inc. (a Colorado
corporation) and subsidiary as of August 31, 2000, and the related statements of
income, retained earnings and cash flows for the years then ended august 31,
2000 and 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Delta-Omega Technologies, Inc.
as of August 31, 2000, and the results of its operations and cash flows for the
years then ended August 31, 2000 and 1999, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has experienced recurring losses and negative
cash flows since commencement of operations. As of August 31, 2000, the Company
does not have adequate working capital in place to support its current level of
operations. These conditions raise substantial doubt about its ability to
continue as a going concern. Management's plans regarding those matters are also
described in Note A. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




Lafayette, Louisiana
October 5, 2000

                                       F-2
<PAGE>
<TABLE>
<CAPTION>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                           Consolidated Balance Sheet


                                     ASSETS
                                     ------

                                                                     August 31,
                                                                        2000
                                                                    ------------
<S>                                                                 <C>
Current assets
  Accounts receivable
     Trade, net of allowance for doubtful accounts                  $     91,180
     Accounts Receivable - factored                                      169,782
     Employees                                                             2,077
     Inventories                                                         136,836
     Prepaid expenses                                                     21,520
     Other current assets                                                 12,335
                                                                    ------------
     Total current assets                                                433,730
Property and equipment, net of accumulated depreciation                  115,688
Intangible assets, net of accumulated amortization                        91,188
                                                                    ------------
     Total assets                                                   $    640,606
                                                                    ============


                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------

Current liabilities
  Bank overdraft                                                    $      1,881
  Accounts payable
     Trade creditors                                                     256,582
     Others                                                               67,526
  Customer prepayments                                                    32,046
  Current maturities of long-term debt and leases                        188,383
  Advance from factor                                                    185,825
  Notes payable-board of director loans                                  401,000
  Accrued expenses                                                        35,067
                                                                    ------------
    Total current liabilities                                          1,168,310
Long-term debt and leases, net of current maturities                      51,958
                                                                    ------------
    Total liabilities                                                  1,220,268


Shareholders' equity
  Convertible, 7 percent cumulative, non-participating preferred
    stock, $.001 par value, shares authorized, 40,000,000; issued
    and outstanding 1,295,000 series B, 2,396,667 series C                 3,692
  Common stock, $.001 par value, shares authorized, 100,000,000;
    issued and outstanding, 17,191,585                                    17,191
  Common stock subscribed                                                  1,556
  Additional paid-in capital                                          12,282,985
  Retained deficit                                                   (12,885,086)
                                                                    ------------
     Total shareholders' equity                                         (579,662)
                                                                    ------------
        Total liabilities and shareholders' equity                  $    640,606
                                                                    ============


           See accompanying notes to consolidated financial statements

                                       F-3
</TABLE>
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                      Consolidated Statements of Operations


                                                      Years ended August 31,
                                                   ----------------------------
                                                       2000            1999
                                                   ------------    ------------

Net product sales                                  $  1,303,335    $  1,451,754

Cost of sales                                           903,068       1,007,964
                                                   ------------    ------------

        Gross profit                                    400,267         443,790

Costs and expenses
    Selling, general and administrative                 848,036         866,927
    Research and development                            115,629         187,528
    Impairment of Long-Lived Assets                      47,974             -0-
                                                   ------------    ------------
                                                      1,011,639       1,054,455
                                                   ------------    ------------
        Operating loss                                 (611,372)       (610,665)

Other operating income, net                              34,515          14,727
Interest expense                                       (156,784)        (50,149)
                                                   ------------    ------------
    Net loss                                           (733,641)       (646,087)

Preferred dividend declared                            (219,275)       (219,275)
                                                   ------------    ------------

Net loss available to common shareholders          $   (952,916)   $   (865,362)
                                                   ============    ============

Weighted average shares outstanding                  16,037,966      15,150,211

Basic and diluted earnings per common share        $       (.06)   $       (.06)
                                                   ============    ============





          See accompanying notes to consolidated financial statements.

                                       F-4
<PAGE>
<TABLE>
<CAPTION>


                                       Delta-Omega Technologies, Inc. and Subsidiary
                                       ---------------------------------------------
                                Consolidated Statements of Changes in Shareholders' Equity


                                                                                    Common       Additional
                                                     Common       Preferred         Stock         Paid in        Retained
                                                     Stock          Stock         Subscribed      Capital        Deficit
                                                  ------------   ------------    ------------   ------------   ------------

<S>                                               <C>            <C>             <C>            <C>            <C>
Balance at September 1, 1998                      $     14,996   $      3,732            --     $ 11,580,522   $(11,066,808)

Issued dividend for Series B & C Preferred                 922           --              --          218,353       (219,275)

Issuance of stock options for services rendered           --             --              --            6,000           --

Net loss                                                  --             --              --             --         (646,087)
                                                  ------------   ------------    ------------   ------------   ------------

Balance at August 31, 1999                              15,918          3,732            --       11,804,875    (11,932,170)

Issuance of common stock for private placement            --             --             1,556        247,344           --

Issued dividend for Series B & C Preferred               1,199           --              --          218,076       (219,275)

Conversion of Convertible Preferred Stock                   40            (40)           --             --             --

Issuance of common stock for services rendered              34           --              --           12,690           --

Net loss                                                  --             --              --             --         (733,641)
                                                  ------------   ------------    ------------   ------------   ------------

Balance at August 31, 2000                        $     17,191   $      3,692    $      1,556   $ 12,282,985   $(12,885,036)
                                                  ============   ============    ============   ============   ============






                                See accompanying notes to consolidated financial statements

                                                            F-5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


                     Delta-Omega Technologies, Inc. and Subsidiary
                     ---------------------------------------------
                         Consolidated Statements of Cash Flows


                                                                Years Ended August 31,
                                                                ----------------------
                                                                  2000          1999
                                                                ---------    ---------
<S>                                                             <C>          <C>
Cash flows from operating activities:
  Net loss                                                      $(733,641)   $(646,087)
    Adjustment to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                 102,845      111,204
    (Gain)/Loss on sale and disposal of property & equipment         (700)     (13,130)
    Bad debt expense                                                  -0-          -0-
    Issuance of common stock for services                          12,724        6,000
    Asset impairment                                               47,974          -0-
    (Increase) decrease in:
    Accounts receivable                                            86,229     (232,418)
    Inventories                                                    86,857      (13,691)
    Prepaid expenses                                                4,075          843
    Other receivables                                              (1,519)       6,814
    Other assets                                                   (1,256)         128
    Increase (decrease) in:
    Accounts payable                                              (33,154)     237,513
    Accrued liabilities                                               (59)          64
                                                                ---------    ---------
    Other liabilities                                              47,530     (101,570)
                                                                ---------    ---------
          Total adjustments                                       354,584        1,757
                                                                ---------    ---------
        Net cash used in operating activities                    (379,057)    (644,330)

Cash flows from investing activities:
   Property acquisitions                                          (43,223)     (50,832)
   Patent costs                                                       -0-       (2,024)
   Proceeds from sale of property and equipment                       700       15,850
                                                                ---------    ---------
           Net cash used in investing activities                  (42,523)     (37,006)

Cash flows from financing activities:
   Bank overdraft                                                   1,881      (63,896)
   Proceeds from borrowing                                        260,265      470,654
   Principal payments of long-term debt and capital leases        (33,530)     (24,857)
   Proceeds from common stock offering                            248,900          -0-
   Proceeds from factoring                                        (40,794)     226,619
   Principal payments on related party notes                      (20,000)     (73,000)
                                                                ---------    ---------
          Net cash (used in) provided by financing activities     416,722      535,520

Net increase (decrease) in cash and cash equivalents               (4,858)    (145,816)
                                                                ---------    ---------
Cash and cash equivalents, beginning of period                      4,858      150,674
                                                                ---------    ---------

Cash and cash equivalents, end of period                        $       0    $   4,858
                                                                =========    =========


             See accompanying notes to consolidated financial statements.

                                          F-6
</TABLE>
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


Note A: Summary of Significant Accounting Policies
--------------------------------------------------

     Nature of organization
     ----------------------

     The Company is involved in developing, manufacturing and marketing
     environmentally safe specialty chemicals for a variety of industrial and
     military uses. These patented, patent pending or proprietary products are
     deemed to be environmentally safe because they are biodegradable and
     formulated without chemicals considered hazardous under federal
     regulations. The Company's products replace hazardous, flammable, toxic and
     ozone-depleting chemicals in a broad range of applications serving
     Industrial, Institutional, Emergency Response and Soil Remediation markets.
     The Company recently added a patent pending product line of downhole
     chemicals for the cleaning of tubing and casing required in the drilling of
     oil and natural gas wells. The Company's sales are primarily concentrated
     in the southeastern United States.

     Basis of presentation
     ---------------------

     Since the Company commenced operations, it has incurred recurring losses
     and negative cash flows from operations. The Company does not have
     sufficient working capital available as of August 31, 2000, to maintain
     operations at their current levels. These factors raise substantial doubt
     about the Company's ability to continue as a going concern. The Company's
     ability to continue as a going concern is dependent upon obtaining
     additional capital investments or generation of adequate sales revenue and
     profitability from operations. The financial statements do not include any
     adjustments relating to the recoverability and classification of asset
     carrying amounts or the amount and classification of liabilities that might
     result should the Company be unable to continue as a going concern.

     To obtain additional capital, the Company implemented a rights offering in
     March 2000 to raise approximately $550,000 solely to accredited and
     sophisticated investors. As of September 30, 2000, the Company has received
     funds totaling $248,900 related to this rights offering. The Company also
     has the option to sell 1 million common shares at an undetermined price per
     share to obtain additional capital. These shares are remaining from 2
     million shares authorized for sale to accredited and sophisticated
     investors by the Company's board of directors in January 1998. For
     immediate capital requirements, the Company expects to negotiate loans from
     board of director members and major shareholders until sufficient funds are
     generated from operations or the financial instruments discussed above are
     implemented. As of September 30, 2000, the Company had a cash balance of
     $4,562.

     Management believes that the sources of funds discussed above will enable
     the Company to sustain its operations and meet its obligations, although
     there can be no assurance that this will be done.

     Revenue recognition
     -------------------

     Revenue for sales of specialty chemicals is recognized when title to the
     finished product has passed and billing for the product has occurred.

     Inventories
     -----------

     Inventories consist of raw materials, finished goods and containers and are
     stated at the lower of cost or market using the first-in, first-out (FIFO)
     method of accounting.

     Property, equipment and depreciation
     ------------------------------------

     Property and equipment is stated at cost and depreciated using the
     straight-line method over their useful lives which is 3 to 7 years for
     furniture and equipment and 5 years for vehicles.

                                       F-7
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     Intangible assets and amortization
     ----------------------------------

     The Company's policy is to amortize its licensing rights to its patented
     products over a 5-year period. Patent costs are capitalized and amortized
     over the life of the patent when granted. The Company periodically assesses
     the recoverability of the unamortized balance based on expected future
     profitability and undiscounted future cash flows related to the patents and
     their contribution to overall operations of the Company.

     Income taxes
     ------------

     Income taxes are accounted for in accordance with the provisions of SFAS
     No. 109 "Accounting for Income Taxes". Under this statement, deferred
     income taxes are provided for by the asset and liability method.

     Loss per common share
     ---------------------

     The net loss per common share has been computed on the basis of the
     weighted average number of shares outstanding during each period. Common
     stock equivalents outstanding were not considered in the computation of
     loss per share because their effect would be antidilutive.

     Cash equivalents
     ----------------

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

     The use of 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.

     Shares issued for non-cash consideration
     ----------------------------------------

     Stock and stock options issued for services are valued at the vendor's
     regular billing rates or at the value of the stock issued, whichever is
     more clearly determinable at date of issuance. Stock issued for property is
     valued at the fair market value of the stock issued or the fair market
     value of the property, whichever is more readily determinable.

     Credit concentration
     --------------------

     During fiscal years 2000 and 1999, one customer, SafeScience, Inc.,
     accounted for twenty-four percent (24%) and sixteen (16%) percent of the
     Company's net sales, respectively. In addition, Petroleum Chemicals, Inc.
     accounted for ten percent (10%) of the Company's 2000 net sales and the
     U.S. Air Force, accounted for twenty-four percent (24%) percent of the
     Company's fiscal 1999 net sales.

     Reclassifications
     -----------------

     Certain prior year balances have been reclassified to conform with current
     year presentation.

                                       F-8
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     Accounting pronouncement
     ------------------------

     During 1997, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards (SFAS) No. 128, "Earnings per Share," SFAS
     No. 129, "Disclosure of Information about Capital Structure," SFAS No. 130,
     "Reporting Comprehensive Income," and SFAS No. 131, "Disclosures about
     Segments of an Enterprise and Related Information." SFAS No. 128, which is
     effective for reporting periods ending after December 15, 1997, has been
     adopted by the Company and the impact on the Company's earnings per share
     was not material. SFAS No. 129, SFAS No. 130 and SFAS No. 131, which are
     effective for reporting periods ending after December 15, 1997, have been
     adopted, and all required disclosures are presented in the Company's
     consolidated financial statements included herein. However, the Company had
     no comprehensive income during the year presented in these financial
     statements.


Note B: Related party transactions
----------------------------------

     Accrued Expenses
     ----------------

     Accrued Expenses includes a $15,000 balance due to the Chairman of the
     Board for expenses incurred during fund raising efforts in fiscal 1997. The
     $15,000 balance due will be paid in the form of common shares. The number
     of common shares to be issued will be calculated using the average stock
     price during the time that the expenses were incurred. The expenses
     incurred were reflected in the selling, general and administrative section
     in the consolidated statements of operations.

     Notes payable-Board of Director loans
     -------------------------------------

     During fiscal year 1999, the Company negotiated nine (9) promissory notes
     totaling $270,000 with related parties, of which $225,000 were with members
     of the board of directors, in order to maintain its current level of
     operations. Each promissory note bears an interest rate of 8.25% per annum.
     These notes are short-term and were due during the fiscal year 1999.
     Extensions were negotiated on these notes which are included as current
     liabilities in the balance sheet. Related party notes totaled $197,000 as
     of August 31, 1999.

     In the current fiscal year, the Company negotiated six additional short
     term promissory notes totaling $224,000 with related parties. One note
     totaling $15,000 bears an interest rate of 9.25% per annum and was paid in
     full plus interest in the second quarter of fiscal year 2000. Three of the
     six short term promissory notes totaling $50,000 each bear interest rates
     of 8.25% per annum and were due on or before April 30, 2000. Any amount of
     principal & interest not paid when these three notes were due will accrue
     interest at the rate of 12 percent per annum until paid. Attached to each
     of the these three notes is a warrant agreement granting the holder
     warrants to purchase 50,000 shares of common stock at an exercise price of
     $.15 per share. The two remaining 90 day promissory notes totaling $59,000
     bear interest rates of 8.25% per annum.

     Related party notes payable totaled $401,000 as of August 31, 2000 and are
     reflected in the current liability section of the accompanying consolidated
     balance sheet.

     The Company expects to repay these loans with funds generated from
     continuing operations or proceeds from the sale of common stock previously
     authorized by the board of directors; however these directors may elect to
     convert the debt into equity.

     Interest expense related to related party notes payable as of August 31,
     2000 totaled $27,814.

                                       F-9
<PAGE>

                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


Note C: Accounts and notes receivable
-------------------------------------

     In February 1999, the Company entered into a factoring agreement with Texas
     Capital Funding, Inc. ("TCF"). The Company agreed to sell, assign,
     transfer, convey and deliver submitted accounts receivable with recourse to
     TCF and TCF agreed to purchase and accept delivery from the Company. TCF
     agreed to transfer funds to the Company equal to 80% of the invoice amount
     submitted. The remaining 20% is retained by TCF until the submitted
     invoices are collected in full. Fees for the service rendered by TCF are
     based upon the collection period of each submitted invoice. Based upon the
     collection of submitted accounts receivable, fees incurred averaged between
     3% and 20% of the invoiced amount with an average of 5% as of August 31,
     2000. Fees incurred are classified as interest expense and reflected in the
     consolidated statements of operations. Interest expense related to the
     factoring of accounts receivable for the current fiscal year totaled
     $94,219. Repayment of any advances is guaranteed by two (2) members of the
     Company's board of directors.

     Accounts and Notes Receivable at the end of August 31, 2000 consists of the
     following:

                  Accounts Receivable, Trade        $ 101,180
                  Accounts Receivable, Factored       169,782
                  Allowance for Doubtful Accounts     (10,000)
                                                    ---------

                                   Total            $ 260,962
                                                    =========


     Trade receivables are shown net of an allowance for doubtful accounts of
     $10,000.


Note D: Inventories
-------------------

     Inventories at August 31, 2000 consisted of the following:

     Raw materials                                     $ 86,867
     Finished goods                                      36,365
     Containers                                           7,358
     Consigned inventory                                  6,246
                                                       --------
           Total                                       $136,836
                                                       ========


Note E: Property and equipment
------------------------------

     Major classes of property and equipment at August 31, 2000 consisted of:

     Furniture and equipment                           $ 528,522
     Leasehold improvements                               29,292
                                                       ---------
                    Total property and equipment         557,814
     Less:  accumulated depreciation                    (442,126)
                                                       ---------
                                                       $115,688
                                                       =========


     Depreciation expense was $95,077 and $102,384 for years ended August 31,
     2000 and 1999, respectively.

     During fiscal year ended August 31, 2000, the Company recorded a $47,974
     impairment write-down of its heating process equipment in accordance with
     Statement of Financial Accounting Standards (SFAS) No. 121. The Company

                                      F-10
<PAGE>

                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     wrote-down this piece of equipment since they appeared to have no revenue
     generating potential based upon recent significant adverse changes in the
     environmental consulting and remediation business. Therefore, the Company
     estimated no future undiscounted cash flows from the heating process
     equipment and fines treatment unit. Thus, as prescribed by SFAS 121, the
     carrying value of these pieces of equipment was reduced to the estimated
     discounted future cash flows which is zero.

     The charge for impairment is included in the selling, general and
     administrative expense section in the fiscal year 2000 accompanying
     consolidated statements of operations.


Note F: Intangible assets
-------------------------

     Intangible assets at August 31, 2000 consisted of the following:

     Patent costs                                $ 143,318
     Less: accumulated amortization                (52,130)
                                                 ---------
     Net Intangible assets                       $  91,188
                                                 =========


     Amortization expense was $7,769 and $8,920 for the years ended August 31,
     2000 and 1999, respectively.


Note G: Long-term debt and lease obligations
--------------------------------------------

     Long-term debt at August 31, 2000, consisted of the following:

          Note payable to a corporation;  principal due two years
             from the effective date of May 14, 1999; interest due
             in quarterly installments at an interest rate of 8.25%   $ 150,000
          Note payable to a bank; principal and interest due in
             monthly installments at interest rates varying from
             9.86% to 9.95%                                              25,973
          Notes and capital leases payable to a corporation;
             principal and interest due in monthly installments at
             interest rates varying from 8.63% to 17.79%                 64,368
                                                                      ---------
     Total debt                                                         240,341
     Less: current portion                                             (188,383)
                                                                      ---------
     Long-term debt                                                   $  51,958
                                                                      =========


     Principal repayments on notes payable and capital leases required for the
     next five years are as follows:

                       2001                       $188,383
                       2002                         32,889
                       2003                         15,458
                       2004                          3,611
                       2005                            -0-
                                                  --------
                             Total debt           $240,341
                                                  ========


     As of August 31, 2000, equipment under capital lease and the related
     accumulated amortization totaled $113,889 and $50,472, respectively.
     Amortization of assets recorded is included in depreciation and
     amortization expense.

                                      F-11
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     During the end of the third quarter of Fiscal 1999, the Company negotiated
     a $150,000 loan agreement with SafeScience, Inc. (SFAS). The note bears
     interest at a rate of 8.25% per annum on the outstanding principal amount
     of the note, and the interest shall be payable quarterly in arrears
     commencing three months after the date of the first of twelve semi-monthly
     advances. The principal sum of the note shall be due and payable two years
     from the effective date of May 14, 1999.

     Collateral on this note is grant of the right and license to the exclusive
     access and use of the Product Formulas to SFAS for the sole purpose of
     satisfying SAFS' production demand as set forth in the Supply &
     Distribution Agreement between the Company and SFAS.

     Interest expense related to long term debt and lease obligations as of
     August 31, 2000 totaled $25,008.


Note H: Shareholders' equity
----------------------------

     In the first quarter of fiscal year 2000, the Company's board of directors
     authorized selling 3,437,500 shares of the Company's common stock at a
     price of $.16 per share through a Private Placement Memorandum offered
     solely to accredited and sophisticated investors. In March and April 2000,
     the Company sold 1,555,625 of the authorized 3,437,500 shares of common
     stock offered through the Private Placement Memorandum.

     During the second quarter of fiscal year 2000, the board of directors
     authorized the issuance of 20,558 shares of common stock at a price of $.46
     per share and 13,618 shares of common stock at a price of $.24 per share.
     The common stock was issued to Wellesley Capital Group, Inc. as
     remuneration for expenses incurred during fund raising efforts for the
     period January 1998 through September 1999.

     In April 1999, the board of directors authorized an extension for the
     Preferred "B" stock of the Company from June 30, 1999 to June 30, 2001.

     In the first quarter of fiscal 1998, the Company issued Baer & Company,
     L.L.C. 39,996 shares of $.001 par value common stock for expenses incurred
     from July 1996 through November 1997 while raising funds on behalf of the
     Company. 27,370 shares were issued at a price of $.43775 per share. The
     remaining 12,626 shares were issued at a price of $.6661 per share. The
     prices per share are based on the average of the bid and last trade value
     of the Company's stock during the period in which the fund raising expenses
     were incurred. Expenses for the fair value of the services provided were
     expensed as incurred.

     In January 1998, the Company's board of directors authorized selling up to
     2 million shares of common stock at the best negotiated price. In March
     1998, the Company sold 986,413 shares of the common stock through a special
     private placement solely to accredited and sophisticated investors at an
     offering price of $.75 per share. The remaining balance of the common
     shares, 1,013,587, were outstanding at August 31, 1999.

     The Company issued 33,333 shares of common stock at the special private
     placement offering price of $.75 per share to Global Strategy & Associates,
     James A. Wylie, Jr. in lieu of cash for consulting services rendered during
     the months of January, February and March, 1998.

                                      F-12
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     Stock-based Incentive Compensation Plans
     ----------------------------------------

     In October 1995, Statement of Financial Accounting Standards No. 123 ("SFAS
     123"), "Accounting for Stock Based Compensation," was issued effective in
     fiscal year 1997 for the Company. Under SFAS 123, companies could either
     adopt a "fair valued based method" of accounting for stock-based incentive
     compensation plans, as defined, or may continue to use accounting methods
     as prescribed by APB Opinion No. 25. The Company has elected to continue
     accounting for its plan under APB Opinion No. 25.

     The Company's policy is to grant options to purchase common stock to
     directors, officers or key employees as part of an incentive program. In
     addition to the grants under this program, the Company grants options to
     purchase common stock to individuals as compensation for services rendered
     in lieu of cash. On January 17, 1991, the Company established a
     non-qualified stock option plan (the 1991 Plan) under which 1 million
     options to purchase common stock were made available. In fiscal year 1994,
     the Company amended the 1991 non-qualified stock option plan to authorize
     the issuance of an additional 600,000 options. All options are
     non-compensatory and are issued at or above the market price on the date
     the option is granted.

     The Company's Compensation and Options Committee determines the term of
     each grant and when it becomes exercisable. No compensation expense has
     been recorded in connection with stock options as the exercise price of all
     options granted exceeded market price of the shares on the dates of the
     grants. The options expire three years from the date of grant.

     The following table summarizes the activity related to stock options:


--------------------------------------------------------------------------------
                       Number         Number of       Range of        Weighted
                     of Options        Options        Exercise         Average
                    Issued under   Issued outside      Prices         Exercise
                      the Plan        The Plan                         Price
--------------------------------------------------------------------------------
Outstanding at
August 31, 1998       509,000          1,636,752     $.34 - $2.50      $0.80
Granted                  --               25,000        $2.00          $2.00
Exercised                --                 --            --             --
Forfeited                --             (200,888)    $0.75 - $1.00     $0.98
                    ---------         ----------
Outstanding at
August 31, 1999       509,000          1,460,864     $.34 - $2.50      $0.85
Granted                  --                 --            --             --
Exercised                --                 --            --             --
Forfeited                --             (504,697)    $.51 - $2.50      $0.94
                    ---------         ----------
Outstanding at
August 31, 2000       509,000            956,167     $.34 - $2.00      $0.76
--------------------------------------------------------------------------------


                                      F-13
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     The following table summarizes information about stock options outstanding
     at August 31, 2000:

--------------------------------------------------------------------------------
            Options Outstanding                           Options Exercisable
--------------------------------------------------------------------------------
                               Wgtd. Avg.
   Range of       Number       Remaining    Wgtd. Avg.     Number     Wgtd. Avg.
   Exercise     Outstanding   Contractual    Exercise   Exercisable   Exercise
    Prices      At 8/31/00        Life        Price      at 8/31/00     Price
    ------      ----------        ----        -----      ----------     -----

$0.34 - $0.99    1,264,000      0.4 years     $0.57       1,264,000     $0.57
$1.00 - $2.00      201,167      1.5 years     $1.94         201,167     $1.94

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


     The options exercisable at August 31, 2000 and 1999, respectively, were
     1,465,167 and 1,794,752 with weighted-average exercises prices of $.82 and
     $.81, respectively.

     Stock Options Granted, Exercised and Forfeited
     ----------------------------------------------

     2000
     ----

     During fiscal year 2000, 504,697 stock options outside of the Company's
     Stock Option Plan expired. The exercise prices for these options range from
     $0.51 to $2.50 per share.

     No assumptions were necessary in fiscal year 2000 to calculate the fair
     value of each option grant as no options were granted.

     1999
     ----

     During fiscal year 1999, 200,888 stock options outside of the Company's
     Stock Option Plan expired. The exercise prices for these options range from
     $.75 to $1.00 per share. Additionally, the Company granted 25,000 stock
     options outside the Company's Stock Option Plan for consulting services
     rendered. The exercise price for these options is $2.00 per share.

     The Company's Board of Directors extended the expiration dates for 7,500
     stock options at $1.00 per share and 103,667 stock options at $2.00 per
     share for an additional three years from the original option expiration
     date.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted-average
     assumptions used for grants in 1999: a) no dividend yield, b) risk-free
     interest rate of 4.63%, c) expected contractual life of 3.4 years, d)
     expected volatility of 100%.

     Based on the above assumptions, the weighted-average grant-date fair value
     of each option granted during fiscal 1999 was $0.088.

     No employee options were granted in fiscal year 1999.

                                      F-14
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     1998
     ----

     During fiscal year 1998, 102,619 stock options outside of the Company's
     Stock Option Plan expired. The exercise prices for these options ranged
     from $2.10 to $3.00 per share.

     In December 1997, the Company's Board of Directors extended the expiration
     date for 40,000 stock options granted in April 1991 to a financial
     consultant for services rendered. The exercise period was extended for an
     additional three (3) years from the expiration date.

     No assumptions were necessary in fiscal year 1998 to calculate the fair
     value of each option grant as no options were granted.

     No employee options were granted in fiscal year 1998.

     1997
     ----

     The Company granted to employees 158,130 common stock options with exercise
     prices equal to or greater than the market price of the stock on the grant
     date. These options were issued in accordance with agreements entered into
     by the Company and each employee.

     The Company granted 53,130 stock options currently exercisable with an
     exercise price of $1.00 per share for technical services rendered during
     the period May 1, 1996 through June 30, 1997. These options expire during
     the period from January 31, 2000 through June 30, 2000.

     The Company granted 5,000 stock options currently exercisable with an
     exercise price of $1.00 per share in accordance with the terms of certain
     employment agreements. These options expire March 10, 2000.

     The Company granted 100,000 stock options not currently exercisable with an
     exercise price of $0.75 per share in accordance with the terms of certain
     employment agreements. The stock options become exercisable when certain
     performance parameters are met. The options expire June 30, 2001.

     No compensation expense was recorded upon issuance of the 158,130 options
     to employees in fiscal 1997 because the exercise price exceeded the market
     prices of the Company's common stock on the measurement date.

     The Company granted to non-employees 171,567 common stock options with
     exercise prices equal to or greater than the market price of the stock on
     the grant date.

     The Company granted 100,000 stock options, of which 25,000 are currently
     exercisable, with an exercise price of $0.51 per share pursuant to the
     terms of a consulting agreement. The 75,000 stock options currently
     non-exercisable become exercisable when certain performance milestones are
     achieved. None of the milestones in accordance with the terms of the
     agreement were achieved in fiscal 1998. These options expire June 30, 2001.

                                      F-15
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     The Company granted 66,667 stock options currently exercisable with an
     exercise price of $0.65 in lieu of cash for consulting services rendered in
     accordance with the terms of a settlement agreement dated April 10, 1997.
     In connection with this grant, one director forfeited 33,333 options with
     an exercise price of $2.00 per share previously granted to him. The options
     expire July 28, 2000.

     The Company granted 4,900 stock options currently exercisable with an
     exercise price of $0.75 in lieu of cash for marketing services rendered.
     The options expire January 31, 2000.

     The Company will continue to use stock option arrangements when possible to
     conserve its cash. The compensation costs for the related awards have been
     recognized in the period for which they were granted. Accordingly, since no
     instruments were issued, there is no pro forma information below.

     Had compensation cost for the Company's 1997 grants for stock-based
     employee compensation plans been determined consistent with SFAS 123, the
     Company's net loss, net loss applicable to common share owners, and net
     loss per common share for 1997 would approximate the pro forma amounts
     below:

                                                         1997
     ---------------------------------------------------------------------
                                             As Reported        Pro forma
                                             -----------       -----------

     Net  loss                               $(1,106,149)      $(1,169,793)

     Net loss applicable to
          common share owners                $(1,345,197)      $(1,408,841)

     Net loss per common share               $      (.10)      $      (.11)
     ---------------------------------------------------------------------


     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes option-pricing model with the following weighted-average
     assumptions used for grants in 1997: a) no dividend yield, b) risk-free
     interest rate of 6.39%, c) expected contractual life of 3.4 years, d)
     expected volatility of 101%.

     Based on the above assumptions, the weighted-average grant-date fair value
     of each option granted during fiscal 1997 was $.40.

     1996
     ----

     The Company granted 757,555 common stock options with exercise prices that
     exceeds the market price of the stock on the grant date. These options were
     issued in accordance with terms of three agreements entered into by the
     Company. The first of these agreements granted the Company's Chairman of
     the Board a option to purchase 600,000 shares of common stock at an
     exercise price of $.34 per share in lieu of cash compensation for services
     to be rendered. In connection with this agreement, 536,000 options with an
     exercise price of $.75 per share and 160,000 options with an exercise price
     of $2.00 per share were forfeited to the Company's 1991 non-qualified stock
     option plan. Another option agreement granted 150,055 stock options with an
     exercise price of $1.00 per share for technical consulting services

                                      F-16
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     rendered in lieu of cash compensation. The third option agreement granted
     7,500 stock options with an exercise price of $1.00 per share in accordance
     with the terms of an employment agreement. There was no compensation
     expense recorded upon issuance of these options in fiscal 1996 because the
     exercise prices exceeded the market prices of the Company's common shares
     on the measurement date.

     1995
     ----

     The Company granted 497,000 common stock options with exercise prices that
     exceeds the market price of the stock on the grant date. These options were
     issued in accordance with terms of agreements entered by the Company and
     the Company's 1991 non qualified stock option plan. The Company granted an
     affiliate, controlled by a member of the Company's Board of Directors,
     options to purchase 137,000 shares of common stock at an exercise price of
     $2.00 per share in lieu cash for the first two (2) years of a lease for the
     Company's facility. In another agreement the Company granted options to
     purchase 155,000 shares of common stock at exercise prices ranging from
     $.65 to $2.00 per share in lieu of cash compensation for professional
     consulting services rendered. The Company also granted 205,000 stock
     options with exercise prices ranging from $.65 to $2.00 in accordance with
     the Company's 1991 Stock Option Plan. There was no compensation expense
     recorded upon issuance of these options in fiscal 1995 because the exercise
     prices exceeded the market prices of the Company's common shares on the
     measurement date.

     1994, 1993, 1992 and 1991
     -------------------------

     The Company granted 1,333,452 common stock options with exercise prices
     that exceeds the market price of the stock on the grant date. These options
     were issued in accordance with terms of agreements entered by the Company
     and the Company's 1991 non qualified stock option plan. The Company granted
     options to purchase 333,452 shares of common stock at exercise prices
     ranging from $.90 to $3.00 per share in lieu of cash compensation for
     professional consulting services rendered. The Company also granted
     1,000,000 stock options with an exercise price of $.75 per share in
     accordance with the Company's 1991 Stock Option Plan. There was no
     compensation expense recorded upon issuance of these options because the
     exercise prices exceeded the market prices of the Company's common shares
     on the measurement date.

     Common Stock Purchase Warrants
     ------------------------------

     During the second quarter of Fiscal 2000, the Company issued three (3)
     warrant agreements granting the holders to purchase 50,000 shares of common
     stock at an exercise price of $.15 per share. The warrants are attached to
     promissory notes negotiated by the Company with major shareholders. Each
     warrant agreement grants the holder the option to purchase one (1) share of
     common stock for every dollar loaned to the Company.

     In the fourth quarter of Fiscal 1999, the Company issued warrants to
     purchase 380,000 shares of common stock at an exercise price ranging from
     $.25 to $.75 per share. The warrants were issued in connection with loan


                                      F-17
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


     agreements negotiated by the Company in order to meet immediate cash
     requirements. The holders of these loan agreements were issued four
     warrants for each dollar loaned to the Company. The warrants expire three
     years from the effective date of the loan agreement.

     The Company's Class D Common Stock Purchase Warrants expired on December
     15, 1993. The Company issued Class E Common Stock Purchase Warrants for
     every two Class D warrants that were outstanding on December 15, 1993.
     1,062,917 Class E Common Stock Purchase Warrants were outstanding at August
     31, 1997, each exercisable at $1.50 into one share of Common Stock until
     June 15, 1999. The Class E Common Stock Purchase Warrants are callable by
     the Company upon 30 days written notice to the holders. On January 8, 1998,
     the Company's board of directors authorized lowering the exercise price of
     the Class "E" Warrants to $.75 per share, and that a Warrant call be issued
     effective immediately. The holders had 30 days to respond and if the
     holders did not convert, the warrants expired after the 30 day period. None
     of the Class "E" Warrants were exercised during the conversion period, and
     the warrants expired on February 14, 1998.

     The Company issued 100,000 Placement Agent Common Stock Purchase Warrants
     to Gilford Securities, Inc. and 100,000 Placement Agent Common Stock
     Purchase Warrants to FBB Corp pursuant to Warrant Agreements dated December
     2, 1994. Each Placement Agent Common Stock Purchase Warrant entitles the
     holder to purchase one share of the Company's common stock at the price of
     $1.00 per share, at any time until October 15, 1999. There is no provision
     for the call or redemption of the Placement Agent Common Stock Purchase
     Warrants.

     The Company issued Class Z Common Stock Purchase Warrants on September 11,
     1996 as part of the June 1996 private stock offering made solely to
     accredited investors. 2,471,667 Class Z warrants are outstanding at August
     31, 1997, each exercisable at $.75 into one share of $.001 Common Stock
     until June 30, 2001. The Class Z Common Stock Purchase Warrants are
     callable by the company upon thirty days written notice at any time on or
     after July 1, 2000 and at any time, notwithstanding the date, that the
     common stock of the company has a closing bid price on ten consecutive
     trading days of $2.00 per share or more.

     In January 1996, the Company issued a Warrant to purchase 600,000 shares of
     common stock to the Chairman of the Board as remuneration for services
     rendered while holding that position. This Warrant may be exercised any
     time on or after January 2, 1996 but prior to the earlier to occur of (i)
     December 31, 2000, or (ii) a sale of substantially all of the stock or
     assets of the Company in a transaction in which it is not the surviving
     corporation. The exercise price is $2.00per share of common stock. The
     Company assigns no value to the Common Stock Purchase Warrants in the
     consolidated financial statements due to the immaterial value associated
     therewith.

     Stock Dividends - Series B and C
     --------------------------------

     The Series B and C Convertible Exchangeable Preferred Stock $.001 par per
     share has an established declared dividend of $.07 per annum per share, due
     on the 30th day of June of each year. The dividend accumulates if not paid
     when due. The dividend may be paid in cash or in stock at the sole
     discretion of the Board of Directors. If paid in stock, the common shares
     issued will be valued at the average bid price for the 30 days preceding
     the June 30 payment date. Once the price per share of common stock is
     determined, a number of common shares equal to the dollar value of the
     dividend which was to be paid on June 30, will be issued with any
     fractional shares of the common stock dividend rounded up.

                                      F-18
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


Note I: Income taxes
--------------------

     At August 31, 2000, deferred taxes consisted of the following:

     Deferred tax assets, net operating loss carry forward         $ 3,897,103
     Deferred tax liabilities, excess of book over tax
        depreciation                                                     5,160
     Valuation allowance                                            (3,902,263)
                                                                   -----------
     Net deferred taxes                                            $         0
                                                                   ===========


     The valuation allowance for deferred tax assets as of September 1, 1999 was
     $3,648,223. The net change in the valuation allowance for the year ended
     August 31, 2000 was an increase of $254,040. The Company has net operating
     loss carryforwards of $11,442,020 available for federal income tax purposes
     which are available to offset taxable income through 2011. The Company has
     alternative minimum tax net operating loss credit carryforwards of
     approximately $4 million available for future periods. A valuation
     allowance of 100% of net operating loss carryforwards is maintained due to
     uncertainty in the Company's ability to generate income.


Note J: Employee compensation plan
----------------------------------

     The Company presently offers no post-employment/post-retirement benefits
     which would be required to be reflected in its financial statements by SFAS
     No. 112 and SFAS No. 106, respectively.

     The Board of Directors has approved a management bonus pool which is based
     upon 12 percent of gross profits before taxes in excess of $500,000
     annually. Bonuses are to be paid to persons filling designated positions.
     As of August 31, 2000, no bonuses had been paid under this plan.


Note K: Commitments
-------------------

     The Company is committed to renting its office space under a non-cancelable
     operating lease until February 28, 2001. Rental expense for the leased
     premise is $6,000 per month payable in cash from March 1, 1996 through
     February 28, 2001 with a renewal option for five additional years at $7,200
     per month. The facility is rented from a company controlled by a former
     member of the Company's board of directors. This rental agreement
     supersedes the original agreement dated October 1, 1993 that was amended
     November 19, 1993 and October 15, 1994.

     Future minimum rental payments, payable in cash, under the lease are as
     follows:

                                                  Payable in
          Year ending August 31,                     Cash
          ----------------------                  ---------

                  2001*                           $  36,000
                                                  =========


     *The term of the operating lease expires February 28, 2001.

     Rent expense under this agreement during the fiscal year ended 2000 totaled
     $72,000.

                                      F-19
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


Note L: Disclosures about Reportable Segments
---------------------------------------------

     Delta-Omega Technologies, Ltd. has four reportable segments: solvents and
     cleaners, firefighting and spill response, oilfield and SafeScience. The
     solvents and cleaners division produce products to serve the aviation
     market and institutional and industrial markets. The firefighting and spill
     response division produce U.L. listed fire foam products that are
     non-toxic, non-hazardous and non-reportable. The oilfield division produces
     products that cater to the needs of the oil and gas industry. The
     SafeScience line of products serves the consumer with products that are
     defined exclusively for safety-for human health and the environment.

     The accounting policies of the segments are the same as those described in
     the summary of significant accounting policies. Delta-Omega Technologies
     evaluates performance based on profit or loss from operations before income
     taxes and interest expense not including nonrecurring gains and losses.

     Delta-Omega Technologies' reportable segments are business units that offer
     different products. Each reportable segment is allocated a percentage of
     administrative costs not attributable to a particular segment according to
     the percentage of gallons sold by the segment. The reportable segments are
     managed separately because each business unit requires different technology
     and marketing strategies.

<TABLE>
<CAPTION>

                                Delta-Omega Technologies, Inc.
              Disclosure of Reported Segment Profit or Loss, and Segmented Assets
                               Fiscal Year Ended August 31, 2000


                            Solvents &   Firefighting &   Oilfield     SafeScience       All
                            Cleaners     Spill Response                                 Other
<S>                         <C>            <C>            <C>           <C>           <C>
Revenues from external
  Customers                 $ 407,391      $ 398,187      $ 196,036     $ 301,721     $    --
Intersegment revenues            --             --             --            --            --
Interest Revenue                 --             --             --            --          33,880
Interest expense                 --             --             --            --         156,784
Depreciation and
    Amortization               24,977         24,196         12,488        16,392        24,792
Segment Profit               (126,869)       (42,195)       (43,211)      (51,930)     (469,436)
Segment Assets                   --             --             --            --         640,606
Expenditures for segment
   Assets                        --             --             --            --          43,223

</TABLE>

                                      F-20
<PAGE>
<TABLE>
<CAPTION>


                          Delta-Omega Technologies, Inc. and Subsidiary
                          ---------------------------------------------
                           Notes to Consolidated Financial Statements
                                         August 31, 2000


                                 Delta-Omega Technologies, Inc.
               Disclosure of Reported Segment Profit or Loss, and Segmented Assets
                                Fiscal Year Ended August 31, 1999


                             Solvents &   Firefighting &    Oilfield      SafeScience      All
                             Cleaners     Spill Response                                  Other
<S>                          <C>            <C>             <C>            <C>           <C>
Revenues from external
  Customers                  $ 633,921      $ 385,022       $ 254,857      $ 177,954         --
Intersegment revenues             --             --              --             --           --
Interest Revenue                  --             --              --             --            851
Interest expense                  --             --              --             --         50,149
Depreciation and
    Amortization                33,995         20,555          14,130         10,277       23,326
Segment Profit                  11,708        (32,593)        (72,700)       (57,922)    (494,582)
Segment Assets                    --             --              --             --        930,484
Expenditures for segment
   Assets                         --             --              --             --         50,832

</TABLE>

                         Delta-Omega Technologies, Inc.
                 Reconciliations of Reportable Segment Revenues
                           Profit or Loss, and Assets


                                                       Fiscal Year Fiscal Year
                                                     --------------------------
                                                        2000           1999
                                                     -----------    -----------
Revenues
--------
Total revenues for reportable segments               $ 1,303,335    $ 1,451,754
                                                     ===========    ===========

Profit or Loss
--------------
Total profit or loss for reportable segments         $  (264,205)   ($  151,507)
Other profit or loss                                    (469,436)      (494,582)
                                                     -----------    -----------
Income before income taxes and extraordinary items   ($  733,641)   ($  646,089)
                                                     ===========    ===========

Assets
------
Other assets                                         $   640,606    $   930,484
Total assets for reportable segments                        --             --
                                                     -----------    -----------
    Consolidated total                               $   640,606    $   930,484
                                                     ===========    ===========

Other significant Items
-----------------------
Research and Development Expenses                    $    90,837    $   153,081
Depreciation Expense-R&D Equipment                        24,792         35,519


*Research and Development expenses not directly accounted for in the totals of a
specific reporting segment is included in the classification "All Other" for
fiscal year 2000 and 1999.

                                      F-21
<PAGE>


                  Delta-Omega Technologies, Inc. and Subsidiary
                  ---------------------------------------------
                   Notes to Consolidated Financial Statements
                                 August 31, 2000


Delta-Omega Technologies, Inc. - Disclosures of Geographic Information and Major
Customers
--------------------------------------------------------------------------------

Products sales for each reportable segment are concentrated in the continental
United States. Revenues from the reportable segment that include only sales to
SafeScience, Inc. represents approximately twenty-three (23%) percent and
sixteen (16%) percent of the Company's total consolidated revenues for fiscal
year 2000 and 1999, respectively.


Note M: Contingencies
---------------------

     The Company is a defendant in certain claims and legal actions arising in
     the ordinary course of business. In the opinion of management, after
     consultation with legal counsel, the ultimate disposition of these matters
     is not expected to have a material adverse effect on the financial
     condition of the Company.











                                      F-22
<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.

                                          DELTA-OMEGA TECHNOLOGIES, INC.

Dated: November 10, 2000                  By:/s/ Marian A. Bourque
                                          ------------------------
                                          Marian A. Bourque
                                          Chief Financial Officer
                                          (Principal Financial and Accounting
                                          Officer)


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

Signatures                            Titles                         Date
----------                            ------                         ----

/s/ Larry G. Schafran          Chairman of the Board           November 10, 2000
---------------------
Larry G. Schafran

/s/ James V. Janes, III        Chief Executive Officer,        November 10, 2000
-----------------------        President
James V. Janes, III

/s/ Marian A. Bourque          Chief Financial Officer,        November 10, 2000
---------------------          Secretary and Treasurer
Marian A. Bourque










                                      F-23