UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  Quarterly  report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

               For the quarterly period ended September 30, 2000

[_]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934

                  For the transition period from _____ to _____

                        Commission file number 000-26095


                              ENVIROKARE TECH, INC.
        (Exact name of small business issuer as specified in its charter)


                Nevada                                      88-0412549
   (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                      Identification No.)

             2470 Chandler Avenue, Suite 5, Las Vegas, Nevada 89120
                    (Address of principal executive offices)

                                 (702) 262-1999
                           (Issuer's telephone number)

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Yes [_] No [_]

                                 NOT APPLICABLE

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date: The total number of shares of Common
Stock,  par value  $.001 per share,  outstanding  as of  November  3, 2000,  was
11,289,478.

Transitional Small Business Disclosure Format (Check one):  Yes [_]  No [X]


<PAGE>


                                TABLE OF CONTENTS

Part I -- FINANCIAL INFORMATION

Item 1.    Financial Statements................................................1

              Accountant's Review Report.......................................2

              Statements of Financial Position.................................3

              Statements of Operations and Comprehensive Loss..................4

              Statement of Stockholders' Equity................................5

              Statements of Cash Flows.........................................6


           Notes to Financial Statements.......................................7


Item 2.    Plan of Operation..................................................17


Part II -- OTHER INFORMATION

Item 1.     Legal Proceedings.................................................22

Item 2.     Changes in Securities.............................................22

Item 3.     Defaults Upon Senior Securities...................................22

Item 4.     Submission of Matters to a Vote of Security Holders...............22

Item 5      Other Information.................................................22

Item 6.     Exhibits and Reports on Form 8-K..................................23






<PAGE>

                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements





                              ENVIROKARE TECH, INC.
                              Financial Statements
                    September 30, 2000 and December 31, 1999













                              WILLIAMS & WEBSTER PS
                          Certified Public Accountants
                        Bank of America Financial Center
                           W 601 Riverside, Suite 1940
                                Spokane, WA 99201
                                 (509) 838-5111




                                       1
<PAGE>


Board of Directors
Envirokare Tech, Inc.
2470 Chandler, Suite 5
Las Vegas, Nevada  89120

Accountant's Review Report

We have reviewed the accompanying statements of financial position of Envirokare
Tech,  Inc.  (a  development  stage  company) as of  September  30, 2000 and the
related  statements  of  operations  and  comprehensive  loss,  cash flows,  and
stockholders'  equity for the nine months ended  September 30, 2000, and for the
period  from  June 15,  1998  (inception)  through  September  30,  2000.  These
financial statements are the responsibility of the Company's management.

We conducted our review in accordance with standards established by the American
Institute  of  Certified  Public  Accountants.  A review  of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters.  It is  substantially  less in scope than an audit in  accordance  with
generally accepted auditing standards,  the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.  Accordingly,
we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  financial  statements  in order  for them to be in
conformity with generally accepted accounting principles.

The financial statements for the year ended December 31, 1999 were audited by us
and we  expressed an  unqualified  opinion on them in our report dated March 31,
2000, but we have not performed any auditing procedures since that date.

As discussed in Note 2, the Company has been in the development  stage since its
inception and has no revenues.  The Company's  continued  viability is dependent
upon the Company's  ability to meet its future  financing  requirements  and the
success of future  operations.  These factors raise  substantial doubt about the
Company's ability to continue as a going concern.  Management's  plans regarding
those matters are  described in Note 2. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
November 3, 2000


                                       2
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                         STATEMENT OF FINANCIAL POSITION


<TABLE>
<CAPTION>
                                                                        September 30,
                                                                            2000         December 31,
                                                                        (unaudited)         1999
                                                                       -------------    -------------
<S>                                                                    <C>              <C>
 ASSETS
       CURRENT ASSETS
             Cash                                                      $      49,118    $     148,046
             Prepaid expenses                                                   --             76,291
             Related Party Loan                                               15,175             --
                                                                       -------------    -------------
                   TOTAL CURRENT ASSETS                                       64,293          224,337
                                                                       -------------    -------------

       PROPERTY AND EQUIPMENT
             Furniture and fixtures                                            1,893            1,593
             Office equipment                                                  6,661            6,661
             Molds                                                            70,000             --
                   Less accumulated depreciation                              (2,587)          (1,385)
                                                                       -------------    -------------
                   TOTAL PROPERTY AND EQUIPMENT                               75,967            6,869
                                                                       -------------    -------------

       OTHER ASSETS
             Deposits and retainers                                           86,571           18,789
             Patent costs                                                     40,167           33,939
                                                                       -------------    -------------
                   TOTAL OTHER ASSETS                                        126,738           52,728
                                                                       -------------    -------------

             TOTAL ASSETS                                              $     266,998    $     283,934
                                                                       =============    =============

LIABILITIES & STOCKHOLDERS' EQUITY
       CURRENT LIABILITIES
             Accounts payable                                          $        --      $      88,155
             Notes payable                                                    61,965           61,965
             Accrued interest                                                 11,429            6,770
             Reimbursement due                                                  --             12,200
                                                                       -------------    -------------
                   TOTAL CURRENT LIABILITIES                                  73,394          169,090
                                                                       -------------    -------------

       COMMITMENTS AND CONTINGENCIES                                            --               --
                                                                       -------------    -------------

       STOCKHOLDERS' EQUITY
             Preferred stock, 10,000,000 shares authorized,
                   $.001 par value; 500,000 shares issued and
                   outstanding                                                   500              500
             Common stock, 200,000,000 shares authorized,
                   $.001 par value; 11,289,478 and 10,746,140 shares
                   issued and outstanding, respectively                       11,289           10,746
             Stock subscriptions receivable                                     --           (105,000)
             Additional paid-in-capital                                    1,062,357          585,400
             Stock options                                                   528,000          552,000
             Accumulated deficit during development stage                 (1,404,480)        (927,600)
             Other comprehensive loss                                         (4,062)          (1,202)
                                                                       -------------    -------------
             TOTAL STOCKHOLDERS' EQUITY                                      193,604          114,844
                                                                       -------------    -------------

             TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $     266,998    $     283,934
                                                                       =============    =============
</TABLE>

       See accountant's review report and notes to financial statements.

                                       3
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                 STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
                                                     For the          For the          For the          For the         Period from
                                                   Three Months     Three Months     Nine Months      Nine Months      June 15, 1998
                                                      Ended            Ended            Ended            Ended        (Inception) to
                                                  September 30,    September 30,    September 30,    September 30,     September 30,
                                                      2000             1999             2000             1999               2000
                                                   (unaudited)      (unaudited)      (unaudited)      (unaudited)       (unaudited)
                                                   ------------     ------------     ------------     ------------     ------------
<S>                                                <C>              <C>              <C>              <C>              <C>
REVENUES                                           $       --       $       --       $       --       $       --       $       --
                                                   ------------     ------------     ------------     ------------     ------------

EXPENSES
      Consulting fees - related parties                  24,000            8,208           47,987           38,208          340,703
      Other consulting fees                              72,000           17,195          121,115           27,695          506,165
      Rent                                                2,292            2,733            6,876            8,607           20,695
      General and administrative                         24,466           22,206           71,535           48,056          182,241
      Depreciation                                          404              163            1,202              489            2,586
      Investor Relations                                  8,800             --             28,135            4,510           28,135
      Professional fees                                  22,128            8,821           76,827           27,605          122,790
      Research and development                           13,310            7,350           20,319            7,350           91,469
      Wages, salaries, and payroll taxes                 58,658             --             98,227             --             98,227
                                                   ------------     ------------     ------------     ------------     ------------
           TOTAL EXPENSES                               226,058           66,676          472,223          162,520        1,393,011
                                                   ------------     ------------     ------------     ------------     ------------

LOSS FROM OPERATIONS                                   (226,058)         (66,676)        (472,223)        (162,520)      (1,393,011)

OTHER EXPENSES
      Interest on notes payable                           1,562            3,280            4,657            5,144           11,469
                                                   ------------     ------------     ------------     ------------     ------------
           TOTAL OTHER EXPENSES                           1,562            3,280            4,657            5,144           11,469
                                                   ------------     ------------     ------------     ------------     ------------

LOSS BEFORE PROVISION FOR INCOME TAXES                 (227,620)         (69,956)        (476,880)        (167,664)      (1,404,480)

PROVISION FOR INCOME TAXES                                 --               --               --               --               --
                                                   ------------     ------------     ------------     ------------     ------------

NET LOSS                                               (227,620)         (69,956)        (476,880)        (167,664)      (1,404,480)

OTHER COMPREHENSIVE LOSS
      Foreign currency translation loss                    (762)            --             (2,860)            --             (4,062)
                                                   ------------     ------------     ------------     ------------     ------------

COMPREHENSIVE LOSS                                 $   (228,382)    $    (69,956)    $   (479,740)    $   (167,664)    $ (1,408,542)
                                                   ============     ============     ============     ============     ============


      BASIC AND DILUTED NET LOSS
           PER COMMON SHARE                        $      (0.02)    $      (0.01)    $      (0.04)    $      (0.02)    $      (0.14)
                                                   ============     ============     ============     ============     ============

      WEIGHTED AVERAGE NUMBER
           OF BASIC AND DILUTED COMMON
           STOCK SHARES OUTSTANDING                  11,189,478       10,282,140       11,035,402       10,282,140       10,431,551
                                                   ============     ============     ============     ============     ============
</TABLE>

       See accountant's review report and notes to financial statements.

                                       4
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>


                                                            Preferred Stock             Common Stock
                                                        -----------------------   -----------------------   Additional
                                                          Number                    Number                    Paid-In
                                                        of Shares      Amount     of Shares      Amount       Capital
                                                        ----------   ----------   ----------   ----------   ----------
<S>                                                        <C>       <C>          <C>          <C>          <C>
Issuance of common stock in June, 1998
      for cash at $.001 per share                             --     $     --     10,000,000   $   10,000   $     --

Net loss for period ended December 31, 1998                   --           --           --           --           --
                                                        ----------   ----------   ----------   ----------   ----------

Balance
      December 31, 1998                                       --           --     10,000,000       10,000         --

Issuance of common stock at $.50 - $1.00 per share            --           --        746,140          746      334,053
      for cash

Issuance of  preferred stock at $.50 per share             500,000          500         --           --        249,500
      for cash

Issuance of stock options for services                        --           --           --           --           --

Contribution of capital by shareholders in the form
      of foregone payment of accounts payable                 --           --           --           --          1,847

Net loss for year ended December 31, 1999                     --           --           --           --           --

Foreign currency translation loss                             --           --           --           --           --
                                                        ----------   ----------   ----------   ----------   ----------

Balance, December 31, 1999                                 500,000          500   10,746,140       10,746      585,400

Cash received for subscriptions receivable                    --           --           --           --           --

Issuance of common stock at $0.50 - $0.75 per share           --           --        543,338          543      356,957
      for cash

Expiration of stock options                                   --           --           --           --        120,000

Issuance of stock options for services                        --           --           --           --           --

Net loss for the nine months ended September 30, 2000         --           --           --           --           --

Foreign currency translation loss                             --           --           --           --           --
                                                        ----------   ----------   ----------   ----------   ----------

Balance, September 30, 2000 (unaudited)                    500,000   $      500   11,289,478   $   11,289   $1,062,357
                                                        ==========   ==========   ==========   ==========   ==========

<CAPTION>
                                                                                   Accumulated
                                                                                     Deficit
                                                                                     During         Other         Total
                                                          Stock     Subscriptions  Development  Comprehensive  Stockholders'
                                                         Options      Receivable      Stage          Loss         Equity
                                                        ----------    ----------    ----------    ----------    ----------
                                                        <C>           <C>           <C>           <C>           <C>
Issuance of common stock in June, 1998
      for cash at $.001 per share                       $     --      $     --      $     --      $     --      $   10,000

Net loss for period ended December 31, 1998                   --            --         (34,427)         --         (34,427)
                                                        ----------    ----------    ----------    ----------    ----------

Balance
      December 31, 1998                                       --            --         (34,427)         --         (24,427)

Issuance of common stock at $.50 - $1.00 per share            --        (105,000)         --            --         229,799
      for cash

Issuance of  preferred stock at $.50 per share                --            --            --            --         250,000
      for cash

Issuance of stock options for services                     552,000          --            --            --         552,000

Contribution of capital by shareholders in the form
      of foregone payment of accounts payable                 --            --            --            --           1,847

Net loss for year ended December 31, 1999                     --            --        (893,173)         --        (893,173)

Foreign currency translation loss                             --            --            --          (1,202)       (1,202)
                                                        ----------    ----------   -----------    ----------    ----------

Balance, December 31, 1999                                 552,000      (105,000)     (927,600)       (1,202)      114,844

Cash received for subscriptions receivable                    --         105,000          --            --         105,000

Issuance of common stock at $0.50 - $0.75 per share           --            --            --            --         357,500
      for cash

Expiration of stock options                               (120,000)         --            --            --            --

Issuance of stock options for services                      96,000          --            --            --          96,000

Net loss for the nine months ended September 30, 2000         --            --        (476,880)         --        (476,880)

Foreign currency translation loss                             --            --            --          (2,860)       (2,860)
                                                        ----------    ----------   -----------    ----------    ----------

Balance, September 30, 2000 (unaudited)                 $  528,000    $     --     $(1,404,480)   $   (4,062)   $  193,604
                                                        ==========    ==========   ===========    ==========    ==========
</TABLE>



       See accountant's review report and notes to financial statements.

                                       5
<PAGE>

                     ENVIROKARE TECH, INC.
                 (A Development Stage Company)
                    STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                     For the         For the         Period from
                                                                   Nine Months     Nine Months      June 15, 1998
                                                                      Ended           Ended         (Inception) to
                                                                  September 30,   September 30,     September 30,
                                                                      2000            1999               2000
                                                                   (unaudited)     (unaudited)       (unaudited)
                                                                  -------------    -------------    -------------
<S>                                                               <C>              <C>              <C>
Cash flows from operating activities:
       Net loss                                                   $    (476,880)   $    (167,664)   $  (1,404,480)
       Adjustments to reconcile net loss
             to net cash used by operating activities:
       Depreciation  and amortization                                     1,202              489            2,586
       Stock options issued for consulting fees                          96,000             --            648,000
       Increase (decrease)  in prepaid expenses and deposits              8,510          (22,409)         (86,570)
       Increase (decrease) in accounts payable                         (100,356)           1,959             --
       Increase in accrued interest                                       4,657            4,640           11,427
       Increase in accrued expenses                                        --              1,762             --
       Increase in accrued expenses to related party                       --             17,000             --
       Expenses paid by note payable                                       --               --              2,870
                                                                  -------------    -------------    -------------

       Net cash used by operating activities                           (466,867)        (164,223)        (826,167)
                                                                  -------------    -------------    -------------

Cash flows from investing activities:
       Loan to related party                                            (15,175)            --            (15,175)
       Purchase of molds                                                (70,000)            --            (70,000)
       Patent costs                                                      (6,228)            --             (6,837)
       Purchase of equipment                                               (300)          (4,593)          (5,942)
                                                                  -------------    -------------    -------------

       Net cash used in investing activities                            (91,703)          (4,593)         (97,954)
                                                                  -------------    -------------    -------------

Cash flows from financing activities:
       Proceeds from sale of preferred stock                               --            250,000          250,000
       Proceeds from sale of common stock                               462,500          102,800          702,299
       Proceeds from issuance of notes payable to related party            --               --               --
       Proceeds from issuance of notes payable                             --             17,500           25,000
                                                                  -------------    -------------    -------------

       Net cash provided by financing activities                        462,500          370,300          977,299
                                                                  -------------    -------------    -------------

Increase (decrease) in cash                                             (96,070)         201,484           53,178

Adjustment for foreign currency                                          (2,860)            --             (4,062)

Cash, beginning of period                                               148,046            2,388             --
                                                                  -------------    -------------    -------------

Cash, end of period                                               $      49,116    $     203,872    $      49,116
                                                                  =============    =============    =============

SUPPLEMENTAL INFORMATION:

       Interest paid                                              $        --      $          42    $        --
                                                                  =============    =============    =============

       Income taxes paid                                          $        --      $        --      $        --
                                                                  =============    =============    =============

NON-CASH TRANSACTIONS:
       Note issued for purchase of property, equipment
              and operating expenses                              $        --      $       3,635    $       3,635
       Note issued for pending patent to related party            $        --      $      33,330    $      33,330
       Stock options issued for consulting fees                   $      96,000    $        --      $     648,000
       Stockholder's contribution for equipment                   $        --      $        --      $       1,847
</TABLE>


       See accountant's review report and notes to financial statements.

                                       6
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Envirokare Tech,  Inc.,  (hereinafter  "the Company"),  was incorporated in June
1998  under the laws of the State of  Nevada.  In  December  1998,  the  Company
acquired the property,  assets and undertakings of a business  manufacturing and
developing a rubber mold technology and patent rights potentially  applicable to
future  development  of a pallet  made of  recycled  materials.  The  Company is
currently  developing  marketing and manufacturing  plans for the products under
development.  The Company maintains an office in Las Vegas,  Nevada. The Company
has elected a fiscal year-end of December 31.

The Company is in the  development  stage,  and as of September 30, 2000 had not
realized any significant revenues from its planned operations.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of  significant  accounting  policies of Envirokare  Tech,  Inc. is
presented to assist in understanding  the Company's  financial  statements.  The
financial  statements and notes are representations of the Company's  management
which is  responsible  for their  integrity and  objectivity.  These  accounting
policies  conform to  generally  accepted  accounting  principles  and have been
consistently applied in the preparation of the financial statements.

Development Stage Activities

The Company has been in the development  stage since its formation in June 1998.
It is primarily  engaged in the refinement of a  manufacturing  process which is
based on  research  findings  for the  development  of pallets  made of recycled
materials.

Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.

As shown in the accompanying  financial statements,  the Company has incurred an
accumulated  deficit of $1,404,480 which includes a net loss of $476,880 for the
nine months ended  September  30, 2000 and has a working  capital  deficit.  The
Company,  being a development stage enterprise,  is currently putting technology
in  place  which  will,  if  successful,  mitigate  these  factors  which  raise
substantial doubt about the Company's ability to continue as a going concern.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of  recorded  assets,  or the  amounts  and
classification  of liabilities  that might be necessary in the event the Company
cannot continue in existence.


                                       7
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Going Concern (Continued)

The Company has raised equity  capital  through the sale of common and preferred
stock.  Management  has  proceeded  as planned in the ongoing  development  of a
recycled  plastic  and rubber  composite  pallet.  The  Company  has worked with
contract  laboratories  to conduct  in-depth  analysis of  compounds.  Extrusion
methods and  equipment  modifications  have been  studied and  refined,  as have
initial  prototypes.  During the year  ended  December  31,  1999,  the  Company
contracted  with   Thermoplastic   Composite   Designs  Inc.  and  Thermoplastic
Flowforming Technologies Corp. for professional and technical services. Finished
product is expected to be available for distribution to potential  customers for
in-use evaluation during the fourth quarter of year 2000.

Concentration of Risk

The  Company  maintains  its  three  cash  accounts  in two  separate  financial
institutions.  Two accounts  are located at one  commercial  bank in  Vancouver,
British  Columbia,  Canada.,  one  of  which  is  a  business  checking  account
maintained in U.S.  dollars.  This account totaled  $7,364,  as of September 30,
2000. This account is not insured.

Accounting Method

The Company's  financial  statements  are prepared  using the accrual  method of
accounting.

Fair Value of Financial Instruments

The  carrying  amounts for cash,  marketable  securities,  accounts  receivable,
accounts payable,  notes payable and accrued liabilities  approximate their fair
value.

Loss Per share

Loss per share was  computed by dividing  the net loss by the  weighted  average
number of shares  outstanding  during the period. The weighted average number of
shares was calculated by taking the number of shares  outstanding  and weighting
them by the amount of time that they were outstanding.  Basic and diluted shares
outstanding are the same, as the inclusion of common stock  equivalents would be
anti-dilutive.  As of September 30, 2000, the Company had convertible  preferred
stock and  stock  options  equivalent  to  12,200,000  common  shares  which are
considered to be anti-dilutive.

Cash and Cash Equivalents

For  purposes  of the  Statement  of  Cash  Flows,  the  Company  considers  all
short-term debt securities  purchased with a maturity of three months or less to
be cash equivalents.

Provision for Taxes

At September  30, 2000 and December  31, 1999,  the Company had net  accumulated
operating  losses of  approximately  $1,404,000 and $925,000,  respectively.  No
provision  for  taxes  or  tax  benefit  has  been  reported  in  the  financial
statements,  as there is not a measurable  means of assessing  future profits or
losses.



                                       8
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassification

The  reclassification  of expenses in the financial  statements  has resulted in
certain  changes  in  presentation  which  have no effect  on the net  losses or
shareholders'  equity for  September  30, 2000 and  December  31,  1999,  or the
periods then ended.

Use of Estimates

The process of preparing  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires the use of estimates and  assumptions
regarding certain types of assets,  liabilities,  revenues,  and expenses.  Such
estimates  primarily relate to unsettled  transactions and events as of the date
of the financial statements.  Accordingly,  upon settlement,  actual results may
differ from estimated amounts.

Impaired Asset Policy

In March 1995,  the  Financial  Accounting  Standards  Board  issued a statement
titled "Accounting for Impairment of Long-lived  Assets." In complying with this
standard,  the Company will review its long-lived  assets quarterly to determine
if any events or changes in  circumstances  have transpired  which indicate that
the carrying  value of its assets may not be  recoverable.  The Company does not
believe  any  adjustments  are  needed to the  carrying  value of its  assets at
September 30, 2000 or December 31, 1999.

Year 2000 Issues

Like other companies,  Envirokare Tech, Inc. could be adversely  affected if the
computer  systems the Company,  its  suppliers or customers  use do not properly
process  and  calculate  date-related  information  and  data  from  the  period
surrounding  and including  January 1, 2000. This is commonly known as the "Year
2000"  issue.  Additionally,  this issue could impact  non-computer  systems and
devices such as production equipment and elevators, etc. Any expenses associated
with the Year 2000 issue are  expensed as  incurred.  At this time,  the Company
does not have any evidence of problems associated with the Year 2000 issue.

Interim Financial Statements

The interim  financial  statements as of and for the nine months ended September
30, 2000 and 1999 included  herein have been  prepared for the Company,  without
audit.  They reflect all  adjustments  which are, in the opinion of  management,
necessary to present  fairly the results of operations  for these  periods.  All
such adjustments are normal recurring adjustments. The results of operations for
the  periods  presented  are not  necessarily  indicative  of the  results to be
expected for the full fiscal year.


                                       9
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Compensated Absences

Employees  of the Company  are  entitled  to paid  vacation,  paid sick days and
personal days off depending on job classification,  length of service, and other
factors.  The Company's  initial  payroll was in May 2000. The Company's  policy
will be to recognize  the cost of  compensated  absences  when  actually paid to
employees.  If  the  amount  could  be  estimated,  currently  it  would  not be
recognized, as the amount would be deemed immaterial at this time.

Translation of Foreign Currency

Monetary assets and liabilities denominated in foreign currencies are translated
into United  States  dollars at rates of exchange in effect at the balance sheet
date.  Gains or losses  are  included  in income for the year,  except  gains or
losses  relating to long-term  debt which are deferred  and  amortized  over the
remaining  term of the  debt.  Non-monetary  assets  and  liabilities  and items
recorded in income arising from transactions  denominated in foreign  currencies
are translated at rates of exchange in effect at the date of the transaction.

Derivative Instruments

In September 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities." This standard  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities in the
consolidated balance sheet and measure those instruments at fair value.

At September  30,  2000,  the Company has not engaged in any  transactions  that
would be considered derivative instruments or hedging activities.

Research and Development Costs

Costs of research and development are expensed as incurred.


NOTE 3 - INTANGIBLE ASSETS

In December 1998, the Company acquired technology rights from Mr. Real Morel and
his affiliated  companies of  International  Pallet Control Systems Inc. and The
Pallet  Company.  The Company is currently  investigating  the patent process on
this technology.  During the nine months ended September 30, 2000, attorney fees
of $6,228,  and for the year ended December 31, 1999 attorney fees of $609, were
added to patent cost. The amortization of patent costs will begin when the final
patents are  granted.  If the Company  does not obtain the patent,  the costs of
acquiring the patent rights from its originator will be charged to operations.


                                       10
<PAGE>

                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment are stated at cost.  Depreciation  is provided  using the
straight line method over the estimated  useful lives of the assets.  The useful
lives of property,  plant and equipment  for purposes of computing  depreciation
are five and seven years. The following is a summary of property,  equipment and
accumulated depreciation.


                                             September 30,       December 31,
                                                 2000               1999
                                              ----------         ----------
     Furniture and Fixtures                   $    1,893         $    1,593
     Less Accumulated Depreciation                   494                269
                                              ----------         ----------
     Net Furniture & Fixtures                 $    1,399         $    1,324
                                              ==========         ==========

     Office Equipment                         $    6,661         $    6,661
     Less Accumulated Depreciation                 2,093              1,116
                                              ----------         ----------
     Net Office Equipment                     $    4,568         $    5,545
                                              ==========         ==========

     Molds                                    $   70,000         $     --
                                              ==========         ==========

The Company,  in the  development of its pallet  products,  has acquired  molds,
which will be depreciated  over their expected  useful life which  currently has
not been determined. The molds are currently carried at cost. See Note 10.


NOTE 5 - DETAILS OF SHORT-TERM DEBT

Reimbursement  due,  in the  amount of  $1,847,  represented  money  owed to Mr.
Timothy Zuch for gift certificates  provided to the Company in fiscal year ended
December  31, 1998,  which were  deducted  from the  purchase  price of computer
equipment.  This debt was forgiven  during the year ending December 31, 1999 and
applied to additional paid-in capital.

Refunds of $12,200 were due at December 31, 1999 to potential investors from the
stock subscription offering. The potential investors did not meet the accredited
investor  criteria that was a  prerequisite  for inclusion in the offering.  The
refunds were paid in February 2000.

Short-term  notes payable at September 30, 2000 and December 31, 1999 consist of
unsecured  notes bearing 10% interest and are dated between  August 18, 1998 and
December 16, 1998.  The  short-term  notes are payable to Mr. Real Morel and are
due on demand.  The principal  amount on the notes is $63,965.  Interest expense
recorded  on the notes  payable at  September  30,  2000 and 1999 was $4,658 and
$1,864, respectively.


                                       11
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 5 - DETAILS OF SHORT-TERM DEBT (CONTINUED)

The  Company is a named  defendant  in an action  filed by Mr. Real Morel in the
Supreme Court of British Columbia, Canada, under which the Company was served in
May 2000.  In this  action,  Mr.  Morel  alleges  non-payment  by the Company of
amounts due  pursuant  to the  aforementioned  demand  promissory  notes.  After
consultation   with  British   Columbia  legal  counsel  and  a  review  of  the
circumstances surrounding the issuance of the notes, the Company has resolved to
dispute this liability. Management of the Company believes that the outcome will
not have a material adverse effect on the financial position of the Company.


NOTE 6 - COMMON STOCK

Upon incorporation on September 15, 1998, 10,000,000 shares of common stock were
issued at $.001 per share,  under  Regulation D, Rule 504. At December 31, 1998,
this common  stock was held by 30  shareholders,  none of whom held in excess of
ten percent of the total.

On February 22, 1999, the Board of Directors  authorized a 2-for-1 reverse stock
split of the Company's $.001 par value common stock. This reverse stock split is
not reflected in the statement of stockholders'  equity because of the effect of
the March 1, 2000 forward stock split described below.

During the year ended  December  31, 1999,  373,070  shares of common stock were
issued for cash.  At December  31, 1999 the balance of stock  subscriptions  was
$105,000. Stock subscriptions were paid, and stock issued February 16, 2000, for
these common stock shares.

During the month of February 2000, 343,338 shares of common stock were issued at
$0.75 per share. The Company's common stock was split 2 for 1 in March 2000. The
split was effected as a 100% stock dividend payable March 6, 2000, to holders of
record March 1, 2000. All references in the accompanying financial statements to
the number of common  shares and per share  amounts  for the nine  months  ended
September  30,  2000 and year ended  December  31,  1999 have been  restated  to
reflect the stock split.

During  September 2000,  200,000 shares of common stock were issued at $0.50 per
share. These shares were issued pursuant in reliance upon the exemption from the
registration  requirements  of the  Securities  Act  of  1933  specified  by the
provisions of Regulation S.


NOTE 7 - PREFERRED STOCK

During the year ended December 31, 1999,  500,000 shares of preferred stock were
issued for $250,000 cash. The preferred  stock has no rights for dividends,  but
is  convertible  to common  stock at the rate of ten  shares of common  for each
preferred share. This conversion feature was modified to twenty shares to one by
the stock split effective March 1, 2000.



                                       12
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 8 - STOCK OPTIONS

In September  1999, the Board of Directors (the "Board") of the company  adopted
the Envirokare  Tech, Inc. 1999 Stock Plan (the "Plan"),  subject to approval of
the Company's  shareholders.  The  shareholders  approved the plan at the Annual
Meeting of the Company's shareholders in May 2000. As adopted, the Plan provided
for  authorization of 2,000,000 shares of common stock for issuance  pursuant to
awards under the Plan. In September 1999, the board had approved the granting of
non-qualified  options under the Plan to purchase an aggregate  1,150,000 shares
of common stock. In June 2000, the Board voted to adjust the number of shares of
Common Stock authorized for issuance under the Plan from 2,000,000 to 4,000,000,
pursuant to the  anti-dilution  provisions  of the Plan,  to reflect the 2 for 1
split of the Company's common stock effected in March 2000. The Board also voted
to make  corresponding  adjustments  to the number of shares subject to previous
option grants, and the exercise prices for such options.

The Company filed a Form S-8 under the Securities  Act of 1933 (the  "Securities
Act") with the  Securities  and  Exchange  Commission  in March 2000 to register
1,150,000  shares  (2,300,000  as adjusted  for the stock split) of common stock
authorized  for issuance  under the Plan. In September  2000,  the Company filed
Post-Effective  Amendment  No. 1 to the Form  S-8,  to  register  the  remaining
1,700,000 shares under the Securities Act.

The  purposes  of the  1999  Stock  Plan are to  attract,  retain  and  motivate
employees,  directors  and  consultants  of  the  Company.  In  accordance  with
Statement  on  Financial  Accounting  Standard  No.  123,  the fair value of the
options granted was estimated using the Black-Scholes  Option Price Calculation.
The  following  assumptions  were  made to value the  stock  options:  risk-free
interest rate at 5%, expected life at 10 years, and expected  volatility at 30%.
For the year ended  December 31, 1999, the Company  recorded  $552,000 ($.48 per
option) in  consulting  fees for the value of the options based upon these Black
Scholes  assumptions.  These stock options will expire  September 29, 2009. (See
Note 9). The plan also  requires  early  exercising  of the  options for various
reasons,   including  employment  termination,   separation  from  services,  or
cancellation of consulting contracts.

All of the option  grants made by the Company to date  provide  that the options
are exercisable  immediately.  The Plan restricts sales for shares received upon
exercise  of  options,  limiting  each  optionee  to sales in any year of option
shares equal to 25% of the total number of shares  received under the optionee's
grant.

In August 2000,  options with respect to 500,000  shares of common stock expired
unexercised.  In  September  2000,  the Board voted to confirm that those shares
were again made available for award under the Plan, pursuant to Plan provisions.
Also in September  2000,  the Board had  approved the granting of  non-qualified
options under the Plan to purchase an aggregate  100,000  shares of common stock
shares to the company's  President and 300,000 shares of common stock to various
consultants. In accordance with Statement on Financial Accounting




                                       13
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 8 - STOCK OPTIONS (CONTINUED)

Standard No. 123, the fair value of the options  granted was estimated using the
Black-Scholes Option Price Calculation.  The following  assumptions were made to
value the stock  options:  risk-free  interest  rate at 5%,  expected  life at 9
years, and expected volatility at 30%. For the quarter ended September 30, 2000,
the Company  recorded $96,000 ($.24 per option) in consulting fees for the value
of the options based upon theses Black Scholes assumptions.  These stock options
will  expire  September  29,  2009  (see Note 9). The plan also  requires  early
exercising of the options for various reasons, including employment termination,
separation  from  services,  or  cancellation  of  consulting  contracts.  As of
September 30, 2000,  there remained  1,800,000  shares of common stock available
for issuance under the Plan.


                                                               Fixed Plan
                                                         -----------------------
                                                                       Weighted
                                                                       Average
                                                         Number of     Exercise
                                                          Shares        Price
                                                        ----------    ----------

Outstanding at December 31, 1998                              --      $     --
Granted                                                  2,300,000          .575
                                                        ----------    ----------
Outstanding at December 31, 1999                         2,300,000          .575
Expired                                                   (500,000)         .575
Granted                                                    400,000          .500
                                                        ----------    ----------
Outstanding at September 30, 2000                        2,200,000    $     .561
                                                        ==========    ==========

Options Exercisable at September 30, 2000                2,200,000    $     .561
                                                        ==========    ==========


NOTE 9 - RELATED PARTIES

Jeannie M. Runnalls, who was appointed president, secretary, and director of the
Company on January 24, 2000, received $23,987 in cash for consulting fees during
the first nine months of 2000. Jeannie M. Runnalls, received $22,715 in cash for
consulting fees during the year ended December 31, 1999.

Stock  options of 2,300,000  were issued for common stock shares during the year
ended  December  31,  1999.  Of these stock  options,  1,000,000  were issued to
related parties (see Note 8).


                                       14
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 9 - RELATED PARTIES (CONTINUED)

Madelyn  Thomas,  who received  $10,000 in consulting fees under the terms of an
ongoing  contract  as of  December  31,  1998 and an  additional  $20,000  as of
December 31, 1999,  is the wife of Charles W.  Thomas,  former  President of the
Company. Mrs. Thomas terminated this contract effective June 30, 1999.

On August 8, 2000,  the Company  authorized a  shareholder's  loan to Jeannie M.
Runnalls in the amount of $15,000.  Terms of the loan require interest  payments
of 7% per annum simple interest. The shareholder loan balance, including accrued
interest, at September 30, 2000 was $15,175.

On September 5, 2000, the Company granted 100,000 stock options for common stock
shares to the new president of the Company. See Note 8.


NOTE 10 - COMMITMENTS AND CONTINGENCIES

The Company  entered into  consulting  contracts with Susan Westfall and Madelyn
Thomas on November 1, 1998 for the purpose of establishing  corporate offices on
behalf of the Company.

The terms of Ms. Westfall's contract specified that she would receive $2,500 per
month  for the  term of the  contract,  which  commenced  November  1,  1998 and
terminated April 30, 1999. The terms of Mrs.  Thomas's  contract  specified that
she would receive $5,000 per month for the term of the contract, which commenced
November  1,  1998  and  terminated  June  30,  1999.  Both  contracts  provided
indemnification  against any and all liability and provided for reimbursement of
expenses up to a specified amount.

On April 1, 1999,  the Company  entered into a lease for office space in British
Columbia  for the  period of twelve  months  beginning  April 1,  1999.  Monthly
payments  for the  initial  year of the lease  were $800  (CDN) per  month,  not
including  utilities.  This  lease was  cancelled  as of July 31,  1999  without
penalty.

The Company  entered  into a lease for office  space in Nevada for the period of
thirty-six  months beginning  October 1, 1998.  Monthly payments for the initial
year  of the  lease  were  $730  per  month,  including  $40 for  utilities.  In
compliance with the terms of the lease, the Company has purchased  comprehensive
public liability insurance. Future annual minimum lease payments for the term of
the lease are as follows for the years ending December 31:

                       2000                                      $2,190
                       2001                                      $6,570



                                       15
<PAGE>


                              ENVIROKARE TECH, INC.
                          (A Development Stage Company)
                        Notes to the Financial Statements
                               September 30, 2000


NOTE 10 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

In  November  1999,  the  Company  entered  into a contract  with  Thermoplastic
Composite Designs (TCD), Inc. and Thermoplastic  Flowforming  Technologies Corp.
(TPF) for  professional  and technical  services.  These  services  included the
design  and   material   specifications,   mold   fabrication,   prototype   and
demonstration  units.  The total  payable by the Company under this contract was
$133,800.  During the year ended  December 31, 1999, the amount paid was $50,800
leaving a balance owing of $83,000.  During the period ended June 30, 2000, this
balance was paid. The Company recorded $70,000 of these research and development
costs to prepaid  expenses as of December 31, 1999.  This amount  represents the
value of the molds  derived  from this  contract,  which may become  depreciable
property if no further  development  is  necessary.  As of June 30,  2000,  this
prepaid  expense of $70,000 was  reclassified  as property and  equipment.  Upon
execution  of a TCD  Licensing  Agreement,  the Company will receive a credit of
$61,600  (representing  46% of the  payments  made to TCD under the  development
contract) toward the license fee payable to TCD.




                                       16
<PAGE>

Item 2. Plan of Operation

     This Form 10-QSB  contains some  statements  that the Company  believes are
"forward-looking  statements."  These include statements about the future of the
pallet industry, statements about future business plans and strategies, and most
other statements that are not historical in nature.  Forward-looking  statements
involve  risks and  uncertainties,  including  changing  market  conditions  and
competitive,  regulatory and other matters discussed in the disclosure contained
in this Form  10-QSB and the other  filings  with the  Securities  and  Exchange
Commission made by the Company from time to time.  These and other factors could
cause  actual  results  to be  materially  different  from any  future  results,
performance  or  achievements  expressed  or  implied.  The  discussion  of  the
Company's plan of operation, including forward-looking statements, does not take
into  account  the effect of any  changes  to the  Company's  operations  or any
external  factors.  Accordingly,  readers  should not place  undue  reliance  on
forward-looking  statements.  Also,  the Company has no  obligation  to publicly
update forward-looking statements it makes in this Form 10-QSB.

     Overview

     The Company is currently in the development stage and has not yet generated
any  operating  revenues.  Since its  inception  in June 1998,  the  Company has
developed a single piece molded  pallet,  E Pallet(TM),  manufactured  primarily
from  recycled  plastics and  granulated  rubber  derived from  discarded  tires
(commonly referred to as "crumb rubber").  The Company is currently in the final
stages   of   testing   this   product,   and   expects   to  begin   generating
licensing-related  fees during 2001. Further,  the Company's  management expects
that the Company  and/or its licensees will commence  commercial  production and
sale of the E Pallet(TM) in 2001.

     The Company had originally  planned to have its licensees  begin  producing
the E Pallet(TM) in June 2000 but decided to conduct additional tests, which has
delayed the  previously  planned  production  start date by  approximately  nine
months.  Significantly  improved  substrate  technology  caused  the  Company to
rethink  their  initial  production  start-up  dates.  Consequently,  additional
product  testing was required  that would be specific to the improved  substrate
composition,  prior to  initiating  the  launch  of  production  operations  for
licensees.  Although the Company's decision to further test the E Pallet(TM) has
set back production dates, the Company believes that this additional testing has
substantially  minimized or  eliminated  any  concerns as to the E  Pallet's(TM)
design and ability to  perform.  The  Company's  testing  program  has  included
in-depth  analysis of  substrate  compounds,  extrusion  methods  and  equipment
modifications.  Initial  prototypes of the E Pallet(TM)  have been developed and
refined.  The  Company  expects  to  have  potential  customers  evaluate  the E
Pallet(TM)  through in-use testing  beginning in the fourth quarter of 2000. The
Company  believes that after a final  engineering  analysis report is completed,
the Company  and/or its licensees will commence  commercial  production of the E
Pallet(TM) once appropriate  production facilities are procured and commissioned
for production, currently anticipated for 2001.



                                       17
<PAGE>

     Liquidity and Capital Resources

     The  Company is not yet  generating  revenues.  For the nine  months  ended
September  30, 2000,  the Company had a net loss of $476,880.  The Company's net
loss  accumulated for the period from June 15, 1998 (inception) to September 30,
2000 was  $1,404,480.  The  Company  anticipates  that it will begin to generate
revenue early in 2001,  upon the planned start of production of the E Pallet(TM)
by the Company'  and/or its  licensees.  At  September  30, 2000 the Company had
current  assets of  $64,293,  consisting  of  $49,118  in cash and  $15,175 in a
related  party loan.  During the nine  months  ended  September  30,  2000,  the
Company's cash resources decreased slightly,  reflecting  increased research and
development  costs and prepaid licensing fees, offset by cash raised by issuance
of the Company's common stock for aggregate proceeds to the Company of $100,000.
At  September  30,  2000 the  Company had  current  liabilities  of $73,394.  At
September 30, 2000 current liabilities  exceeded current assets by $9,101. Other
than as  discussed  above,  the  Company  is not aware of any  trends,  demands,
commitments  or  uncertainties,  other than  those  affecting  business  and the
economy in general,  that could result in the Company's liquidity  decreasing or
increasing in a material way within the next 12 months.

     To date,  the Company has raised  capital  through  private  placements  of
common  stock  and  convertible   preferred  stock.  The  Company  has  budgeted
expenditures for the twelve months through September 2001 of $525,000, and plans
to raise  additional  funds in the next  several  months to cover  its  proposed
expenditures. These funds may be raised through additional equity financings, as
well as  borrowings  and other  resources.  The  Company  is  currently  holding
discussions  with potential  investors.  With the capital it has raised to date,
and the  additional  funds it plans to  raise in the next  several  months,  the
Company now believes  that it is at the point where it can move forward with its
production and marketing plans,  which in the short term include the start-up of
E Pallet(TM)  manufacturing  operations by the Company or licensees,  and in the
longer term include adding additional production lines and expanding the product
line mix.  Management of the Company believes that its financing plans described
above will enable it to meet its obligations  including cash requirements for at
least the next twelve months to September 30, 2001.

     To achieve and  maintain  competitiveness  of its  products  and to conduct
further  testing and  development  that will allow the Company to enter into the
production stage of operations, the Company may be required to raise substantial
funds in addition to funds already  raised through the issuance of the Company's
shares.  There can be no  assurance  that  additional  funding will be available
under  favorable  terms,  if at all. If adequate  funds are not  available,  the
Company may be required to curtail operations  significantly.  For example,  the
Company's plans include setting up its own production operations, in addition to
having  licensees  produce the E Pallet(TM).  If the Company cannot raise enough
funds,  it may not be able to carry  out its plan to set up its own  operations.
The Company might also have to obtain funds through  entering into  arrangements
with  collaborative  partners  or others.  That  could  require  the  Company to
relinquish  rights to certain  products,  which could impair  future  sources of
revenues for the Company.



                                       18
<PAGE>

     Product Testing and Development

     The Company has been actively involved in extensive testing and development
of the E Pallet(TM).  The Company  contracted with substrate  component  testing
engineers in the Akron,  Ohio area who performed the primary series of component
testing.  Subsequent  testing has been conducted on the E Pallet(TM) at Virginia
Polytechnic  Institute  and State  University  through  the William H. Sardo Jr.
Pallet and Container Research  Laboratories.  Additional E Pallet(TM) testing is
scheduled  during  November  2000 at Virginia  Polytechnic  Institute  and State
University testing facility.  The Company's  development focus is to ensure that
the E Pallet(TM) meets or exceeds current performance standards for hardwood and
plastic  pallets,  and that the E Pallet(TM) will be superior in performance and
will be cost  effective  to  produce  and sell.  In  particular,  the  Company's
development focuses on the safety, structural integrity,  reliability,  and cost
effectiveness  of the E  Pallet(TM),  involving  in-depth  analysis  of compound
variables and  strengths,  extrusion  methods and equipment  modifications.  The
Company believes that after extensive  studies and refinement,  it has minimized
or  eliminated  any  concerns  as to the E  Pallet's(TM)  design and  ability to
perform.  The Company  plans to conduct  further  testing which it believes will
provide  information  as to the longevity of the E Pallet(TM)  compared to other
pallets.  Analysis to date  indicates  that the  Company's  standard  48-inch by
40-inch  E  Pallet(TM)  will  surpass   current   hardwood  and  plastic  pallet
performance and will be a strong competitor in the pallet industry worldwide.

     On November 16, 1999, the Company and Thermoplastic Composite Designs, Inc.
("TCD"),  entered into a  product/technology  development contract in connection
with  TCD's  assisting  the  Company  in  modifying  earlier  versions  of the E
Pallet(TM)   design.   TCD  is  a  composite  systems   engineering  and  design
corporation.  The  contract  required  TCD to  deliver a pallet  that would meet
design specifications including:  48-inch by 40-inch dimension; a maximum weight
requirement; and a target substrate composition. The contract also provided that
TCD would supply the appropriate  engineered E Pallet(TM) mold to be used at the
Company's first production facility. This first generation mold was available to
produce  finished  product in April  2000.  The  Company's  payments  under this
contract totaled $50,800 in 1999, and $83,000 in 2000,  completing the Company's
payment  obligations  under the  contract.  Finished  E  Pallet(TM)  product  is
scheduled for distribution to potential  customers for in-use  evaluation during
the fourth quarter of 2000.


                                       19
<PAGE>

     Anticipated Revenue Sources; Marketing and Distribution

     The Company  plans to generate  revenues  from  national and  international
licensing  agreements and royalty  agreements based on units of production.  The
Company  will also  develop  and operate its own  manufacturing  facilities.  In
December  1999,  the Company  announced  that it had received a letter of intent
from  Cultech  International   Corporation  to  manufacture  and  market  the  E
Pallet(TM)  in Asia.  Cultech  intends  to obtain  exclusive  manufacturing  and
marketing rights to the E Pallet(TM) for all of Asia. The terms of the letter of
intent provide that the Company will deliver to Cultech a  manufacturing  system
that will  enable  Cultech to produce one million E  Pallets(TM)  per year.  The
parties also  contemplate  that,  once  engineering  studies are  satisfactorily
completed,  the parties will enter into an agreement  whereby  Cultech will make
payments to the Company  including  licensing fees and royalty payments based on
units of E  Pallet(TM)  production,  although  the  letter  of  intent  does not
obligate the Company to enter into such an agreement.

     In March  2000,  the  Company  announced  that it had  received a letter of
intent from Bryan Container Company,  located in Bryan, Texas, providing for the
Company  and  Bryan  to  negotiate  an  agreement  whereby  Bryan,  a  container
manufacturer,  would modify its production  site to incorporate the E Pallet(TM)
manufacturing  system,  using the Company's  custom E Pallet(TM)  molds. In June
2000, the Company and Bryan Container  decided not to pursue these  contemplated
arrangements and are not negotiating any formal  agreement.  Also in March 2000,
the Company announced that it had received a letter of intent from International
Pallets  of  California,  providing  for the  parties  to  enter  into a  formal
agreement  to allow  International  Pallets  to  produce,  market and sell the E
Pallet(TM)  in California  and Nevada.  However,  in June 2000,  the Company and
International Pallets decided not to pursue these contemplated  arrangements and
are not negotiating any formal  agreement.  The Company currently plans to build
and operate a wholly owned  operation for California  and Nevada.  The Company's
management  anticipates  that  initial  production  of the E  Pallet(TM)  should
commence in 2001 from the Company's planned production facility.

     Proposed Acquisition

     In July 2000,  the Company  announced that it had signed a letter of intent
with  Electroship (NY) Inc.  ("Electroship"),  whereby the Company would acquire
all of the outstanding  stock of Electroship in exchange for common stock of the
Company,  with other terms and  conditions  to be agreed  upon.  It is currently
anticipated that the Company would issue approximately 2.5 million shares of its
common stock in exchange for the Electroship shares. Electroship,  based in Long
Island,  New  York,  develops  wireless  tracking  technology  for the  shipping
industry.


                                       20
<PAGE>


     Employees

     The Company  currently  has four  full-time  employees.  Management  of the
Company  anticipates using consultants for business,  accounting and engineering
services on an as-needed basis.  Management does not currently anticipate making
any significant changes to the Company's employee headcount.


                                       21
<PAGE>

                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings

     Reference is made to the Company's  Quarterly Report on Form 10-QSB for the
quarterly period ended June 30, 2000, for a discussion of an action filed by Mr.
Real Morel against the Company in the Supreme Court of British Columbia, Canada.


Item 2. Changes in Securities

     On or about  September  25, 2000,  the Company  sold 200,000  shares of its
$.001 par value  common  stock for $.50 per  share.  The shares  were  issued in
reliance upon the exemption from the registration requirements of the Securities
Act of 1933 specified by the provisions of Regulation S promulgated  thereunder.
Specifically,  the offers and sales were made to "non-U.S.  persons  outside the
United States of America," as set forth in Regulation S. The offering  price for
the shares was arbitrarily established by the Company and had no relationship to
assets, book value, revenues or other established criteria of value. The Company
realized proceeds of $100,000. The proceeds of the offering were used to pay for
operating costs and provide working  capital.  There were no commissions paid on
this transaction.


Item 3. Defaults Upon Senior Securities

     None.


Item 4. Submission of Matters to Vote of Security Holders

     None.


Item 5. Other Information

     Effective September 5, 2000, Richard M. Clark was elected a Director of the
Company.  He was also  elected as  President,  Secretary  and  Treasurer  of the
Company,  succeeding  Jeannie M. Runnalls in those  positions.  Ms.  Runnalls is
continuing to serve as a Director of the Company.


                                       22
<PAGE>


Item 6. Exhibits and Reports on Form 8-K

     (a)  Exhibits

     3.1  Company's  Articles  of  Incorporation,  as amended  October  12, 1999
          (incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Annual  Report on Form 10-KSB for the year ended  December  31,  1999,
          filed with the Commission on April 7, 2000).

     3.2  Company's  By-laws as amended and restated May 31, 2000  (incorporated
          herein by reference to Exhibit 3.2 to the Company's  Quarterly  Report
          on Form 10-QSB for the  quarterly  period ended June 30,  2000,  filed
          with the Commission on August 14, 2000).

    10.1  General  Assignment of Assets of the Rubber Mold Technology,  dated as
          of December  15,  1998,  between  Real  Morel,  as  Assignor,  and the
          Company, as Assignee (incorporated herein by reference to Exhibit 4 to
          the  Company's  Registration  Statement  on Form 10-SB  filed with the
          Commission on May 14, 1999,  Registration  No.  000-26095  ("Company's
          Form 10-SB")).

    10.2  Promissory Notes Executed by the Company in Favor of Real Morel, dated
          as of December 15, 1998, December 15, 1998, August 18, 1998, September
          24, 1998 and  November 16, 1998  (incorporated  herein by reference to
          Exhibit 5 to Company's Form 10-SB).

    10.3  Management Services  Agreement,  dated as of November 1, 1998, between
          Susan Westfall, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 6 to Company's Form 10-SB).

    10.4  Management Services  Agreement,  dated as of November 1, 1998, between
          Madelyn Thomas, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 7 to Company's Form 10-SB).

      27  Financial Data Schedule

     (b)  Reports on Form 8-K

     The  Company  filed no reports on Form 8-K  during the three  months  ended
September 30, 2000.


                                       23
<PAGE>


                                    SIGNATURE

     In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on November 14, 2000.


                                       ENVIROKARE TECH, INC.
                                       Registrant

                                       By:      /s/   RICHARD M. CLARK
                                           ------------------------------------
                                           Name:  Richard M. Clark
                                           Title: President and Director
                                                  (Principal Executive Officer
                                                  and Principal Financial and
                                                  Accounting Officer)


                                       24
<PAGE>

Exhibit
Number    Description of Document
------    -----------------------

3.1       Company's  Articles  of  Incorporation,  as amended  October  12, 1999
          (incorporated  herein by  reference  to Exhibit  3.1 to the  Company's
          Annual  Report on Form 10-KSB for the year ended  December  31,  1999,
          filed with the Commission on April 7, 2000).

3.2       Company's  By-laws as amended and restated May 31, 2000  (incorporated
          herein by reference to Exhibit 3.2 to the Company's  Quarterly  Report
          on Form 10-QSB for the  quarterly  period ended June 30,  2000,  filed
          with the Commission on August 14, 2000).

10.1      General  Assignment of Assets of the Rubber Mold Technology,  dated as
          of December  15,  1998,  between  Real  Morel,  as  Assignor,  and the
          Company, as Assignee (incorporated herein by reference to Exhibit 4 to
          the  Company's  Registration  Statement  on Form 10-SB  filed with the
          Commission on May 14, 1999,  Registration  No.  000-26095  ("Company's
          Form 10-SB")).

10.2      Promissory Notes Executed by the Company in Favor of Real Morel, dated
          as of December 15, 1998, December 15, 1998, August 18, 1998, September
          24, 1998 and  November 16, 1998  (incorporated  herein by reference to
          Exhibit 5 to Company's Form 10-SB).

10.3      Management Services  Agreement,  dated as of November 1, 1998, between
          Susan Westfall, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 6 to Company's Form 10-SB).

10.4      Management Services  Agreement,  dated as of November 1, 1998, between
          Madelyn Thomas, as Contractor, and the Company (incorporated herein by
          reference to Exhibit 7 to Company's Form 10-SB).

27        Financial Data Schedule


                                       25