<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE  ACT
         OF 1934

         For the fiscal year ended December 31, 2000

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934
                             Commission file number

                         GEOTEC THERMAL GENERATORS, INC
                 (Name of Small Business Issuer in Its Charter)

                    FLORIDA                                      59-3357040
         (State or Other Jurisdiction of                      (I.R.S. Employer
         Incorporation or Organization)                      Identification No.)

          1615 S. Federal Highway, Suite 101, Boca Raton, Florida 33432
               (Address of Principal Executive Offices)(Zip Code)

                                 (561) 447- 7370
                (Issuer's Telephone Number, Including Area Code)

Securities  registered  under  Section 12(b) of the  Securities  Exchange Act of
1934:

         Title of Each Class           Name of Each Exchange on Which Registered

                  None                                 None

Securities  registered  under  Section 12(g) of the  Securities  Exchange Act of
1934:

                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                                (Title of Class)

Check  whether the  registrant:  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such 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 [ ]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

State registrant's revenues for the year ended December 31, 2000 -$152,261

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant on March 31, 2001, computed by reference to the closing bid price
of the Geotec Thermal Generators, Inc. Common Stock as reported by OCTBB on that
date $.685: $3,000,913

                      APPLICABLE ONLY TO CORPORATE ISSUERS

The number of shares  outstanding of the  registrant's  Common Stock,  par value
$.001 per share (the "Common Stock"), as of March 31, 2001, was 21,960,108


Transitional Small Business Disclosure Format (check one):  Yes        No     X
                                                               -------   -------

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

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                                     PART 1

ITEM 1.  DESCRIPTION OF BUSINESS


1. General

The Company was incorporated in the State of Florida in February 1998 to provide
services in the energy industry.  The Company's  offices are located at. 1615 S.
Federal Highway,  Suite 101, Boca Raton,  Florida 33432. The telephone number is
(561)447-7370   the  fax  number   (561)447-7371   and  the  e-mail  address  is
RLueck@Mindspring.com.

The  Company  has  obtained  a ten-year  exclusive  license to market and sell a
unique oil treatment service to customers in North,  Central, and South America.
This technology,  Gas Generators(TM) (or the  "Generators(TM)"),  is designed to
produce a  thermo-chemical  treatment of oil and gas wells,  designed to restore
and increase output capacities,  thereby enabling  increased  production of oil.
The  proprietary  technology  was developed by the former Soviet Union  Military
Research and  Production  Facility,  ("FR&PC  ALTAI,") for the USSR  Ministry of
Geology.  This increase in oil  production  can be measured in barrels per year,
with one barrel of oil valued at  approximately  US$ 29.00 as of December  2000.
The Company was granted an exclusive  license to import the  Generators(TM)  for
use in the oil and gas exploration  industry in August 1997 and three subsequent
contracts  comprise  the  patentability,  long-term  agreement  and  transfer of
technology.

2. Background

FR&PC ALTAI,  manufactures many technologies,  from atomic-size  diamond powders
and nitrogen air bag  technology to advanced  military  weapons and rocket fuel.
Their  firm has  been  developing  (since  the  1950's)  and  manufacturing  the
Generators(TM)  since the early 1970's  (experimentation on 6,500 wells prior to
1986, and  subsequent  commercialization  with an additional  30,000 wells since
1986)  and  have  continued  to  refine  the  technology,  striving  to make the
Generators(TM)  suitable for all  geological  conditions  to depths below 22,000
feet.

The USSR  Ministry  of Geology  approached  FR&PC  ALTAI in the early  1970's to
resolve  the  problem  of  under-productive  oil  wells,  and then to  design an
economical  process  that would  increase the  commercial  growth of oil and gas
inventories  while  simultaneously  raising the efficiency of oil, gas and input
wells.  Upon  evaluating  the  filtration  properties of the rock  formations in
various  formations,  they identified the problem of rock  formations  suffering
typically irreversible changes during the operation and servicing of the wells.

The current model, PGDBK Generator, has been activated in more than 30,000 wells
since its  development.  For  example,  in the Tyumen  oil basin in Russia,  the
result  was an  additional  extraction  of 295  million  tons of oil (i.e.  2.36
billion barrels of oil, when valued per barrel at $15.25, is approximately US$36
Billion).

Using the Generators(TM) in the Aktyubiinsk  region,  several oil wells that had
been considered to be "exhausted" have been revived, with their capacity greatly
increased.  The additional  extraction from the  successfully  treated wells has
averaged 12,000 barrels of oil per year/per well (US$183,000). Wells in specific
fields have yielded results averaging 125 barrels per day increase.  Once a well
is treated,  the service  benefits  can last from  several  months up to several
years,  depending  on the  geological  characteristics  of the area and  several
technical characteristics at the site.

                                       2
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3. Generator(TM) Technology/Applications

PGDBK Gas Generators(TM)  perform an advanced well stimulation  process designed
to increase  oil and natural gas output.  The  technology  has been proven to be
safe and effective  throughout  regions of Asia and Eastern Europe.  Compared to
similar services, such as hydraulic fracturing or acidizing,  the Generators(TM)
are much more effective and safe, and much less costly. The Generators(TM)  were
developed  utilizing  a method of bed  fracture  with the  pressure  of a solid,
pulsating  propellant charge. The Generators(TM) do not contain explosives and a
combustion blast does not occur,  which is obviously  important for governmental
safety and environmental considerations.

Customers best suited for using the Generators(TM) are sites with high pressure,
oil-rich    levels   where    filtration    properties   of   the   local   rock
formation/structure  have undergone  irreversible  changes,  thereby causing the
well to become non-producing or inactive. More than twenty-five years of Russian
service  experience  has provided the Company with data that  verifies  that the
Generators(TM)  utilize  a  process  which  is a  clean,  safe,  economical  and
environmentally-sound  procedure  which is capable of  creating  the  rebirth of
non-producing wells.

Until now,  comparative  services have been cumbersome and costly.  However, the
Generators(TM)  do not  require  any pumps or other  compressor-type  machinery,
which can be  prohibitive,  as they are often bulky and  difficult to use.  This
makes the Generators(TM) ideal for regions/sites,  which are difficult to access
due to certain geological properties and characteristics.

The  reduced  cost to  operators  is  profound  when  compared  to  conventional
hydraulic  fracturing  methods.  The procedure is relatively  simple, and easily
handled by small personal units. The entire Generator (TM) treatment process can
be  completed  in several  hours,  and always in less than one entire  day.  The
hydraulic fracturing process typically takes several days due to its complexity,
and in  difficult  scenarios,  the  process  has been  known to take  weeks with
substantial cost to obtain  noticeable  results at a much lower success rate and
yield than the Company's exclusive technology.

4. Patents and Trademarks

The Company's  believes that the technology and resulting  processes and methods
developed  by  FR&PC  ALTAI  have  not  been  discovered/utilized  by any  other
competitors  on an  international  basis.  As such, the Company has filed US and
international   patents  on  several  composite   materials,   and  on  the  use
characteristics of the Generators(TM) for oil, gas and water wells. In addition,
confidential  and  proprietary  information  owned  by  the  Company,  has  been
protected by  Confidentiality  Agreements  and Employee  Contracts,  designed to
cover all proprietary technology and other confidential information.  Trademarks
and trade  names  will and do protect  both the  Company  and the  Generator(TM)
registered names.

5. Vendors, Suppliers, Distributors, Customers

The Company and management have spent  considerable time, effort, and expense in
developing  strong  relationships  and  alliances  with  several   organizations
involved in the energy industry throughout the world.

                                       3
<PAGE>

The Company's  exclusive Gas Generators(TM)  Development  Agreement,  with FR&PC
ALTAI, signed in 1997, includes a long-term  Technology  Agreement  (effectively
triggered in July 2000, with the Company's acceptance of the technology) for ten
years,  with a ten-year  renewal option.  The exclusive  service areas presently
encompass North, Central, and South America. Of the 2.9 million oil/gas wells in
the US and  Canada  and  2.5  million  wells  in  South/Central  America,  it is
estimated that the majority of the wells contain the general geological criteria
necessary  to  allow   successful   treatment   from  the  Company's   exclusive
Generators(TM) technology.

The Company  will  purchase  the  generators  through a Russian  company,  which
regulates  the sale  and  subsequent  use of the  technology.  In 1993,  Russian
President  Boris  Yeltsin  established  Rosvooruzhenie,  now known as  Roooo,  a
government-controlled  company to import and export military type technology. In
August 1997, it was reorganized into the Federal State Unitary Enterprise, State
Company,   Rosvooruzhenie,   and  has  become  the  largest  trader  in  Russia,
controlling more than 90% of the country's  exports of weapons and military type
equipment, by dealing with over fifty different countries.  All of the Company's
Generators(TM) will be imported to the United States by Rosvooruzhenie.


The  Company  retains  the right to  decline  to treat any  well,  designed  for
instances when a particular well does not meet the  Generators(TM)  requirements
for successful treatment. The Company estimates that eighty percent (80%) of the
stripper  wells in the US and Canada are candidates to be  successfully  treated
with the  Generators(TM)  process.  In  addition,  a fee for a  service  pricing
structure  has been  established  with a view to be price  competitive  to other
fracturing methods, including nitrogen or CO2 bed fracturing.  This procedure is
scientific  in nature with the ability to calculate  the success  potential  and
yield for any well with the proper data inserted into formulas that comprise the
body of knowledge for use of the PDGBK gas generators.

The first 60  generators  were  received in the  Companies  US  warehouse in the
Spring  of 2000.  The  Company  is  required  to  purchase  a  minimum  of 5,000
generators over the next ten years. A total of 1,000  generators are required to
be  ordered  in the  first  two  years  (starting  with  the  acceptance  of the
technology in July 2000,  by the Company),  with a minimum of 500 units per year
in the subsequent eight years.


  In the late  spring/early  summer of 2000,  Geotec treated 20 wells to qualify
and prove the technology according to the standards established in the Agreement
between the Russian Federation and the Company.

The purpose of these well treatments was to:

o        Demonstrate the technology worked according to the representations made
         by the Russian Federation, the manufacturer of the gas generators;
o        Prove that the generators  communicated with the hydrocarbon  reservoir
         such that increases in hydrocarbons could be reasonably expected in all
         future well treatments;
o        Acquire the technology from the Russian technical  staff,  that treated
         the  wells alongside the Company's  staff;
o        Demonstrate that no damage was done to the well casing,  cement  around
         the casing as well as the rock  formation;
o        Prove that the yields could be expected from different rock  formations
         at different  depths,  for the generators  available to the Company for
         these treatments (future treatments will require a greater inventory of
         generators for different depths and rock formations);
o        Show increases in marginal wells, where other methods could not provide
         economically viable well hydrocarbon increases;
o        Establish the economies of the well treatment
o        Train  the  Company's  staff  such  that the staff  could  utilize  the
         generators without assistance from the Russian training crews;
o        Establish data from all the wells, to utilize in publications  and with
         well  operators,  including the filming of the process,  to confirm the
         technology;

The Company has not treated any additional  oil wells.  The Company is arranging
for the return of  representatives  from the Russian  Federation to complete the
training of the Company's staff. The Company expects to complete training in the
second quarter of 2001.

                                       4
<PAGE>

 A team of FR&PC ALTAI  scientists  did join the Company's US treatment  team in
the Spring and Summer of 2000,  for purposes of treating the initial  wells that
were utilized to transfer the technology to the Company. Final field training is
scheduled in the second  quarter of 2001.  Results from the first treated wells,
confirmed  the  value  of the  technology.  Also,  during  the  treatments,  the
Company's technical  personnel were trained on safety and effectively  conducted
the entire procedure,  from assembly and ignition down to data collection. In 20
out of 20 wells, the technology  established  communication  with the reservoir.
This was seen instantly on the well site. In some cases,  initial production was
generated  from the  wellhead.  No known  damage was  created  in the wells,  as
demonstrated,  by water (in the case of a water injection well that was treated)
or hydrocarbon  increased  production.  The Company  contracted for these wells,
without having the technology  transferred,  which was the purpose of these well
treatments.  Of the 20  wells,  15 wells  were shut in for 4-15  years,  and the
balance of the wells were  producing 1 barrel of oil, or less per day,  prior to
treatment.

The technology,  as transferred,  in management's opinion, would only be used in
those wells to be  commercially  viable which are about 7 of the wells that were
treated.  Now that the technology has been acquired,  the Company can determine,
in advance, which wells should be treated and what the yields should be from the
mathematical probability curves.

These  treatments  confirmed to management  that the claims made by FR&PC ALTAI,
which are included on the Company's web site, for success and hydrocarbon yield,
are actually exceeded by proper use of the technology.

6. The Market: Target Customers and Marketing Strategy

There are 2.9 million oil and gas wells in North  America and 2.5 million  wells
in Central and South  America.  The Company  believes a  substantial  portion of
these wells will benefit from stimulation with the PGDBK Generators(TM).  Of the
number stimulated, FR&PC ALTAI has determined an average success rate of 70% for
oil wells and 90% for gas wells.

Short Term Strategy

         The Company  has  determined  that its  Generator(TM)  services  can be
         provided  at an almost  negligible  cost when  compared  to the  profit
         potential available for oil and gas wells, with a high rate of success.
         This success is documented  though  results -- evidenced by the Russian
         certification of the Generator(TM)  process, which shows a 65%+ success
         rate of first  6,500 well  treatments  during the  product  development
         stage, which was concluded in 1986.

         The Company will not benefit from its process unless the  Generator(TM)
         well treatment is successful.  The Company will treat a well for 38-50%
         (or a negotiated fee for service) of increased production of new oil or
         gas, as produced by the Company's treatment process.  (The revenue sums
         are subsequent to the land lease override and state  production  taxes,
         which  generally  account  for  20% of  the  gross  production.)  As an
         example,  if the oil  well  is  producing  20  barrels  per day  before
         treatment,  and  produces  120 barrels of oil per day after  treatment;
         then the  Company  would  receive  one half of 100 barrels per day (120
         less the 20 barrels for the land lease and state  production  taxes) or
         about  $1250 per day.  (calculated  at $25 per barrel)  Annual  revenue
         would be approximately $300,000 per year for a well with this increased
         yield.

         As with any well treatment procedure, this process works for a specific
         period of time. The Company will subsequently  re-treat the well, as in
         the example  cited above,  then split the gross  revenues with the well
         operator, less the land lease override and state production taxes. Well
         treatment will be made available as long as, in the Company's  opinion,
         there remains a substantial opportunity to the increase well production
         and oil or gas output,  or the well  operator  may opt to pay a fee for
         service, if the Company is unwilling to continue treatments.

                                       5
<PAGE>

         The Company  anticipates  expanding its sales and technical  staff upon
         receipt of additional financing, and plans to continue contracting with
         several oil well operators and energy companies throughout the US.

         Generator(TM)  treatment  service will initially be performed in the US
         and Canada, for the near term, with oil and gas wells that have limited
         or no  production.  Of the 2.9 million wells in the US and Canada,  2.5
         million  wells are  inactive  or are very low  producers.  The  Company
         estimates that at least two-thirds of these wells are owned by small or
         intermediate-sized  companies,  comprising  85%  of  the  oil  and  gas
         production in the US and Canada.

Long Term Strategy

         Company's  management feels that a great opportunity  exists with large
         oil and gas  companies  in the US,  Canada,  and  offshore  wells.  The
         Company does not believe that all large oil well companies will provide
         a  percentage  of the oil to be produced at the current  pricing of oil
         and gas.  Rather,  the Company  believes it will  receive a fee for its
         Generator treatment services, often as high as $1,000,000 per treatment
         for offshore wells. Many offshore oilrigs have greater than five wells,
         drilled  below the ocean,  and  therefore  the  process  may  produce a
         revenue stream without oil override contracts in these instances.

         It is the Company's  strategy to separate itself from any other company
         using  inert gases that are pumped  into a well,  similar to  hydraulic
         fracturing, with the same 20-30% success rate. It is also the Company's
         strategy to differentiate  itself from any other company  utilizing gas
         generator technology and the Company has:

         a. Filed for patent, the case-less gas generator, which can  be  custom
            fitted to the oil producing zone height at the well site
         b. Filed for patent,  the  length  between  and  sequence  of  the  gas
            igniters, as well as their location inside the propellant
         c. Filed for patent,  the  pressure  sequence  of  gases as produced by
            location of the gas igniters
         d. Emphasized  the  proprietary nature of the gas propellant materials,
            and their method of production
         e. Filed for patent, the use of the Generators(TM) in several different
            forms with several well whole temperatures and conditions

         The Company  intends to maintain a high level of secrecy  regarding the
         production and use of  Generators(TM)  following the acquisition of the
         technology from FR&PC ALTAI.  The Company may transfer a portion of the
         manufacturing  technology  to  another  part of the world such as South
         America;  however,  all production  technology is not anticipated to be
         transferred outside of one production facility in the US.

7. Competition

Several  companies have been involved or are currently  involved in some type of
gas generating stimulation. The Company believes that the current gas generation
technology in use today, while somewhat effective,  is inferior to the Company's
Generator(TM)  technology, as it is more expensive and has not compiled the same
success   rate.   The   following   companies   provide   minimal   competition:
Servo-Dynamics,  Inc.,  Schlumberger  Technology,  Compulog PST, and Oryx Energy
Company.

                                       6
<PAGE>

8. Government Regulations

Jurisdiction for importing the Generators(TM) into the US for use in the oil and
gas  industry is within the scope of the Bureau of Alcohol  Tobacco and Firearms
(ATF). This agency requires the Company to be licensed under 27 CFR Part 55. The
Company has met all the  pre-qualifications,  and has been issued the  necessary
importing license.  The Company also has a Department of Transportation  license
for  transporting  the  generators  by common  carrier in North America from the
Company's licensed US depot.

Oil Industry Regulation

         General.   Political  developments  and  federal  and  state  laws  and
         regulations  (and orders of regulatory  bodies  pursuant  thereto) will
         affect the  Company's oil and natural gas services from time to time in
         varying  degrees.  In particular,  federal and state tax laws and other
         regulatory  laws  relating to the  petroleum  industry,  and changes in
         those laws and the underlying administrative regulations, govern a wide
         variety of  matters,  including  the  drilling  and spacing of wells on
         producing acreage, allowable rates of production,  marketing,  pricing,
         prevention of waste and pollution  and  protection of the  environment.
         Such laws,  regulations  and orders  may  restrict  the rate of oil and
         natural gas production below the rate that would otherwise exist in the
         absence of such laws,  regulations  and  orders  and may  restrict  the
         number of wells that may be drilled on a particular lease.


         Price Regulations.  Effective January 28, 1981,  Congress abolished all
         federal controls on the price of domestically  produced oil. Since that
         date,  competition  and supply and demand  primarily  have affected the
         price of oil.  Sales of natural gas by the  Company's  partners will be
         subject to  regulation  of  production,  transportation  and pricing by
         governmental  agencies.  Generally,  the regulatory agency in the state
         where a producing gas well is located supervises  production activities
         and, in addition,  the  transportation  of natural gas sold intrastate.
         Since the  adoption  of the  Natural Gas Policy Act of 1978 (the NGPA),
         the Federal  Energy  Regulatory  Commission  (AFERC) has  regulated the
         price of intrastate as well as interstate gas.

         The NGPA is a complicated and lengthy piece of legislation. It provides
         for wellhead price  controls for specified  time periods,  decontrol of
         certain  prices  depending  on location,  depth or time of  production,
         emergency  allocation  authority,  curtailment of deliveries to certain
         consumers coupled with preferential delivery status to other consumers,
         incremental  pricing  to large  industrial  consumers,  refunding  with
         interest  as  to  receipts  in  excess  of  the  ceiling  prices,   and
         substantial  penalties  (both civil and criminal) for violations of the
         NGPA.  Complex  pricing  provisions  of the NGPA include  approximately
         thirteen major pricing categories.

         Certain states have adopted legislation which has the effect of setting
         a ceiling price for certain  natural gas sold under existing  contracts
         and not committed or dedicated to interstate  commerce before enactment
         of  the  NGPA.   The   United   States   Supreme   Court   upheld   the
         constitutionality  of that  type of  state-mandated  price  control  by
         Kansas.  The pricing  categories  referred to above  represent  maximum
         authorized  prices.  A natural gas purchaser does not  necessarily  pay
         those prices,  which are generally affected by the level of competition
         in the area, the  availability of pipelines and markets,  and the price
         ceilings under the NGPA.


         State  Regulation.  State  statutory  provisions  relating  to oil  and
         natural gas  generally  require  permits for the  drilling of wells and
         also cover the spacing of wells,  the prevention of waste,  the rate of
         production, the prevention and clean-up of pollution and other matters.

                                       7
<PAGE>

         Possible  Legislation.  Currently there are many legislative  proposals
         pertaining  to the  regulation  of the oil and  natural  gas  industry,
         including   decontrol  of  natural  gas  prices  and   modification  of
         legislation  affecting  pipeline  companies.  Any of such proposals may
         directly  or  indirectly  affect  the  activities  of any  Company.  No
         prediction can be made as to what additional energy  legislation may be
         proposed,  if any,  nor which  bills may be  enacted  nor when any such
         bills, if enacted, would become effective.

         Regulation of the Environment. The exploration, development, production
         and  processing  of oil and natural gas are subject to various  federal
         and state laws and  regulations  to protect  the  environment.  Various
         state and governmental agencies are considering, and some have adopted,
         other laws and regulations  regarding  environmental control that could
         adversely  affect the activities of the Company.  Compliance  with such
         legislation and regulations, together with any penalties resulting from
         noncompliance therewith,  will increase the cost of oil and natural gas
         development,  production  and  processing.  Certain of these  costs may
         ultimately  be  borne by the  Company.  Management  does not  presently
         anticipate that compliance with federal,  state and local environmental
         regulations   will  have  a   material   adverse   effect  on   capital
         expenditures,  earnings or the  competitive  position of the Company in
         the oil and natural gas industry.

The  preceding  discussion  of regulation of the oil and natural gas industry is
not intended to constitute a complete discussion of the various statutes, rules,
regulations or governmental orders to which the Company's operations,  services,
and revenues may be subject.

ITEM 2. DESCRIPTION OF PROPERTIES

         PROPERTIES

         The Company  currently  leases  facilities  consisting of approximately
2,700,  square feet of office  space in Boca Raton,  Florida  pursuant to a five
year lease,  with  initial  monthly base rental  amount of $5,300,  inclusive of
taxes,  operating  expenses  for the common area of the  building,  maintenance,
janitorial services and electricity.  The Company also leases a storage facility
for its gas  generators,  which is  centrally  located in the oil/gas  producing
states.  From  this  location,  the  Company  can  readily  ship its  generators
throughout North America.

ITEM 3. LEGAL PROCEEDINGS

         None.

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

         Not Applicable.
                                       8
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                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

         The  Company's  Common  Stock is traded on the OTCBB  under the  symbol
"GETC."  The  following  sets forth the range of high and low closing bid prices
for the Common Stock as reported on NASDAQ during each of the periods presented.
The  quotations  set forth below are  inter-dealer  quotations,  without  retail
mark-ups,  markdowns or commissions,  and may not necessarily  represent  actual
transactions.

            Period                                       High             Low
             1999

         Fourth Quarter                                 $9.000          $3.500

                   2000

         First Quarter                                  $7.750          $3.125
         Second Quarter                                 $7.750          $3.375
         Third Quarter                                  $6.688          $1.469
         Fourth Quarter                                 $1.594          $ .563

         2001
         First Quarter                                  $1.156          $ .750

 The Company  believes  that as of December 31, 2000,  there were  approximately
86 record  holders  of  the Company's  Common Stock.  The Company  believes that
there are substantially in excess of 300 beneficial and round lot holders of the
Company's Common Stock.

         The Company  has not paid any cash  dividends  on its Common  Stock and
currently  does not expect to declare or pay cash  dividends in the  foreseeable
future.  The  Company  presently  intends  to retain  any  earnings  that may be
generated to provide funds for the operation of business.

ITEM 6.  MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

         The following  discussion  and analysis  should be read in  conjunction
with the financial  statements  of the Company and the notes  thereto  appearing
elsewhere herein.

RESULTS OF OPERATIONS

Revenue  increased from $0 for the year ended December 31, 1999, to $152,261 for
the year ended December 31, 2000. In May 2000, the Company began the transfer of
technology  from the Russian  Federation  and began treating wells in the United
States.  Revenues  for the  Company  are not  immediate.  An oil or gas  well is
treated with all the expense for the Company occurring at the moment of treating
the well. It can take 60-90 days after a well treatment  before the Company will
see the  initial  revenues.  The  process  requires  that  well be  cleaned  (or
swabbed), tubing, rods, oil tanks and pump must be replaced or installed and the
well flowed,  while  monitoring  fluid levels,  for a few weeks to establish the
optimum  production for the formation.  Finally,  oil is collected in tanks, and
periodically,  delivered for payment.  The oil wholesaler  pays the operator and
the  Company  approximately  30 days  later.  The  Company  has not  treated any
additional oil wells since the above mentioned. The Company is arranging for the
return of  representatives  from the Russian Federation to complete the training
of the Company's staff.  The Company expects to complete  training in the second
quarter of 2001.

While the costs are incurred up front, the well revenue can last for many months
or years without additional expense to the Company.

                                       9
<PAGE>

Cost of goods sold increased $0 for the year ended December 31, 1999 to $111,043
for the year ended  December 31, 2000.  Cost of goods sold  represents  the cost
incurred with treating the initial wells.

General and  administrative  expenses increased from $489,291 for the year ended
December  31,  1999 to  $1,104,237  for the year ended  December  31,  2000.  an
increase of $614,946.  The increases were due to additional employees hired, and
increased  legal and accounting  fees incurred in connection  with the Company's
expanding activities and patent applications.

Stock compensation expense was from $32,538 for the year ended December 31, 1999
compared to $2,467,595  for the year ended December 31, 2000. The Company issued
common stock to three  employees of the Company,  in lieu of and as  replacement
for employee stock options, and issued common stock for financial consulting and
public relation  services.  The Company  expensed  deferred  compensation in the
amount of $899,257. Such amounts represent stock issued for financial consulting
services. The Company has decided to cancel the consulting services agreement.

Interest  expense for the year ended  December  31, 1999 was $4,058  compared to
$57,449  for the  year  ended  December  31,  2000.  The  increase  is do to the
Company's increase in borrowings.

INVESTING

Cash used in  investing  activities  increased  from  $4,581  for the year ended
December 31, 1999 to $65,648 for the year ended December 31, 2000 an increase of
$61,067.The increase was do to purchasing of office equipment and patent related
costs.

LIQUIDITY AND CAPITAL RESOURCES

The Company  issued  637,000  shares of common  stock  valued at  $1,122,748  to
several consultants for financial services and investor relations.

The Company  issued a consultant  25,000 stock options  exercisable at $2.00 per
share and 50,000 stock options  exercisable at $3.00.  These options were valued
at $51,730.  The Company also issued 200,000 stock options  exercisable at $5.00
per share to a consultant. These options were valued at $388,840.

The Company  issued 378,000 shares of common stock valued at $1,134,000 to three
employees.

The Company completed a private placement of a total of 207,333 shares of common
stock for net proceeds of $625,748.  With prices ranging from $2.50 to $5.00 per
share. In connection with one of the placements,  the Company also issued 50,000
common stock warrants  expiring April 2003. Each warrant  entitles the holder to
purchase one share of common stock at a price of $4.50.

The Company  repaid a note of  $120,000  from an  Investment  Trust based in the
Bahamas.

The  Company  borrowed a total of  $447,845  from an  Investment  Trust based in
Bermuda.  The notes bear  interest  at 12.5% per annum and are  payable one year
from the date of issuance.

On August 2, 2000,  the  Company  entered  into a Private  Equity Line of Credit
Agreement  with a private  investor as  arranged  by Jesup & Lamont,  Investment
Bankers  pursuant to which the Company  will have the right to sell to IIL up to
6,000,000  shares of its common stock following  effectiveness  of the Company's
registration statement relating to the transaction.  Under the agreement, Geotec
would have the right to provide put notices for its Common  Stock in amounts not
less  than  $200,000  nor in excess of the  lesser of  $2,500,000  or 15% of the
weighted average price of its Common Stock during the applicable  trading period
multiplied  by the total  trading  volume of Geotec  Common  Stock  during  this
trading  period.  The  purchase  price for  these  shares is equal to 88% of the
specified  market  price during the  evaluation  period for the put. The Company
also issued to IIL a warrant to purchase  500,000  shares of Common Stock of the
Company, which is exercisable during its three-year term at an exercise price of
$4.89,  subject to certain  adjustments  as provided in the  Warrant.  Under the
terms of the  Agreement,  the  Company  is also  authorized  to  issue  separate
warrants  equal to 50% of the  number  of  shares  purchased  as part of the put
Agreement.   Geotec  has  agreed  to  file  a  registration  statement  for  the
transaction within 60 days of the date of execution of the contract. The Company
has also agreed to limit future  financing  during the commitment  period of the
Agreement,  subject to various  expectations  and  financings in which IIL would
have a right of first refusal

                                       10
<PAGE>

On October 3, 2000 the Company  decided  not to proceed  with  funding  with the
Private Equity Line of Credit  Agreement with a private  investor as arranged by
Jesup & Lamont,  Investment Bankers. The Company believes that its current share
price is not in the best interest of the Company or its  Stockholders to proceed
with this  agreement.  The Company is  currently is  exploring  other  financing
alternatives, as well as Investment Banking, that will be more beneficial to the
Company and its shareholders.

The report of the independent  auditors on the Company's financial statements as
of December 31, 2000 contains an explanatory  paragraph regarding an uncertainty
with respect to the ability of the Company to continue as a going  concern.  The
Company is not generating significant revenues and has an accumulated deficit of
($4,391,599).  The Company  anticipates that its use of cash will be substantial
for the  foreseeable  future.  In particular,  management of the Company expects
substantial  expenditures in connection with the treatment of additional  wells.
The Company expects that funding for these expenditures will be available out of
the  Company's  future cash flow and issuance of equity  and/or debt  securities
during the next 12 months and thereafter.  There can be no assurance  whether or
not such financing will be available on terms satisfactory to management. If the
Company does not obtain additional financing,  it will be unable to purchase the
minimum amount of generators under its contract with FR&PC ALTAI.

                                       10A
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

         See  "Index  to  Financial  Statements"  for the  financial  statements
included in this Form 10-KSB.

                          INDEX TO FINANCIAL STATEMENTS


Independent Auditors' Report                                                F-2

Balance Sheet                                                               F-3

Statements of Operations                                                    F-4

Statement of Stockholders' Deficit                                          F-5

Statements of Cash Flows                                                    F-6

Notes to Financial Statements                                         F-7 - F-12

<PAGE>


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors
Geotec Thermal Generators, Inc.


We have audited the  accompanying  balance sheet of Geotec  Thermal  Generators,
Inc. as of December 31, 2000, and the related statements of operations,  changes
in stockholders'  deficit,  and cash flows for the years ended December 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 audit 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 audit provides 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 Geotec Thermal Generators, Inc.
as of December 31, 2000,  and the results of its  operations  and its cash flows
for the year ended  December  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.  The  Company  incurred  losses of
$3,588,063  and  $525,887  for the  years  ended  December  31,  2000 and  1999,
respectively.  Additionally,  the Company had a working  capital  deficiency  of
$641,864 at December 31, 2000. These conditions  raised  substantial doubt about
the  Company's  ability to continue as a going  concern.  Management  plans with
respect  to  these  matters  are  also  described  in  Note 2 to  the  financial
statements. The accompanying financial statements do not include any adjustments
that might result should the Company be unable to continue as a going concern.




                                                   /S/ Feldman Sherb & Co., P.C.
                                                       Feldman Sherb & Co., P.C.
                                                    Certified Public Accountants



New York, New York
April 2, 2001


                                       F-2
<PAGE>

                         GEOTEC THERMAL GENERATORS, INC.

                                  BALANCE SHEET

                                DECEMBER 31, 2000

                                     ASSETS

CURRENT ASSETS:
     Cash                                                    $           51,521
     Inventories                                                         50,540
     Due from officers                                                    3,522
     Prepaid expenses                                                    12,400
                                                              ------------------
         TOTAL CURRENT ASSETS                                           117,983
                                                              ------------------

PROPERTY AND EQUIPMENT, net                                              47,080

ORGANIZATION COSTS, net                                                     374

PATENTS                                                                  13,039

DEPOSIT                                                                  16,878
                                                              ------------------
                                                             $          195,354
                                                              ==================

CURRENT LIABILITIES:

     Accounts payable and accrued expenses                   $          192,502

     Notes payable                                                      567,345
                                                              ------------------
         TOTAL CURRENT LIABILITES                                       759,847
                                                              ------------------
STOCKHOLDERS' DEFICIT:
     Common stock, $.001 par value, 50,000,000
          shares authorized; 21,960,108 shares
          issued and outstanding                                         21,960
     Additional paid-in capital                                       4,135,527
     Deferred compensation                                             (330,381)
     Accumulated deficit                                             (4,391,599)
                                                              ------------------
        TOTAL STOCKHOLDERS' DEFICIT                                    (564,493)
                                                              ------------------
                                                             $          195,354
                                                              ==================






                        See notes to financial statements

                                       F-3

<PAGE>

                         GEOTEC THERMAL GENERATORS, INC.

                            STATEMENTS OF OPERATIONS



                                                                For the Year
                                                            Ended December 31
                                                       ------------------------
                                                             2000       1999
                                                       ------------------------

REVENUES                                              $    152,261  $     -

COST OF GOODS SOLD                                         111,043        -
                                                       ------------  -----------

GROSS PROFIT                                                41,218        -
                                                       ------------  -----------
COSTS AND EXPENSES:

     General and administrative                          1,104,237     489,291

     Stock compensation expense                          2,467,595      32,538
                                                       ------------  -----------
                                                         3,571,832     521,829
                                                       ------------  -----------

OPERATING LOSS                                          (3,530,614)   (521,829)

OTHER EXPENSES:
    Interest                                               (57,449)     (4,058)
                                                       ------------  -----------
NET LOSS                                              $ (3,588,063) $ (525,887)
                                                       ============  ===========
BASIC AND DILUTED NET LOSS PER SHARE                  $      (0.17) $    (0.03)
                                                       ============  ===========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING     21,220,970  20,716,728
                                                       ============  ===========





                        See notes to financial statements
                                       F-4

<PAGE>


                         GEOTEC THERMAL GENERATORS, INC.

                       STATEMENT OF STOCKHOLDERS' DEFICIT

                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                               Common Stock           Additional
                                        --------------------------    Paid-in        Deferred         Accumulated
                                             Shares        Amount       Capital      Compensation       Deficit          Total
                                        -------------- ----------- ------------------------------- ---------------  --------------
<S>                                         <C>       <C>          <C>             <C>              <C>            <C>
Balance at December 31, 1998                2,000,000 $     2,000  $     282,000   $      -         $   (277,649)  $         6,351

  Issuance of common stock
  pursuant to exchange agreement           18,544,257      18,544       (18,544)          -                 -                  -
  Issuance of common stock                    165,678         166        417,059          -                 -              417,225
  Common stock issued for services             27,840          28        142,760      (110,250)                             32,538
  Net loss                                       -         -                -              -            (525,887)          (525,887)
                                        -------------- ----------- ------------------------------- --------------- -----------------

Balance at December 31, 1999               20,737,775      20,738        823,275      (110,250)         (803,536)           (69,773)

  Sale of common stock                        207,333         207        625,541           -                -               625,748
  Issuance of stock
      options for services                       -            -          430,978       (42,138)             -               388,840

  Common stock issued to employees            378,000         378      1,133,622           -                -             1,134,000

  Common stock issued for  services           637,000         637      1,122,111    (1,077,250)             -                45,498
  Amortization of deferred
     compensation                                -            -             -          899,257              -               899,257

   Net loss                                      -            -             -              -          (3,588,063)        (3,588,063)

                                        -------------- ----------- ------------------------------- ---------------  ----------------
Balance at December 31, 2000               21,960,108 $    21,960  $   4,135,527   $  (330,381)    $  (4,391,599)  $       (564,493)
                                        ============== =========== =============================== ===============  ================
</TABLE>





                        See notes to financial statements
                                       F-5

<PAGE>



                         GEOTEC THERMAL GENERATORS, INC.

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                  For the Year Ended December 31,
                                                              -----------------------------------------
                                                                     2000                  1999
                                                              ------------------   -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                          <C>     <C>           <C>     <C>
     Net loss                                                $       (3,588,063)   $       (525,887)
                                                              ------------------   -------------------
     Adjustments to reconcile net loss to net cash
       used in operating activities:
     Depreciation and amortization                                       13,389             3,568
     Amortization  of deferred compensation                             899,257                -
     Stock options issued for compensation                              388,840                -
     Stock issued for compensation                                    1,179,498             32,538
     Changes in assets and liabilities:
          Decrease (increase) in inventories                             79,420           (129,960)
          Increase in due from officers                                  (3,522)                -
          Increase in prepaid expenses                                  (12,400)                -
          Increase in deposits                                            -                (16,878)
          Increase  in accounts payables and accrued
           expenses                                                     182,764              8,847
                                                              ------------------   -------------------
NET CASH USED IN OPERATING ACTIVITIES                                  (860,817)          (627,772)
                                                              ------------------   -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Patent expenses                                                    (13,039)                -
     Purchase of property and equipment                                 (52,609)            (4,581)
                                                              ------------------   -------------------
NET CASH USED IN INVESTING ACTIVITIES                                   (65,648)            (4,581)
                                                              ------------------   -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Repayment of debt                                                 (120,000)                -
     Proceeds from issuance of debt                                     447,845            239,500
     Proceeds from issuance of common stock                             625,748            417,225
                                                              ------------------   -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES
                                                                        953,593            656,725
                                                              ------------------   -------------------
NET INCREASE IN CASH                                                     27,128             24,372
CASH, beginning of period                                                24,393                 21
                                                              ------------------   -------------------

CASH, end of period                                          $           51,521    $        24,393
                                                              ==================   ===================
SUPPLEMENTAL CASH FLOW INFORMATION:
     Cash paid for:
          Income taxes                                       $             -       $            -
                                                              ==================    ==================

          Interest                                           $            7,260    $            -
                                                              ==================   ===================
Non-cash investing and financing activity:
     Common stock and options issued for services            $        2,687,724    $       142,788
                                                              ==================   ===================
</TABLE>





                        See notes to financial statements
                                       F-6
<PAGE>


                         GEOTEC THERMAL GENERATORS, INC.

                          NOTES TO FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999


1.       ORGANIZATION:

         Geotec  Thermal  Generators,  Inc.  ("Geotec"  or the  "Company")   was
         incorporated  on February 2, 1998,  in the state of Florida.

         The  Company's  intends  to  commercialize  the  Russian  Federations's
         technology  for  secondary  oil and gas recovery in North,  Central and
         South America.  The technology  has been used on  approximately  30,000
         Russian  wells to date.  The Company was formed to complete the initial
         development contract,  which was executed in August 1996. Subsequent to
         the  development  contract,  three  contracts were  executed,  covering
         patent  rights,  transfer  of  technology  and a  long  term  exclusive
         contract for the geographic area as mentioned above.

         During  October  1999,  the Company was acquired by  Kennsington,  Inc.
         ("Kennsington"), for 18,714,775 shares of Kennsington common stock, for
         all of the equity of the Company.  As a result of this  transaction the
         principals  of  Geotec   received   approximately   90%  of  the  total
         outstanding  common  stock  of  Kennsington.  Upon  completion  of  the
         transaction  there were  20,714,775  shares of  Kennsington  issued and
         outstanding.  The  acquisition  has  been  accounted  for as a  reverse
         acquisition  under  the  purchase  method  for  business  combinations.
         Accordingly,  the  combination  of the two  companies  is recorded as a
         recapitalization  of the  Company,  pursuant  to which the  Company  is
         treated as the  continuing  entity.  In November  of 1999,  Kennsington
         changed its name to Geotec  Thermal  Generators,  Inc.  as part of  the
         merger of its subsidiary into itself.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.  Basis of Presentation - The Company has incurred  operating  losses
             of  approximately  $3,588,000  and  $526,000  for the  years  ended
             December  31,  2000  and  1999.  There  is also a  working  capital
             deficiency  of $641,864 at December  31, 2000.  No assurance  exist
             that the Company will not encounter substantial delays and expenses
             related  to the  financing  of  its  successful  completion  of its
             product  development and marketing  effort and / or other unforseen
             difficulties. The Company will be required to expand its management
             and   administrative   capabilities   in   order  to   manage   the
             aforementioned  items as well as to respond to  competitive  market
             conditions.  These and other factors may require  additional  funds
             and the  Company  may seek such  funds  through  additional  equity
             financing, debt financing, collaborative arrangements or from other
             resources.  Such funds may not be available on terms  acceptable to
             the Company.  Based on the Company's current plans and assumptions,
             the Company believes its cash on-hand and subsequent financing will
             be sufficient to fund its anticipated  operations  through December
             31, 2001.

         B.   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  revenue  and  expenses during the reporting
              period. Actual results could differ from those estimates.

         C.   Cash and cash  equivalents  - The  Company  considers  all  highly
              liquid  temporary cash  investments  with an original  maturity of
              three months or less when purchased, to be cash equivalents.

                                       F-7
<PAGE>
         D.  Inventories - Inventories are stated at lower of cost or market  on
             the first-in, first-out method of inventory valuation.

         E.  Property  and  equipment  -  Property  and  equipment is stated  at
             cost.  Depreciation  of  property  and equipment is computed  using
             the  straight-line  method  over  the estimated useful lives of the
             assets.

         F.  Stock  based  compensation  -  The   Company   accounts  fo r stock
             transactions  in  accordance  with APB  Opinion No. 25, "Accounting
             For Stock  Issued  To  Employees."  In  accordance  with  Statement
             of  Financial Accounting Standards No. 123 ("SFAS 123"),"Accounting
             For Stock - Based Compensation,"  the  Company   adopted   the  pro
             forma disclosure requirements of SFAS 123.

         G.   Concentration  of credit risk - Credit  losses,  if any, have been
              provided  for  in  the  financial  Statements  and  are  based  on
              management's expectations. Financial instruments which potentially
              subject the Company to concentrations of credit risk are primarily
              cash and accounts receivables. The Company invests its excess cash
              in high quality  short-term  liquid money market  instruments with
              major Financial  institutions and the carrying values  approximate
              their  market  value.  The  Company  does not  believe  that it is
              subject to any unusual or significant  risks, in the normal course
              of business.

         H.   Income taxes - Income taxes  are  accounted for under Statement of
              Financial  Accounting  Standards  No.  109, "Accounting for Income
              Taxes," which is an asset and liability approach that requires the
              recognition  of  deferred  tax  assets  and  liabilities  for  the
              expected   future  tax  consequences  of  events  that  have  been
              recognized in the Company's financial statements or tax returns.

         I.   Net loss per  share - Basic  loss per  share  has been  calculated
              based  upon  the  weighted   average   number  of  common   shares
              outstanding.  Stock  options  have been  excluded as common  stock
              equivalents  in the diluted  earnings  per share  because they are
              either antidilutive, or their effect is not material.


         J.   Fair  value  of  financial  instruments  -  The  carrying  amounts
              reported  in the  balance  sheet for cash,  accounts  payable  and
              accrued  expenses  approximate  fair value based on the short-term
              Maturity of these instruments.


         K.   Impairment of long-lived  assets - The Company reviews  long-lived
              assets for impairment whenever circumstances and situations change
              such that there is an indication that the carrying amounts may not
              be  recovered.  At December 31, 1999,  the Company  believes  that
              there has been no impairment of its long-lived assets.

         L.   New accounting  pronouncements - In June 1998  and June  2000, the
              FASB issued SFAS No133, "Accounting for Derivative Instruments and
              Hedging Activities" and  SFAS  No. 138,  "Accounting  for  Certain
              Derivative Instruments  and Certain  Hedging   Activities."  These
              statements establish  accounting and reporting standards requiring
              that every derivative instrument  be recorded on the balance sheet
              as either an asset or liability measured at its fair value.   SFAS
              Nos.133 and 138 also require that changes in the derivative's fair
              value be recognized currently in earnings  unless  specific  hedge
              accounting  criteria are met.  SFAS Nos. 133 and 138 are effective
              for fiscal years  beginning  after June 15, 2000. The Company does
              not expect that the  adoption of these new  standards  will have a
              material impact on the Company's earnings or financial position.

                                       F-8
<PAGE>
              In December 1999, the Securities and Exchange  Commission  ("SEC")
              issued Staff accounting Bulletin No. 101, "Revenue  Recognition in
              Financial   Statements"  ("SAB  101"),   which  clarifies  certain
              existing   accounting   principles   for  the  timing  of  revenue
              recognition and its classification in the financial statements. In
              June 2000, the SEC delayed the required implementation date of SAB
              101. As a result,  SAB 101 will not be  effective  for the Company
              until the quarter ended  September 30, 2001. In October 2000,  the
              SEC issued further guidance on the interpretations included in SAB
              101. The Company is currently  analyzing  the impact of this Staff
              Accounting Bulletin.

              In September  2000, the FASB issued SFAS No. 140  "Accounting  for
              Transfers and Servicing of Financial Assets and Extinguishments of
              Liabilities--a  replacement  of FASB  Statement  No.  125"  ("SFAS
              140").   SFAS  140  revises  the  standards  for   accounting  for
              securitizations  and  other  transfers  of  financial  assets  and
              collateral and requires certain  disclosures,  but it carries over
              most  of  SFAS  125's  provisions  without  reconsideration.  This
              Statement is effective  for  transfers  and servicing of financial
              assets and  extinguishments  of liabilities  occurring after March
              31,  2001.   This  Statement  is  effective  for  recognition  and
              reclassification  of collateral  and for  disclosures  relating to
              securitization transactions and collateral for fiscal years ending
              after December 15, 2000.  The Company is currently  analyzing this
              new standard.
INVENTORIES

         The Company as part of their agreement with the Russian Federation (see
         Note 8) was  required  to  purchase  gas  generator  units.  These  gas
         generators  can be used  only  once  for  each  attempt  at oil and gas
         recovery for each well.  The  generators are stated at lower of cost or
         market.  Cost is  determined  using the  first-in  first-out  method of
         inventory pricing.

4.       PROPERTY AND EQUIPMENT

         Property and  equipment  consisted of the  following as of December 31,
         2000:

          Furniture and Fixtures           5 Years           $        33,990
          Data processing equipment        3 Years                    30,931
                                                                  -------------
                                                                      64,921
          Less: accumulated depreciation                             (17,841)
                                                                  -------------
                                                             $        47,080
                                                                  =============
5.       NOTES PAYABLE

         In November  1999,  the Company  borrowed  $119,500  from an Investment
         Trust based in Bermuda.  The loan is due in  November  2001,  two years
         from the date of  issuance.  Interest  on the note is 12.50% per annum,
         payable upon repayment of the principal.

         During the year ended December 31, 2000 the Company borrowed a total of
         $447,845  from an  Investment  Trust based in  Bermuda.  The notes bear
         interest  at 12.5%  per  annum  and  payable  one year from the date of
         issuance.

                                      F-9
<PAGE>
6.       COMMON STOCK AND STOCK OPTIONS

         In 1999 the Company completed a private  placement of 165,678 shares of
         its common stock at prices  ranging form $2.38 to $3.50 per share.  The
         Company issued these shares for gross proceeds of $417,225. The Company
         also issued 4,840 shares of common stock for services.

         In December  1999 the Company  issued 20,000 shares of common stock for
         legal  services  to be  rendered.  The shares  were valued at $5.51 per
         share.

         In December  1999 the Company  issued  3,000 shares of common stock for
         consulting  services  rendered.  The  shares  were  valued at $5.51 per
         share.

         The Company issued common stock as  compensation  for services  valuing
         such issues at the fair market  value of the common stock  issued.  The
         Company  issued  637,000 shares of common stock valued at $1,122,748 to
         several consultants for financial services and investor relations.

         The Company  issued a consultant  25,000 stock options  exercisable  at
         $2.00 per share and 50,000 stock options  exercisable  at $3.00.  These
         options were valued at $51,730.  The Company also issued  200,000 stock
         options  exercisable at $5.00 per share to a consultant.  These options
         were valued at $430,978 as per a Black Scholes valuation.

         The Company issued common stock as  compensation  for services  valuing
         such issues at the fair market  value of the common stock  issued.  The
         Company  issued  378,000 shares of common stock valued at $1,134,000 to
         three employees.

         The Company completed a private placements of a total of 207,333 shares
         of common stock for net proceeds of $625,748.  With prices ranging from
         $2.50 to $5.00 per share. In connection with one of the placements, the
         Company also issued 50,000 common stock  warrants  expiring April 2003.
         Each warrant  entitles the holder to purchase one share of common stock
         at a price of $4.50.

7.       INCOME TAXES

         The Company  accounts  for income  taxes under  Statement  of Financial
         Accounting  Standards  No. 109,  "Accounting  for Income  Taxes" ("SFAS
         109").  SFAS 109  requires the  recognition  of deferred tax assets and
         liabilities  for both the expected  impact of  differences  between the
         financial  statements and tax basis of assets and liabilities,  and for
         the  expected  future tax  benefit to be derived  from tax loss and tax
         credit carryforwards.  SFAS 109 additionally requires the establishment
         of a valuation  allowance to reflect the  likelihood of  realization of
         deferred tax assets.

         The  provision  (benefit)  for income  taxes  differs  from the amounts
         computed by applying the  statutory  federal  income tax rate to income
         (loss) before provision for income taxes is as follows:

                                                    Year ended December 31,
                                             ----------------------------------
                                                     2000            1999
                                            ----------------- -----------------

           Taxes benefit computed
              at statutory rate              $  (1,250,000)     $  (220,000)

           Permanent Difference                    875,000            -

           Losses for which no tax
              benefit utilized                     375,000          220,000
                                             ----------------- -----------------
           Net income tax benefit            $        -         $     -
                                             ================= =================

         The Company has a net  operating  loss  carryforward  for tax  purposes
         totaling approximately  1,250,000 at December 31, 2000 expiring between
         the years 2014 and 2019.
                                      F-10
<PAGE>
         Listed below are the tax effects of the items  related to the Company's
net tax liability:


                                             December 31, 2000
                                          ---------------------
         Tax benefit of net
         operating loss carryforward           $   312,000

          Valuation Allowance                     (312,000)
                                           ---------------------
        Net deferred tax asset recorded        $        -
                                           =====================

8.       COMMITMENTS

         A.The Company leases a vehicle from a related party, under an operating
           lease expiring in February 2003.

           In  December  1999,  the  Company  entered into a five year lease for
           office space commencing April 2000.

           Future minimum rental payments  under  the  non-cancelable  operating
           lease are as follows:

                       Year ended December 31,
                               2001             $       73,752
                               2002                     76,315
                               2003                     71,674
                               2004                     71,516
                               Thereafter                5,974
                                                    -------------
                                                $      346,311
                                                    =============

         B.   The Company  entered into an  agreement in December  1998 with the
              Russian  Federation  whereby  upon  successful  testing  of 60 gas
              generators,  the  Company is  required to order a minimum of 5,000
              gas generators over a ten year period. A total of 1,000 generators
              is required  to be ordered in the first two years,  with a minimum
              of 500 units per year in the subsequent eight years.

              The  Company is obligated to purchase approximately  $4,500,000 of
              generators over the next three years.

         C.   Employment  Agreements - In January 1999, the Company entered into
              five-year  employment  agreements  with two  officers.  The  total
              annual  commitment  to  the  Company  for  these  agreements  will
              aggregate  $350,000.  On  October  1 2000 the  Board of  Directors
              increased the salaries to $500,000 per annum.

              In  July and  December  1999,  the Company  entered  into a 5 year
              employment   agreement   with  two  officers.   The  total  annual
              commitment  to the Company  for these  agreements  will  aggregate
              $135,000.

                                      F-11
<PAGE>

9.       STOCK OPTIONS

          In  2000,  the  Company  had  compensation  cost  for  the  Plan  been
         determined  based on the fair value at the grant dates for awards under
         the  Plan,  The  Company's  net  loss and loss  per  share  would  have
         increased to the pro forma amounts indicated below:

                                         As Reported        Pro Forma
                                        --------------     ------------

                Net loss                $  (3,585,063)      $  (3,585,063)
                Basic and diluted net
                 loss per share         $      (.17)      $      (.17)

         The fair value of each option  grant is  estimated on the date of grant
         using  the  Black  Scholes  option-pricing  method  with the  following
         weighted average  assumptions  used for grants in 2000;  dividend yield
         0%, expected volatility 50%, risk free interest rate 7%, expected lives
         in years 5.

         The weighted  average fair value of stock  options  granted  during the
         year ended December 31, 2000 was $4.36.  No employee stock options were
         granted in 2000.

         Stock option transactions were as follows:

<TABLE>
<CAPTION>
                                                                          Weighted Average Exercise
                     Number of options                  Shares                      Price
         ------------------------------------------- -------------       -----------------------------
        <S>                                            <C>            <C>           <C>
         Outstanding at December 31, 1998              126,000        $              2.38
                                                    -------------       -----------------------------
         Outstanding at December 31, 1999              126,000        $              2.38
         Granted                                       275,000        $              4.36
         Cancelled                                    (126,000)       $              2.38
                                                     -------------       -----------------------------
         Outstanding at December 31, 2000              275,000        $              4.36
                                                     =============       =============================
</TABLE>

         The following options were outstanding at December 31, 2000:
<TABLE>
<CAPTION>

                        Range of        Outstanding     Weighted Average    Exercisable    Weighted Average     Remaining
           Plan      Exercise Price       Options        Exercise Price       Options       Exercise Price    Life (Years)
         ---------- ----------------- ---------------- ------------------- -------------- ------------------- --------------
           <S>        <C>                 <C>                <C>              <C>               <C>                 <C>
           Other      $2.00-$5.00         275,000            $4.36            275,000           $4.36               2
</TABLE>


                                      F-12
<PAGE>

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

         None.

                                    PART III

ITEM 9.  MANAGEMENT

                                   MANAGEMENT

         The  following  table sets forth  certain  information  concerning  the
current directors of the Company and the executive officers of the Company:

                                   MANAGEMENT
The officers and directors of the Company are as follows:

Name                                Age              Position
--------------------------------------------------------------------------------

Daniel Pepe                         45               President and Chairman

W. Richard Lueck                    51         Chief Executive Officer, Director
Secretary/Treasurer

Martin Scott                        33               Chief Financial Officer


Albert O. Banahene                  38               Chief Petroleum Engineer

The  following  is a  brief  description  of  the  business  background  of  the
directors/key employees of the Company.

Daniel Pepe has been  Chairman and  President of the Company  since 1998.  After
consulting  from  1996-1998 with FR&PC ALTAI,  a Russian  military  research and
production  facility,  he was offered  the  opportunity  to develop  their PGDBK
Generators in the North,  Central,  and South America  markets.  Mr. Pepe worked
directly  with  the firm  and  their  Director  General,  and then  successfully
negotiated with the Russian Government, identifying opportunities for successful
implementation of the technology into Asian markets.

From 1991 until 1996,  Mr. Pepe served as President for Lexde Inc., a management
company,  which helped  identify  opportunities  for US companies to develop and
market products in the former Soviet Union. While there, Mr. Pepe worked with US
and Russian  government  agencies,  gaining  experience  and  forming  strategic
alliances with several  organizations.  In 1994, Mr. Pepe  negotiated a contract
with  FR&PC  ALTAI to  develop  the North  American  market for the use of their
patented  atomic-size  nano  diamond  powder  within high  technologies  such as
Chemical Vapor Deposition and Physical Vapor Deposition film coatings.

In 1991, Mr. Pepe formed WTE, an independent  consulting company that identified
opportunities for US companies to promote and market their products and services
in the former Soviet Union,  where he strengthened  interpersonal  relationships
between the companies and high ranking personnel in the Soviet Union government.
Mr.  Pepe's  entrepreneurial  experience  includes the founding and operating of
successful businesses in a vast array of industries, including real estate, ship
building, and residential commercial construction.

From 1985 until 1991, Mr. Pepe served as Vice President of Sales/Development for
Ridgemont  Construction,  a New England real estate  developer,  where he helped
develop and build  residential  and commercial  projects  throughout the region,
with the initial project generating  $13,000,000.  From 1984-85, Mr. Pepe worked
as a Sales  Representative for PYA Monarch, a wholesale food distributor,  where
he refined his sales skills, opening new accounts and establishing many customer
contacts.

From 1982-1984, Mr. Pepe was Manufacture Engineer for General Dynamics, where he
was responsible for several  manufacturing  units,  increasing worker output and
improving  the  manufacturing   process  for  various  shipping  vessels.   From
1980-1982, Mr. Pepe was Plant Supervisor for Waganhiem Provisions,  Inc., a food
wholesale/distribution  company, where he managed fifty (50) employees. Mr. Pepe
is a member of the Society of Petroleum  Engineers  (SPE). Mr. Pepe received his
BS in Industrial Engineering/Technology from Roger Williams University in 1980.

W. Richard Lueck has been the Chief Executive Officer,  Secretary and a Director
for the Company since its inception in 1998. Mr. Lueck has  accumulated  over 25
years of experience in financing,  building,  and managing of several biomedical
companies,  with  jobs and  duties  covering  executive  management,  marketing,
technology acquisition, quality control and operations. Mr. Lueck also currently
holds the  positions of Executive  Vice  President for Freedom  Motors,  Ltd., a
company providing rotary engine development,  and President of Light Lift, Inc.,
a company specializing in patented portable  scaffolding  systems,  where he has
been responsible for the  capitalization  structure and obtaining  financing for
both high-growth companies.

                                       11
<PAGE>
From 1992  through  1996,  Mr.  Lueck served as  Executive  Vice  president  for
Cytoferon  Corporation,  where he was responsible  for corporate  restructuring,
finance,  marketing,  and  scientific  development  of Viragen,  Inc.  Mr. Lueck
spearheaded  Viragen's acquisition of Cytoferon  Corporation.  From 1988-89, Mr.
Lueck was Senior Group manager for Coulter Electronics,  where he specialized in
marketing,  product development, and technology transfers. From 1984 until 1988,
Mr. Lueck served as Executive Vice President and Director for American  Labor, a
company  specializing  in  coagulation  and  hematology  products in the medical
industry. From 1979 until 1981, Mr. Lueck served as Senior Marketing Manager for
Warner-Lambert  in  Southbridge,  MA,  where  he  was  involved  in  multi-plant
marketing,  manufacturing,  and  operations.  Mr. Lueck was also  Executive Vice
President of Medical Analysis Systems from 1982-1984,  a technology company that
stabilized enzymes/clinical reagents.

From 1972 until 1974, Mr. Lueck worked at the  University of Minnesota,  Masonic
Hospital as a Research Scientist for Laboratory Operations, Cancer Research, and
Virology. Mr. Lueck received his BS in Biological Sciences/Biochemistry from the
University  of Minnesota in 1974 and select MBA classes at Nova  University  and
New York Institute of Technology from 1976-77.

Martin  Scott,  a certified  public  accountant,  has been the  Company's  Chief
Financial  Officer  since  January  2000.  Mr.  Scott  serves as  Secretary  and
Treasurer and Principal  Accounting  and  Financial  Officer of Registry  Magic,
Incorporated  (RMAG) since October  1997.  From June 1996 until October 1997, he
was employed as an Audit  Supervisor by Millward & Co., CPAs.  From October 1995
until  June  1996,   Mr.  Scott  served  as   Controller   of  ERD  Waste  Corp.
(Nasdaq:ERDI),  a waste disposal company.  Prior thereto,  from January 1995, he
was  employed as a Senior  Accountant  with the firm of Richard A. Eisner & Co.,
LLP. From January 1991 to January  1995, he was employed as a Senior  Accountant
with the firm of Feldman Radin & Co., P.C.

Albert  O.  Banahene  has been the  Company's  Chief  Petroleum  Engineer  since
September 1999. His petroleum industry  experience span three continents;  North
America, Europe and Africa.  Practical experience includes reservoir engineering
studies,  reservoir  simulation,  well test analysis,  production  optimization,
production forecasting, and oil/gas property evaluation.

Mr. Banahene was a Petroleum  Engineer with JHR  Corporation of Bridgeville,  PA
responsible for Reservoir Management and Production Optimization (1999). He also
worked for Petroleum  Reservoir  Engineer for GeoKnowledge AS of Oslo developing
models for prospect  analysis and fiscal regimes  (1998).  Mr.Banahene  acquired
extensive Petroleum Production Operations and Reservoir  Engineering  experience
on some West African fields  including Nemba Field in Angola;  Tano and Saltpond
Fields in Ghana;  and the Ibex,  Kudu and Eland Fields in La Cote  d'Ivoire.  He
worked with the Ghana National  Petroleum  Corporation for 8 years  (1990-1998).
During this tenure, he played a key role in developing strategies of integration
of West  African  Energy  Projects.  He was a member  with a  dynamic  role in a
multi-disciplinary  team  (GNPC-Chevron) in developing some West African oil/gas
fields  to  supply  gas to  regional  thermal  plants  and  other  markets  - an
integrated  project.  He was part of a  multi-disciplinary  team (from the World
Bank, Ministry of Finance,  Ministry of Mines and Energy, National Petroleum and
Electric  Utility  companies)  tasked to rank and select proposed  thermal power
plants to complement existing  hydroelectric  system. Mr. Banahene has also been
involved in petroleum  production  optimization in Bavli (Byelurus) and Rechitsa
(Russia) oil fields in the late 1980's.

                                       12
<PAGE>
Albert O.  Banahene  earned a Masters of  Engineering  Degree from the  Colorado
School  of Mines  (1995).  He also  holds a  Masters  of  Science  in  Petroleum
Engineering from the Moscow Institute of Oil and Gas, Russia (1989).  Albert has
also earned credits towards the Master of Energy  Management  program offered at
the Norwegian School of Mines in Norway (1998/99).

         During  the  year  ended  December  31,  2000  the  Company's  Board of
Directors held meetings and took action by unanimous  written consent a total of
7 times.

Board Committees and Related Information

NONE.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  directors and executive  officers,  and persons who own more than ten
percent of the Company's  outstanding  Common Stock to file with the  Securities
and Exchange  Commission (the "SEC") initial reports of ownership and reports of
changes  in  ownership  of  Common  Stock.  Such  persons  are  required  by SEC
regulation to furnish the Company with copies of all such reports they file.

         To the Company's  knowledge,  based solely on a review of the copies of
such reports furnished to the Company and written  representations that no other
reports were required,  all Section 16(a) filing requirements  applicable to its
officers,  directors  and greater than ten percent  beneficial  owners have been
complied with for the period for which this report relates.


ITEM 10. EXECUTIVE COMPENSATION
         The  following  table sets  forth the  aggregate  compensation  paid to
Daniel  Pepe and W.  Richard  Lueck  (the  "Named  Executive  Officers")  by the
Company.  No other  executive  officer of the  Company  was paid a total  annual
salary and bonus for the fiscal year ended December 31, 2000, which was $100,000
or more.

<TABLE>
<CAPTION>
                                                                                      Securities            Other
Name and Principal              Fiscal                                                Underlying            Annual
Position                        Year              Salary             Bonus              Options          Compensation
--------                        ----              ------             -----           -------------       ------------
<S>                             <C>               <C>                  <C>               <C>                 <C>
Daniel Pepe                     2000              $126,459             -0-               -0-                 -0-
President & Chairman            1999              $107,752             -0-               -0-                 -0-
                                1998               $68,626             -0-               -0-                 -0-

W. Richard Lueck,               2000              $101,250             -0-               -0-                 -0-
Secretary  & Treasurer & CEO    1999              $ 37,002             -0-               -0-                 -0-
                                1998               $ 1,600             -0-               -0-                 -0-
</TABLE>

Effective  January  1, 1999,  the  Company  entered  into  five-year  employment
agreements  with each of Daniel Pepe and W.  Richard  Lueck  providing  for base
annual salaries of $175,000,  with their salary  increasing to $250,000 per year
when  annual  revenue  reaches  $5,000,000.  On  October  1,  2000 the  Board of
Directors  increased  Daniel Pepe and W.  Richard  Lueck  salary to $250,000 per
annum.  The  employees  may  receive  annual  bonuses at the  discretion  of the
Company,  with bonuses to be determined by the Compensation and Audit Committee.
No formula or criteria have been specifically determined.

                                       13
<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

None

AGGREGATED FISCAL YEAR END OPTION VALUE TABLE

The following table sets forth certain information  concerning unexercised stock
options held by the Named  Executive  Officers as of December 31, 2000. No stock
options were exercised by the Named  Executive  Officers during the period ended
December 31, 2000. No stock appreciation rights were granted or are outstanding.


               Number of Unexercised Option   Value of Unexercised in the money
                 Held at December 31, 2000       Options at December 31, 2000
            --------------------------------------------------------------------
2000

Name        Exercisable        Unexercisable           Exercisable Unexercisable

NONE            -                  -                                  -


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table sets forth,  as of December  31,  2000,  information  with
respect to the  beneficial  ownership of the Company's  Common Stock by (i) each
person  who is known by the  Company  to own  beneficially  more  than 5% of its
Common  Stock,  (ii) each  director and nominee for  director,  (iii) each Named
Executive  Officer (as defined  herein),  and (iv) all  directors  and executive
officers as a group:

<TABLE>
<CAPTION>
                                                                                          PERCENTAGE OF
                                                                                            OUTSTANDING
NAME AND ADDRESS OF                                   SHARES OF COMMON STOCK               SHARES BENEFI-
BENEFICIAL OWNERS(1)(2)                                 BENEFICIALLY OWNED                  CIALLY OWNED(1)
-----------------------                             ----------------------------           ---------------
<S>                                                       <C>                                 <C>
Daniel & Jodi Pepe........................                   787,500                            3.6%
W. Richard Lueck..........................                   787,500                            3.6%
ADRP NORM Trust (3).......................                 7,350,000                           33.5%
Honest Tee Control Trust (4)..............                 7,350,000                           33.5%
Walter Smith..............................                 1,272,000                            5.8%
All officers and directors
as a group (2 persons)....................                17,547,000                           79.9%
</TABLE>
                                       14
<PAGE>


(1)      Unless  otherwise  indicated below, the persons in the table above have
         sole voting and  investment  power with  respect to all shares shown as
         beneficially  owned by them,  subject to community  property laws where
         applicable. A person is deemed to be the beneficial owner of securities
         that  can be  acquired  by such  person  within  60 days  from the date
         indicated above upon the exercise of options.  Each person's percentage
         of ownership is  determined  by assuming  that any options held by such
         person have been exercised.  As December 31, 2000 there were 21,960,108
         shares of Common Stock outstanding.

(2)      Unless otherwise indicated below, the address of each person is c/o the
         Company at 1615 S.Federal Highway, Suite 101, Boca Raton, Florida 33432

(3)            W. Richard Lueck is trustee.

(4)            Daniel and Jodi Pepe are trustees.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

All transactions between the Company and its officers,  shareholders and each of
their  affiliated  companies  have been made on terms no less  favorable  to the
Company than those  available  from  unaffiliated  parties.  In the future,  the
Company  intends  to handle  transactions  of a similar  nature on terms no less
favorable to the Company than those  available  from  unaffiliated  parties.

The Company  leases a vehicle from a related  party,  under an  operating  lease
expiring in February 2003.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K.

      A. EXHIBITS:

      Exhibit

Exhibit 1         Underwriting Agreement(1)

Exhibit 2         Plan of Acquisition, Reorganization, Arrangement,
                  Liquidation, Etc. (1)
Exhibit 3         Articles of Incorporation
                  By-laws (as amended) (1)

Exhibit 4         Instruments Defining the Rights of Security Holders Above (1)

Exhibit 5         Voting Trust Agreement (1)

Exhibit 6         Material Contracts (1)
Exhibit 7         Letter on Accountant Change (1)
Exhibit 8         Information on Subsidiaries (1)

Exhibit 9         Power of Attorney (1)

Exhibit 10            Employment Agreement with Daniel Pepe (1)

Exhibit 11            Employment Agreement with W. Richard Lueck(1)

                                       15
<PAGE>

Exhibit 12            Employment Agreement with Albert O. Bahahene (1)

Exhibit 13            Employment Agreement with Martin Scott (1)

Exhibit 14           Lease Agreement with Residuary Trust U/W Leroy E.Dettman(1)

Number                     Description

      *  Filed herewith

       (1) Files as an exhibit to the Company's  Registration  Statement on Form
           10SB12G/A (File No.  000-26315) as filed with and declared  effective
            by the Commission on September 2, 1999.

      B. REPORTS ON FORM 8-K:

                                       16

<PAGE>


                                   SIGNATURES


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

                         Geotec Thermal Generators, Inc.


      DATE:April 16, 2001                    By:/s/Daniel Pepe
                                                   ---------------
                                                    President and COB


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

      DATE:April 16, 2001                       /s/ Daniel Pepe
                                                   --------------------
                                                   President and Chairman

      DATE:April 16, 2001                       /s/ W. Richard Lueck
                                                    -------------------
                                                    CEO, Secretary and Treasurer


      DATE:April 16, 2001                       /s/ Martin P. Scott
                                                    -------------------
                                               Chief Financial Officer, Director

                                       17