<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly period ended March 31, 2000

                           Commission File No. 0-28137

                                 MICROBEST, INC.
                                 ---------------
              (Exact name of small business issuer in its charter)

Minnesota                                                    41-1864003
-------------------------------                              -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               identification No.)

     751 Park of Commerce Drive, Suite # 122 Boca Raton, Florida 33487-3623
     ----------------------------------------------------------------------
                    (Address of principal executive offices)

                   Issuer's telephone number (561) 995 - 9770

Check whether the registrant (1) filed all documents and reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 period
beginning January 19, 2000.

Yes [ ]    No [X]

There were 16,443,614 shares of the company's common stock outstanding on March
31, 2000


<PAGE>   2

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

         Balance Sheets
         Statements of Operations
         Statements of Cash Flows
         Notes to Financial Statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

         Background and Financial History
         Financial Condition
         Results of Operations
         Liquidity and Capital Resources

                            PART 11 OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         Incorporated herein by reference to Item 3 in the Company's Annual
         Report on form 10-KSB for the year ended December 31, 1999.

ITEM 2. CHANGES IN SECURITIES

         None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5. OTHER INFORMATION

         None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         None


                                       1



<PAGE>   3

                                 MICROBEST, INC.
                                 BALANCE SHEETS
                      MARCH 31, 2000 AND DECEMBER 31, 1999

<TABLE>
<CAPTION>
                                                                         (Unaudited)
                                                                             2000                1999
                                                                         ------------        ------------
<S>                                                                      <C>                 <C>
                                                 ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                             $         --        $         --
   Accounts receivable, net of allowances of $5,400                           116,954              28,598
   Inventories, net                                                            48,789              76,866
   Prepaid expenses                                                             5,000               8,000
                                                                         ------------        ------------

            TOTAL CURRENT ASSETS                                              170,743             113,464

PROPERTY AND EQUIPMENT, net                                                    59,578              62,502

OTHER ASSETS                                                                    4,685               2,385
                                                                         ------------        ------------

            TOTAL                                                        $    235,006        $    178,351
                                                                         ============        ============

                                LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable and accrued expenses                                 $    460,341        $    474,898
   Cash overdraft                                                               7,554               7,047
   Current portion of capital lease obligation                                  1,981               1,981
   Litigation settlement payable                                              361,000             361,000
                                                                         ------------        ------------

            TOTAL CURRENT LIABILITIES                                         830,876             844,926
                                                                         ------------        ------------

LONG-TERM DEBT:
                                                                         ------------        ------------
  Capital lease obligation - long term portion                                 12,205              12,205
  Notes payable - shareholder                                                 150,000             150,000
  Convertible promissory notes                                                171,875             166,500
                                                                         ------------        ------------
            TOTAL LONG-TERM DEBT                                              334,080             328,705
                                                                         ------------        ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
   Preferred stock, 50,000,000 shares authorized, at stated value                 400                 400
   Common stock, 100,000,000 shares authorized, at stated value                16,444              15,110
   Additional paid-in capital                                               2,990,881           2,757,214
   Deficit                                                                 (3,937,675)         (3,768,004)
                                                                         ------------        ------------

            STOCKHOLDERS' DEFICIT, NET                                       (929,950)           (995,280)
                                                                         ------------        ------------

            TOTAL                                                        $    (99,074)       $   (150,354)
                                                                         ============        ============
</TABLE>


                                       2
<PAGE>   4

                                 MICROBEST, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                   2000                1999
                                                               ------------        ------------

<S>                                                            <C>                 <C>
SALES, net                                                     $    230,378        $    117,371

COST OF SALES                                                       102,023              73,101
                                                               ------------        ------------

            GROSS MARGIN                                            128,355              44,270

ADMINISTRATIVE EXPENSES                                             279,623             243,520

LITIGATION SETTLEMENT EXPENSES                                           --             525,000
                                                               ------------        ------------

            LOSS FROM OPERATIONS                                   (151,268)           (724,250)

INTEREST EXPENSE                                                    (18,403)            (17,000)
                                                               ------------        ------------

            LOSS BEFORE PROVISION FOR INCOME TAXES                 (169,671)           (741,250)

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

            NET LOSS                                           $   (169,671)       $   (741,250)
                                                               ============        ============

LOSS PER COMMON SHARE:
   Basic and diluted                                           $      (0.01)       $      (0.06)
                                                               ============        ============
   Weighted average common
         shares outstanding                                      15,777,182          12,316,346
                                                               ============        ============
</TABLE>


                                       3
<PAGE>   5

                                 MICROBEST, INC.
           STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (UNAUDITED)
                    FOR THE THREE MONTHS ENDED MARCH 31, 2000

<TABLE>
<CAPTION>
                                                          Preferred Stock                  Common Stock
                                                     --------------------------    -----------------------------   Additional
                                                                  Stated Value                    Stated Value      Paid-in
                                                     # of Shares $.01 per share    # of Shares   $.001 per share    Capital
                                                     ----------- --------------    -----------   ---------------   ----------

<S>                                                  <C>         <C>               <C>           <C>               <C>
STOCKHOLDERS' DEFICIT, January 1, 2000                  40,020        $400          15,110,750       $15,110       $2,757,214

Issuance of common stock for cash                           --          --           1,072,804         1,074          152,926

Issuance of common stock for services                       --          --             260,000           260           80,741

Net loss for the three months ended March 31, 2000          --          --                  --            --               --
                                                        ------        ----          ----------       -------       ----------

STOCKHOLDERS' DEFICIT, March 31, 2000                   40,020        $400          16,443,554       $16,444       $2,990,881
                                                        ======        ====          ==========       =======       ==========

<CAPTION>
                                                                        Stockholders'
                                                         Deficit        Deficit, Net
                                                       ------------     -------------

<S>                                                    <C>              <C>
STOCKHOLDERS' DEFICIT, January 1, 2000                 $ (3,768,004)     $ (995,280)

Issuance of common stock for cash                                --         154,000

Issuance of common stock for services                            --          81,001

Net loss for the three months ended March 31, 2000         (169,671)       (169,671)
                                                       ------------      ----------

STOCKHOLDERS' DEFICIT, March 31, 2000                  $ (3,937,675)     $ (929,950)
                                                       ============      ==========
</TABLE>


                                       4
<PAGE>   6

                                 MICROBEST, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                  2000              1999
                                                               ----------        ----------

<S>                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                    $ (169,671)       $ (741,250)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
      Depreciation                                                  3,000             3,000
      Interest expense, beneficial conversion feature               5,375                --
      Common stock issued for services, net                        81,001                --
      Common stock issued for litigation settlement                    --           525,000
      Other non cash charges                                        4,511                --
      Changes in certain assets and liabilities:
         Accounts receivable                                      (88,357)              741
         Inventories                                               28,077           (22,659)
         Accounts payable and accrued liabilities                 (14,557)           54,148
         Cash overdraft                                              (507)               --
                                                               ----------        ----------

            NET CASH USED IN OPERATING ACTIVITIES                (151,128)         (181,020)
                                                               ----------        ----------

CASH FLOWS FROM INVESTING ACTIVITY:
   Change in other assets                                          (2,300)             (600)
   Purchases of property and equipment                                (76)           (7,930)
                                                               ----------        ----------

            NET CASH USED IN INVESTING ACTIVITIES                  (2,376)           (8,530)
                                                               ----------        ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments on capital lease obligation                              (496)             (496)
   Proceeds from sale of stock                                    154,000           143,100
                                                               ----------        ----------

            NET CASH PROVIDED BY FINANCING ACTIVITIES             153,504           142,604
                                                               ----------        ----------

            NET INCREASE (DECREASE) IN CASH
             AND CASH EQUIVALENTS                                      --           (46,946)

CASH AND CASH EQUIVALENTS, Beginning of period                         --            56,554
                                                               ----------        ----------

CASH AND CASH EQUIVALENTS, End of period                       $       --        $    9,608
                                                               ==========        ==========
</TABLE>


                                       5
<PAGE>   7

NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000

NOTE 1. BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited interim financial
statements include all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the Company,
the results of its operations and changes in cash flows for the interim periods
presented.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. These statements should be read in conjunction with the
Company's audited financial statements and notes thereto for the years ended
December 31, 1999 and 2000 included in its Annual Reports filed on FORM 10-KSB,
both of which were filed in August 2001.

The results of operations for the interim periods included in this report are
not necessarily indicative of the operating results for the full year

NOTE 2. GOING CONCERN CONSIDERATIONS

The Company's financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company has incurred
substantial losses since inception, has funded operations through investor
capital, and has not generated sufficient revenues from its operating activities
to cover its expenses. Management recognizes that the Company must generate
additional resources and attain profitable operations to enable it to continue
in business. Management plans to continue obtaining additional capital through
the issuance of common stock, the issuance of debt, and to obtain operating
capital through revenue growth. The realization of assets and satisfaction of
liabilities in the normal course of business is dependent upon the Company's
raising additional growth capital and resuming and sustaining profitable
operations. However, no assurances can be given that the Company will be
successful in these activities. Should any of these events not occur, the
accompanying financial statements will be materially affected.

NOTE 3. SIGNIFICANT ACCOUNTING POLICIES

INCOME TAXES. As of December 31, 2000, the Company has tax net operating losses
carryforwards (NOLs) of approximately $4,423,000, and accordingly no income tax
provision (benefit) is recognized on the financial statements. All deferred
taxes created by NOLs are offset in their entirety by a deferred tax asset
valuation allowance.

EARNINGS (LOSS) PER SHARE. Statement of Financial Accounting Standard 128,
"Earnings Per Share" requires companies with complex capital structures or
common stock equivalents to present both basic and diluted earnings per share
(EPS). Basic EPS is calculated by dividing net income by the weighted average
number of common shares outstanding during the period. Diluted EPS is calculated
by dividing net income available to common shareholders by the weighted average
number of common shares and common stock equivalents. Common equivalent shares
are excluded from the computation in periods in which they have an anti-dilutive
effect. The Company's common equivalent shares include the convertible preferred
stock, the convertible promissory notes, and stock options.

RECLASSIFICATIONS. Certain prior period amounts have been reclassified to
conform to the presentation used in the current period.


                                       6
<PAGE>   8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

The following Management's Discussion and Analysis should be read in conjunction
with the financial statements and related notes thereto that appear elsewhere
herein.

FORWARD LOOKING STATEMENTS

This Form 10-QSB contains certain forward-looking statements. These
forward-looking statements include statements regarding marketing plans, capital
and operating expenditures, results of operations, potential utility and
acceptance of our existing and proposed products, and the need for and
availability of additional financing. The forward-looking statements included
herein are based on current expectations and involve a number of risks and
uncertainties. These forward-looking statements are based on assumptions
regarding our business which involve judgments with respect to among other
things, future economic and competitive conditions, future regulations, and
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond our control. Although we believe that
the assumptions underlying the forward-looking statements are reasonable, any of
the assumptions could prove inaccurate and, therefore, actual results may differ
materially from those set forth in the forward-looking statements. Any
forward-looking statement speaks only as of the date on which such statement is
made. New factors emerge from time to time, and it is not possible for us to
predict all such factors. Further, we cannot assess the impact of each such
factor on the business or the extent to which any factor, or combinations of
factors, may cause actual results to differ materially from those contained in
any forward-looking statement. In light of the significant uncertainties
inherent in the forward-looking information contained herein, the inclusion of
such information should not be regarded as any representation by us or any other
person that our objectives or plans will be achieved.

BACKGROUND AND FINANCIAL HISTORY

Although Microbest Inc. has been in existence since 1993, the Company has not
been able to develop its operating plan to the point where it can sustain
profitable operations. The Company has been involved essentially in product
development and market testing and development since it was founded. In 1997 the
Company began concentrating its marketing efforts in the food service industry
and has been successful in developing a presence for its products in that
market.

The business of-developing, marketing and selling the Company's biological
cleaning products is capital intensive. The Company intends to continue its
selling and marketing efforts and will require additional capital in order to
continue operating at the current level, to expand its business, and to fund
production and development costs. Additional capital financing may not be
available. Without such financing, the Company will not be able to continue at
its present operational level or fully implement its business strategy.

The Company has been unable to generate sufficient cash flow from operations
throughout its history to fund operations, including its marketing development
plans and the concentration of marketing efforts in the food service industry.
For the two years and three months ended March 31, 2000, the company generated
$1,092,704 in net sales. During this same period the company recorded net
losses of $3,269,123. The Company generated $1,939,334 from financing activities
during this period to help fund the shortfall in working capital.

LIQUIDITY AND CAPITAL RESOURCES

For the two years and three months ended March 31, 2000 the Company issued
5,048,571 shares of common stock for cash, for services and for litigation
settlement all as restricted under rule 144, in reliance on Section 4 (2) of the
Securities Act of 1933, and also issued 2,060,377 shares of common stock for
cash without registration pursuant to an exemption from registration under rule
504. Accredited investors have provided the funds necessary to cover the
Company's shortfall in working capital during the past two years.


                                       7
<PAGE>   9

In August 1999 the Company arranged for $500,000 financing through the private
sale of restricted shares of its common stock to several unrelated accredited
investors who are familiar with the Company, its mission and its products. The
shares were offered without registration in reliance on Section 4 (2) of the
Securities Act of 1933. The price for the shares sold was at a discount of 25%
to the average closing bid price as reported on the Over the Counter Bulletin
Board for the five days prior to the date of sale. This financing was designed
to meet the working capital needs of the Company through the balance of 1999. As
of February 3, 2000 the Company received $500,000 from the sale of 2,387,366
shares of common stock under these arrangements.

On September 1, 1999 the Company issued $200,000 of Convertible Promissory
Notes, which-bear Interest at 8 3/4% and mature in two years, with interest due
at maturity. After 15 months and until maturity, the outstanding balance of
principal and interest shall be convertible, at the option of the holder, into
shares of the Company's common stock at a conversion price 20% below the average
closing bid prices of the common stock for the prior 90 days. The notes are
unsecured. See notes to the financial statements. The proceeds from the notes
were used to repay $200,000 advanced to the Company by Matthew J. Bruderman, a
related party (see Item 12 Certain Relationships and Related Transactions)

Also on September 1, 1999, the Company issued a $150,000 promissory note to a
firm controlled by Mr. Bruderman, due in one year, with interest at 12 1/2%,
which is due at maturity. The holder of the note also received 50,000 shares of
the Company's common stock at the time of issuance. The proceeds of the note
were used to meet operating expenses. The note is unsecured and is past due as
to principal and interest. See notes to the financial statements.

As indicated above, the Company raised substantially all its invested funds
through the private sales of its common stock relying on exemptions from
registration under the Securities Act of 1933. To continue such sales of its
common stock has recently become more costly to the Company because of the
decline in the market price of the Company's common stock on the OTC/BB. The low
bid price dropped from $.75 in the first quarter of 1999 to $.187 in October
1999. After being removed from the OTC/BB on January 20, 2000 because of Rule
6530 the shares have traded as low as $0.05 per share on the National Quotation
Bureau's Electronic Quote System. If the Company is unable to raise capital
through the sale of its common stock or is unable to find alternative sources of
investor funds, the Company's ability to continue will be in jeopardy.

On March 20, 2000 the Company received a "Notice of Exercise by Raymond Evans
and Simon Mundlak (hereinafter SIMRAY) of a Put Option" demanding that the
Company purchase the 300,000 shares of common stock covered by the "put" for
$450,000 all in accordance with the SIMRAY Settlement Agreement. (See Item 3.
Legal Proceedings and Note 5 Litigation Settlement). As the Company did not have
the cash resources to fulfill it purchase obligation, SIMRAY exercised the right
of judgment they received in the settlement negotiated in 1998. Late in May
2000, the Company was involved in good faith negotiations with SIMRAY to resolve
the issue, when SIMRAY took separate aggressive maneuvers to take control of the
Company's bank accounts and all of its physical assets. The Company moved
quickly to protects its assets. On June 1, 2000 the Company filed for bankruptcy
protection under the provisions of Chapter 11 of the United States Bankruptcy
Code.

At the time of this hostile maneuver, the Company was negotiating a $2.5 million
financing commitment with a Wall Street investment banking firm with which it
has had a relationship for several years. These negotiations were terminated as
a result of the bankruptcy filing.

On August 21, 2000 the Company reached a new settlement with SIMRAY. Under the
terms of this settlement SIMRAY would receive $200,000 in cash, retain as free
trading shares 50,000, of the 600,000 shares of common stock they owned and they
received a two year option to acquire 250,000 shares of the Company's common
stock at a 25% discount to the market price of the shares when exercised.
A shareholder of the Company paid the $200,000 cash, another shareholder
conveyed the 50,000 free trading shares and the Company executed the stock
option agreement.


                                       8
<PAGE>   10

After executing the above described settlement, In October 2000 the Company
applied for and was granted dismissal from the Bankruptcy.

In January 2000, pursuant to a SEC filing on FORM 10-SB in November 1999, the
Company became subject to the periodic reporting rules of the 1934 Securities
Exchange Act. As of August 9, 2001, the Company has not filed its annual,
quarterly, or periodic reports as required by the 34 Act and the regulations of
the SEC. Management of the Company expects all past due SEC reports to be filed
before the end of September 2001. What actions, if any, the SEC may take as a
result of the Company's non-compliance is unknown.

THE FOLLOWING TABLE SUMMARIZES THE COMPANY'S OPERATING RESULTS FOR THE PERIODS
INDICATED:

<TABLE>
<CAPTION>
                                         $ IN THOUSANDS
                                  THREE MONTHS ENDED MARCH 31,
                                       2000          1999
                                      ------        ------

<S>                                   <C>           <C>
STATEMENT OF OPERATIONS DATA
Net Sales                             $  230        $  117
Gross Profit (Loss)                   $  128        $   44
Expenses
Salaries Wages & Benefits             $  163        $  108
Occupancy Costs                           36            32
Travel                                    31            24
Professional Fees                         25            40
Marketing Expenses                        25            39
Interest Expense                          18            17
Litigation Settlement                     --           525
                                      ------        ------
Total Expenses                        $  298        $  785
Net Income (Loss)                     $ (170)       $ (741)
</TABLE>

FINANCIAL CONDITION

The Company's financial position deteriorated in 2000 and 1999 as accounts
payable and short term financing increased at a greater rate than the growth in
accounts receivable and inventory. Accordingly, negative working capital
increased to $732,000 at the end of 1999 from $467,000 at the end of 1998 and
increased to $660,000 at the end of the first quarter 2000. Current liabilities
at the end of 1999 include an increase of $261,000 in the liabilities related to
the SIMRAY settlement and an increase of $176,000 in accounts payable and
accrued expenses, offset by a decrease of $200,000 in short term financing
obligations The negative working capital position at the end of the first
quarter 2000 is slightly better than at the end of the year 1999 because of an
increase in accounts receivable.

The Company was delinquent in depositing some of its payroll taxes in periods as
far back as December 1997. According to IRS records, the Company owed $184,433
in taxes, penalties and interest as of July 20, 2001. On July 24, 2001, the
Company entered into an installment agreement with the IRS to pay $5,000 per
month to settle this obligation. All amounts due per the IRS have been accrued
by the Company and are included on the balance sheet ($133,136 at March 31, 2000
and $144,215 at December 31, 1999). The IRS has filed a tax lien against the
Company to secure its position.

The Company's accumulated operating deficit as of March 31, 2000 is $3,938,000
and is directly attributable to the inability to increase sales quickly enough
to fund the marketing efforts that, in the opinion of management, are necessary
to realize the required level of revenues to attain profitable operations. This
operating deficit is offset by $2,991,000 in the Company's capital account
reflecting the funds it has been able to raise through sales of its common
stock. The financial shortfall of this strategy is that it requires the
continuous infusion of investment capital to keep the Company running and
creates an


                                       9
<PAGE>   11

environment where ongoing commitments (including payroll and operating expenses)
are met on a week-to-week basis. The danger is that the Company may run out of
funds to continue sales and marketing efforts before it can achieve a sustaining
level of sales. The Company has no plans to increase further the number of
employees or for significant capital expenditures until sufficient investment
capital is raised or until revenues increase substantially.

OPERATING RESULTS

The Company has improved its gross operating margin over the past two years by
concentrating sales efforts on pallet-sized bulk shipments. This strategy
reduced the need for one company-operated facility and has allowed for more
economic lot purchasing and a significant reduction in freight costs. During
this time the Company significantly improved the internal controls over its
financial operations which were deficient before the installation of a
computerized accounting system on January 1, 1999. The results of these efforts
are reflected in improved gross profit margin which improved to over 50% in 2000
compared with less than 40% in 1999.

William Breslin was appointed CFO of the Company on January 1, 1999 and
installed an integrated computerized accounting system, and established
acceptable internal accounting controls, thereby correcting the previously
existing weaknesses in the Company's accounting system. In the opinion of
management, all corrections that needed to be made were included in these
adjustments.

In 1999 and 1998 the Company increased its operating expenses significantly to
support the marketing expansion plan initiated during 1997. The Company
increased its staff to six employees early in 1998 and to 10 full time employees
in 1999. The majority of this staff is involved with sales and marketing. The
increase in 1999 reflects increased commissions paid on higher sales, plus the
salary for Mr. Breslin who joined the Company as CFO on January 1, 1999.

The Company moved into expanded office facilities early in 1998, thereby
increasing office occupancy expenses and related expenses of supporting the
expanded sales and marketing staff. The increase in occupancy costs in 1999
includes rent, local and long distance telephone, utilities, lease of computers
and office equipment as well as added office supplies and expenses required to
support the increase staff.

Travel expenses were higher in 2000 because of more sales staff traveling

Professional fees were high in 1999 because of audit and legal fees associated
with initial SEC filings, legal fees associated with litigation and financial
consulting services.

Discretionary marketing expenses have been curtailed during 2000 as cost cutting
moves.

The Company recorded $525,000 in 1999 of litigation settlement expenses in
connection with the settlement of the SIMRAY matter. (See description above
under Liquidity and Capital Resources)

The Company is currently involved in litigation with a former officer. See Part
II, Item 1. Legal Proceedings below.

PLAN OF OPERATION

The Company's financial statements have been prepared on a going concern basis
which contemplates the realization of assets and the settlement of liabilities
and commitments in the normal course of business. The Company has incurred
losses for the last four years and has an accumulated deficit from operations of
$3,928,000 at March 31, 2000. Management recognizes that the company must
generate additional financial resources to enable it to continue operations and
is presently working on receiving financing commitments in this regard.

The realization of assets and the satisfaction of liabilities in the normal
course of business is dependent upon the company obtaining additional equity
capital and ultimately achieving profitable operations.


                                       10
<PAGE>   12

However, no assurances can be given that the Company will be successful in these
activities. Should any of these events not occur, the financial results will be
materially affected.

The Company plans to continue its current strategy of developing a presence for
its products in the food service industry. Additionally, work needs to continue
on rounding out the product line and expanding penetration into other target
markets. This strategy will continue to require additional ongoing investor
financing. While management of the Company believes it will be able to arrange
the necessary financing to support its plan, if it is unable to, there is
substantial doubt that the Company will be able to continue.

As described above the Company's expenditures to date have greatly exceeded its
revenues even though those revenues have shown growth from year to year (sales
for the year 1999 were $485,724 compared with $376,602 in 1998). The Company
continues to have sales growth but at a less than a desirable rate and plans to
continue its aggressive market development plan. As indicated above the
operations of the Company have been financed primarily with funds provided by a
small group of accredited investors. Management of the Company is confident this
group will continue funding the Company's operating plan until it is financially
successful.

"Y2K" ISSUE

Management of the Company believes it is in full compliance with the "Y2K"
issue. The Company operates an internal Local Area Network for all of its
computer operations and all the software and substantially all the hardware in
use passed successfully into the new year without disruption. Based on
discussions with its major vendors, the Company believes there will be no
interruption from its vendors that will interfere with the Company's operations.
Management of the Company believes that the "Y2K" issue will not have a material
effect on the Company's business, results of operations or financial condition.

                                    SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             Date: August 31, 2001

                                                   Microbest, Inc.


                                                   /s/ Michael J. Troup
                                                   -----------------------------
                                                   Michael J. Troup
                                                   Chief Executive Officer
                                                     and Chairman

                                       11