<PAGE>

                                  UNITED STATES
                       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, 1999

[] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
        For the transition period from to

                        Commission file number 000-26856


                                QUADRATECH, INC.
                 (Name of small business issuer in its charter)

            Nevada                                      95-4396848
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


  11401 Valley Blvd Suite 200A
      El Monte, California                                91731
(Address of principal executive offices)                (Zip Code)

Issuer's telephone number (626) 401-2700


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

                                      None


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

                               $0.001 Common Stock
                                (Title of class)

                                       1
<PAGE>

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 there is no 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]

As of December 31, 1999, 36,513,301 shares of the Registrant's Common Stock,
$0.001 par value, were outstanding. The aggregate market value of the Common
Stock held by non-affiliates of the registrant (i.e. excluding shares held by
executive officers, directors, and control persons as defined in Rule 405) on
that date was $2,808,606.30 computed at the closing price on that date.

The registrant's revenue for the December 31, 1999 fiscal year was $3,341,480.

                                       2

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                                TABLE OF CONTENTS


                                                                            Page
Item 1. Description of Business................................................4

Item 2. Description of Property................................................7

Item 3. Legal Proceedings......................................................7

Item 4. Submission of Matter to Vote of Security Holders.......................8

Item 5. Market for Common Company Equity and Related Stockholder Matter........8

Item 6. Management's Discussion and Analysis or Plan of Operation..............9

Item 7. Financial Statements..................................................10

Item 8. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.............................10

Item 9. Executive Compensation................................................13

Item 10. Security Ownership of Certain Beneficial Owners and Management.......14

Item 11. Certain Relationships and Related Transactions.......................15

Item 12. Exhibits and Reports on Form 8-K.....................................15

                                       3

<PAGE>

Item 1. Description of Business
-------------------------------

Introduction.

        Quadratech, Inc. (the "Company") was incorporated on February 4, 1984
under the laws of the State of Utah. On March 19, 1990, the Company changed its
domicile from the State of Utah to the State of Nevada. Until August 1993, the
Company had no operations. In 1993, the Company entered into an agreement and
plan of reorganization with the shareholders of (OSA) Oil Scavenger Absorbent, a
California corporation ("OSA, Inc."). The shareholders of OSA, Inc. received
5,500,000 shares, representing 60% of the then outstanding shares, in exchange
for all of their issued and outstanding shares of stock in OSA, Inc.

        OSA, Inc. was incorporated in 1992 to act as a distribution company for
oil absorbent products. Its shareholders were Maria Comfort, Ed V. Lunenschloss,
William Snyder, Michael Montgomery, and John Sullivan. With dissatisfaction of
products then on the market, the Company developed its oil absorbent product.

Business of the Company.

        The Company's business units are divided into two (2) areas, the
development and manufacturer of environmental absorbents and the supply of
third-party logistics (3PL).

        The development of environmental absorbent products consists of
identifying and evaluating potential products and if the evaluation proves
favorable, obtaining all of the requisite components required to complete
manufacture of the product, including financing and any government approvals.

        3PL services is the information gathering, order coordination, order
processing, supply of transportation equipment and completion of supply, via
physical delivery of durable and non- durable goods. The Company performs
administrative duties at its headquarters in El Monte, CA, with the
corresponding transportation services provided in three (3) western states;
California, Nevada, and Arizona from two terminals located in California, one
(1) in City of Industry and one (1) in Calipatria.

The Industry.

        The manufacture of a product used for the clean-up of hazardous spills
of oil and oil-based petrochemicals was the initial market sought by the
Company. An oil absorbent material is used to absorb the spilled oil. The oil
can be removed from the absorbent material and returned or recycled in
accordance with all applicable Federal, State and local laws.

        Total Cradle-to-Grave remediation of the product by removing hazardous
waste from the customers operations, then recycling or disposing of the used
absorbent and waste products into government approved products or services,
provides a significant advantage to our customers. The hazardous material
industry is growing very rapidly, sparked by increased governmental regulations
concerning disposal of these types of materials. Quadratech is currently
emphasizing the value of their products and services to those commercial and
governmental agencies which are concentrating their attentions on
environmentally safe products which are non-toxic, therefore justify our total
redemption capability.

                                       4

<PAGE>

        As of the date hereof, the Company has focused attention on providing
absorbent products for four separate markets: oil and acid absorbents,
agricultural applications and pet litter. Each product line has its own market.
The oil and acid absorbent material is sold in the hazardous material market;
the agricultural market applies to several applications, i.e. egg washing,
animal bedding material, and effluent management; the pet litter is a grocery
and catalog item which has the unique capability of being flushed down the
toilets while providing odor removal and significant absorbent qualities.

I.  Products.

         A. Oil Absorbent Materials and Alternative-Energy Products. The Company
         obtained by assignment from Ed V. Lunenschloss U.S. Patent No.5,248,391
         issued on September 28, 1993 for its oil absorbent material and
         currently has the rights/an unrestricted license as an oil-spill
         cleanup agent, in accordance with Title 23, Division 3, Chapter 10, of
         the California Code of Regulations. The Company believes that there are
         other licensed competitors whose products may be used on a restricted
         basis, i.e., their products, unlike the Company's cannot be deployed or
         used in free form in open waterways. Further, such absorbent products
         are classified as a renewable energy source.

         B. Floor sweeps. The company's floor sweep products absorb and retrieve
         spilled oil and waste water from airplanes (jet fuel), gasoline
         stations (gas and diesel), machine shops, barge floors, repair shops
         and caustic acids, such as battery electrolytes, chromium acid and
         sulfuric acid.

         C. Pet Litter. Flush it (TM) Pet Litter, made from recycled paper,
         primarily for the feline market, is more absorbent than clay, silica,
         and diatomaceous earth. It can be flushed down the toilet, and it helps
         in cleaning sludge build-up, with its oil and grease absorbency. It is
         deemed by the Company to be environmentally friendly, biodegradable,
         with excellent odor control and minimum tracking. Stable Mate, made
         from recycled paper, is a biodegradable, odor controllable absorbent
         utilized primarily for horse bedding or other animal uses. The
         Company's initial testing of the product indicates that it has no
         adverse health impact on animals. The Company has commenced marketing
         this product directly to horse owners and to entities who board, either
         permanently or temporarily (horse racing tracks) and/or transfer
         animals and to distributors.

         D. B4tk Disinfecting Sanitizer. B4tk is a bacteria and virus killing
         product, applicable to agricultural animals, that is sprayed in the
         animal stalls, pens and on animal bedding.

         E. Acid Absorbent. A battery acid floor sweep-absorbent also made from
         recycled paper, is capable of neutralizing acids such as battery
         electrolytes, chromium acid, and sulphuric acid

II.  Services:

         A. ACCU CHEM Conversion, Inc. (ACC) was incorporated in January 1994
         under the laws of California. The Company acquired 83% of ACC in
         October 1999 in a tax-free re-organization plan approved by a majority
         of the Company's Shareholders.

         ACC performs third party logistics support for food, chemical and
         textile manufacturers located throughout the United States. ACC's third
         party support services include: operation of two (2) railroad terminals
         in Southern California, the transportation of both hazardous and
         non-hazardous materials in a fleet of company owned and operated
         tractors and trailers, and a Just-In-Time purchase/supply agreement
         with a leading aerospace company.

         ACC employees twenty-eight (28) full-time personnel and maintains its
         Corporate Headquarters in El Monte, California.

                                       5

<PAGE>

Marketing and Sales.

         In 1999 the Company marketed its products principally through both
sales representatives and direct marketing in the United States. Though several
independent distributors were involved in product sales, this market, both
domestic and foreign, still needs further development. The Company in the past
has marketed its products successfully for specific emergency spills in Korea,
Japan and Hong Kong and looks forward to further development of this market.

       The Company is also developing plans for promotion of their Pet Litter
product through nationally known distributors.

The Competition, Other Products.

I.  Products

         The Company competes on a national basis with a large number of
environmental service firms. These range in size from small local companies to
large national firms, many of which have considerably greater resources than the
Company. While the service capabilities of these competitors overlap with
several of the service areas provided by the Company, few compete in all areas
of the Company's markets. Factors influencing the Company's competitiveness are
price, reputation for quality, the availability and skills of engineering and
construction personnel, financial strength, knowledge or markets, site
conditions and estimating abilities. Although the environmental business is
highly competitive, particularly for competitively bid projects, the Company
believes its experience and skill make it well positioned to compete
effectively.

         The Company encounters substantial competition from companies in the
polypropylene absorbent materials field. Major polypropylene competitors include
large chemical equipment manufactures substantially larger than the Company,
with substantially greater financial capabilities. The natural non-toxic
absorbent materials field is relatively new and rapidly growing, and the nature
of the competition is not yet defined.

II.  Services

         The Company competes with numerous small, medium and large third party
logistics companies throughout the United States. ACC ranked one-hundred forty
first (141st) in total revenue among tank truck carriers in the United States in
1999, and with the acquisition of MAG Transport, Inc. (MAG) QUDT rank will (as
compared to 1999) (141st) will improve substantially in FY2000.

         ACC benefits from the strategic location of two (2) rail terminals in
California, with the potential for expansion in other strategic locations.


Proprietary Information.

         The Company holds a patent for the Oil Absorbent Material and plans to
pursue additional patents for B4tk, floor sweep, pet litter and acid absorbent
products.

Employees.

         As of December 31, 1999 the Company had twenty-eight (28) full-time
employees All through its 83% owned subsidiary, Accu Chem Conversion, Inc. A
significant amount of production capability has been out-sourced for OSA's
product to independent manufacturing contractors.

                                       6
<PAGE>

Item 2. Description of Property.
--------------------------------

         The Company's office is located at 11401 Valley Blvd. Suite 200A, El
Monte, California, 91731. The Company leases/rents three (3) other locations:

         1.  300 N. Baldwin Park Blvd, City of Industry, CA  91731

         2.  13226 E. Nelson Avenue, City of Industry, CA  91746

         3.  600 S. Brown Avenue, Calipatria, CA  92233


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

         On May 15, 1998, the Securities and Exchange Commission ("the
Commission") filed a Complaint against the Company. In connection therewith, the
Company entered a general appearance, waived service upon it of a Summons and of
the Complaint of the Commission and admitted the jurisdiction of the Court over
it and over the subject matter of this action. The Company admitted that
pursuant to Section 13(a) of the Securities Exchange Act of 1934 ("Exchange
Act") [15 U.S.C. Section 78m(a)] and Rules 12b-25, 13a-13 [17 C.F.R. Sections
240.12b-25, 240.13a-1 and 240.13a-13] promulgated thereunder, it was required to
file, and it has filed: (a) to file with the Commission its Annual Reports on
Form 10-K [17 C.F.R. Section 249.310]: (1) for its fiscal year ended December
31, 1996, which was due on or before March 31, 1997; and (2) for its fiscal year
ended December 31, 1997, which was due on or before March 31, 1998; (b) to file
with the Commission its Quarterly Reports on Form 10-Q [17 C.F.R. Section
249.308a]: (1) for its fiscal quarter ended March 31, 1997, which was due on or
before May 15, 1997; (2) for its fiscal quarter ended June 30, 1997, which was
due on or before August 14, 1997; and (3) for its fiscal quarter ended September
30, 1997, which was due on or before November 14, 1997; (c) to file with the
Commission its Notifications of Late Filing on Form 12b-25 [17 C.F.R. Section
249.322]: (1) for its Annual Reports on Form 10-K; (i) for its fiscal year ended
December 31, 1996, which was due before April 1, 1997; and (ii) for its fiscal
year ended December 31, 1997, which was due on or before April 1, 1998; and (2)
for its Quarterly Reports on Form 10-Q: (i) for its fiscal quarter ended March
31, 1997, which was due on or before May 16, 1997; (ii) for its fiscal quarter
ended June 30, 1997, which was due on or before August 15, 1997; and (iii) for
its fiscal quarter ended September 30, 1997, which was due on or before November
17, 1997; The Company, without trial, argument or adjudication of any issue of
fact or law, waived entry of findings of fact and conclusions of law pursuant to
Rule 52 of the Federal Rules of Civil Procedure, except as set forth herein and
in the Final Judgment of Permanent Injunction as to the Company (the "Final
Judgment") to be entered in the action. The Company waived any right it may have
had to appeal from the Final Judgment to be entered in the action. The Company
waived service upon it of the Final Judgment and agreed that the entry of the
Final Judgment by the Court and filing with the Clerk in the United States
District Court for the District of Columbia will constitute notice to the
Company of the terms and conditions of such Final Judgment. The Company entered
the Consent voluntarily and represented that no offer, promise or threat of any
kind whatsoever had been made by the Commission or any of its members, officers,
employees, agents or representatives in connection with or in consideration
therefore. The Company agreed that the Consent shall be incorporated by
reference into the Final Judgment, a copy of which was to be entered by the
Court in this action. The Company consented, before the taking of any testimony
and without trial, argument or adjudication of any issue of fact or law therein
to the entry, without further notice, of the Final Judgment: (a) restraining and
enjoining the Company and its officers, agents, servants and employees and
attorneys, and those persons in active concert or participation with them, who
receive actual notice of the Final Judgment by personal service or otherwise,
and each of them, from failing or causing the failure to file timely and in
proper form with the Commission at its headquarters office, accurate and
complete information and reports as are required to be filed with the Commission
pursuant to Section 13(a) of the Exchange Act and Rules 12b-25, 13a-1 and

                                       7
<PAGE>

13a-13, promulgated thereunder, including, among others, Annual Reports,
Quarterly Reports and Notifications of Late Filing; (b) ordering the Company to
require any outgoing chief executive officer or president of the Company to
deliver or cause to be delivered a copy of the Final Judgment and of the Consent
to any incoming chief executive officer or president of the Company to deliver
or cause to be delivered a copy of the Final Judgment and of the consent to any
incoming chief executive officer or president of the Company; and (c) ordering
the Company to file with the Commission at its headquarters office in
Washington, D.C.: (1) a complete and accurate Annual Report on Form 10-K for its
fiscal year ended December 31, 1996 by May 29, 1998; (2) complete and accurate
Quarterly Reports on form 10-Q for its fiscal quarters ended March 31, June 30
and September 30, 1997 by June 15, 1998; (3) a complete and accurate Annual
Report of Form 10-K for its fiscal year ended December 31, 1997 by June 30,
1998; and (4) such other periodic reports which may become due prior to the
entry of the Final Judgment.

        As of March 1, 2000 the Company had filed with the SEC, three (3)
quarters of Form 10QSB Reports due for 1999.

Item 4. Submission of Matter to Vote of Security Holders.
---------------------------------------------------------

        None.


Item 5. Market for Common Company Equity and Related Stockholder Matter.
------------------------------------------------------------------------

        As of December 31, 1999 The Company had 36,513,301 shares of record of
its common stock. The Company has not paid cash dividends on its common stock.
The Company anticipates that for the foreseeable future any earnings will be
retained for use in its business, and no cash dividends will be paid on the
common stock. Declaration of common stock dividends will remain within the
discretion of the Company's Board of Directors and will depend upon the
Company's growth, profitability, financial condition and other relevant factors.

        The Company common stock is traded on the bulletin board system under
the symbol "QUDT." The table below reflects the high and low bid and ask
quotations for each of the Company's fiscal quarters for the two fiscal years
covered by this report. The prices reflect inter-dealer prices, without retail
mark-up, mark-down or commission and do not necessarily represent actual
transactions.

         As of December 31, 1999, the company had issued and outstanding
36,513,301 shares of Common Stock. 25,897,828 of said share of stock have
restrictive legends imposed thereon and stop transfer order have been issued to
the Company's transfer agent.

                                              1999

                                              HIGH                LOW
                                              ----                ---
1st Quarter                                   $ .30               $ .18
2nd Quarter                                   $ .19               $ .13
3rd Quarter                                   $ .31               $ .18
4th Quarter                                   $ .18               $ .13

                                              1998

                                              HIGH                LOW
                                              ----                ---
1st Quarter                                   $ .37               $ .20
2nd Quarter                                   $ .26               $ .125
3rd Quarter                                   $ .30               $ .04
4th Quarter                                   $ .41               $ .04

                                       8
<PAGE>

Dividends.

        The payment of dividends is within the discretion of the Board of
Directors of the Company. The Company currently intends to retain all earnings,
if any, in the foreseeable future for use in the development of the Company's
business. The Company has not paid dividends since inception. It is not
anticipated that any dividends will be paid in the foreseeable future and there
can be no assurance that dividends can or will ever be paid. The payment of
dividends is contingent upon future earnings, if any, the Company's financial
condition and capitol requirements, general business conditions and other
factors.

Item 6. Management's Discussion and Analysis or Plan of Operation.
------------------------------------------------------------------

        Comparison of Years ended December 31, 1999 and December 31, 1998.

Results of Operation.

         In 1998, the Company focused its major effort on marketing its oil
absorbent products to commercial and government accounts as its priority
product. There was also a continuing effort to develop distributors for the
Flush-it per litter product. Initial efforts to develop an agricultural product
were begun but no sales of product to this market area were achieved, as
additional development and research were required to adequately prepare the
product for market.

        Total revenue for the Company in 1999 was $3,341,380.00 an increase in
sales over 1998 sales of $3,260,987.00 mainly due to the acquisition of 83% of
ACCU CHEM Conversion, Inc. (ACC). ACC's 1998 gross sales were 2.2 million
dollars.

         The OSA division of the Company generated $43,336.00 in sales for 1999.
The resulting combined loss for the Company in 1999 was $108,453.00 which is the
combination of a net loss from the OSA division with a net profit from the ACCU
CHEM division of $320,678.00.

         Due to the Reporting Requirements for a Purchase Method of
Acquiring/Business Combination, the Company can only include ACC's profits for
the fourth (4th) quarter in the annual filing, however, a pro-forma report
applying ACC's profits for the entire year would generate an annualized profit
of $136,768 or $.00375/share.

         OSA's expenses have been greatly reduced due to the temporary cessation
of manufacturing operations while product lines are evaluated and presented to
municipalities, private spill-response contractors, Department of Energy
facilities, medical supply distributors, national automotive supply chains and
Internet pet supply companies. During this evaluation process, OSA's expenses
for administrative, general and sales costs will remain at a minimum.

        ACC's expenses for terminal/trucking, administrative and general
expenses are within normal guidelines as established by industry standards. ACC
expects to improve the 1999 ratio of operating expenses to gross revenue for
Fiscal year 2000, mainly due the acquisition of MAG Transport, Inc. (MAG) by the
Company in 2000, that will allow several redundant job functions and expense
centers to be combined or eliminated through attrition.

        The Company believes that internally generated funds will be sufficient
to maintain the existing business base in both divisions of the Company through
2000. The Company may consider further issuance of stock to cancel indebtedness
or to fund any future merger/acquisition.

                                        9
<PAGE>


         Total revenues for fiscal 1999 were $3,341,480 an increase of
$3,260,987 over 1998 revenues.

         The liquidity of the Company and its available capital resources have
improved greatly as compared to 1998.

         The Company believes that internally generated funds and the sale and
issuance of stock for cash, or in cancellation of indebtedness, will provide
minimum capitol resources to finance operations, fund capital expenditures and
planned research activities. The Company's need for funds has been reduced
predicated upon the significant reduction in property rental and maintenance
expenses and the reduction of marketing costs.

Item 7. Financial Statements.
-----------------------------

        The Financial Statements are set forth as an Exhibit hereto.

         a)  Exhibit A

Item 8. Directors, Executive Officers, Promoters and Control Persons; Compliance
--------------------------------------------------------------------------------
        with Section 16(a) of the Exchange Act.
        ---------------------------------------

                                       10

<PAGE>

At December 31, 1999, the officers and directors of the Company were:

Name and address                          Age                Position
----------------                          ---                --------

Craig G. Robitaille                        40              Chief Executive
21391 Dockside Circle                                      Officer and President
Huntington Beach, Ca  92646

Ted D. Kimbrough                           63              Director & Secretary
1933 Durango Avenue
Los Angeles, CA  90034

William Snyder                             75              Director
509 South Hindry
Inglewood, CA  90301

Christopher Wiles                          44              Director
23535 Windom Street
West Hills, CA  91304

Michael J. Oliva                           55              Director
10552 Beardsly Circle
Villa Park, CA  92861

Lloyd D. Smithson                          60              Director
1170 Oakengate Road
San Dimas, CA  91773

Lilly V. Lee                               68              Director
4751 Wilshire Blvd. Suite 207
Los Angeles, CA  90010

Perry Cope                                 63              Director
129 E. Colorado P.E. 552
Monrovia, CA  91016

Michael Mills                              38              Director
601 S Milliken Avenue K100
Ontario, CA  91761


        The directors of the Company are elected to serve until the next annual
Shareholders' meeting or until their successors are duly elected and qualified.

                                       11
<PAGE>

Background of Current Officers and Directors.

         BILL SNYDER is the founder and CEO of Caprice Engineering Company,
which he established in 1972. Mr. Snyder started it as a supplier to the U.S.
Government of miscellaneous aircraft spare parts. During his tenure, (since
1972) the firm increased its yearly sales from $100,000 to $3,000,000. His
experience ranges from sales and inventory control through manufacturing and
quality control, with emphasis on the day to day administration of a
Government-controlled business. From 1968 to 1972, Mr. Snyder was sales manager
of Sparkadyne Corporation, a military spare parts manufacturing company. From
1950 to 1967, Mr. Snyder was Purchasing Supervisor at Rockwell Aviation, a
supplier of aircraft and space equipment to the U.S. Government.

         CHRISTOPHER WILES received a Bachelor of Science degree in Accounting
from San Francisco State University, California in 1978. From 1983 to 1988 he
was National Sales Manager Teraco, Inc., a company engaged in the manufacture of
promotional goods and from 1982 until was Vice President-Sales for Ocean
Manufacturing Corporation, a company engaged in the manufacture of promotional
products. From 1993 to the present Mr. Wiles has been engaged in the business of
marketing promotional products under the name of CW Marketing & Promotional
Services. Mr. Wiles joined the Board on December 27, 1996.

         TED D. KIMBROUGH received his Bachelor of Science in Education from
Northern Illinois State University, his Master of Science in Education from
California State University, Los Angeles, did Post graduate studies at
Pepperdine University, University of California at Los Angles and University of
Southern California and an Honorary Juris Doctorate from the University of West
Los Angeles. Mr. Kimbrough is the President and Owner of Multi-Kim & Associates,
Inc. and the former Superintendent of Schools for the Sacramento Unified School
District (1996-1997), Chicago Unified School District (1990-1993); Compton
Unified School District (1982-1990). Previously, he had been employed by the Los
Angeles Unified School District.

         PERRY COPE received his Bachelor of Administration in Marketing from
the University of Houston, Houston, TX and a Masters of Business Administration
from the University of Southern California. Mr. Cope has over 35 years
experience in marketing and executive management with North American Philips and
Xerox Corporation. He was at Xerox for Xerox Medical Systems, and was later
Director of Sales and Service for Philips Medical, Ultrasound Division. Mr. Cope
founded Sea to Sea International Consulting Company in 1991 and acted as a
consultant to medical product manufacturers for six years. Mr. Cope joined the
Board on November 1, 1997. In 1997 mr. Cope became Chief Executive Officer of
the Company.

         LILLY V. LEE is Chairman of Lilly International, Inc. Ms. Lee's
business business activities include real estate investments, trade, trucking,
retail, franchise consultant strategy alliances with various sectors of business
in the U.S.A., Australia, China, Hong Kong, Indonesia, Thailand and the
Philippines. Ms. Lee is currently the Chairman of the World Trade Center
Association, Los Angeles, Long Beach which is linked with other trade offices in
97 countries, and is the Chairman of Southern California Asian Pacific American
Legal Center, Executive Council. Ms Lee is on the Executive Boards of Bank Plus
Corporation and Fidelity Federal Bank and is a member of the Board of Directors
of Gateway Investment Services, Inc.

         MICHAEL L. MILLS has been a Director of Klever marketing, Inc. since
November 1998. For the past five years prior to November 1998, Mr. Mills was
President/COO of Olson Farms, a private company. On November 1998, Mr. Mills
became Chairman/CEO of Olson Farms.

         CRAIG GLEN ROBITAILLE received his Bachelor of Science in Environmental
and Occupational Health from Cal State University, Northridge, California. From
1981 through 1993, Mr. Robitaille was an executive with various southern
California businesses involving quality control and facility and plant
management. In 1993, he founded ACCU CHEM Conversion, Incorporated, a chemical
handling and transportation company, with special emphasis on handling hazardous
materials.

                                       12
<PAGE>

         MICHAEL J. OLIVA attended Pepperdine College in Los Angeles, CA through
1966. In 1971 purchased half ownership of a local trucking company in Los
Angeles; later in that same year began warehousing as a compliment to the local
trucking program. In 1979 purchased a second local trucking company and in 1982
merged them to become Ernst Air Speed Trucking. In 1991 the company moved to
Montebello, CA, becoming Ernst Trucking and Warehousing, a division of Tobic,
Inc.

         LLOYD D. SMITHSON served as a Branch Operations Officer with Bank of
America after which he took a position with a public accounting firm
specializing in operational and tax accounting for the transportation and
distribution industry. During these same six years he attended Cal State, Los
Angeles. For the next eighteen years Mr. Smithson owned and operated his tax
accounting and consulting firm. He later became the CFO and General Manager for
Admiral Transportation. During this 10-year tenure he became one of the three
founders of ACCU CHEM Conversion, Inc. in the City of Industry and has
functioned as CFO.

Item 9. Executive Compensation.
-------------------------------

        The following table sets forth the cash compensation which was paid by
the Company for services rendered to the Company. During fiscal years ended 1998
and 1999 the following payments were made:

<TABLE>
<CAPTION>

                                                                  Remuneration
                                                                  ------------
Name                                Position                    1998         1999
--------------------------------------------------------------------------------------
<S>                                 <C>                           <C>           <C>

Perry Cope                          President/QUDT                $45,000       $10,000(1)

Lloyd D. Smithson                   Controller                          0       $57,352.72(4,5)

Craig G. Robitaille                 President and Chief                 0       $87,000(2,5)
                                    Executive Officer

Maria Comfort                       President and Chief           $32,000(3)          0

All Executive officers as a group                                 $77,000       $154.352.72
</TABLE>

        No compensation is payable to Directors of the Company in connection
with attendance at Board Meetings, except as to such Directors who also serve as
Officers of the Company in capacities other than Directors and/or Officers. At
this time no other compensation has been scheduled for any other member of the
Board of Directors or Officers of the Corporation.

        Future compensation of Officers will be determined by the Board of
Directors based upon the financial condition and performance of the Company, the
financial requirements of the Company, and upon individual performance of each
Officer. The Board of Directors intents to ensure that the salaries paid to the
Company's Officers and employees are reasonable and prudent and are based upon
both the financial condition and performance of the Company and upon the
performance of the individual Officers.

(1)  employment ended March, 1999
(2)  represents compensation for entire year
(3)  employment ended in 1998
(4)  represents compensation for entire year
(5)  both officers are under employment contracts that run through February,
     2011 with two (2) five (5) year options.

                                       13
<PAGE>

Item 10. Security Ownership of Certain Beneficial Owners and Management.
------------------------------------------------------------------------

         The following table sets forth as at December 31, 1999, certain
information as to the common stock of the Company owned of record and/or
beneficially by each person who is known to the Company to own more than five
(5%) percent of the outstanding common stock, and by all officers and directors
of the Company.

Name and Address                    Amount Beneficially
of Owner                            and/or Owned Record               Approx. %
-------------------------------------------------------------------------------

Perry Cope                                    1,001,000                    3.0%
1231 San Carlos Road
Monrovia, California 91016

Ted D. Kimbrough                               400,000                    1.1%
1933 Durango Avenue
Los Angeles, California 90034

Lilly V. Lee                                   200,000                    ---
4751 Wilshire Boulevard
Suite 207
Los Angeles, CA 90010

Craig Glen Robitaille                        5,200,000                   14.2%
21391 Dockside Circle
Huntington Street, CA 92646

William Snyder                               1,879,259                    5.0%
409 South Hindry
Inglewood, California 90301

Christopher Wiles                              410,000                    1.1%
23535 Windom Street
West Hills, California 91304

Michael J. Oliva                             5,200,000                   14.2%
10552 Beardsly Circle
Villa Park, CA  92861

Lloyd D. Smithson                            5,000,000                   13.7%
1170 Oakengate Road
San Dimas, CA  91773

Michael Mills                                  100,000                   ----
11401 Valley Blvd Suite 200A
El Monte, CA  91731

Francis Rigney, MD                           3,100,000                    8.5%
2605 California Street
San Francisco, CA  94115-2617


                                       14
<PAGE>

Item 11. Certain Relationships and Related Transactions.
--------------------------------------------------------

        In 1999 there were significant conversions of debt and accrued interest
to stock Francis Rigney, MD of $192,000 in debt to 1.2 million shares of stock -
March 1999.

Item 12. Exhibits and Reports
------------------------------


         Financial Statements filed as part of this report, prepared by W.
William Cary, Certified Public Accountant for the fiscal year ended December 31,
1999, with the related consolidated statements of operations and accumulated
deficit, and cash flow for the year then ended.

                                       15
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Company has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.



                                                     QUADRATECH INC.



                                                     ---------------------------
                                                            (company)
                                                     Date: April 5, 2000


                                                   By: /s/ Craig G. Robitaille
                                                     ---------------------------
                                                          Craig G. Robitaille
                                                          President



                                       16
<PAGE>


                         QUADRATECH, INC. & SUBSIDIARIES


                        CONSOLIDATED FINANCIAL STATEMENTS

                                       AND

                          INDEPENDENT AUDITOR'S REPORT

                                DECEMBER 31, 1999


<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders of Quadratech, Inc.

I have audited the accompanying consolidated balance sheet of Quadratech, Inc.
(a Nevada Corporation) and its subsidiaries as of December 31, 1999 and the
related consolidated statement of operations and accumulated deficit, and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these consolidated financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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 presentations. I believe that my audit has a reasonable basis for my
opinion.

In my opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial positions of Quadratech, Inc.
and its subsidiaries as of December 31, 1999 and the results of their operations
and their cash flows for the year then ended, in conformity with generally
accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 13 to
the consolidated financial statements, the Company's operating losses in prior
years and deficit in stockholders' equity raise doubts about their abilities to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.



W. William Cary, CPA
Temecula, CA
May 3, 2000


<PAGE>

                         QUADRATECH, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999


                                     ASSETS

Current Assets
Cash                                                              $       3,986
Accounts Receivable(Note 1)                                             588,693
Inventories (Note 1)                                                    109,405
Miscellaneous receivables                                                12,340
   Prepaid expenses                                                      67,012
                                                                  --------------
Total Current Assets                                                    781,436
                                                                  --------------

Fixed Assets
Equipment & Leasehold improvements, net of depreciation and       --------------
          amortization (Notes 1 & 3)                                    630,336
                                                                  --------------
Other Assets
   Patents, Marks and Copyrights, net of amortization of $3,837          11,708
   Deposits                                                              25,507
                                                                  --------------
      Total other assets                                                 37,215
                                                                  --------------


      Total Assets                                                $   1,448,987
                                                                  ==============

     The accompany notes are an Integral part of these financial statements


<PAGE>

                         QUADRATECH, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1999


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts Payable & accrued expenses                               $     310,377
Accrued litigation costs                                                 11,000
Payroll taxes payable                                                    52,116
Insurance contracts payable (Note 4)                                     42,479
Accrued interest                                                         75,018
Line of Credit (Note 2)                                                  85,000
Notes Payable, current portions (Note 3)                                271,145
                                                                  --------------
      Total Current Liabilities                                         847,135
                                                                  --------------


Long-term Debt, net of current portion (Note 3)                         555,539

Minority interest in equity of subsidiary (Note 5)                       44,700
                                                                  --------------
      Total Liabilities                                               1,447,374
                                                                  --------------



Stockholders' Equity
Common Stock,  $.001 par value,
50,000,000 shares authorized;
36,513,301 shares issued and outstanding                                 36,513

Paid-in Capital                                                       3,372,237
Accumulated Deficit                                                  (3,407,137)

                                                                  --------------
      Total Stockholders' Equity                                          1,613
                                                                  --------------


        Total Liabilities and Stockholders' Equity                $   1,448,987
                                                                  ==============

     The accompany notes are an Integral part of these financial statements


<PAGE>

                         QUADRATECH, INC. & SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
                      For the year ended December 31, 1999


<TABLE>
<CAPTION>
<S>                                                                               <C>
Sales, net of discounts                                                           $   3,341,480
                                                                                  --------------

Cost of Sales                                                                         2,056,752
                                                                                  --------------

   Gross profit                                                                       1,284,728
                                                                                  --------------

Operating expenses                                                                    1,153,978

Income from operations                                                                  130,750

Other income (expense):
 Rental Income                                                                           61,800
 Other income                                                                            10,273
 Loss on disposal of fixed assets                                                        (2,104)
 Interest, net                                                                          (92,838)

Less: Income of purchased company  prior to date of acquisition (Note 5)               (230,126)
Less: Minority income of consolidated subsidiary                                        (15,095)

Loss before provision for income taxes                                                 (137,340)

Provision for income taxes (Note 1 )                                                     (1,600)

Loss before extraordinary item                                                         (138,940)

Extraordinary item - utilization of operating loss carryforward                          30,487

Net Loss                                                                               (108,453)

Accumulated deficit:
 Beginning balance, as previously stated                                             (3,168,244)
 Prior year adjustments (Note 12)                                                      (130,440)
                                                                                  --------------

  Ending Accumulated deficit                                                      $  (3,407,137)
                                                                                  ==============

Net loss per share                                                                      (0.0044)
                                                                                  ==============

Weighted average of shares outstanding                                               24,716,938
                                                                                  ==============
</TABLE>

     The accompany notes are an Integral part of these financial statements


<PAGE>

<TABLE>                                        QUADRATECH, INC. & SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                         Year Ended December 31, 1999
<CAPTION>

                                                                              Paid In        Accumulated
                                              Shares           Amount         Capital          Deficit         Total
                                           ------------------------------------------------------------------------------
<S>                                           <C>          <C>             <C>             <C>             <C>
Balance at December 31, 1998                  18,611,228   $      18,611   $   2,891,707   $  (3,168,244)  $    (257,926)

Prior years adjustments (Note 12)                                                               (130,440)  $    (130,440)
                                           ------------------------------------------------------------------------------

Adjusted balance                              18,611,228          18,611       2,891,707      (3,298,684)  $    (388,366)

Stock issuance (Note 6)                          802,073             802          67,638                   $      68,440

Stock issuance for Note payable                1,200,000           1,200         190,800                   $     192,000

Stock issuance for Acc Chem
 Conversion, Inc acquisition
  (Note 5)                                    15,000,000          15,000         132,992                   $     147,992

Stock options exercised                          900,000             900          89,100                   $      90,000

Net Loss                                                                                        (108,453)  $    (108,453)
                                           ------------------------------------------------------------------------------

Balance at December 31, 1999                  36,513,301   $      36,513   $   3,372,237   $  (3,407,137)  $       1,613
                                           ==============================================================================

                    The accompany notes are an Integral part of these financial statements
</TABLE>


<PAGE>

                         QUADRATECH, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Year Ended December 31, 1999

<TABLE>
<CAPTION>
<S>                                                                               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net Loss                                                                      $    (108,453)
    Adjustments to reconcile net loss to net income to net cash
       provided by operating activities
       Depreciation and amortization                                                     58,344
       Loss on disposal of assets                                                         2,104
            Accounts Receivable                                                        (128,073)
            Inventory                                                                    32,185
            Prepaid/other assets                                                         57,503
            Deposits                                                                      3,650
            Accounts payable & accrued expenses, including payroll taxes payable       (196,113)
            Insurance contracts payable                                                  42,479
            Extraordinary item                                                          (30,487)
            Minority interest in subsidiary                                              15,095
                                                                                  --------------

NET CASH USED BY OPERATING ACTIVITIES                                                  (251,766)
                                                                                  --------------

CASH FROM INVESTING ACTIVITIES:
            Purchase of equipment                                                        (2,369)
                                                                                  --------------
                Net cash used in investing activities                                    (2,369)
                                                                                  --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
            Proceeds from long term debt                                                146,496
            Proceeds from sales of common stock                                          90,000
            Principal payments on long term debt                                        (46,918)
            Cash balance from subsidiary purchase                                        56,282
                                                                                  --------------
                Net cash provided by financing activities                               245,860
                                                                                  --------------

NET DECREASE IN CASH                                                                     (8,275)

BEGINNING OF  YEAR                                                                       12,261

END OF YEAR                                                                               3,986

Supplemental disclosures:
Cash paid during the year for:
             Interest                                                                    45,622
             Income taxes                                                                 1,600
</TABLE>

     The accompany notes are an Integral part of these financial statements


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations
--------------------
Quadratech, Inc. (The Company) was formed under the laws of Nevada on February
4, 1994. The Company and its wholly owned subsidiary, Oil Scavenger Absorbent,
Inc. (OSA), (a California corporation), was established to offer significant
solutions for certain environmental problems from the development and
manufacturing of a range of environmentally safe bio-degradable products.

The Company acquired 83.33% of Accu Chem Conversion, Inc. (A California
corporation) on October 1, 1999, see Note 5. Accu Chem Conversion, Inc. is
engaged in three business areas: Accu Chem Conversion, Inc. performs quality
analysis and finalizes inspections on requested flight - sensitive materials for
BNA, leases and operates rail unloading spots for hazardous materials, and
provides rail and trucking of in-bond shipments.

Principles of Consolidation
---------------------------
The accompanying consolidated financial statements include the accounts of The
Company, it's wholly owned subsidiary, OSA, and its 83.33% owned subsidiary Accu
Chem Conversion, Inc. The operating results of Accu Chem Conversion, Inc. are
reflected from the date of acquisition (October 1, 1999) The acquisition of Accu
Chem Conversion, Inc was accounted using the purchase method of accounting. See
Note 5. All material intercompany accounts and transactions have been
eliminated.

Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.

Cash
----
Cash equivalents are included in cash. The Company considers all highly liquid
debt instruments with an original maturity of three months or less to be cash
equivalents. As of December 31, 1999, there were no cash equivalents. The
Company prepares its consolidated statements of cash flows using the indirect
method as defined under Financial Accounting Standards Board Statement No 95.

Trade Accounts Receivable
-------------------------
It is the opinion of management that all accounts receivables are considered to
be fully collectable, accordingly, no allowance for doubtful accounts was
recorded. If amounts are not considered collectable, they will be charged to
operations when determination is made. The actual bad debts for 1999 were $ 409.

Inventories
-----------
Inventories are stated at the lower of costs (first-in, first out) or market.

Intangible Assets
-----------------
Patents, marks and copyrights are capitalized and amortized over five years
using the straight-line method.


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Research and Development
------------------------
Research and development costs are expensed as incurred.

Equipment and Leasehold Improvements
------------------------------------
Equipment and leasehold improvements are recorded at cost, less accumulated
depreciation and amortization. Depreciation and amortization is computed using
the straight-line method over the estimated useful life of the assets.
Depreciation and amortization expense for 1999 was $136,870. The Equipment and
leasehold improvements as of December 31, 1999 includes the following -

                  Equipment                                       $     778,150
                  Office equipment and furniture                         97,603
                  Leasehold Improvements                                258,445
                                                                  --------------
                                                                      1,134,198
                  Less accumulated depreciation and amortization       (503,862)
                                                                  --------------
                  Net book value                                  $     630,336
                                                                  ==============

Maintenance and repairs are charged to operations when incurred. Betterments and
renewals are capitalized. When property and equipment is sold or otherwise
disposed of, the asset account and related accumulated depreciation is relieved,
and any gain or loss is included in operations.

Revenue Recognition
-------------------
Revenue from sales is recognized when products are shipped.

Income taxes
------------
Income taxes are provided for the tax effect of transactions reported in the
consolidated financial statements and consist of taxes currently due plus
deferred taxes related primarily to temporary differences in the recognition of
depreciation expense. Although The Company has not filed its consolidated
Corporate tax return for 1999, it is anticipated that the net operating losses
of the parent company will be available to offset the profits of Accu Chem
Conversion, Inc. for 1999. As of December 31, 1999 the Company has net operating
losses of $2,801,813 available to reduce future taxable income. To the extent
not utilized, the carryforwards will begin to expire in the year 2009. The tax
provision for 1999 consist of the minimum California franchise tax of $800 for
each California entity.


NOTE 2 - LINE OF CREDIT

The Company has a operating line of credit, renewed annually, with interest only
payments due monthly. Interest is 2.35% over the bank's prime rate. The balance
as of December 31, 1999 was $ 85,000, which is the maximum borrowing under the
line of credit.


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 3 - NOTES PAYABLE

<TABLE>
<CAPTION>
<S>                                                                                                  <C>
Note payable to Frances Rigney, unsecured, interest payable monthly at 10% per annum. The
original note amount was $ 316,500. In 1999 $192,000 of the note was converted to
1,200,000 shares of The Company's stock. The note matures July 2001.                                 $     158,500

Note payable to Annetee Kroes, due on demand, interest at 10% per annum, payable in monthly
principal payments of $5,000 per month. The note is unsecured.                                              50,000

Note payable to Bank of America dated February 11, 1999 is payable in monthly payments of
$5,395 including interest at 9% per annum. The note is secured by the fleet assets of the
83.33% owned subsidiary - Accu Chem Conversion, Inc. and is personally guaranteed by three
officers and shareholders of The Company. Principal and interest are payable through
March 1, 2004.                                                                                             232,416

Business credit line with Bank of America, dated April 26, 1996 accrues interest at 2 3/4%
over the bank's prime rate. Principal payments of $ 1,389, plus interest are due monthly.
The note matures September 2002. The note is secured by the assets of The Company and is
personally guaranteed by three officers and shareholders.                                                   45,833

Notes payable to related party, dated February 9, 1998, the note holder is the remaining
16.67 % minority shareholder of Accu Chem Conversion, Inc.  Interest accrues at 7% monthly
and compounds, the accrued and compounded interest is included as a short term liability
on the balance sheet. The notes mature on December 31, 2008, and are secured by all The
Company assets.                                                                                            172,283

Note payable to related party dated July 1996 is payable in monthly payments of $ 444.89,
including interest at 12%., and is secured by all Company assets.                                            7,551

Note payable to Holtrachem is payable in monthly payments of $ 506.91 including interest at
8% per annum. Secured by Automotive equipment, the note matures October 31, 2000.                           29,420

Note payable to a customer, dated October 1, 1999 is payable in monthly payments of no
less than $2,000 plus interest at 8% per annum. The note matures October 10, 2000. The
customer and note holder reserve the right of offset should this note not be paid timely.                   30,486

Note payable to Frances Rigney, dated May 29, 1999 is payable in monthly payments of
$ 3,000, plus interest at 7.5% per annum. The note matures on September 29, 2000                            33,751


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 3 - NOTES PAYABLE (Continued)

Note Payable is payable in monthly principal and interest payments of $ 2,460.19 including
interest at 10% per annum. The note matures December 31, 2000.                                              26,487

Various notes payable to stockholders are due on demand, bearing interest at 10% per annum and
are secured by all The Company assets. The notes mature September 2000.                                     39,957
                                                                                                     --------------
                                                                                                           826,684
Less current portion                                                                                      (271,145)
                                                                                                     --------------
Long term debt, net                                                                                  $     555,539
                                                                                                     ==============
</TABLE>


Following are matures of long-term debt for each of the next five years:
        2000                                      $ 271,145
        2001                                        230,310
        2002                                         70,134
        2003                                         61,797
        2004                                         21,014

NOTE 4 - INSURANCE CONTRACTS PAYABLE

The Company finances its insurance premiums over a nine month period. The
monthly installments on the insurance financing agreement are $ 12,924,
including interest at 7.74%.

NOTE 5 - ACQUISITION OF SUBSIDIARY

On October 1, 1999 The Company acquired 83.33% of Accu Chem Conversion, Inc.
( A California Corporation ) in a business combination using the purchase method
of accounting. See note 1 for a description of Accu Chem Conversion Inc.'s
business activities. The results of operations of Accu Chem are included in the
accompanying financial statements since the date of acquisition. The Company
issued 15,000,000 share of its stock for the purchase. The purchase recorded the
assets and liabilities at book value.

The following pro forma information assumes the acquisition had occurred on
January 1, 1999:
                         Net Sales                                   $ 3,341,480

                         Income before extraordinary item            $   106,281

                         Net income                                  $   136,768

                         Earnings per share:
                                    Income before extraordinary item       0.004
                                    Net Income                             0.005


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 6 - COMMON STOCK TRANSACTIONS

In March 1999, the Company converted $192,000 of notes payable into 1,200,000
shares of stock.

The Company granted 100,000 shares of stock to a new board member and 500,000
shares to the Company's president.

In addition, the Company issued 202,073 shares of stock to the former president
in lieu of payable prior year salary shortfalls totaling $ 68,440.

As discussed in Note 5, 15,000,000 shares were issued for the purchase of 83.33%
of Accu Chem Conversion, Inc.

Note 7 -STOCK OPTIONS

In November 1998, the Company granted 1,600,000 stock options at various
exercise prices and expiration dates. As of December 31, 1999, 900,000 shares
had been exercised and 300,000 shares were expired. The remaining balance of
400,000 shares will expire on August 31, 2001 and are exercised at $ .25 per
share at August 31, 2000 and $ .50 per share at August 31, 2001.

NOTE 8 - EARNINGS PER SHARE

Earnings per share is based on the weighted average number of shares of common
stock and common stock outstanding during the period. Had the stock options
discussed in note 7 been exercised, the loss per share would have been .004 .
The 15,000,000 of stock issued for the purchase of Accu Chem Conversion, Inc was
calculated in the weighted average as of October 1,1999.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Leases
------
The Company leases its office facilities for $1,300 per month, the lease expires
December 31, 2000.

The Company's subsidiary has three leases, the subsidiary leases office and
terminal facilities for $4,000 per month from a related party, on a month to
month basis, the lease is currently under negotiation. This lease is with the
remaining 16.67% shareholder of Accu Chem Conversion, Inc.

The Company leases a warehouse and rail spur facility from three of its
shareholders. This lease calls for monthly lease payments of $6,000 on a
month-to-month basis. The Company subleases its warehouse for about $5,500 per
month. Rental income for the year ended December 31, 1999 was $61,800. This
sublease is on a month- to- month basis.


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 9 - COMMITMENTS AND CONTINGENCIES (Continued)

Leases (Continued):
-------------------
The Company leases another rail facility and office space for the greater of
$4,000 per month or the product of $ 1.25 multiplied by its shipped weights in
excess of 4,000 tons. This lease expires March 2000. The Company is currently
negotiating a renewal of this lease for another 5 years and will be on a
month-to-month until a new lease can be finalized.

The total rent expense for the year ended December 31, 1999 was $ 181,989.

The Company also leases fleet equipment from Accu Chem Leasing LLC, the members
of the LLC are three shareholders and officers of the Company. The lease calls
for monthly payments of $ 5,555, the lease is on a month-to-month basis. The
Company is responsible for maintenance, taxes and insurance on the fleet
equipment.


Employment Agreements
---------------------
The Company's majority owned subsidiary has employment contracts with three of
it's officers. The contracts are dated March 1, 1996, and call for minimum
salaries between $60,000 - $81,600 per year for the first three years, then
increasing to $80,000 - $93,600 per year for years four and five. The employee
may extend the term for two additional five year terms. The employment
agreements also call for bonuses based on gross sales and gross profit, these
bonuses have been earned in 1999, and have been waived by the officers. One
officer has not taken any compensation, it is management's opinion that this
compensation will not paid in the near future and therefore, not accrued as of
December 31, 1999.

Contingencies
-------------
The Company's majority owned subsidiary, Accu Chem Conversion, Inc., is in
dispute with the minority ownership over previous years operating expenses. No
reasonable estimate of the loss can be estimated at this time. Therefore, no
provision for these disputed charges has been recorded at December 31, 1999. It
is the opinion of management that the issue will be resolved with out financial
impact on the company. The Company also has a note payable and lease arrangement
with this related party, See Notes 3, .
and lease commitment early in this note.


NOTE 10 - MAJOR CUSTOMERS

The Company's majority owned subsidiary, Accu Chem Conversion, Inc, had five
major customers under contract that accounted for about 70% of The Company's
sales in 1999, of which four of these customers have been under contract since
1996. Three of these contracts expire in 2000, renewal is excepted for periods
from one to five years.


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 11 - SUBSEQUENT EVENTS;

As of March 2000 a major customer representing 31% of Accu Chem Conversion,
Inc.'s customer base, chose not to renew their contract with Accu Chem due to
processing changes within the customer's company. The major expense related to
this customer is subhauler costs, as compared to fixed or employee costs,
therefore, direct expenses are reduced against the reduced income from this
customer. It is management's opinion that these sales will be replaced and this
will not have a significant impact on the financial condition of The Company.
Management has indicated that about 50% of the sales have already been replaced.

On April 25, 2000 The Company purchased 61.2% of the stock of MAG
Transportation, Inc.(MAG) for $150,000 in cash. The Company agreed to purchase
the remaining 38.8% for an additional $ 90,000 in cash no later than October 25,
2000. The business combination will be accounted for as a purchase. The total
purchase price will exceed the fair value of the assets by about $570,597 which
will be amortized over 10 years. The results of operations of MAG will be
included with the results of the Company as of April 25, 2000. Assuming the
acquisition has occurred on January 1,1999, Company's net sales, net income and
earnings per share would have been $ 5,759,188, $ 13,159, and $ 0 ,
respectively.

Management believes that the acquisition of MAG expands the Company's customer
base and will allow for reduced combined operating expenses, such as: reduced
costs of leasing, interest, insurance and administrative costs, in combination
with exposure to MAG'S contract customer base, will expand The Company's ability
to market both its absorbent products in the Western United States and the
services that Accu Chem Conversion, Inc. performs at this time.


NOTE 12 - PRIOR YEARS ADJUSTMENTS

The accumulated deficit as of December 31, 1998 have been restated to correct
two errors. Management did not accrue compensation expense of $ 104,440 for two
officers fro earings attributable to prior years, and did not accrue litigation
costs of $26,000, also attributable to prior years.


<PAGE>

                         QUADRATECH , INC & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          Year Ended December 31, 1999


NOTE 13 - GONG CONCERN

The accompanying consolidated financial statements are presented on the basis
that The Company is a going concern. Going concern contemplates the realization
of assets and the satisfaction of liabilities in the normal course of business
over a reasonable period of time. The Company incurred significant losses in
prior years, which has caused an accumulated deficit, and have allowed current
liabilities to exceed current assets by $65,699 at December 31, 1999. Based on
the current liabilities reduced in the first quarter of 2000, its is
management's opinion that the current liabilities will not exceed current asset
as of March 31, 2000.

Management, through the acquisition of Accu Chem Conversion, Inc has
significantly increased sales and added profitability. See Note 5 regarding the
acquisition and 1999 pro forma information. With the acquisition of the majority
owned subsidiary, it is management's opinion that the Company will be profitable
in the future.

The Company continued existence depends on its ability to meet its financing
requirements and the success of its future operations. The financial statements
do not include any adjustments that might result from this uncertainty.