<PAGE>

                                  FORM 10-KSB


                  Annual report under Section 13 or 15(d) of
                      the Securities Exchange Act of 1934

                    For the fiscal year ended: May 31, 2000

                         WHITNEY AMERICAN CORPORATION
              (Exact name of registrant as specified in charter)

                                   DELAWARE
        (State or other jurisdiction of incorporation or organization)

          0-22907                                        54-1956957
   (Commission File Number)              (I.R.S. Employer Identification Number)

            8150 Leesburg Pike, Suite 1200, Vienna, Virginia  22182
                   (Address of Principal Executive Offices)

                                (703) 893-0582
             (Registrant's telephone number, including area code)


     Securities registered under Section 12(b) of the Exchange Act:   NONE

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

                        Common Stock, $.00001 PAR VALUE

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such report), 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.  [_]

The registrant's revenue for its most recent fiscal year.        $ 12,592,855
                                                               --------------

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked prices of such common equity, was not
determinable.

At May 31, 2000, a total of 4,217,020 shares of common stock were outstanding.
<PAGE>

                                     PART I

Item 1.  Description of Business.

DEVELOPMENT OF THE BUSINESS

Whitney American Corporation (the "Company"), is a holding company which,
through its wholly-owned operating subsidiary, Kemron Environmental Services,
Inc., provides environmental investigation and engineering services;
environmental assessments; consulting and site remediation services; and
environmental testing and analytical services.

The Company was incorporated on June 18, 1987, under the laws of the State of
Delaware. The Company's initial activities were directed towards the raising of
capital. Pursuant to an Agreement and Plan of Reorganization, Industrial Waste
Processing, Inc., a Nevada corporation ("IWP"), was merged with and into the
Company on October 20, 1988 and subsequently changed its name to Industrial
Waste Processing, Inc. On April 17, 1989, the Company's parental affiliate
Pacific Energy and Mining Company ("PEMC") reacquired all of the Company's
outstanding obligations. The Company had been inactive from April 1989 through
February 1998 with no significant assets. In February 1997, the Company filed
with the Delaware Secretary of State a Certificate of Amended and Restated
Certificate of Incorporation that, among other things, changed the Company's
name back to Whitney American Corporation.

In keeping with the Company's strategic business plan, the Company, on March 10,
1998,  acquired Kemron Environmental Services, Inc.(Kemron).  Kemron was
acquired through a tax-free stock exchange agreement.  Kemron merged with and
into the Company, effectively changing the state of domicile of the Company as a
result of Kemron being the surviving corporation. Upon consummation of the Stock
Exchange Agreement, the stockholders of Kemron became the owners in the
aggregate of approximately 86% of the outstanding common stock of the Company.
Pursuant to the Stock Exchange Agreement, an additional 3,500,000 shares of
common stock, $.00001 par value, of the Company were issued in exchange for the
existing common stock of Kemron. The transaction was treated as a reverse
acquisition, recorded at historical cost under the purchase method.  Therefore,
the results of operations and other historical information of Kemron presented
in this report are those of the Company.

Concurrent with the reverse acquisition with and into Whitney, the Company
entered into a Stock Exchange Agreement with three additional entities:  Exeter
Group, Inc. ("Exeter"), Coastline International, Inc. ("Coastline"), and New
Horizons, Inc. ("New Horizons").  As a result of management differences and the
Company's lack of management control over these entities, the Company entered
into separate rescission agreements on October 19, 1998, April 26, 1998 and May
12, 1998, respectively, which collectively address the Company and Exeter,
Coastline and New Horizons agreements that involved the return of the respective
shares originally issued by the Company in connection with the failed mergers.
However, under terms of the settlement agreements, the Company was successful in
recovering all but 190,973 shares of common stock and stock options for 135,532
shares of common stock, originally issued in connection with the failed mergers.

BUSINESS OPERATIONS

The Company, through its wholly-owned subsidiary, provides a wide range of
environmental consulting and analytical services to the public and private
sectors.

Consulting and Engineering Services Group
-----------------------------------------

The Company, through its operating subsidiary, provides services under four
separate regional consulting offices located in Atlanta, Georgia; Marietta,
Ohio; Vienna, Virginia and Charleston, West Virginia.  Environmental consulting
services are performed for a wide variety of governmental and private-sector
clients, predominantly in the areas of water pollution control, and
investigation and remediation of soils
<PAGE>

and ground waters that have been contaminated with hazardous or non-hazardous
contaminants. The consulting activities involve providing expert scientific,
engineering, and regulatory policy analyses to clients that are regulated
directly under various federal, state, and local environmental laws and
regulations. The remediation services involve providing design, fabrication,
installation and operations and maintenance of technologies to reduce the levels
of contamination in soils and ground waters.

Each regional office is responsible for the project management and ultimate
profitability of its operation.  Contracts are competitively bid and are on a
fixed price, time and materials, and cost reimbursable basis.  The length of
most contracts is less than one year; however, larger remediation and operation
and maintenance contracts may extend to two or three years for completion.

The consulting services group provides investigations and pre-acquisition audits
of environmentally contaminated waste sites such as disposal units,
manufacturing facilities, abandoned sites, and military bases covered under RCRA
and CERCLA regulations.   The related activities performed for investigations
include sampling and analysis of sediment for contamination; test borings to
evaluate geological conditions; installation, development, and sampling of
groundwater monitoring wells.  Site investigations and assessments ascertain
whether contamination exists and, if so, the consulting services will propose
the most cost effective solutions to mitigate this contamination.

The consulting services group has considerable experience in designing remedial
action plans that eliminate or reduce the release of hazardous contaminants into
the environment.  Remedial alternatives are analyzed for effective solutions
while remaining cost effective.  The consulting service's various alternatives
proven through successful site work include in-situ treatment, soil aeration and
bioremediation, groundwater air sparging, and soil vapor extraction.  These
alternatives can provide cost-effective and environmentally-sound solutions to
contamination problems without the need to take more extensive efforts of
excavation, pumping, and off-site disposal.

One of the principal consulting services provided is underground storage tank
(UST) testing, removal, investigation and remediation.  Contracts under which
the Company's operating subsidiary are currently performing include Fortune 100
companies and the State of Georgia under the state-funded Georgia UST Management
Program.

Other services provided through the Company's operating subsidiary include
asbestos services such as asbestos surveys, abatement design and abatement
monitoring programs.  Additional services include; lead based paint assessments,
monitoring, and remediation; wetland delineation and mapping, permitting,
functional value assessment, and mitigation/restoration; and ecological
investigations concerning the effects of effluents and land-disturbing
activities on aquatic biota..

Analytical Services
-------------------

The Company operates a comprehensive environmental laboratory equipped with
fully-automated, state-of-the-art instrumentation.  The laboratory, located in
Marietta, Ohio, performs services under unit based pricing which can be
contracted for individual job orders or  master service agreements.  The longer
duration projects are typically in support of an operation and maintenance phase
of contaminated sites that require monitoring of cleanup levels through all
stages of remediation.

Sample analysis conducted at the laboratory includes soil, water, biological
samples, sludge and waste.   The Company's laboratory operation has experience
in most standard methods for sample testing as defined through EPA, NIOSH, ASTM,
and APHA.  The services also extend to providing consultation and
recommendations in the design phase of any sampling project.


SUPPLIERS AND CUSTOMERS
<PAGE>

The operating subsidiary purchases equipment and supplies for the laboratory
operation and consulting services.  The laboratory operation engages in the most
significant volume of purchase activity with vendors and suppliers.  Supplies
for the laboratory include kits for water/soil sample shipment, glassware, gases
such as Argon and Nitrogen, solvents such as deionized water, and general office
supplies.  Although the laboratory has maintained ongoing relations with various
suppliers, there are no dependencies with any individual vendors.  Pricing is
reevaluated on a periodic basis and almost all supplies can be obtained through
other suppliers at competitive prices.

The consulting services has teaming agreements with various subcontractors based
on the type of project work, qualifications and location of subcontractor, and
competitiveness of pricing. The relationship with outside consulting companies
is based solely on the project work and as projects turnover, so will the
consulting service's subcontractor support. There are no contractual
arrangements with subcontractors for which the Company's operating subsidiary
has long-term commitments.

The customers of the laboratory and consulting services include both private
sector clients and government or publicly funded entities.  In fiscal 2000, the
Company estimates that approximately 59% of its operating subsidiary's revenues
were derived from private sector clients and 41% from government contracts.

The primary clients that represent 60% of the Company's operating subsidiary's
sales include Union Carbide Corporation, Earth Tech, Landrum & Brown, State of
Georgia, Columbia Gas, Versar, IT Corporation, U.S. Air Force, and the U.S. Army
Corp of Engineers.

LICENSES

The Company, through its operating subsidiary, is licensed and/or certified in
all jurisdictions where required in order to conduct its operations.  In
addition, certain management and staff members are licensed and/or certified by
various governmental agencies as professional engineers, professional
geologists, subsurface evaluators, hazardous materials manager, remedial site
manager, asbestos supervisors, and asbestos inspectors.

INSURANCE

The Company's operating subsidiary maintains liability insurance for claims
arising from job performance for both consulting and analytical services.  The
policy, which provides a $1.0 million limit per claim and $2.0 million in the
aggregate, insures against both property damage and bodily injury arising from
contracting activities of the operating subsidiary.  The policy is written on an
"occurrence" basis which provides coverage for insured risks that occur during
the policy period, irrespective of when a claim is made.  Higher policy limits
of up to $7.0 million are available for individual projects.  The operating
subsidiary also provides worker's compensation insurance, at statutory limits,
which covers the employees of the Company's operating subsidiary engaged in
laboratory and field service activities.

Certain contracts of the Company's operating subsidiary require performance and
payment bonds for which bonding programs are maintained to satisfy these
requirements.

COMPETITIVE CONDITIONS

The environmental industry is highly competitive and includes both small firms
and large diversified firms, which have the financial, technical and marketing
capabilities to compete on a national level.  The industry is comprised of
dozens of large firms and several hundred small firms.  The small firms tend to
be more regionalized and concentrated to certain geographical locations.  Much
of the work awarded to the Company's operating subsidiary is the result of
competitive pricing, its reputation for quality, and work performance history.
<PAGE>

REGULATORY MATTERS

There are relatively few federal, state or local regulations that are directly
applicable to the Company's operating subsidiary.  In general, the consulting
services group provides technical advice to clients who are directly affected by
federal, state and local regulations.  These services do, however, include
conducting investigations and preparing reports according to federal and state
guidance documents that have been developed under numerous federal and state
regulatory programs.  The analytical services group must conduct sample analyses
based on certain regulatory standards and methods as directed through client
specifications.   It is, therefore, imperative that the Company's operating
subsidiary keep abreast of changes under regulatory programs as well as new
promulgations.

In the course of conducting investigations of hazardous waste sites, the
consulting services group must comply with various federal and state regulations
regarding the shipping of hazardous materials and the disposition of potentially
hazardous investigation-derived wastes.  The shipping of hazardous materials
(generally soil and water samples from waste sites under investigation) is
governed by the Hazardous Materials Transportation Act of 1974 (HMTA), which
establishes rules for the packaging, marking, labeling, and acceptable condition
of hazardous materials offered for intrastate or interstate transportation, and
the Hazardous Materials Transportation Uniform Safety Act of 1990, which amended
HMTA with regard to, among other things, highway routing, shipping papers, and
training requirements.  Disposition of investigation-derived wastes may be
regulated under either the Toxic Substances Control Act (TSCA) if the wastes
contain polychlorinated biphenyls (PCBs), or the Resource Conservation and
Recovery Act (RCRA) if the wastes contain other hazardous materials.

Site remediation involves the actual handling of contaminated materials, and so
the consulting services group's remediation activities are subject to numerous
federal, state and local environmental regulations.  The regulations most often
applied to remediation sites are federal regulations promulgated under RCRA,
TSCA, the Clean Air Act (CAA), and the Clean Water Act (CWA), or the state-
designated counterparts to those federal regulations.  In general, remediation
technologies must be permitted under one or more of these laws.

All site investigation and remediation activities are governed by Occupational
Safety and Health Administration (OSHA) requirements.  These regulations set
forth requirements for engineering and administrative controls, work area
practices, proper supervision, training, medical surveillance, and
decontamination practices for worker and off-site protection.

The Company believes it is in compliance with all of the federal, state and
local statutes and regulations which affect its consulting and remediation
businesses.

EMPLOYEES

Through the acquisition of the operating subsidiary Kemron Environmental
Services, Inc., the Company now has 145 full-time employees, located at the
Vienna, Virginia; Marietta, Ohio; Atlanta, Georgia and Charleston, West Virginia
offices.  This consists of senior management, professional staff, scientists,
chemists, field technicians, and staff employees within the consulting services
offices, the laboratory, and the headquarters facility.  The staff employees
include accounting, administrative, sales and clerical personnel.

Exchange Act Registration

The company voluntarily filed with the Securities and Exchange Commission
("SEC") a registration statement on Form 8-A (file no. 0-22907) in order to
register the Company's common stock under Section
<PAGE>

12(g) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), which
became effective on September 29, 1997. The Company had previously filed with
the SEC certain annual, quarterly and other reports on a voluntary basis, but
pursuant to that Exchange Act registration, the Company now is required to file
periodic reports and other information with the SEC as required by the Exchange
Act.

Item 2.  Description of Property

As of May 31, 2000, the Company, through its operating subsidiary, leases five
facilities and does not own any real estate.  The headquarters office is
combined with consulting office space in Vienna, VA (8500 square feet), a
portion of which is subleased to another tenant (3800 square feet).  The
laboratory facility located in Marietta, OH represents the largest portion of
leased space (18,000 square feet) plus an expansion completed in May 2000
(additional 12,000 square feet).  Other consulting offices are located in
Atlanta, GA (7500 square feet) and Marietta, OH (2000 square feet and separate
from laboratory facility).  An expansion of the existing laboratory facility was
completed around the same time as the Company's May 2000 yearend.  This
expansion has added approximately 12,500 square feet that will be shared by both
the laboratory and the consulting office in Marietta, OH.  The Marietta
consulting group will be vacating the other lease space in June 2000 and
terminating its current lease.

Production equipment of the laboratory includes analytical instruments such as
gas chromatographs, high pressure liquid chromatographs, autosamplers, atomic
absorption spectrophotometers, and inductively coupled plasma instruments.  A
significant level of investment in the laboratory has taken place to secure
current technology and enhance computerization in the analytical processes.  The
more recent acquisitions of laboratory equipment have been transacted under
equipment lease arrangements.

The consulting offices are equipped with field vehicles, sampling devices, and
equipment for remediation processes such as air sparging and soil vapor
extraction.

Item 3.  Legal Proceedings

The Company has two separate lawsuits pending that involve employment practices.
The outcome of both of these lawsuits has been finalized or is near settlement
as of the filing date of this report.  The aggregate value of the two
settlements is expected to equal $35,000 plus the Company's legal fees
associated with the defense of these claims.

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

None


                                    PART II

Item 5.  Market For Common Equity and Related Stockholder Matters.

Market Information

The Company's outstanding common shares were traded in extremely small volumes
during this reporting period.  The more recent trades have ranged in value from
$.07 to $.09 per share.  The Company's common stock is quoted "name only" in the
over-the-counter market under the symbol "WHAM" on the OTC Electronic Bulletin
Board operated by the National Association of Securities Dealers, Inc.  Although
some trading activity has occurred over the past reporting year, there is no
assurance that an active market ever will arise in the Company's shares.

                                FISCAL 2000
                               HIGH      LOW
                               ----      ----
          First Quarter        0.07      0.07
<PAGE>

          Second Quarter           0.07  0.07
          Third Quarter            0.07  0.07
          Fourth Quarter           0.07  0.07

Holders

The Company's common stock is held of record by approximately 178 persons, which
does not include shares held in nominee or "street" name.

Dividends

The Company does not expect to pay cash dividends on its capital stock in the
foreseeable future.  Payment of dividends in the future will depend on the
Company's earnings and its cash requirements at that time.

Item 6.  Financial Statements.

The following table reflects selected consolidated financial data for the
Company for the two fiscal years ended May 31, 2000 and 1999.

-------------------------------------------------------------------------------
                                                 For the Years Ending May 31,
-------------------------------------------------------------------------------
OPERATING DATA                                     2000                 1999
-------------------------------------------------------------------------------
                                                        (in thousands)
-------------------------------------------------------------------------------
Contract revenues                               $12,593              $13,515
-------------------------------------------------------------------------------
Gross margin                                      3,365                3,950
-------------------------------------------------------------------------------
Income from operations                              403                1,170
-------------------------------------------------------------------------------
Other income (expense)                             (131)                (170)
-------------------------------------------------------------------------------
Income before income taxes                          272                1,000
-------------------------------------------------------------------------------
Net income                                          228                1,000
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
COMMON SHARE DATA
-------------------------------------------------------------------------------
Net income per common share:
-------------------------------------------------------------------------------
     Basic                                         0.05                 0.24
-------------------------------------------------------------------------------
     Diluted                                       0.05                 0.21
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Weighted average common shares outstanding
-------------------------------------------------------------------------------
      Basic                                       4,229                4,237
-------------------------------------------------------------------------------
      Diluted                                     4,658                4,685
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
BALANCE SHEET DATA
-------------------------------------------------------------------------------
Working capital                                 $ 1,009              $ 1,050
-------------------------------------------------------------------------------
Total assets                                      5,422                4,949
-------------------------------------------------------------------------------
Long-term obligations                               651                  338
-------------------------------------------------------------------------------
Total stockholders' equity                        2,047                1,819
-------------------------------------------------------------------------------

Item 7.   Management's Discussion and Analysis

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

          Forward Looking Statements
<PAGE>

This report contains forward-looking statements and information relating to the
Company that are based on the beliefs of its management as well as assumptions
made by and information currently available to its management.  When used in
this report, the words "anticipate", "believe", "estimate", "expect", "intend",
plan and similar expressions, as they relate to the Company or its management,
are intended to identify forward-looking statements.  These statements reflect
management's current view of the Company with respect to future events and are
subject to certain risks, uncertainties and assumptions.  Should any of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in this
report as anticipated, estimated or expected.  The Company's realization of its
business aims will depend in the near future principally on the successful
completion of its acquisition of operations as discussed below.

WHITNEY AMERICAN CORPORATION

Whitney American Corporation (WHAM) was incorporated on June 18, 1987 under the
laws of the State of Delaware with the intended purpose of raising capital to
acquire business concerns.  Whitney American Corporation had not had any active
business operations since April 1989, other than occasionally searching for a
business to acquire, until the acquisition on March 10, 1998.  In keeping with
the Company's strategic business plan, the Company, on March 10, 1998 acquired
Kemron Environmental Services, Inc. (Kemron).  The company was acquired through
a tax-free stock exchange agreement.  Kemron, as the only operating entity of
the Company, was considered the surviving company.


     Financial Condition of the Company at May 31, 2000 vs May 31, 1999

As stated above, except for a brief interlude in 1988, Whitney American (the
Company) did not have any business operations or income since 1989, until it
acquired Kemron. Therefore, the acquisition made Kemron the surviving company.
Consequently, most of the financial information and data presented herein is the
financial information and data pertaining to Kemron Environmental Services,
Inc., the wholly-owned subsidiary of the Company.

The financial condition of the Company continued to improve for the fiscal year
ended May 31, 2000. Total stockholders equity increased 12.5% from $1,819,150 to
$2,046,881 for the year ended May 31, 2000. The current ratio dropped slightly
to 1.37 for the year ended May 31, 2000 as compared to 1.38 for the prior year.
Net income generated in the current fiscal year provided the working capital to
improve the financial position. The additional proceeds achieved from these
company profits have been applied towards the repayment of debt. The line of
credit has increased from $350,000 as of May 31, 1999 to $703,848 as of May 31,
2000. The line of credit balance as of the end of this reporting period is
considered in the normal range given the Company's working capital requirements.

Total assets increased by $472,370 while total liabilities increased by $244,639
as of May 31, 2000 as compared to May 31, 1999.  This is principally the result
of capital expenditures that occurred during the current fiscal year.  The
Company invested approximately $950,000 in new laboratory instruments,
remediation systems and field equipment.  Of this equipment, approximately
$650,000 was acquired under capital lease arrangements. The company continues to
secure lease and financing arrangements for most all equipment acquisitions,
thereby maintaining optimal credit availability. After the depreciation
provision, the net book value of property and equipment has increased by
approximately $431,000 as of May 31, 2000.

These changes in financial condition improved the Company's credit position with
its senior lender, allowing the credit line to remain at favorable terms on the
borrowing rate.  The Company maintains a line of credit of $1.8 million with the
bank, secured by the Company's accounts receivable.  The line of credit has
provided a significant source of the Company's cash requirements.  The actual
balance on the line of credit will fluctuate during the period based on
financing activities.  There are no significant working
<PAGE>

capital requirements pending at May 31, 2000. The Company's available line of
credit is expected to be sufficient to meet the Company's needs for the
foreseeable future.

     Result from Operations at May 31, 2000 vs May 31, 1999

The Company experienced a modest decline in the service revenue for the fiscal
year ending May 31, 2000 which in turn resulted in decreased operating results.
The gross revenue decreased by approximately $922,000, a 6.8% decline from the
previous fiscal year, while income from operations decreased by approximately
$585,000, representing a 14.8% decrease for the year ended May 31, 2000. This
resulted in a net income decrease of approximately $728,000 for the year ended
May 31, 2000, before incomes taxes. Income per share decreased from a $.24 per
share in fiscal 1999 to $.05 per share for the current fiscal year.

The Company's performance for the current fiscal year was still positive, even
though operating performance did not meet the forecasted expectations or the
results of the prior fiscal year.  The environmental industry has remained
stable, although mergers and acquisitions occurring within the industry have
disrupted some of the Company's project base.   The changes in operating
performance for the fiscal year ended May 31, 2000 has been highlighted by
several actions taken by management along external circumstances as follows:

     (1)  The Company has continued to put forth the marketing plan to develop
          further diversification of existing client base to minimize the
          dependency on the Company's core clients. Fiscal year 2000 proved to
          be a successful achievement of this marketing effort, as new clients
          accounted for over $614,000 of sales for the consulting services group
          and $800,000 of sales for the laboratory. Several of the new
          consulting clients were obtained through a new office that has been
          established in Charleston, West Virginia. A presence in this area has
          created opportunities with industrial and consulting companies in a
          market territory that the Company has not previously explored. The
          laboratory operation continues to increase its share of Air Force
          clientele under the AFCEE program. This has become a lucrative service
          area for the laboratory, now established as one of the top
          laboratories in the nation for AFCEE work.

     (2)  During fiscal year 1999, the Company began the process of expanding
          the service production capacity at the laboratory facility under three
          separate phases. The first phase involved a significant investment in
          new laboratory instrumentation and robotic equipment, over $1M of
          purchased and leased equipment has been introduced to the facility
          over the past two years streamline processes and ensure the highest
          quality standards can be attained for the Company's laboratory
          clients. The second phase was the conversion of 1600 square feet of
          existing warehouse space into laboratory space. Both phases were
          significantly completed during the prior fiscal year ended May 31,
          1999. The main objectives of these two phases has been to solve the
          problem of the laboratory's ceiling on service production capacity.

          The third phase of the laboratory facility and the most significant
          has been a major expansion effort adding 12,500 square feet of space
          to the existing facility. The construction process was completed in
          May 2000 and represents the final phase of the Company's plan for
          positioning the laboratory to achieve a three year goal of 50% sales
          growth. The facility expansion also provides additional space for the
          consulting operation in Marietta, Ohio. The business growth for this
          consulting office over the past two years has necessitated the
          additional office space. The lease on the previous office space for
          the consulting group was terminated. Further, the co-sharing of the
          new facility space is expected to provide cost savings for some of the
          common space and administrative support.

     (3)  The overhead expenses remained fairly stable for the fiscal year ended
          May 31, 2000. Office space utilization has remained at good levels,
          any excess space has been occupied under sublease agreements. The
          small increase in overhead that was experienced in fiscal year 2000
          can be attributed in part to the business development efforts of the
          Emerging
<PAGE>

          Technologies division. This venture has been discontinued
          during the current fiscal due to the lack of success in securing
          viable technologies that met the Company's criteria (see Results of
          Business Diversification section that follows). It was a positive
          indicator that with the decreased revenues for the year ended May 31,
          2000 there was no associated increase in overhead costs for the year.
          The largest contributor to changes in overhead expenses comes in the
          form of: (1) labor for administrative duties such as technical
          training, research, marketing & proposal efforts, and office functions
          or; (2) "bench time" which is not having chargable projects to stay
          utilized. The fact that overhead remained relatively constant with
          decreased sales is a positive indication that there was no adverse
          effect on labor activities when compared to the prior fiscal year.

The operating performance is expected to improve from fiscal year 2000 and the
Company will be looking towards further sales expansion by focusing on the
primary services offered by the Company, while still devoting attention and
resources to the diversification strategy.  Some of the following
accomplishments illustrate how the business goals are already being achieved:

     (1)  The laboratory has become established as one of the top national
          operations for analytical services under both the Army Corps of
          Engineers (Army Corps) and Air Force Center for Environmental
          Excellence (AFCEE) programs. This has fostered expansion of the
          federal sector work for the laboratory through existing contracts and
          through outside consultant contracts, supporting their federal
          contacts as a subcontractor. The Company also provides direct support
          to the Air Force for analytical services out of the Brooks AFB but has
          seen a significant decline in project work since the base has
          progressed with plans to shutdown the base's laboratory operation.
          Much of this analytical work has been channeled back to individual Air
          Force bases to select their own contractors for providing services.
          The Company has been successful in securing subcontract agreements
          with many of the consulting firms that were awarded the service
          contracts for AFCEE work at these individual bases.

     (2)  Several sites awarded under the Georgia Underground Storage Tank
          Program (GUST) contract have advanced to the remediation phase of
          work. The Company has provided the remediation systems in the form of
          equipment, along with installation of monitoring wells and O&M. These
          sites will have systems operating over a period of as much as 24
          months, depending the level of cleanup required. In addition, the
          Company continues to support the State of Georgia with report reviews
          of other contractor's corrective action plans (CAP A and CAP B
          reports), providing a supplemental service under the GUST contract for
          the current fiscal year.

     (3)  The Company has established projects with new clients that are
          anticipated to cultivate long term relationships with expanded
          environmental services such as risk management planning, health and
          safety audits/training, water resources, waste water treatment, and
          UIC permitting. New accounts for the Company include Virogroup, CH2M
          Hill, Geo-Marine, Inc., Allied Waste Industries, Speedway
          SuperAmerica, Law Engineering, and Horsley & Witten.


     Results of Diversification Strategy

The Company, with the acquisition made in the fiscal year 1998, attempted to
begin implementing its long term strategy of identifying viable companies for
acquisition.  The acquisition of Kemron provided the Company with a very
reputable company in the environmental market to serve as a platform for its
diversification strategy.

During the last two months of the fiscal year ended May 31, 2000, the Company
entered negotiations with Kiber Environmental Services, Inc. ("Kiber"), another
consulting and laboratory company located in
<PAGE>

Atlanta, Georgia to consider a purchase agreement in which the Company would
acquire all of the assets and liabilities of Kiber. Shortly after the completion
of the fiscal year ended May 31, 2000, the agreement was achieved and executed
by the two companies in which Kemron through its parent company Whitney will
acquire all of the assets and liabilities of Kiber. The two principal owners and
officers of Kiber will join the Company as part of the senior management team.
Other details of this acquisition are provided under a separate Form 8-K filing.
This acquisition will create an exciting opportunity for the Company as Kiber
and Kemron each have a somewhat separate and distinct client base with some
different lines of service. Kiber has a large amount of business in the area of
treatability studies while Kemron has most of its business in analytical
services and site investigation/remediation. The goal is to begin acquainting
the clients of each company with the additional services that are now available
in an effort to expand the level of service provided to our current client base.

During fiscal year 1999, the Company launched a new initiative by creating an
Emerging Technologies Division.  The mission of the new initiative was to
identify companies with new, innovative and emerging technologies and to assist
those companies to meet and/or comply with regulatory requirements which the
technologies may require.  Although the Emerging Technologies Division
experienced great success in identifying technologies and developing marketing
alliances, the Division lost some of its core clients that aided in self-funding
this new division.  Further, many of the opportunities that were identified
required far too many resources in way of both manpower and capital.  Because of
these circumstances, the Division was shutdown in December 1999.


     Discussion of Material Items

     (i)   short term and long term liquidity

The Company's short and long term liquidity continues to improve as a result of
the profits generated during the fiscal year 2000.  Kemron's senior lender
provides the working line of credit for a $1.8M borrowing capacity.  The
Company's current credit standing with the senior lender is very strong.
Without lending for a line of credit, the Company would be adversely affected.

     (ii)  Internal and external sources of liquidity

The only internal sources of liquidity available to the Company are the earnings
of it principal operating subsidiary, Kemron.  External resources may become
available depending on the success of the effort to raise equity capital.  The
Company has explored opportunities with outside investment groups for the
possibility of raising equity capital for the Company.  As of the reporting
date, the Company does not have any such agreements and cannot make any
predictions as to the success of this effort in the future.

     (iii) Material Commitments for Capital Expenditures and Expected Sources

The Company' completion of the Marietta, Ohio facility expansion was completed
at the end of the current fiscal year.  The added facility costs have increased
the rent expense by approximately $70,000 on an annual basis.  The expansion was
included under an amendment to the current lease in place with Gutierrez
Properties, Limited Partnership which remains effective through January 2007.

As discussed earlier, the company has already incurred significant capital
expenditures during the past two fiscal years through purchases of laboratory
equipment, further automation of all regional offices and remediation equipment.
The capital expenditures shall be limited over the forthcoming fiscal year, this
will mostly entail the replacement of equipment that may be taken out of
service.  Total budgeted expenditures are not expected to exceed $400,000.

     (iv)  Known Trends, Events, or Uncertainties
<PAGE>

The only known trends, events, or uncertainties that have had or that are
reasonably expected to have a material impact on the net sales or revenue or
income from continuing operations is the activity that may occur with mergers
and acquisitions in the environmental industry.   Examples such as Dow
Chemical's acquisition of Union Carbide Corporation can have a significant
impact on the level of business we retain with Union Carbide Corporation who is
currently one of our five largest clients.  Conversely, this acquisition could
generate additional opportunities with Dow Chemical if our services performed
with Union Carbide Corporation are positively reflected throughout their
organization.

     (v)   Significant elements of income or loss that do not arise from the
     Company's
        operations.

There were no significant income or loss events to report during fiscal year
2000.

     (vi)  Causes for Material Changes

There are no causes nor material changes in one or more line items of the
Company's financial statements between the periods ending May 31, 2000 and May
31, 1999.

     (vii) Seasonal Aspects

The environmental market as a whole may be subject to seasonal factors,
particularly harsh winters.  Prolonged periods of cold temperatures impact the
ability to conduct field activities which then may reverberate throughout the
industry.  While the engineering and consulting activities may be somewhat
affected, Kemron's laboratory operation is very susceptible to this factor.
Testing laboratories are volume sensitive operations with a substantial fixed
operating cost.  Strategic marketing of clients located in geographic areas with
warm weather and careful planning are a prerequisite for profitable winter
months.  Kemron's laboratory operation experienced a slowdown during this past
winter which the operation had been able to avoid over the prior two years.
However, this year's winter slowdown was not attributed entirely to the weather
conditions, several projects anticipated for the winter months encountered
scheduling delays and did not commence until Spring 2000.


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

None exist as of the reporting date.

                                   PART III

Item 9  Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of The Exchange Act.

Identification of Directors and Executive Officers

Directors are elected for one-year terms or until the next annual meeting of
shareholders and until their successors are duly elected and qualified.
Officers hold office at the pleasure of the Board of Directors.  The table below
sets forth the name, age, position and tenure of each director and executive
officer.  Mr. Heishman, as secretary, is not considered "executive" officers.
All Directors have tenures effective since March 10, 1998 when each individual
assumed office following the Stock Exchange Agreement.

                           Year
                           First
Name                      Elected  Position Held and Tenure
----                      -------  ------------------------

     Juan J. Gutierrez       1998  Chairman, Chief Executive Officer, Director
<PAGE>

    John M. Dwyer           1998  Vice President, Director

    David E.Vandenberg      1998  Vice President, Director

    John S. Heishman        1998  Secretary/Treasurer, Director

Biographical Information

The following is a brief account of the business experience during at least the
past five years of each director and executive officer, including the principal
occupation and employment during that period.

JUAN J. GUTIERREZ, 58, is Chairman and CEO of the Company.  He has been Chairman
and CEO of Kemron Environmental Services, Inc. since 1983, when he purchased
Kemron.  He is also Chairman and CEO of InterAmerica Technologies, Inc., a
software development and systems integration company which he founded in 1971.
Both companies have enjoyed rankings on the list of the 500 largest Hispanic-
owned businesses compiled by Hispanic Business magazine.  Mr. Gutierrez has
received numerous achievements and community awards, including being selected by
the U.S. Hispanic Chamber of Commerce as the 1984 Hispanic Businessman of the
Year, and receiving the 1994 Small Business Administration's Lifetime Minority
Business Achievement Award.  He is a graduate of Pan American University at
Edinberg, Texas.

JOHN M. DWYER, 40, is a Director of the Company and a Vice President of Kemron.
Mr. Dwyer is responsible for the management and administration of Kemron's
Consulting and Engineering Division, including profit and loss performance, as
well as Kemron's marketing and business development.  He has been with Kemron
for over 20 years and brings a wealth of experience and expertise in the
development, design, and execution of small and large scale environmental
programs involving hazardous waste, site investigations, remedial construction,
environmental assessments and permitting assistance services, as well as leaking
underground storage tanks.  Mr. Dwyer holds an A.S. degree in computer and
electrical technology from the Southern Institute of Technology.

DAVID E. VANDENBERG, 44, is a Director of the Company, and a Vice President of
Kemron.  He is a 1979 graduate of the University of Wisconsin with degrees in
Chemistry and Business.  With 20 years of experience in the environmental field,
through the changes in legislation, market conditions and growth of the
environmental service industry.  He has managed the growth of a 3 person
environmental laboratory to a staff of over 80 professionals, and today Kemron's
Ohio Valley Laboratory is one of the nation's largest, most respected
environmental laboratories.  Mr. Vandenberg is responsible for the laboratory's
sales and marketing strategies, operational oversight and profit and loss
performance.

JOHN S. HEISHMAN, 35, is the Secretary/Treasurer and a Director of the Company,
and is responsible for Finance and Contract Administration for the Company.  He
has over 13 years of finance and accounting experience in both commercial and
federal contracting.  Mr. Heishman joined Kemron's management team in 1996 and
has brought vast experience in forecasting/budgeting, cash management, financial
analysis, corporate and operational accounting.  Prior to joining Kemron, Mr.
Heishman worked for Computer Sciences Corporation and in public accounting with
Ernst & Young.  He holds a BBA in accounting from James Madison University, and
is a Certified Public Accountant in Virginia.


Item 10.  Executive Compensation

Cash Compensation

The following sets forth the compensation earned by the Company's Chief
Executive Officer and any highly compensated executive officers.  There has been
no supplemental compensation of restricted stock
<PAGE>

awards, stock appreciation rights, or long term incentive plans. Bonus plans are
strictly based on performance objectives within each individual fiscal year.

                                                       Annual Compensation

<TABLE>
<CAPTION>
                                                                                              Other Annual
  Name and Principal Position           Year            Salary               Bonus            Compensation
<S>                                     <C>            <C>                  <C>                 <C>
Juan J. Gutierrez, CEO                  2000           $125,000             $38,500               $-0-
                                        1999            114,063              91,000                -0-

John M. Dwyer,                          2000           $126,500             $19,250               $-0-
Vice President - Marketing              1999            114,711              45,500                -0-

David E. Vandenberg,                    2000           $123,200             $17,250               $-0-
Vice President - Laboratory             1999            108,519              45,500                -0-
Operations

John S. Heishman                        2000           $ 78,280             $ 5,378               $-0-
Vice President - Finance &              1999             73,500              10,376                -0-
 Administration
</TABLE>


Compensation Pursuant to Plans

The compensation identified above as bonus paid to executive officers represents
compensation under the Company's profit sharing incentive program for each of
the two fiscal years.


Other Compensation

  None


Item 11.  Security Ownership of Certain Beneficial Owners and Management

Beneficial Ownership Following Acquisitions

The following table sets forth as of the report date, the names of persons who
own of record, or were known by the Company to own beneficially, more than five
percent of its total issued and outstanding common stock and the beneficial
ownership of all such stock as of that date by executive officers and directors
of the Company and all such executive officers and directors as a group.  Exept
as otherwise noted, each person listed below is the sole beneficial owner of the
shares and has sole investment and voting power as to such shares.

<TABLE>
<CAPTION>
                            Name and Address               Amount & Nature of          Percent of
Title of Class             Of Beneficial Owner             Beneficial Ownership           Class
<S>                    <C>                                 <C>                       <C>
Common Stock,          Juan J. Gutierrez                        3,450,000            73.2%  1,2
$.00001 par value      8150 Leesburg Pike, Suite 1200
                       Vienna, Virginia  22182
SAME                   David E. Vandenberg                        191,666             4.1%    2
</TABLE>
<PAGE>

<TABLE>
<S>                   <C>                                 <C>                           <C>
                       109 Starlite Park
                       Marietta, Ohio  45750

SAME                   John M. Dwyer                              191,666                4.1% 2
                       1300 Spring Street
                       Atlanta, Georgia  30309

SAME                   John S. Heishman                             - 0 -                 - 0 -
                       8150 Leesburg Pike, Suite 1200
                       Vienna, Virginia  22182

SAME                   InterAmerica Technologies, Inc.            887,778               18.8% 1
                       8150 Leesburg Pike, Suite 1400
                       Vienna, Virginia  22182

                      All executive officers and
                      Directors as a group (4 persons)          3,833,332               81.3%
</TABLE>

/1/ Mr. Gutierrez is the sole owner of InterAmerica Technologies, Inc., and
claims beneficial ownership of shares held by that entity.

/2/ Include shares of the common stock subject to purchase upon the exercise of
options granted under the Company's 1997 Compensatory Stock Option Plan,
including 350,000 (Juan J. Gutierrez), 25,000 (John M. Dwyer), and 25,000 (David
E. Vandenberg).

Changes in Control

None

Item 12.  Certain Relationships and Related Transactions

The President/CEO has provided a personal guarantee to the Company operating
subsidiary's principal lender along with other financial lenders for equipment.
The Company is attempting to discharge the personal guarantee with each lender
as the Company's credit position continues to strengthen.

The laboratory facility in Marietta, OH is leased through a related party.  In
addition, certain administrative resources are provided through a separate
related party.  Refer to the notes to the audited financial statements for
further details.

The company has no understandings with its officers or directors, or other
shareholders, pursuant to which such persons have agreed to contribute capital
to the Company or otherwise provide funds to the Company.  There are no other
reportable transactions involving promoters, executive officers, or directors of
the Company as required by Item 404 of Regulation S-B.
<PAGE>

                                   SIGNATURES

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



WHITNEY AMERICAN CORPORATION


                              By  /s/ Juan J. Gutierrez
                                  ---------------------
                                  JUAN J. GUTIERREZ
                                  PRESIDENT AND CEO

                              DATED:   AUGUST 25, 2000


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

<TABLE>
<CAPTION>
           Name                 Title                                   Date
<S>                             <C>                                 <C>
      /s/ Juan J. Gutierrez     Chief Executive Officer, President  August 25, 2000
     -------------------------
     Juan J. Gutierrez          and Chairman of the Board

     /s/ John M. Dwyer          Executive Vice President            August 25, 2000
     -------------------------
     John M. Dwyer              and Director

     /s/ David E. Vandenberg    Executive Vice President            August 25, 2000
     -------------------------
     David E. Vandenberg        and Director

     /s/ John S. Heishman       Secretary, Treasurer                August 25, 2000
     -------------------------
     John S. Heishman           and Director
</TABLE>

Item 13. Exhibits and Reports on Form 8-K.

  (a)    Exhibits. The following exhibits are filed with this report, except
         those indicated as having previously been filed with the Securities and
         Exchange Commission and are incorporated by reference to another
         report, registration statement or form. References to the "Company"
         mean Whitney American Corporation.

         3.0  Certificate of Incorporation (incorporated by reference to Exhibit
              3.0 to Registration Statement No. 33-17397-D, effective March 7,
              1988)
         3.05 Certificate of Amended and Restated Certificate of Incorporation
              of the Company (incorporated by reference to Exhibit 3.1 to Form
              8-K dated February 12, 1997)
         3.1  Bylaws of the Company (incorporated by reference to Exhibit 3.1 to
              Registration Statement No. 33-173797-D, effective March 7, 1988)
         3.2  Amendment to Bylaws of the Company (incorporated by reference to
              Exhibit 3.2 to Registration Statement No. 33-17397-D, effective
              March 7, 1988)
<PAGE>

              3.3  Restated Bylaws of the Company (incorporated by reference to
                   Exhibit 3.2 to Form 8-K dated February 12, 1997)
              4.0  Specimen Stock Certificate (incorporated by reference to
                   Registration Statement No. 33-17397-D effective March 7,
                   1988)
             10.2  1997 Stock Option Plan (incorporated by reference to Exhibit
                   10.1 to Form 8-K dated February 12, 1997)
             10.3  1997 Employee Stock Compensation (incorporated by reference
                   to Exhibit 10.2 to Form 8-K dated February 12, 1997)
             23.0  Consent of Independent Auditors - Reznick Fedder & Silverman


     (b)     The Company filed the following Current Reports on Form 8-K during
             the three months ended May 31, 2000.

             Filing of Form 8-K on May 17, 2000 of the proposed merger purchase
             agreement between the Company and Kiber Environmental Services,
             Inc.


     (c)     Financial statements and supplementary data.

             Index to Financial Statements Independent Auditors' Report  F-1

             Consolidated Balance Sheets as of May 31, 2000 and 1999     F-2

             Consolidated Statements of Operations for the years ended
             May 31, 2000 and 1999                                       F-3

             Consolidated Statements of Changes in Stockholders' Equity
             for the years ended May 31, 2000 and 1999                   F-4

             Consolidated Statements of Cash Flows for the years ended
             May 31, 2000 and 1999                                       F-5

             Notes to Financial Statements                               F-6

                                                                    Exhibit 23.0
             Whitney American Corporation


             Gentlemen:

                  We hereby consent to use in the Form 10-KSB, of our report
             dated July 7, 2000, related to the financial statements of Whitney
             American Corporation and Subsidiary as of and for the years ended
             May 31, 2000 and 1999, which is contained therein.


             /s/  Reznick Fedder & Silverman
             -------------------------------
             Reznick Fedder & Silverman
             Bethesda, MD

<PAGE>

                  Whitney American Corporation and Subsidiary


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                      PAGE
                                                                      ----
<S>                                                                   <C>
INDEPENDENT AUDITORS' REPORT                                             3


CONSOLIDATED FINANCIAL STATEMENTS


     CONSOLIDATED BALANCE SHEETS                                         4


     CONSOLIDATED STATEMENTS OF OPERATIONS                               5


     CONSOLIDATED STATEMENTS OF CHANGES IN
          STOCKHOLDERS' EQUITY                                           6


     CONSOLIDATED STATEMENTS OF CASH FLOWS                               7


     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                          9
</TABLE>
<PAGE>

                         INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Whitney American Corporation


     We have audited the accompanying consolidated balance sheets of Whitney
American Corporation and Subsidiary, as of May 31, 2000 and 1999, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years then ended.  These consolidated financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatements.  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 presentation.  We believe our audits provide a reasonable
basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Whitney American Corporation and Subsidiary as of May 31, 2000 and 1999, and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

Bethesda, Maryland
July 7, 2000

/s/ Reznick Fedder & Silverman
-------------------------------
    Reznick Fedder & Silverman

                                      -3-
<PAGE>

                  Whitney American Corporation and Subsidiary

                          CONSOLIDATED BALANCE SHEETS

                             May 31, 2000 and 1999

                                    ASSETS


                                                            2000         1999
                                                        -----------   ----------
CURRENT ASSETS
  Cash                                                  $     1,000   $    1,000
  Accounts receivable, net of allowance
    of $259,512 and $199,963                              3,600,834    3,746,340
  Prepaid expenses and other assets                          88,688       94,989
  Deferred tax asset, current                                42,416            -
                                                        -----------   ----------

     Total current assets                                 3,732,938    3,842,329
                                                        -----------   ----------

EQUIPMENT AND LEASEHOLD IMPROVEMENTS
  Leasehold improvements                                    270,137      244,566
  Equipment                                               3,176,169    2,412,945
  Automobiles                                               360,309      251,930
  Furniture and fixtures                                     50,803       36,186
                                                        -----------   ----------

                                                          3,857,418    2,945,627

  Less accumulated depreciation and amortization          2,425,397    1,944,316
                                                        -----------   ----------

     Net equipment and leasehold improvements             1,432,021    1,001,311
                                                        -----------   ----------

OTHER ASSETS
  Accounts receivable, long term portion                    143,804       29,457
  Intangibles, net of amortization                                -       17,744
  Deferred tax asset                                         44,882            -
  Deposits                                                   67,975       58,409
                                                        -----------   ----------

     Total other assets                                     256,661      105,610
                                                        -----------   ----------

     Total assets                                       $ 5,421,620   $4,949,250
                                                        ===========   ==========

                     LIABILITIES AND STOCKHOLDERS' EQUITY
                                                            2000         1999
                                                        -----------   ----------
CURRENT LIABILITIES
  Line of credit                                        $   703,848   $  350,000
  Note payable, current maturities                            4,225        3,829
  Notes payable - equipment, current maturities             101,600      205,930
  Capital lease liability, current maturities               316,584      142,127
  Accounts payable and accrued expenses                   1,048,361    1,572,344
  Accrued payroll and related liabilities                   409,774      412,216
  Due to related parties                                    105,745      105,745
  Income taxes payable, current                              33,336            -
                                                        -----------  -----------

       Total current liabilities                          2,723,473    2,792,191
                                                        -----------  -----------

LONG-TERM DEBT
  Notes payable, net of current maturities                   14,747       19,343
  Notes payable - equipment, net of current maturities       70,553       44,146
  Capital lease liability, net of current maturities        541,319      274,420
  Deferred income taxes payable                              24,647            -
                                                        -----------  -----------

     Total long-term liabilities                            651,266      337,909
                                                        -----------  -----------

     Total liabilities                                    3,374,739    3,130,100
                                                        -----------  -----------

COMMITMENTS AND CONTINGENCIES                                     -            -

STOCKHOLDERS' EQUITY
  Preferred stock, $.00001 par value, 5,000,000
    shares authorized, none issued                                -           -
  Common stock, $.00001 par value,
    50,000,000 shares authorized, 4,217,020 and
    4,266,020 issued  and outstanding                            42           42
  Additional paid-in capital                              1,658,684    1,658,684
  Retained earnings                                         388,155      160,424
                                                        -----------  -----------

     Total stockholders' equity                           2,046,881    1,819,150
                                                        -----------  -----------

     Total liabilities and stockholders' equity         $ 5,421,620   $4,949,250
                                                        ===========  ===========

                See notes to consolidated financial statements

                                      -4-
<PAGE>

                  Whitney American Corporation and Subsidiary

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                       Years ended May 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                           2000                1999
                                                                    ----------------    -----------------
<S>                                                                 <C>                 <C>
REVENUE FROM SERVICES                                               $     12,592,855    $      13,514,743

COST OF SERVICES                                                           9,228,190            9,565,061
                                                                    ----------------    -----------------

     GROSS PROFIT                                                          3,364,665            3,949,682
                                                                    ----------------    -----------------

OPERATING EXPENSES
     Overhead                                                              1,481,176            1,436,764
     General and administrative                                            1,332,498            1,242,392
     Bad debts                                                               147,588              100,629
                                                                    ----------------    -----------------

        Total operating expenses                                           2,961,262            2,779,785
                                                                    ----------------    -----------------

INCOME FROM OPERATIONS                                                       403,403            1,169,897
                                                                    ----------------    -----------------

OTHER INCOME
     Gain on sale of assets                                                   31,413               13,617
     Other                                                                       593                  984
                                                                    ----------------    -----------------

                                                                              32,006               14,601
                                                                    ----------------    -----------------
OTHER EXPENSES
     Interest                                                               (163,270)            (184,854)
                                                                    ----------------    -----------------

                                                                            (163,270)            (184,854)
                                                                    ----------------    -----------------

INCOME BEFORE INCOME TAXES                                                   272,139              999,644

     INCOME TAXES                                                             44,408                    -
                                                                    ----------------    -----------------

NET INCOME                                                          $        227,731    $         999,644
                                                                    ================    =================

Basic net income per common share                                   $           0.05    $            0.24
                                                                    ================    =================

Weighted average common share outstanding                                  4,228,538            4,237,321
                                                                    ================    =================

Diluted net income per common share                                 $           0.05    $            0.21
                                                                    ================    =================

Weighted average common share outstanding                                  4,657,776            4,685,321
                                                                    ================    =================
</TABLE>

                See notes to consolidated financial statements

                                     - 5 -
<PAGE>

                  Whitney American Corporation and Subsidiary

          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                       Years ended May 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                         Retained
                                                                                         earnings
                                            Common stock            Additional          (accumulated
                                            --------------
                                       Shares          Amount     paid-in capital          deficit)             Total
                                      --------         ------     ---------------       -------------          -------
<S>                                   <C>             <C>         <C>                   <C>                 <C>
Balance, May 31, 1998                 4,211,020       $  42        $ 1,654,984              $ (839,220)     $   815,806

  Stock issuance                         25,000           -              3,700                       -            3,700


  Stock options exercised                30,000           -                  -                       -                -


  Net income                                  -           -                  -                 999,644          999,644
                                      ---------      ------        -----------              ----------      -----------

Balance, May 31, 1999                 4,266,020          42          1,658,684                 160,424        1,819,150

  Stock cancellation                    (49,000)
                                                          -                  -                       -                -

  Net income                                  -           -                  -                 227,731          227,731
                                      ---------      ------        -----------              ----------      -----------
Balance, May 31, 2000                 4,217,020       $  42        $ 1,658,684              $  388,155      $ 2,046,881
                                      =========      ======        ===========              ==========      ===========
</TABLE>


                See notes to consolidated financial statements

                                      -6-
<PAGE>

                  Whitney American Corporation and Subsidiary

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                       Years ended May 31, 2000 and 1999


<TABLE>
<CAPTION>
                                                                                     2000                  1999
                                                                                  ------------         -------------
<S>                                                                              <C>                  <C>
Cash flows from operating activities
 Net income                                                                       $    227,731         $     999,644
 Adjustments to reconcile net income to net cash provided by
 operating activities:
  Depreciation and amortization                                                        540,657               455,924
  Gain on sale of assets                                                               (31,413)              (13,617)
  Allowance for doubtful accounts                                                       59,549                27,133
  Changes in operating assets and liabilities:
        (Increase) decrease in accounts receivable                                     (28,390)             (466,229)
        (Increase) decrease in prepaid expenses and other assets                         6,301               (44,362)
        (Increase) decrease in deferred tax asset                                      (87,298)                    -
        (Increase) decrease in deposits                                                 (9,566)                4,395
        Increase (decrease) in accounts payable and accrued expenses                  (523,983)              607,118
        Increase (decrease) in accrued payroll and related liabilities                  (2,442)               50,511
        Increase (decrease) in accounts payable - related party                              -               (41,429)
        Increase (decrease) in income taxes payable                                     57,983                     -
                                                                                  ------------         -------------

             Net cash used in investing activities                                     209,129             1,579,088
                                                                                  ------------         -------------

Cash flows from investing activities
 Purchases of equipment and leasehold improvements                                    (306,042)             (307,214)
 Proceeds received from sale of fixed assets                                            33,617                32,000
 Proceeds from notes receivable                                                              -                34,593
                                                                                  ------------         -------------

             Net cash used in investing activities                                    (272,425)             (240,621)
                                                                                  ------------         -------------

Cash flows from financing activities
 Net payment on line of credit                                                         353,848            (1,140,000)
 Payment of note payable                                                                (4,200)              (61,196)
 Payment of notes payable - equipment                                                  (97,235)              (68,354)
 Proceeds from note payable                                                                  -                24,800
 Proceeds from note payable - equipment                                                 19,312                55,000
 Payments on related party advances                                                          -               (45,992)
 Principal payments under capital lease obligations                                   (208,429)             (102,725)
                                                                                  ------------         -------------

             Net cash provided by (used in) financing activities                        63,296            (1,338,467)
                                                                                  ------------         -------------

             NET INCREASE (DECREASE) IN CASH                                                 -                     -

Cash, beginning                                                                          1,000                 1,000
                                                                                  -------------        -------------

Cash, end                                                                         $      1,000         $     $ 1,000
                                                                                  ============         =============
</TABLE>

                                  (continued)

                                      -7-
<PAGE>

                  Whitney American Corporation and Subsidiary

               CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                       Years ended May 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                              2000                   1999
                                                                       --------------------   -------------------
<S>                                                                    <C>                    <C>
Supplemental disclosure of cash flows information:
Cash paid during the year for interest                                 $           163,270    $          184,854
                                                                       ===================    ==================

Cash paid during the year for income taxes                             $           101,706    $                -
                                                                       ===================    ==================

Fair value of stock issued in exchange for services                    $                 -    $            3,700
                                                                       ===================    ==================

Liabilities for equipment under capital leases                         $           649,785    $          380,469
                                                                       ===================    ==================
</TABLE>

                See notes to consolidated financial statements

                                      -8-
<PAGE>

                  Whitney American Corporation and Subsidiary

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             MAY 31, 2000 AND 1999

1.   ORGANIZATION

     Whitney American Corporation (the "Company") was incorporated in the State
     of Delaware in June 1987. The Company, through its wholly owned subsidiary,
     Kemron Environmental Services, Inc. ("Kemron"), is a multi-disciplinary
     environmental engineering, consulting and analytical services firm
     headquartered in Vienna, Virginia. Incorporated in June 1975 in the State
     of New York, Kemron provides environmental engineering, consulting and
     remediation services principally to commercial and industrial clients and
     to Federal and state environmental regulatory and non-regulatory agencies
     as well. Kemron also provides environmental laboratory testing services to
     this client base. With headquarters in Vienna, Virginia, Kemron maintains
     engineering and consulting operations at Vienna, Virginia; Atlanta Georgia;
     Marietta, Ohio; and Charleston, West Virginia. Kemron's testing laboratory
     is also situated in Marietta, Ohio.

2.   SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation and Consolidation
     ---------------------------------------

     The consolidated financial statements include the accounts and operations
     of the Company and its wholly owned subsidiary, Kemron. All significant
     intercompany balances and transactions have been eliminated in
     consolidation.

     Concentration of Credit Risk
     ----------------------------

     The Company provides services to customers in multiple industries such as
     oil and gas, metals, chemicals, textiles and automotive. Approximately 35%
     of the Company's customer base is comprised of the federal and state
     governments. The majority of the Company's customers are located in the
     midwest, northeast, and southeast regions of the United States.

     Allowance for Doubtful Accounts
     -------------------------------

     The Company establishes an allowance for doubtful accounts based upon
     several factors, such as credit risk and analysis of specific customer
     accounts.

                                      -9-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             MAY 31, 2000 AND 1999

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Equipment and Leasehold Improvements
     ------------------------------------

     Equipment and leasehold improvements are stated at cost. Depreciation is
     computed using the straight-line method based on the estimated useful lives
     of the assets ranging from 2 to 7 years. Amortization of leasehold
     improvements is computed on the term of the lease of 15 years or its useful
     life, whichever is less.

     Contract Revenue
     ----------------

     The Company recognizes revenue as the related services are provided. On
     fixed price contracts, revenue is recognized on the basis of the estimated
     percentage of completion of services rendered. On cost reimbursement
     contracts, revenue is recognized as costs are incurred and includes
     applicable fees earned essentially in the proportion that costs incurred
     bear to total estimated final costs. Materials and subcontract costs
     reimbursed by the client are included in revenue from services. Anticipated
     losses are recognized in the period in which the losses are reasonably
     determinable.

     A significant portion of contracts with the United States Government and
     State Agencies are subject to audit and adjustment. Revenue has been
     recorded in amounts expected to be realized on final settlement. Included
     in accounts receivable are revenues from claims where recovery is probable
     in the opinion of management.

     Use of Estimates
     ----------------

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     the disclosure of contingent assets and liabilities at the date of the
     financial statements, and the reported amounts of revenue and expenses
     during the reporting period. Actual results could differ from those
     estimates.

     Stock-Based Compensation
     ------------------------

     SFAS No. 123, "Accounting for Stock-Based Compensation," requires expanded
     disclosures of stock-based compensation arrangements with employees and
     encourages (but does not require) compensation cost to be measured based on
     fair value of the equity instrument awarded (see note 12). The Company has
     chosen to continue to account for employee stock-based compensation using
     the intrinsic value method prescribed in Accounting Principles

                                     -10-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             MAY 31, 2000 AND 1999


2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
     related Interpretations. Accordingly, compensation costs for stock options
     is measured as the excess, if any, of the quoted market price of the
     Company's stock at the date of the grant over the amount the employee must
     pay to acquire stock.

     Intangible Assets
     -----------------

     Intangible assets represent costs in excess of the net assets acquired by
     the Company and are being amortized by the straight-line method over 15
     years, which is management's estimate of the remaining economic useful
     life.

     Income Taxes
     ------------

     The Company accounts for income taxes in accordance with SFAS No. 109,
     "Accounting for Income Taxes." Under the liability method prescribed by
     SFAS No. 109, a deferred tax asset or liability is determined on the
     differences between the financial statement and tax basis of assets and
     liabilities as measured by the enacted tax rates which will be in effect
     when these differences reverse. Significant differences between financial
     statement and income tax accounting creating deferred income taxes consists
     of bad debt and depreciation expense. Deferred income taxes are also
     recognized for operating losses that are available to offset future taxable
     income.

     Net Income per Common Share
     ---------------------------

     Basic net income per common share is computed based upon the weighted
     average number of common shares outstanding during the period.

     Diluted earnings per share is computed on the basis of the average number
     of shares outstanding plus the effect of outstanding stock options using
     the "treasury stock" method. Basic and dilutive earnings per share for the
     years ending May 31, 2000 and 1999 are as follows:

                                     -11-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             MAY 31, 2000 AND 1999

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

<TABLE>
<CAPTION>
                                                                                                 2000                   1999
                                                                                             ----------             ----------
     <S>                                                                                    <C>                    <C>
      Net income available to common shareholders (A)                                        $  227,731             $  999,644
                                                                                             ----------             ----------

      Average outstanding:
        Common stock (B)                                                                      4,228,538              4,237,321
        Employee stock options                                                                  429,238                448,000
                                                                                             ----------             ----------

      Common stock and common stock equivalents (C)                                           4,657,776              4,685,321
                                                                                             ----------             ----------

      Earnings per share:
        Basic (A/B)                                                                          $     0.05             $     0.24
                                                                                             ==========             ==========

        Diluted (A/C)                                                                        $     0.05             $     0.21
                                                                                             ==========             ==========
</TABLE>

      Line of Credit and Notes Payable
      --------------------------------

      The carrying amounts approximate fair value.

3.    SEGMENT INFORMATION

      The Company's reportable segments are strategic business units that offer
      different services. The Company has two reportable segments: analytical
      and consulting services. Analytical services include lab testing services
      for varying analytical programs such as NPDES, RCRA, CERCLA and OSHA.
      Consulting services provide investigations and assessment services at non-
      regulated contaminated sites and at sites covered by RCRA and CERCLA
      regulations, which investigations may include preliminary assessments,
      site investigations, groundwater assessments, remedial investigations,
      feasibility studies, and remedial action plans. The accounting policies of
      the segments are the same as those described in the summary of significant
      accounting policies (note 2).

                                     -12-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             MAY 31, 2000 AND 1999

3.   SEGMENT INFORMATION (Continued)

     Sales, operating income (loss) and identifiable assets by reportable
     segment for the years ended May 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                   (Dollars in thousands)
                                                                   2000              1999
                                                                  -------           -------
     <S>                                                            <C>               <C>
      Sales to unaffiliated customers:

        Analytical services                                           $ 6,972           $ 7,071
        Consulting services                                             5,621             6,444
                                                                      -------           -------

      Total                                                           $12,593           $13,515
                                                                      =======           =======

      Operating income (loss):

        Analytical services                                           $   286           $   812
        Consulting services                                               287               631
        Other                                                            (170)             (273)
                                                                      -------           -------

      Total                                                           $   403           $ 1,170
                                                                      =======           =======

       Identifiable assets:

        Analytical services                                           $ 2,696           $ 2,458
        Consulting services                                             1,619             1,344
                                                                      -------           -------

      Total                                                           $ 4,315           $ 3,802
                                                                      =======           =======
</TABLE>

                                     -13-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

4. ACCOUNTS RECEIVABLE

   Accounts receivable consist of the following:

<TABLE>
<CAPTION>
                                                                2000              1999
                                                           --------------    --------------
   <S>                                                     <C>               <C>
   Billed (includes retention of $278,963 and $212,412)        $3,297,496        $3,164,694

   Unbilled                                                       706,654           811,066

   Less allowance for doubtful accounts                          (259,512)         (199,963)
                                                           --------------    --------------

                                                               $3,744,638        $3,775,797
                                                           ==============    ==============
</TABLE>

   The unbilled receivables on long-term contracts consist primarily of month-
   end revenue accrued but not billed as of May 31, 2000 and 1999. Such billings
   occur in the following month.

   The retention balances reported as of May 31, 2000 and 1999 include amounts
   of $143,804 and $29,457, respectively, anticipated to be collected beyond 12
   months from the balance sheet date.

5. NOTE PAYABLE AND LINE OF CREDIT

   Note payable and the line of credit at May 31, 2000 and 1999 consisted of the
   following:

<TABLE>
<CAPTION>
                                                           2000             1999
                                                      --------------   --------------
   <S>                                                <C>              <C>
   Line of credit with a bank, $1,800,000 payable on
   demand, bearing interest at 10.5%, secured by
   accounts receivable and the personal guarantee of
   the corporation's majority stockholder.             $     703,848   $      350,000
                                                      ==============   ==============

   Note payable with the lessor of the Atlanta
   office, $24,800 term loan, monthly principal
   payments of $331 plus interest at 10%, for
   buildout of lease space                             $      18,972   $       23,172
                                                      ==============   ==============
</TABLE>

                                     -14-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

5.  NOTE PAYABLE AND LINE OF CREDIT (Continued)

    Maturities of the note payable and the line of credit for the four years
    succeeding May 31, 2000 are as follows:

                        May 31, 2001           $708,073
                                2002              5,524
                                2003              5,655
                                2004              3,568

6.  NOTES PAYABLE - EQUIPMENT

    Notes payable for equipment at May 31, 2000 and 1999 are as follows:

<TABLE>
<CAPTION>
                                                                2000             1999
                                                          --------------   --------------
    <S>                                                   <C>              <C>
    Equipment notes bearing interest ranging from 8.4%
    to 10.75%.  Interest is payable monthly with
    aggregate monthly principal payments of $8,903
    and maturities through February 2004.  The notes
    are collateralized by equipment and the personal
    guarantee of the majority stockholder.                     $ 172,153     $    250,076

    Less current maturities                                      101,600          205,930
                                                          --------------   --------------

                                                               $  70,553     $     44,146
                                                          ==============   ==============
</TABLE>

    Maturities of notes payable - equipment for each of the four years
    succeeding May 31, 2000 are as follows:

                      May 31, 2001              $101,600
                              2002                42,728
                              2003                18,040
                              2004                 9,785
                                                --------

                                                $172,153
                                                ========

                                     -15-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

7.  CAPITAL LEASES

    The Company leases computers and other equipment under capital leases with
    maturities through March 2005. The following is a schedule by years of
    future minimum lease payments under capital leases, together with the
    present value of net minimum lease payments at May 31, 2000.


                                May 31, 2001                           $389,788
                                        2002                            298,833
                                        2003                            208,496
                                        2004                             51,632
                                        2005                             36,415
                                                                       --------

    Total minimum lease payments                                        985,164
    Less amount representing interest                                   127,261
                                                                       --------

    Present value of net minimum lease payments                         857,903
    Less current maturities                                             316,584
                                                                       --------

    Total non-current obligations under capital leases                 $541,319
                                                                       ========

    Included in fixed assets are the following assets under capital leases at
    May 31, 2000 and 1999:

                                                         2000          1999
                                                     ------------   ----------

    Equipment - Computers/office                       $   96,811     $ 75,179
    Automobiles                                           111,915      131,917
    Equipment - Other                                     993,312      705,707
                                                     ------------   ----------

                                                        1,202,038      912,803
    Less accumulated depreciation                         333,128      409,930
                                                     ------------   ----------

                                                       $  868,910     $502,873
                                                     ============   ==========

                                     -16-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999


8.  COMMITMENTS AND CONTINGENCIES

    Office and Facilities Leases
    ----------------------------

    The Company conducts its operations in leased facilities under operating
    leases expiring at various dates through 2007. Approximate minimum rental
    commitments for five years as of May 31, 2000 are as follows:

                     May 31, 2001                $425,385
                             2002                 422,695
                             2003                 381,521
                             2004                 250,233
                             2005                 229,667

    Other facilities are leased under short-term agreements. Rent expense for
    all leases for the years ended May 31, 2000 and 1999, was $346,934 and
    $390,634, respectively.

    Equipment Leases
    ----------------

    The Company has entered into various equipment operating leases expiring
    between August 2000 and May 2004. Lease expense for the years ended May 31,
    2000 and 1999, was $269,278 and $247,519, respectively. A schedule of the
    future minimum lease commitments for four years as of May 31, 2000 is as
    follows:

                     May 31, 2001                 $194,044
                             2002                  148,732
                             2003                   81,385
                             2004                   13,182

                                     -17-
<PAGE>

                 Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

8.   COMMITMENTS AND CONTINGENCIES (Continued)

     Legal Proceedings
     -----------------

     The Company is involved in two separate legal proceedings with former
     employees relating to discharge and discrimination. Both former employees
     are in process of a settlement for lost wages, damages and expenses of
     approximately $35,000. The two cases have reached tentative agreement of
     terms but are still pending the final approval of each former employee. As
     of May 31, 2000, the collective settlement amount for the two proceedings,
     estimated to be $35,000 has been included in accrued expenses.

9.   EMPLOYEE BENEFIT PLAN

     The Company participates in a 401(k) plan, the InterAmerica/Kemron 401(k)
     Plan and Trust. The plan is available to all employees who are at least 21
     years old, with certain exceptions, primarily for leased employees and
     those covered by collective bargaining agreements. The Company will make
     compensation deferral contributions for the benefit of all eligible
     employees in the amount directed by each employee up to the limits set by
     the Internal Revenue Service.

     The Company will make annual matching contributions of three percent of the
     employee's Matched Compensation Deferral. The plan provides for a vesting
     of Company contributions to the employee over a period of six years. During
     the years ended May 31, 2000 and 1999, the Company's matching contributions
     totaled $98,988 and $63,618, respectively.

10.  RELATED PARTY TRANSACTIONS

     Due to Related Parties
     ----------------------

     An affiliated company provides computer and other services to the Company
     at cost. Certain expenses at headquarters facilities such as administrative
     support, LAN and telecommunications support, and human resources are shared
     among the companies. During the years ended May 31, 2000 and 1999, annual
     expenditures totaled $248,793 and $289,992, respectively, of which $88,296
     and $89,790, respectively, were charged to the Company.

     In addition, the company has a liability due to a stockholder in the amount
     of $105,745. The liability is noninterest bearing and payable upon demand.
     As of May 31, 2000 and May 31, 1999, the amount due was $105,745.

                                     -18-
<PAGE>

                 Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999


10.  RELATED PARTY TRANSACTIONS (Continued)

     Notes Payable - Related Party
     -----------------------------

     The Company issued two promissory notes payable to the Company's majority
     stockholder in the original amounts of $600,000. The notes bear interest at
     the rate of 10% per annum with monthly installments of principal and
     interest of $8,350. The amount of interest expense for the year ended May
     31, 1999 was $1,293. As of May 31, 1999, the Company has paid the two
     promissory notes payable in full.

     Rent Expense - Related Party
     ----------------------------

     The Company leases its Vienna, Virginia headquarters office from a related
     party under a sublease agreement. The amount of rent expense paid to the
     related party for the years ended May 31, 2000 and 1999 was $184,057 and
     $181,560, respectively.

     The Company leases its Marietta, Ohio office from a related party. The
     amount of rent expense paid to the related party for the years ended May
     31, 2000 and 1999 was $125,304 and $125,304, respectively.

11.  INCOME TAXES

     As of May 31, 2000 and 1999, the Company has a net operating loss
     carryforward of approximately $-0- and $264,000, respectively, for income
     tax purposes.

                                     -19-
<PAGE>

                 Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999


11.  INCOME TAXES (Continued)

     Deferred income taxes reflect the net tax effects of temporary differences
     between the carrying amounts of assets and liabilities for financial
     reporting purposes and the amounts reported for income tax purposes.

     The provision for income tax consists of the following:


<TABLE>
<CAPTION>

May 31, 2000KemronFinancial Printing Group                                       May 31, 2000           May 31, 1999
                                                                            -------------------    -------------------
 <S>                                                                         <C>                      <C>
Current taxes                                                                           131,706                388,377
Deferred income taxes                                                                     4,053               (388,377)
Adjustment of beginning of year valuation allowance                                     (91,351)                     -
                                                                            -------------------    -------------------
                                                                              $          44,408      $               -
                                                                            ===================    ===================

The tax effects of temporary differences that give rise to deferred tax
 assets are as follows:
                                                                                May 31, 2000           May 31, 1999
                                                                            -------------------    -------------------

Depreciation                                                                           $ 51,902      $               -
Bad debts                                                                                28,396                      -
Other liabilities                                                                         7,000                      -
                                                                            -------------------    -------------------
   Total temporary differences                                                           87,298                      -

Tax effect of net operating loss carryforwards                                                -                 91,351
                                                                            -------------------    -------------------
                                                                                         87,298                 91,351

Less valuation allowance                                                                      -                (91,351)
                                                                            -------------------    -------------------
   Net deferred tax asset                                                     $          87,298      $               -
                                                                            ===================    ===================

A reconciliation of income tax at the statutory rate to the company's
 effective rate is as follows:
                                                                                May 31, 2000           May 31, 1999
                                                                            -------------------    -------------------

Computed at the expected statutory rate                                                      33%                    35%
Net operating losses carryforward                                                           (25)                   (35)
State income taxes                                                                            4                      -
Other                                                                                         4                      -
                                                                            -------------------    -------------------
Income tax expense - effective rate                                                          16%                     -
                                                                            ===================    ===================
</TABLE>


                                     -20-

<PAGE>

                 Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999


12.  MAJOR CUSTOMERS

     Earned revenue and the related accounts receivable from major customers are
     as follows:

<TABLE>
<CAPTION>
                                                                               Earned                   Accounts
                                                                               revenue                 receivable
     As of May 31, 2000:                                                     -----------------     ------------------
     ------------------
     <S>                                                                     <C>                   <C>
     Private sector (six customers)                                                 $4,119,241               $970,547
                                                                             =================     ==================

     Public sector (three customers)                                                $3,352,618               $601,315
                                                                             =================     ==================

<CAPTION>
                                                                                 Earned                 Accounts
                                                                                Revenue                Receivable
                                                                             ------------------    ------------------
     As of May 31, 1999:
     ------------------
     <S>                                                                      <C>                  <C>
     Private sector (seven customers)                                                $4,027,336            $1,026,011
                                                                             ==================    ==================

     Public sector (four customers)                                                  $5,529,959            $  901,738
                                                                             ==================    ==================
</TABLE>

13.  STOCK COMPENSATION PLANS

     The Company adopted stock option plans in 1997 under which pools of
     2,000,000 and 1,500,000 shares of the Company's common stock have been
     reserved. The plans are administered and terms of option grants are
     established by a committee appointed by the Board of Directors. Under terms
     of the plans, options may be granted to the Company's employees to purchase
     shares of common stock. Options become exercisable immediately upon grant
     and expire ten years from the date of the grant, six months after
     termination of employment without cause, or one year after death or
     permanent disability of the employee. The committee appointed by the Board
     of Directors determines the option price (not less than 85% fair market
     value) at the date of the grant. The Company has applied APB Opinion No. 25
     and related Interpretations in accounting for the plans, as permitted by
     SFAS No. 123.

                               -21-
<PAGE>

                 Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999


13.  STOCK COMPENSATION PLANS (Continued)

     Had compensation cost been determined in accordance with FASB Statement No.
     123, the Company's net income per share would have been the proforma
     amounts indicated below:

<TABLE>
<CAPTION>
                                                                                           Year ended May 31,
                                                                               ----------------------------------------
     <S>                                                                         <C>                  <C>
                                                                                            2000                   1999
                                                                               -----------------    -------------------
     Net income
      As reported                                                                       $227,731               $999,644
                                                                               =================    ===================
      Proforma                                                                          $227,731               $999,644
                                                                               =================    ===================

     Net income per common share - Basic:
      As reported                                                                       $   0.05               $   0.24
                                                                               =================    ===================
      Proforma                                                                          $   0.05               $   0.24
                                                                               =================    ===================

     Net income per common share - Diluted:
      As reported                                                                       $   0.05               $   0.21
                                                                               =================    ===================
      Proforma                                                                          $   0.05               $   0.21
                                                                               =================    ===================
</TABLE>

  All options granted were issued pursuant to the stock options plans. The fair
  value of each option granted under the plan is estimated on the date of grant
  using each option granted under the Black-Scholes option-pricing model. The
  following weighted average assumptions for 2000 were used: expected dividend
  yield of 0%, expected volatility rate of 200%, risk-free rate of 5.5% and
  expected lives of four years.

  The Company granted options for 635,532 shares of common stock at the exercise
  price of $.25 per share in previous years which expire in 2008. During the
  fiscal years ended May 31, 2000 and 1999, no options were granted by the
  Company

                                     -22-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

13.  STOCK COMPENSATION PLANS (Continued)

     The following depicts activity in the plans for years ended May 31, 2000
     and 1999:

<TABLE>
<CAPTION>
                                                                                 Year ended May 31, 2000
                                                                        -----------------------------------------
                                                                             Options                Per share
                                                                           outstanding           exercise price
                                                                        -----------------       -----------------
     <S>                                                                <C>                     <C>
     Outstanding May 31, 1999                                                     448,000                   $0.25
     Options granted                                                                    -                       -
     Options cancelled                                                            (48,000)                   0.25
                                                                        -----------------

     Outstanding May 31, 2000                                                     400,000
                                                                        =================

<CAPTION>
                                                                                 Year ended May 31, 1999
                                                                        -----------------------------------------
                                                                             Options                  Per share
                                                                           outstanding             exercise price
                                                                        -----------------         ---------------
     <S>                                                                  <C>                     <C>
     Outstanding May 31, 1998                                                     478,000                   $0.25
      Options granted                                                                   -
      Options exercised                                                           (30,000)                   0.25
                                                                        -----------------

     Outstanding May 31, 1999                                                     448,000
                                                                        =================
</TABLE>

14.  MERGERS

     On March 10, 1998, Kemron merged with and into Whitney. The Merger was
     treated as a reverse acquisition, with Kemron retaining the majority voting
     interest in the merged entity.

     Concurrent with the Merger, the Company entered into a merger agreement
     with three additional entities: Exeter Group, Inc. ("Exeter"), Coastline
     International, Inc. ("Coastline") and New Horizons, Inc. ("New Horizons").
     As a result of management differences and the Company's lack of the
     management control over these entities, the Company entered into separate
     rescission agreements on October 19, 1998, April 26, 1998 and May 12, 1999,
     respectively, which collectively address the Company and Exeter, Coastline
     and New Horizons agreements that involved the return of the respective
     shares originally issued by the Company in connection with the failed
     mergers.

                                     -23-
<PAGE>

                  Whitney American Corporation and Subsidiary

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                             May 31, 2000 and 1999

14.  MERGERS (Continued)

     Under terms of the settlement agreements, the Company was successful in
     recovering all but 190,973 shares of common stock and stock options for
     135,532 shares of common stock, at the exercise price of $.25 per share,
     issued in connection with the failed mergers. The 190,973 shares, 135,532
     stock options and subscriptions receivable on issued stock and uncollected
     exercised options proceeds, $13,000 and $7,500, respectively, are deemed
     unrecoverable due to the shares being transferred to third parties and
     management's attempts to arrange for any form of repossession of these
     shares have failed.

     The failed merger costs, representing the fair value of the unrecoverable
     shares and stock options, have been treated as an increase in paid-in
     capital.

     Based on legal opinions received by management concerning the issuance of
     stock in the failed mergers, and the subsequent rescission agreements,
     management considers the failed mergers a nullity and void ab initio.
     Accordingly, the accounts and operations of Exeter, Coastline and New
     Horizons have been omitted from the Company's consolidated financial
     statements. All common stock, stock options and per-share amounts from the
     date of the failed mergers to May 31, 2000 have been retroactively adjusted
     to reflect the nullification of the issuance of the original stock and
     stock options.

15.  COMMON STOCK

     During the fiscal year ended May 31, 2000, 49,000 shares of stock were
     voluntarily returned to the Company by a former employee for no
     consideration paid by the Company. These shares were subsequently cancelled
     by the Company.

16.  SUBSEQUENT EVENTS

     On June 29, 2000, Kemron entered into a merger agreement with a separate
     corporation, Kiber Environmental Services, Inc. ("Kiber") where Kiber will
     merge with and into Kemron and cease to exist. In accordance with the
     agreement, Kemron agrees to pay to the stockholders of Kiber $300,000 in
     cash, a promissory note for $150,000 bearing interest at 10% per annum and
     secured by a personal guaranty by a stockholder of the Company and 200,812
     shares of capital stock of the Company. Additionally, the Company's
     purchase price of Kiber may be reduced, if certain Kiber receivables are
     not realized with a 12 month period following the merger.

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