<PAGE>
                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                                FORM 10-KSB

     [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
          FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                     OR

     [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
          FOR THE TRANSITION PERIOD FROM _________ TO _________

                      COMMISSION FILE NUMBER: 33-18778

                               POTENCO, INC.
               ---------------------------------------------
               (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

     NEVADA                                                  99-0259494
-------------------------------                         -------------------
(STATE OR OTHER JURISDICTION OF                           (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)                         IDENTIFICATION NO.)


                           3730 KIRBY SUITE 1200
                            HOUSTON, TEXAS 77098
                   -------------------------------------
                  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

     ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 587-4645.
     SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE.

     SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
     COMMON STOCK, PAR VALUE $0.001 PER SHARE.

     CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR
SUCH SHORTER PERIOD THAT THE ISSUER WAS REQUIRED TO FILE SUCH REPORTS), AND
(2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
    YES   .  NO X .

     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 THE 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 ISSUER HAD NO REVENUES IN ITS MOST RECENT FISCAL YEAR.

     THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
COMPUTED BY REFERENCE TO THE PRICE AT WHICH STOCK WAS SOLD, OR THE AVERAGE
BID AND ASKED PRICES OF SUCH STOCK, AS OF MARCH 31, 2000 WAS: $0.00

     THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON EQUITY, AS OF APRIL 19, 2000, WAS: 11,613,871

     DOCUMENTS INCORPORATED BY REFERENCE: NONE.

                                     1
</Page>

<PAGE>
TABLE OF CONTENTS

PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

   Item 1.   Description of Business . . . . . . . . . . . . . . . . . . .4
             General . . . . . . . . . . . . . . . . . . . . . . . . . . .4
             Employees . . . . . . . . . . . . . . . . . . . . . . . . . .4
             Executive Officers of the Registrant. . . . . . . . . . . . .4
   Item 2.  Description of Property. . . . . . . . . . . . . . . . . . . .4
   Item 3.  Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .4
   Item 4.  Submission of Matters to a Vote of Security Holders. . . . . .4

PART II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

   Item 5.   Market for the Registrant's Common Equity and

             Related

   Stockholder Matters
   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
   Item 6.   Management's Discussion and Analysis of
             Financial Condition and Results of Operations . . . . . . . .5
             General . . . . . . . . . . . . . . . . . . . . . . . . . . .5
             Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . .6
             Results of Operations . . . . . . . . . . . . . . . . . . . .6
   Item 7.  Financial Statements . . . . . . . . . . . . . . . . . . . . .6
   Item 8.  Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure. . . . . . . . . . . .7

PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

   Item 9    Directors, Executive Officers, Promoters and
             Control Persons;Compliance With Section 16(a)
             of the Exchange Act . . . . . . . . . . . . . . . . . . . . .7
   Item 10.  Executive Compensation. . . . . . . . . . . . . . . . . . . .7
             Compensation of Directors
   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
   Item 11.  Security Ownership of Certain Beneficial
             Owners and Management . . . . . . . . . . . . . . . . . . . .8
   Item 12. Certain Relationships and Related Transactions . . . . . . . .8
   Item 13. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . .8

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
                                     2
</Page>
<PAGE>

PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

GENERAL

     POTENCO, Inc., (the "Company" or the "Registrant") is a Nevada
corporation.  As used herein, the terms the "Company" and the "Registrant"
refer to the Company, unless the context otherwise requires.

     For financial information regarding the segments of the Registrant's
operations, see the information contained in the Consolidated Financial
Statements incorporated by reference in Item 7 hereof.  The Registrant has
not had any revenues since 1990.

     The Registrant was incorporated on September 25, 1987 under the name
of Potenco, Inc., Inc. as a development stage company.  In August 1988, the
Registrant participated in the time-share resort real estate business
through its then wholly-owned subsidiary, Colonial Properties, Inc., a
Florida corporation.  As a result of adverse business circumstances, no
material business operations have been conducted by the Registrant since
1990.

EMPLOYEES

     At December 31, 1999, the Registrant had no employees.

EXECUTIVE OFFICERS OF THE REGISTRANT

     At December 31, 1999, the Registrant had no executive officers.

ITEM 2.   DESCRIPTION OF PROPERTY.

     Not applicable.

ITEM 3.   LEGAL PROCEEDINGS

     From time to time, the Registrant is or will be involved in litigation
relating to claims arising out of its operations in the normal course of
its business. The Registrant believes that it is not presently a party to
any litigation the outcome of which would have a material adverse effect on
its results of operations or financial condition.

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

     Not Applicable.

                                     3
</Page>
<PAGE>

PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS.

     The Registrant's Common Stock trades on the OTC Pink Sheets of the
National Association of Securities Dealers, Inc. (the "NASD") in the United
States.  The range of the high and low bid information for the Common Stock
for each full quarterly period within the two most recent fiscal years is
shown on the following table.  As of December 31, 1999, the Registrant was
authorized to
issue 50,000,000 shares of the Common Stock, of which there were issued and
outstanding 16,600,000 shares.

<TABLE>
<CAPTION>
                                                           COMMON STOCK
                                                             BID PRICE
                                                        --------- ---------
CALENDAR YEAR 1999                                           Low      High
                                                        --------- ---------
<S>                                                     <C>       <C>
               First Quarter                            $   0.00  $   0.00
               Second Quarter                               0.00      0.00
               Third Quarter                                0.00      0.00
               Fourth Quarter                               0.00      0.00
                                                        --------- ---------
CALENDAR YEAR 1998                                           Low      High
                                                        --------- ---------
               First Quarter                            $   0.00  $   0.00
               Second Quarter                               0.00      0.00
               Third Quarter                                0.00      0.00
               Fourth Quarter                               0.00      0.00
</TABLE>

     As of March 31,1999 the high and low bids with respect to the price of
the Common Stock were no trades made.

     As of December 31, 1999, there were 58 holders of record of the Common
Stock.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS

     The following is a discussion of the Registrant's financial condition
and results of operations.  This discussion should be read in conjunction
with the Consolidated Financial Statements of the Registrant appearing
under Item 7 of this Report.  Statements contained in this "Management's
Discussion and Analysis of Financial Conditions and Results of Operations,"
which are not historical facts may be forward-looking statements.  Such
information involves risks and uncertainties, including those created by
general market conditions, competition and the possibility that events may
occur which could limit the ability of the Registrant to maintain or
improve its operating results or execute its primary growth strategy.
Although management believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could be
inaccurate, and there can therefore be no assurance that the

                                     4
</Page>
<PAGE>
forward-looking statements included herein will prove to be accurate.  The
inclusion of such information should not be regarded as a representation by
management or any other person that the objectives and plans of the
Registrant will be achieved.  Moreover, such forward-looking statements are
subject to certain risks and uncertainties which could cause actual results
to differ materially from those projected.  Readers are cautioned not to
place undue reliance on these forward-looking statements that speak only as
of the date hereof.

GENERAL

     Management intends for the Registrant to proceed in its efforts to
expand holdings through the purchase of existing, profitable, private,
companies where there is a demonstrable gain in productivity through the
minimization of general and administrative costs which are duplicative.
Management will seek to implement a capital structure which affords the
greatest flexibility for future acquisitions while maintaining an adequate
base of equity to cushion against fluctuations in the business cycle.
Currently the company is a developement stage corporation.

LIQUIDITY AND CAPITAL RESOURCES

     In order to complete the any acquisitions, the Registrant will require
additional funding.  Management believes that this funding is available
through investment bankers who may expressed an interest in providing
equity and debt funding.  There can be no assurance as to the availability
or terms of this financing.

     Certain transactions may require the Registrant to incur additional
debt, and the degree to which the Registrant may be leveraged could have
important consequences, including the following: (i) the possible
impairment of the Registrant's ability to obtain financing in the future
for potential acquisitions, working capital, capital expenditures or
general corporate purposes; (ii) the necessity for a substantial portion of
the Registrant's cash flow from operations to be dedicated to the payment
of principal and interest on its indebtedness; (iii) the potential for
increased interest expense due to fluctuations in interest rates; and (iv)
the potential for increased vulnerability of the Registrant to economic
downturns and possible limitation of its ability to withstand competitive
pressures.  The Registrant's ability to meet its debt service obligations
will be dependent upon the Registrant's future performance, which will be
subject to general economic conditions and to financial, business and other
factors affecting the operations of the Registrant, many of which are
beyond its control.

RESULTS OF OPERATIONS

     The Registrant has generated no revenues since 1990, and has had no
activity since 1990.

ITEM 7.   FINANCIAL STATEMENTS.

     The information required by this Item 7 appears on pages 10 through 12
of this Report, and is incorporated herein by reference.

                                     5
</Page>
<PAGE>

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

         Not applicable.

PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The information set forth under "Item 1.  Description of Business
-Executive Officers of the Registrant" is incorporated herein by reference.
At the date of this Report, there are no officers of the Registrant..

     In the years prior to December 31, 1999, various officers and
directors of the Registrant have failed to file a Form 3 on a timely basis
upon becoming an executive officer and director of the Registrant.

     Set forth below are the directors of the Registrant, together with
their ages as of the date of this Report.  Each director is elected for a
one year term and serves until his successor is elected and qualified.

<TABLE>
<CAPTION>
Name             Age  Position                         Director Since
--------------------------------------------------------------------------
<S>              <C>  <C>                              <C>
Quigg Lawrence   64   Chairman, President & Director   February 16, 2000
--------------
Robert Reisinger 50   Director                         February 16, 2000
----------------
Steven Chase     43   Director                         February 16, 2000
------------
</TABLE>
     Certain information with respect to the members of the Board of
Directors of the Registrant is set forth above in "Item 1.  Description of
Business - Executive Officers of the Registrant."

ITEM 10.  EXECUTIVE COMPENSATION.

     Since 1990, the Registrant has not paid salaries or other form
compensation to any of its officers or directors.

COMPENSATION OF DIRECTORS

     The Registrant does not compensate any of its directors for their
services to the Registrant as directors.  However, the Registrant does
reimburse its directors for expenses incurred in attending board meetings.

                                     6
</Page>
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

     The following table presents certain information regarding the
beneficial ownership of all shares of the Common Stock at April 19, 2000
(i) each person who owns beneficially more than five percent of the
outstanding shares of the Common Stock, (ii) each director of the Company,
(iii) each named executive officer, and (iv) all directors and officers as
a group.
<TABLE>
<CAPTION>
                         Shares Beneficially Owned

Name of Beneficial Owner (1)                Number         Percent (2)
-------------------------------------------------------------------------
<S>                                    <C>                <C>
E. Growth Partners                      4,125,500              35.52%
Couger Capital                          3,683,600              31.72%

All directors and officers
as a group (N/A)
</TABLE>

(1)  Unless otherwise indicated, each person named in the above-described
     table has the sole  voting and investment power with respect to his
     shares of the Common Stock beneficially owned.

(2)  Unless otherwise provided, the calculation of percentage ownership is
     based on the total  number of shares of the Common Stock outstanding
     as of April 19, 2000 any shares of the Common Stock which are not
     outstanding as of such date but are subject to options, warrants, or
     rights of conversion exercisable within 60 days of March 31, 2000
     shall be deemed to be outstanding for the purpose of computing
     percentage ownership of outstanding shares of the Common Stock by such
     person but shall not be deemed to be outstanding for the purpose of
     computing the percentage ownership of any other person.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Not applicable.

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

     (a)  List of Documents Filed with this Report.

     (1)  Consolidated Financial Statements, POTENCO, Inc. and subsidiary
companies--
          Report of Schvaneveldt & Company, P.C., independent certified
            public accountants,
          dated December 30, 1999. . . . . . . . . . . . . . . . . . . . 11
          Balance Sheet-for the Years Ended December 31, 1999. . . . . . 12
          Notes to Consolidated Financial Statements as of December 31,
            1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

                                     7
</Page>
<PAGE>

     All schedules have been omitted since the information required to be
submitted has been included in the financial statements or notes or has
been omitted as not applicable or not required.

     (2)  Exhibits--  The exhibits indicated by an asterisk (*) are
incorporated by reference.


EXHIBIT NO.    IDENTIFICATION OF EXHIBIT

  23(a)*       Consent of Schvaneveldt & Company, P.C., certified public
accountants.

  27*          Financial Data Schedule.


(c)  Financial Statement Schedules.

     No schedules are required as all information required has been
presented in the audited financial statements.



                                     8
</Page>
<PAGE>
                                 SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.


                                        POTENCO, INC.


May 23, 2000                            /S/ Quigg Lawrence
                                        -----------------------------
                                        Quigg Lawrence
                                        President, Director

May 23, 2000                            /S/ Robert Reisinger
                                        -----------------------------
                                        Robert Reisinger
                                        Secretary, Director


                                     9

</Page>


<PAGE>



                               Potenco, Inc.
                       (A Development Stage Company)

                            Financial Statements

                          December 31, 1999 & 1998





                                     10
</Page>
<PAGE>
[Letterhead]
                           Schvaneveldt & Company
                        Certified Public Accountant
                     275 East South Temple, Suite #300
                         Salt Lake City, Utah 84111
                               (801) 521-2392

Darrell T. Schvaneveldt, C.P.A.

                        Independent Auditors Report
                        ----------------------------

Board of Directors
Potenco, Inc.
(A Development Stage Company)

I have audited the accompanying balance sheets of Potenco, Inc., (a
development stage company), as of December 31, 1999 and 1998, and the
related statements of operations, stockholders' equity, and cash flows
accumulated from September 25, 1987 (Inception) to December 31, 1999 and
the years ended December 31, 1999 and 1998.  These financial statements are
the responsibility of the Company's management.  My responsibility is to
express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with generally accepted auditing
standards.  Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the  financial statements are
free of material misstatements.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as
evaluating the overall financial statements presentation.  I believe that
my audit provides a reasonable basis for my opinion.

In my opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Potenco, Inc., (a
development stage company), as of December 31, 1999 and 1998, and the
results of its operations and its cash flows accumulated from September 25,
1987 (Inception) to December 31, 1999 and the years ended December 31, 1999
and 1998, in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note #4 to the
financial statements, the Company has an accumulated deficit and a negative
net worth at December 31, 1999.  These factors raise substantial doubt
about the Company's ability to continue as a going concern.  Management's
plans in regard to these matters are also discussed in Note #4.  The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.


/S/ Schvaneveldt & Company
Salt Lake City, Utah
May 2, 2000

                                     11
</Page>

<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                               Balance Sheets
                         December 31, 1999 and 1998
<TABLE>
<CAPTION>
                                                     December     December
                                                     31, 1999     31, 1998
                                                   -----------  -----------
<S>                                                <C>          <C>

       Assets

Current Assets                                     $      -0-   $      -0-
                                                   -----------  -----------
       Total Assets                                $      -0-   $      -0-
                                                   ===========  ===========


       Liabilities & Stockholders' Equity

Current Liabilities
-------------------
  Accounts Payable                                  $ 143,317   $      900

Stockholders' Equity
--------------------
  Common Stock; 50,000,000 Shares Authorized
     at $0.001 Par Value, 560,312 & 60,312 Shares
     Issued & Outstanding Retroactively Restated          560           60
  Paid In Capital                                   1,666,811    1,666,811
  Deficit Accumulated in the Development Stage     (1,810,688)  (1,667,771)
                                                   -----------  -----------
       Total Stockholders' Equity                  (  143,317)  (      900)
                                                   -----------  -----------
       Total Liabilities & Stockholders' Equity    $      -0-   $      -0-
                                                   ===========  ===========


 The accompanying notes are an integral part of these financial statements
                                     12

</Page>
<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                          Statement of Operations
    Accumulated from September 25, 1987 (Inception) to December 31, 1999
            and the Years Ended December 31, 1999, 1998 and 1997

</TABLE>
<TABLE>
<CAPTION>

                                   Accumulated         1999         1998         1997
                                   ------------ ------------ ------------ ------------
<S>                               <C>          <C>          <C>          <C>

Revenues                           $       -0-  $       -0-  $       -0-  $       -0-
                                   ------------ ------------ ------------ ------------
Expenses
--------
  Filings & Fees                         1,000          100          100          100
  Interest Expenses                     14,993          -0-          -0-          -0-
  Time Share Activities                240,113          -0-          -0-          -0-
  Motel Activities                     162,108          -0-          -0-          -0-
  Administrative Expenses              301,413      142,817          -0-          -0-
  Loss of Subsidiaries               1,091,061          -0-          -0-          -0-
                                   ------------ ------------ ------------ ------------
       Total Expenses                1,810,688      142,917          100          100
                                   ============ ============ ============ ============
       Net Loss                    ($1,810,688) ($  142,917) ($      100) ($      100)
                                   ============ ============ ============ ============
     Basic & Diluted Earnings
     Per Share                                  ($     2.36) ($     0.00) ($     0.00)

     Weighted Average Shares
     Outstanding Retroactively
     Restated                                        60,312       60,312       60,312

</TABLE>

 The accompanying notes are an integral part of these financial statements

                                     13

</Page>

<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                     Statement of Stockholders' Equity
          From September 25, 1987 (Inception) to December 31, 1999
<TABLE>
<CAPTION>
                                                                             Deficit
                                                                         Accumulated
                                           Common Stock         Paid In  Development
                                        Shares       Amount     Capital        Stage
                                     ------------------------------------------------
<S>                                 <C>          <C>         <C>       <C>
Balance, September 25, 1987                -0-    $     -0-   $     -0- $        -0-

Shares Issued to Incorporators
for $0.02 Per Share
Retroactively Restated                   2,727            3      14,997

Net Loss for Year Ended
December 31, 1987                                                        (        67)
                                     ------------------------------------------------
Balance, December 31, 1987
Retroactively Restated                   2,727            3      14,997  (        67)

Contributed Capital                                                 119

Shares Issued with Public
Offering at $0.10 Per Share
Retroactively Restated                   9,091            9     249,991

Cost of Public Offering                                      (   28,860)

Shares Issued in Connection
with Reverse Acquisition
Retroactively Restated                  48,494           48   1,430,564

Net Loss for Year Ended
December 31, 1988                                                        (   304,825)
                                     ------------------------------------------------
Balance, December 31, 1988
Retroactively Restated                  60,312           60   1,666,811  (   304,892)

Net Loss for Year Ended
December 31, 1989                                                        ( 1,361,979)
                                     ------------------------------------------------
Balance, December 31, 1989
Retroactively Restated                  60,312           60   1,666,811  ( 1,666,871)

Net Loss for Year Ended
December 31, 1990                                                        (       100)
                                     ------------------------------------------------
</TABLE>
 The accompanying notes are an integral part of these financial statements

                                     14

</Page>
<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
               Statement of Stockholders' Equity -Continued-
          From September 25, 1987 (Inception) to December 31, 1999
<TABLE>
<CAPTION>
                                                                             Deficit
                                                                         Accumulated
                                           Common Stock         Paid In  Development
                                        Shares       Amount     Capital        Stage
                                     ------------------------------------------------
<S>                                 <C>          <C>         <C>        <C>
Balance, December 31, 1990
Retroactively Restated                  60,312           60   1,666,811  ( 1,666,971)

Net Loss for Year Ended
December 31, 1991                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1991
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,071)

Net Loss for Year Ended
December 31, 1992                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1992
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,171)

Net Loss for Year Ended
December 31, 1993                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1993
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,271)

Net Loss for Year Ended
December 31, 1994                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1994
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,371)

Net Loss for Year Ended
December 31, 1995                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1995
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,471)

Net Loss for Year Ended
December 31, 1996                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1996
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,571)


</TABLE>
 The accompanying notes are an integral part of these financial statements
                                     15
</Page>

<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
               Statement of Stockholders' Equity -Continued-
          From September 25, 1987 (Inception) to December 31, 1999
<TABLE>
<CAPTION>
                                                                             Deficit
                                                                         Accumulated
                                           Common Stock         Paid In  Development
                                        Shares      Amount      Capital        Stage
                                     ------------------------------------------------
<S>                                 <C>          <C>         <C>        <C>
Net Loss for Year Ended
December 31, 1997                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1997
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,671)

Net Loss for Year Ended
December 31, 1998                                                        (       100)
                                     ------------------------------------------------
Balance, December 31, 1998
Retroactively Restated                  60,312           60   1,666,811  ( 1,667,771)

Shares issued for Services             500,000          500

Net Loss for Year Ended
December 31, 1999                                                        (   142,917)
                                     ------------------------------------------------
Balance, December 31, 1999             560,312   $      560 $ 1,666,811  ($1,810,688)
                                     ================================================

</TABLE>

 The accompanying notes are an integral part of these financial statements
                                     16
</Page>

<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                          Statements of Cash Flows
    Accumulated from September 25, 1987 (Inception) to December 31, 1999
            and the Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
                                   Accumulated         1999         1998         1997
                                   ------------ ------------ ------------ ------------
<S>                               <C>          <C>          <C>          <C>
Cash Flows from Operating Activities
------------------------------------
  Net Loss                         ($1,700,371) ($  142,917) ($      100) ($      100)
  Loss on Subsidiaries                 852,554          -0-          -0-          -0-
  Amortization                          17,825          -0-          -0-          -0-
  Non Cash Expenses                        500          500          -0-          -0-
  Change in Operating Liabilities;
   Increase in Accounts Payable         33,000      142,417          100          100
                                   ------------ ------------ ------------ ------------
     Net Cash Used by Operating
     Activities                    (   796,492)         -0-          -0-          -0-

Cash Flows from Investing Activities
------------------------------------
  Organization Costs               (    17,825)         -0-          -0-          -0-
                                   ------------ ------------ ------------ ------------
     Net Cash Used in Investing
     Activities                    (    17,825)         -0-          -0-          -0-

Cash Flows from Financing Activities
------------------------------------
  Proceeds of Sales of Common
   Stock                               240,177          -0-          -0-          -0-
  Contributed Capital                      119          -0-          -0-          -0-
  Cash from Revenue Acquisition        574,021          -0-          -0-          -0-
                                   ------------ ------------ ------------ ------------
     Net Cash Provided by
     Financing Activities              814,317          -0-          -0-          -0-
                                   ------------ ------------ ------------ ------------
     Net Increase (Decrease)
     In Cash                               -0-          -0-          -0-          -0-

     Cash at Beginning of Period           -0-          -0-          -0-          -0-
                                   ------------ ------------ ------------ ------------
     Cash at End of Period         $       -0-  $       -0-  $       -0-  $       -0-
                                   ============ ============ ============ ============
Disclosures from Operating Activities
-------------------------------------
  Interest                         $    14,993  $       -0-  $       -0-  $       -0-
  Taxes                                    -0-          -0-          -0-          -0-

</TABLE>

 The accompanying notes are an integral part of these financial statements

                                     17

</Page>

<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                       Notes to Financial Statements

NOTE #1 - Organization
----------------------

Potenco, Inc., (Potenco) was organized in the state of Nevada on September
25, 1987.  The Articles of Incorporation state the purpose of the
corporation is to conduct business in the field of financial and business
consulting and operation; to seek for and acquire business opportunities in
the financial field; or transact any lawful business, or to promote or
conduct any legitimate object or purpose, under and subject to the laws of
the state of Nevada.

NOTE #2 - Significant Accounting Policies
-----------------------------------------

A.   The Company uses the accrual method of accounting.
B.   Revenues and directly related expenses are recognized in the period
     when the goods are shipped to the customer.
C.   The Company considers all short term, highly liquid investments that
     are readily convertible, within three months, to known amounts as cash
     equivalents.  The Company currently has no cash equivalents.
D.   Basic Earnings Per Shares are computed by dividing income available to
     common stockholders by the weighted average number of common shares
     outstanding during the period.  Diluted Earnings Per Share shall be
     computed by including contingently issuable shares with the weighted
     average shares outstanding during the period.  When inclusion of the
     contingently issuable shares would have an antidilutive effect upon
     earnings per share no diluted earnings per share shall be presented.
E.   Inventories:   Inventories are stated at the lower of cost, determined
     by the FIFO method or market.
F.   Depreciation: The cost of property and equipment is depreciated over
     the estimated useful lives of the related assets.  The cost of
     leasehold improvements is amortized over the lesser of the length of
     the lease of the related assets of the estimated lives of the assets.
     Depreciation and amortization is computed on the straight line method.
G.   Estimates:   The preparation of the financial statements in conformity
     with generally accepted accounting principles requires management to
     make estimates and assumptions that affect the amounts reported in the
     financial statements and accompanying notes.  Actual results could
     differ from those estimates.

NOTE #3 - Income Taxes
----------------------

Potenco, Inc., has adopted FASB 109 to account for income taxes.  Potenco,
Inc., currently has no issues that create timing differences that would
mandate deferred tax expense.  Net operating losses would create possible
tax assets in future years.  Due to the uncertainty as to the utilization
of net operating loss carryforwards an evaluation allowance has been made
to the extent of any tax benefit that net operating losses may generate.
Subsequent to the report Potenco had a change in officers and a change in
control.  When control of an entity changes net operating losses generally


                                     18
</Page>
<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                 Notes to Financial Statements -Continued-

NOTE #3 - Income Taxes -Continued-
----------------------------------

can be used only by the tax payer (Officers) who sustained the losses.
There can be no assurance that the net operating losses sustained before
the change in control will be available for future benefits.

Potenco, Inc., has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal revenue Codes are met.  These
losses are as follows:
<TABLE>
<CAPTION>             Year of Loss              Amount     Expiration Date
                      -------------      --------------    ----------------
                     <S>                  <C>             <C>
                       1987 - 1998         $ 1,667,771         2007 - 2008
                              1999              32,102                2019
</TABLE>
<TABLE>                                                          1999           1998
<CAPTION>                                                ------------- --------------
<S>                                                     <C>           <C>
Current Tax Asset Value of Net Operating Loss
  Carryforwards at Current Prevailing Federal Tax Rate   $    577,956  $     567,042
Evaluation Allowance                                     (    577,956) (     567,042)
                                                         ------------- --------------
       Net Tax Asset                                     $        -0-  $         -0-
                                                         ============= ==============
Current Income Tax Expense                                        -0-            -0-
Deferred Income Tax Benefit                                       -0-            -0-
</TABLE>

NOTE #4 - Going Concern
-----------------------

Potenco, Inc., has no assets and no operations from which it can obtain
working capital.  Potenco, Inc., recognizes that it must find a source of
working capital or Potenco, Inc., may not be able to continue its
existence.  Current officers of Potenco, Inc., are seeking a business
opportunity through merger or acquisition that would provide operations
with a revenue flow and the possibility of additional capital investment.

NOTE #5 - Stockholders' Equity
------------------------------

Potenco, Inc., is authorized to issue 50,000,000 shares of $0.001 par value
stock.

Pursuant to Form S-18 Registration statement Potenco, Inc., issued
2,500,000 shares at $0.01 per share for gross proceeds of $250,000, cost of
the offering was $28,860.

In the year ended December 31, 1988, Potenco, Inc., issued 13,350,000
shares in a reverse acquisition transaction with Colonial Properties &
Development Corp., and Subsidiaries, a Florida Corporation.  Colonial
Properties & Development Corp., and Subsidiaries, ceased operations in 1989
and were suspended by the state of Florida for failure to file an Annual
Report in 1991.

On November 17, 1999, the Board of Directors authorized a one for two
hundred seventy five (1 for 275) reverse split of its outstanding shares.
                                 19 </Page>
<PAGE>
<PAGE>
                               Potenco, Inc.
                       (A Development Stage Company)
                 Notes to Financial Statements -Continued-

NOTE #5 - Stockholders' Equity -Continued-
------------------------------------------

In December 1999, the Company issued 500,000 shares of common stock, valued
at $500,  in consideration for services rendered to the Company.

NOTE #6 - Subsequent Events
---------------------------

Subsequent to its year end the Company issued 2,998,350 shares pursuant to
a Form S-8 Filing in satisfaction of $59,967, additionally, 4,585,000
shares of common stock restricted as to Rule 144K were issued in
satisfaction of accrued expenses of $45.850.

The Company sold 4,029,100 shares of common stock for cash of $40,291.



                                     20
</Page>