SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    Form 10-K

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

                   For the fiscal year ended October 31, 2000

                                       OR

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

                         Commission file number 0-17430

                               DANZER CORPORATION

             (Exact name of registrant as specified in its charter)

               New York                                 13-3431486
        (State of other jurisdiction of                 (IRS Employer
           incorporation or organization)                Identification No.)

        17500 York Road                                 21740
        Hagerstown, Maryland                            (Zip Code)
        (Address of principal executive offices)
                                 (301) 582-2000
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:   None
                                                              ----

Securities registered pursuant to Section 12(g) of the Act:

                        Common Stock ($0.0001 par value)
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                                  YES X                NO ____
                                    -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of the Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [ ]

As of October 31, 2000, the aggregate market value of the Company's common stock
held by non-affiliates of the registrant, based on the average bid and ask
price, was approximately $1,500,000.00.

As of December 31, 2000, the registrant had 17,760,015 shares of common stock
outstanding.
<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

In addition to historical information, this annual report on Form 10-K contains
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially. Factors that might cause or contribute to
such differences include, but are not limited to, those discussed in the section
entitled "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations." Readers should carefully review the risks described
in this and other documents that the Company files from time to time with the
Securities and Exchange Commission, including the quarterly reports on Form 10-Q
to be filed by the Company in 2001. Readers are cautioned not to place undue
reliance on the forward-looking statements, which speak only to the date of this
Annual Report on Form 10-K. The Company undertakes no obligation to publicly
release any revisions to the forward-looking statements or reflect events or
circumstances after the date of this document.

General:
-------

In fiscal 1998, the shareholders of Global Environmental Corp. ("Global")
authorized Global to change its name to Danzer Corporation ("Danzer" or the
"Company"), which name change was effected in fiscal 1999. In November 1999, the
Company also changed its trading symbol on the Over The Counter Bulletin Board
from "GLEN" to "DNZR". Danzer, through its wholly owned subsidiary, Danzer
Industries, Inc. ("DII"), fabricates metal parts and truck bodies for the
service and utility markets.

History and Development of Business:
-----------------------------------
Danzer, formerly named Affiliated National, Inc., was incorporated in New York
in 1987 under the name Global Environmental Corp. In January 1988, Danzer
completed an initial underwritten public offering of 400,000 units for an
offering price of $1.00 per unit. Each unit consisted of one share of common
stock, three Class A Warrants and three Class B Warrants.

In August 1988, Danzer acquired all of the outstanding capital stock of Global
Holdings. In June 1988, Global Holdings purchased all of the outstanding capital
stock of DII from its sole shareholder. DII is located in Hagerstown, Maryland
and has the ability to produce and install a wide range of custom designed and
engineered fabricated metal products.

In November 1988, Global Holdings' newly incorporated subsidiary, Texcon,
purchased certain assets from a manufacturing concern (Texcon Inc., a South
Carolina corporation), located in Greenville, SC. The assets acquired consisted
of contracts to produce engineering and design services for pollution control
systems as well as assets used in air monitoring and testing.

In December 1988, Global Holdings' newly incorporated subsidiary, Rage, acquired
substantially all of the assets of Rage Engineering, Inc., located in
Plumsteadville, PA. Rage designed and assembled pneumatic handling systems used
in the processing of bulk materials in manufacturing and pollution control
processes.

In August 1993, the Company acquired the assets of Morrison Industries L.P., a
manufacturer of specialized utility truck bodies and moved these assets to its
manufacturing facilities. The Company began production of the Morrison bodies in
December 1993. Prior to this date, the Company produced its own proprietary
truck bodies.

In October 1994, the Company's Texcon subsidiary was closed. All Texcon products
and systems were then marketed under Rage and/or Global Environmental Corp.

                                     PAGE 2
<PAGE>

In June 1996, the Company sold Rage Inc. to William V. Rice in exchange for
517,000 shares of Danzer and cancellation of his employment agreement and a cash
payment by the Company.

In August 1997, the Company decided that the future of Danzer was in the metal
fabrication business as it related to the manufacture and distribution of truck
bodies for the service and utility market. A strategic direction was established
that called for the phase out of all business that was not associated with truck
bodies by the end of the first quarter of fiscal year 1998.

In November 1997, the Company sold the Airline product line to Rage, Inc. for
$413,000, with $150,000 paid at closing and the remaining $263,000 taken in the
form of a 6% promissory note secured by the Airline assets and maturing May 19,
2001. At December 31, 1999, Rage had made $85,000 in principle payments pursuant
to the Note, but is in default on its obligations, failing to make the November
15, 1999 payment on time.

In the fiscal second quarter of 1998, Danzer shipped the last orders for
Schindler Elevator, an elevator manufacturer. For the year ended October 31,
1998, the Company booked approximately $304,000, or 4% of sales, to Schindler,
and further recorded sales of approximately $1.1 million, or 13% of sales, in
fiscal year 1997. Despite this loss of revenue, the Company believes the
benefits of eliminating this relationship will far outweigh the costs, as it
will allow the Company to focus on its core business, thereby allowing it to
better compete through a higher level of service and increased manufacturing
efficiencies.

Effective December 16, 1998, the Company agreed to pay $200,000 to repurchase an
outstanding 5% gross royalty interest on all Morrison truck bodies sold. The
royalty was originally retained by the entity that sold Morrison Industries,
L.P. to Danzer in August 1993. Included in the total consideration of the
transaction was approximately $65,000 in amounts owed by Danzer for past due
royalty payments. Danzer paid $50,000 up front and became obligated on the
balance pursuant to a $150,000 promissory note bearing interest at 7.75% and due
on or before December 15, 1999. In December 1999, Danzer paid off the balance of
the note.

Substantial business developments:
---------------------------------
o    During the first quarter of fiscal 1994, the Company entered into a joint
     venture agreement with Cadema Corporation. During the term of the joint
     venture terminating December 31, 1998 (unless otherwise extended), the
     joint venture has the right to contract for the design and installation of
     air pollution control equipment in the Company's name in all areas of the
     world outside the United States and its territories. The joint venture has
     expired and no future operations are expected.

o    In September 1994, Danzer completed a private offering of 7,550 shares of
     10% Cumulative Convertible Senior Preferred Stock (the `10% Preferred') at
     $100 per share. Each share of the 10% Preferred was converted into 200
     shares of common stock.

o    On December 31, 1994, Renaissance Capital Partners, Ltd. (`Renaissance')
     exchanged $1,600,000 principal amount of the Company's 12.5% Convertible
     Debentures for 16,000 shares of the Company's Series B Cumulative
     Convertible Senior Preferred Stock ("Series B Preferred") at $100 per
     share. The Company also issued Renaissance a 10% Term Note in the principal
     amount of $211,635 due December 31, 1997 representing interest accrued on
     the Convertible Debentures through September 30, 1994. Each Series B
     Preferred share was convertible into 200 shares of common stock.

o    In August 1995, the Company issued 1,200,000 shares through a private
     placement for $300,000. 1,000,000 shares were issued to R. W. Snyder and
     200,000 shares were issued to Renaissance.

o    During fiscal 1996 and 1997, the holders of the 10% Preferred and the
     Series B Preferred converted their shares and accrued dividends to common
     stock at a conversion rate of $0.25 per share.

                                     PAGE 3

o    In March 1997, Renaissance loaned the Company $150,000 in the form of a 10%
     Convertible Promissory Note ("Note"), convertible into common stock at
     $0.25 per share. The note provided that Renaissance would convert the
     entire principal into 600,000 shares of common stock upon the Company
     obtaining a loan secured by a lien on the land and improvements owned by
     Danzer under terms acceptable to Renaissance.

o    Effective August 1997, Duncan-Smith Co. ("DSC") loaned DII $650,000
     pursuant to an 11% Promissory Note ("DSC Note") secured by a lien on all
     real property and improvements owned by DII, including the manufacturing
     facility in Hagerstown, MD. To effectuate the DSC Note, Fremont Financial
     Corporation (now known and hereafter referred to as "Finova"), the
     Company's working capital lender, agreed to subordinate its previously
     senior position in the Company's real property and improvements, including
     the manufacturing facility in Hagerstown, Maryland, to the DSC Note.

o    Contemporaneous with the closing of the DSC Note, Renaissance, in
     accordance with the provisions of its Note, converted the entire note into
     600,000 shares of common stock.

o    In August 1997, the Company made a strategic decision to focus solely on
     the manufacturing of truck bodies and accessories for the service and
     utility markets. Management believes this renewed focus will allow the
     Company to maximize shareholder value by eliminating non-synergistic
     operations, increasing manufacturing efficiencies, streamlining capital
     resources, reducing overall cost structure and enabling the Company to
     better compete in its core business.

o    In November 1997, the Airline product line was sold to Rage Inc. By the end
     of the 1998 fiscal second quarter, the Company had ceased fulfilling the
     Schindler account. Schindler made up approximately 13% of the Company's
     sales in fiscal 1997, or about $1.1 million, and approximately 4% of the
     Company's sales in fiscal 1998, or about $304,000. The Company believes the
     loss of revenue from Airline and Schindler will be more than offset by the
     Company's ability to compete better by providing a higher level of service,
     and from production efficiencies gained by concentrating on a single
     product line.

o    At the annual Shareholder's meeting held December 1997, the Company elected
     a new Board of Directors consisting of Goodhue W. Smith, III, Chairman of
     the Board, Stephen C. Davis, Russell G. Cleveland and William L. Pryor,
     III.

o    In December 1997, R.W. Schuster retired as President and CEO of the
     Company. Stephen C. Davis, a member of the Company's Board of Directors,
     took over as interim CEO and agreed to lead the search for a new President
     and CEO.

o    In December 1997, Renaissance agreed to loan the Company $150,000 pursuant
     to a 10% promissory note secured by substantially all of the assets of the
     Company. All interest and principal due under the note was payable on or
     before September 30, 1998. At October 31, 1998, the Company was in default
     on the obligation. In February 1999, Renaissance converted the entire
     $150,000 principal balance owed on the Note, plus $17,531.80 in accrued
     interest owed at the date of conversion, into 1,675,318 shares of the
     Company's common stock, a rate of $0.10 per share.

o    In March 1998, the Company hired Mr. M.E. Williams as President and CEO.
     Mr. Williams has over 30 years of experience in manufacturing and 7 years
     of truck body manufacturing experience. Mr. Williams became a director of
     the Company in April 1999. Also in fiscal 1999, William L. Pryor, III
     resigned from the Board.

o    In January 1999, due to a change in timing of purchase orders from the
     Company's major customer, as well as a decrease in overall orders to be
     shipped pursuant to those purchase orders, the Company sought to
     renegotiate with its mortgage holders and also obtain additional financing.
     On January 25, 1999, the owners of the DSC Note agreed to defer receipt of
     the principal portion of quarterly payments due on the DSC Note for the

                                     PAGE 4
<PAGE>

     quarters ending February 15, 1999 and May 15, 1999. In exchange for this
     agreement, the Company increased the interest rate on the DSC Note to 13%
     until such time as the Company could catch up with the normal principal
     repayment schedule. In addition, the Company secured a $25,000 loan from
     its majority shareholder, Renaissance Capital Partners, Ltd., in exchange
     for a 13% promissory note due on or before December 31, 1999. All funds
     loaned by Renaissance were repaid by February, 2000.

o    Effective January 21, 2000, the Company and Bank of America Commercial
     Finance Corporation ("BOACFC") entered into a loan agreement whereby BOACFC
     agreed to lend the Company $600,000 pursuant to a 7 year term loan and
     arrange a $1.75 million working capital credit facility (the "BOACFC
     Loan"). Upon closing, the BOACFC Loan replaced the Company's facility with
     Finova and paid off the DSC Note in full. Simultaneously with this
     re-financing DSC secured certain over advances on the revolver portion for
     a period of one year. The security took the form of a $150,000 cash
     deposit. DSC was paid a commitment fee, received interest on the cash
     deposit and earn interest when the cash deposit is at risk. Effective
     October 2, 2000 the loan agreement with BOACFC was purchased by Wells Fargo
     Business Credit, Inc. ("Wells Fargo").

Proposed Transaction:
--------------------

In October 2000 Danzer announced it was in discussions with Canron Corporation
("Canron") about entering into an agreement in which Danzer would acquire
Canron. The transaction, as currently proposed, would result in Canron
shareholders owning approximately 91% of the fully diluted equity interests of
Danzer if all Canron shareholders accepted the offer. Notwithstanding continuing
discussions between the parties with regard to the proposed transaction, the
parties have not executed or delivered definitive documentation. Although
Danzer, Canron and certain of the principal securityholders of Canron expect to
continue to discuss the possibility of combining the businesses of Danzer and
Canron, no assurance can be given regarding the ultimate likelihood that a
definitive agreement with regard to such a transaction will be executed and
delivered, what the material terms of such an agreement might be, or if the
transactions contemplated in any such agreement will ever be consummated. It is
likely that any definitive agreement relating to the combination of the
businesses of Canron and Danzer will be subject to the satisfaction of
conditions precedent, including the obtaining of necessary consents, including
consents of third party lenders and the like, the truthfulness of
representations and warranties by the parties to any such definitive agreement,
the absence of material litigation or claims and other conditions precedent
common in such transactions. Canron, headquartered in Oak Brook, Illinois, is a
leading steel fabricator and erection company with approximately $220 million in
gross revenues. Canron is controlled by Robert F. Smith, former Vice Chairman of
USA Waste Services, Inc. (now Waste Management, Inc.).

Description of the Business:
---------------------------
Danzer is a holding company and through DII, its sole operating subsidiary,
engages in the manufacturing and marketing of specialized truck bodies,
platform/stake bodies, and toolboxes for the service and utility markets. The
DII business can be broken down into two general categories: private label
products which are sold directly to the Company's largest customer; and
proprietary products which are marketed under the Company's Morrison brand,
which are sold through the Company's internal sales force to a network of
value-added distributors throughout the United States. Sales of the private
label products to the Company's primary customer represent the largest portion
of the Company's business, accounting for 56.7% of sales in fiscal 2000.

Management believes the service and utility portion of the commercial truck body
market may be growing at a faster rate based on information from the American
Institute of Service Body Manufacturers. In addition, management believes
downstream users such as cable, utility and media service providers are making
and will continue to make large capital investments in their own infrastructures
to ensure their ability to compete in newly deregulated markets. These factors
are the primary reasons why the Company shifted its strategy in 1997 to focus
solely on the service and utility truck body market.

                                     PAGE 5

<PAGE>

Manufacturing Capabilities:
--------------------------

The Company's manufacturing activities are located at DII's operating facility
in Hagerstown, Maryland where the Company produces truck bodies for sale under
the Morrison trademark as well as bodies built to order for other original
equipment truck manufacturers. The standard body sizes are 96, 108 and 132
inches in length and are painted with a finish paint or primer depending on
customer requirements. The Company outsources certain small parts such as door
cables, door gaskets, hinges and locks. The equipment used at the DII facility
enables the Company to fabricate certain metal products up to 1/2 inches thick.
Materials used include aluminum, stainless steel, and mild steel in both sheet
and plate. The finished bodies are shipped to customers for installation on
truck body chassis. DII offers heliarc and MIG welding, brazing, CNC, forming,
assembly, and painting services to its customers, and also maintains in-house
CAD/CAM design and engineering capabilities.

Government Regulation:
---------------------

The Company is subject to regulation by federal, state, and local agencies that
have jurisdiction over areas such as environmental and fire hazard control
issues and regulate the work place to insure safe working conditions for the
Company's employees. These regulatory bodies could take actions that would have
a material adverse affect upon the Company's ability to do business. The
business of the Company does not subject it to any special regulatory authority.

Competition:
-----------

There are a significant number of companies engaged in the manufacture of
service truck bodies in the United States. While many of these companies are
relatively small and do not possess the Company's technical capacity, a number
of its competitors are much larger and possess equal or greater technical and
financial resources. Four such competitors are: Knapheide Manufacturing Co.,
Omaha Standard, Inc., Reading Body Works, Inc., and Stahl, a Scott Fetzer Co.,
which is a wholly owned subsidiary of Berkshire Hathaway, Inc. The Company
competes with others in its industry through price and service, with price being
the most important factor, and offers truck bodies made to the individually
specified requirements of its customers.

Marketing:
---------

The Company's manufacturing operation generally markets to customers throughout
the United States. The Company sells its private label products direct and
markets its proprietary Morrison products to a network of value-added
distributors who in turn sell to municipalities, utility companies, cable
companies, phone companies and contractors. In fiscal 2000, the Company sold its
products to over 300 different distributors. The Company's internal sales force
consists of two individuals who have exclusive territories and are paid
commissions based on sales achieved by them in their respective selling areas.
Company representatives attend regional and national trade shows on a consistent
basis, and the Company also advertises regularly in trade journals and other
related publications.

Principal Customers:
-------------------
During the fiscal year ended October 31, 2000, the Company had one customer that
represented 10% or more of total net sales: Mobile Tool International, a truck
body supplier. In the year ended October 31, 2000, the Company had sales of $4.4
million to Mobile Tool, or approximately 56.7% of total revenue booked for the
year.

Manufacturing and Facilities:
----------------------------

                                     PAGE 6

<PAGE>

The Company purchases its raw materials from numerous suppliers and has not had
any difficulty in obtaining components or raw materials. DII purchases
domestically produced and imported sheet metal from a number of distributors and
is not dependent upon any particular source of supply. The Company bears the
risks of its products and systems not conforming to customer specifications, but
in most cases, defects and deficiencies are correctable. Management believes
that the Company's existing manufacturing and office facilities are adequate to
meet its present needs and anticipated growth.

Employees:
---------

As of October 31, 2000, Danzer had approximately 90 employees. Of these
employees, 21 are involved in sales, administration and engineering, and 69 are
in manufacturing of Danzer's products. Danzer has a contract through January
2003 with United Brotherhood of Carpenters and Joiners of America and believes
its employee relations are satisfactory.

Patents and Proprietary Technology:
----------------------------------

The Company does not rely on any patents, registered trademarks, or special
licenses to give it a competitive advantage. The Morrison brand name does have
brand recognition in our served markets. The Company's position in its industry
depends mainly on its ability to offer competitive pricing. The Company did not
incur, during any of its last three fiscal years, and does not contemplate
incurring, any material research and development expenses.

Insurance:
---------
The Company carries a broad range of insurance coverage which management
considers sufficient to provide acceptable levels of financial resources to
protect the employees, assets, and operations of the Company that may be
negatively affected in the event of a loss. The Company does not currently
maintain, and in the future may not choose to or may not be able to obtain,
coverage for liabilities arising from environmental damage, professional design
deficiencies or other circumstances which could arise as a result of the type of
business in which the Company engages. To date, the Company has not had
difficulty in obtaining insurance. However, if the Company should be unable to
obtain adequate insurance or should decide to operate without insurance, a
partially or completely uninsured claim against the Company, if successful and
of sufficient magnitude, could have a material adverse affect upon the Company's
business or its financial condition.

Seasonality:
-----------
The Company's business has not generally been seasonal in the past. However, the
Company has historically experienced a reduced flow of orders during late
November, December and early January. No seasonal modification of the Company's
production schedule or staffing is required under normal business circumstances.
The Company is also impacted when its customer base has difficulty obtaining
truck chassis. In the Company's October 31, 2000, fiscal year this problem was
more pronounced due to the tire shortage caused by Firestone's recall of certain
large size tires.

Warranties:
----------

In connection with most contracts for manufacture the Company warrants its
product to be free from defects in material and workmanship and performance
under normal use and service for a period of twelve months after shipment. The
obligation of the Company is generally limited to the repair or replacement of
the defective product.

Backlog:
-------

                                     PAGE 7

<PAGE>

At October 31, 2000, the Company's backlog was approximately $1,034,200 versus
$567,000 at October 31,1999. The October 31, 2000 backlog is expected to be
filled within the 2001 fiscal year.

Export Sales:
------------
No sales of goods were exported to foreign countries during the fiscal years
ended October 31, 2000 or 1999.

ITEM 2.  PROPERTIES

DII owns its principal manufacturing facility that is located in an 80,000
square foot plant on an eleven acre site in Hagerstown, Maryland, near the
intersection of two major interstate highways. Approximately 75,000 square feet
are used in manufacturing and 5,000 square feet are used as office space. This
property secures the Wells Fargo Loan.

The Company believes that its property, plant and equipment are well maintained
and adequate for its requirements. The Company also believes that all of its
assets are adequately covered by insurance.

ITEM 3.  LEGAL PROCEEDINGS

None

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

None.


                                     PART II

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

Danzer's common stock was listed on the National Association of Security Dealers
Automated Quotations System (NASDAQ) under the symbol "GLEN" until September 29,
1993 at which time the Company was "delisted". Danzer's common stock is
currently traded on the Over-the-Counter Electronic Bulletin Board under the
symbol "DNZR". The following table sets forth the high and low bid quotations
for the common stock for the fiscal quarters indicated.

Fiscal 1999
-----------
                                      High                      Low
                                    ---------                  --------
First Quarter                       $ 0.1600                  $ 0.0850
Second Quarter                      $ 0.1000                  $ 0.0850
Third Quarter                       $ 0.1600                  $ 0.0850
Fourth Quarter                      $ 0.0938                  $ 0.0600

Fiscal 2000
-----------
                                      High                      Low
                                    ---------                  --------
First Quarter                       $ 0.2000                  $ 0.0300
Second Quarter                      $ 1.1000                  $ 0.0900
Third Quarter                       $ 0.0900                  $ 0.0300
Fourth Quarter                      $ 0.4000                  $ 0.0400

The above quotations reflect inter-dealer prices, and may not include retail
mark-up, mark down or commissions and may not necessarily represent actual
transactions.

                                     PAGE 8

<PAGE>

At October 31, 2000, there were approximately 826 holders of record of Danzer's
common stock excluding the shares of its largest shareholder. Most of the shares
of the common stock are held in street name for an unknown number of beneficial
owners. To date Danzer has not paid a cash dividend on its common stock. The
payment and amount of any future cash dividends would be restricted by the
Company's lender and will necessarily depend upon conditions such as the
Company's earnings, financial condition, working capital requirements and other
factors.

ITEM 6.  SELECTED FINANCIAL DATA.

The following table sets forth certain selected consolidated financial
information concerning the Company. This information is not covered by the
independent auditor's report. For further information, see the accompanying
Consolidated Financial Statements of Danzer Corporation and subsidiary for the
years ended October 31, 2000, 1999, 1998, 1997 and 1996, and the information set
forth in Item 7, "Management's Discussion and Analysis of Financial Condition
and Results of Operations", and in Item 8, "Financial Statements and
Supplementary data" below.

The following information is a summary of the consolidated financial statements
of the Company included elsewhere and should be read in connection with such
consolidated financial statements.
<TABLE>
<CAPTION>

Operating Data:                         Year Ended October 31,
---------------                         ----------------------
                               (Amounts in thousands, except per share data)

                                           2000      1999      1998     1997      1996
                                           ----      ----      ----     ----      ----

<S>                                        <C>       <C>       <C>      <C>       <C>
Net sales                                  $7,706    $6,580    $7,605   $8,762    $8,154
Income (loss) from operations                 313       478       391    (226)     (420)
Income (loss) from continuing                 210       294       175    (323)     (502)
operations
Income (loss) from discontinued             -         -         -         -        (210)
operations
Income (loss) from sale of  Rage Inc.       -         -         -         -        (215)
Net Income (loss)                             210       294       175    (323)     (928)
Net income (loss) per share and
fully-diluted
Net income (loss) per share
attributable to common shareholders
Continuing Operations                         .01       .02       .01    (.02)     (.32)
Discontinued Operations                     -         -         -         -        (.09)
Loss on Disposal                            -         -         -         -        (.09)
Total                                         .01       .02       .01    (.02)     (.50)
Weighted average number of shares          17,334    16,754    15,775   13,601     2,340
outstanding
</TABLE>

                                     PAGE 9

 <PAGE>
<TABLE>
<CAPTION>

Balance Sheet Data:                                           As of October 31,______________
-------------------                         -------------------------------------------------

                                2000                 1999                  1998                 1997                  1996
                                ----                 ----                  ----                 ----                  ----
<S>                          <C>                   <C>                  <C>                   <C>                   <C>
Working capital              $  58,017             $(383,606)           $(263,665)            $ 132,578             $(401,536)
(deficiency)
Total assets                 3,385,866             3,300,996            3,558,497             3,723,463            4,306,496
Long-term debt,              1,549,457             1,768,003            2,065,149             2,177,145            1,888,907
including  current
portion
Stockholders' equity           935,568               714,567              247,055                71,815               207,056
(deficiency)
</TABLE>



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The following discussion and analysis of the financial condition and results of
operations of the Company should be read in conjunction with the audited
financial statements and related notes of the Company included elsewhere in this
report. This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this Annual Report on Form 10-K contain
forward-looking statements that involve risks and uncertainties. The Company's
ability to increase sales depends on many factors not within the Company's
control including planned capital expenditures by end users, general economic
conditions and pricing policies by competitors. Additionally, the Company is
dependent on sales to one purchaser that represented 56.7% of total sales in the
twelve month period ending October 31,2000. The Company's decision to focus
exclusively on truck body sales also increases the risk of selling to only one
industry segment.

The preparation of financial statements in conformity with generally accepted
accounting principles requires Management to make estimates and assumptions that
affected the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. As a
result, the actual results realized by the Company could differ materially from
the results discussed in or contemplated by the forward-looking statements made
herein. Words or phrases such as "will," "expect," "believe," "intend,"
"estimates," "project," "plan" or similar expressions are intended to identify
forward-looking statements. Readers are cautioned not to place undue reliance on
the forward-looking statements made in this Annual Report on Form 10-K.

Results of Operations
---------------------
Fiscal 2000 Compared to Fiscal 1999

For the twelve-month period ending October 31,2000 the Company reported sales of
$7,706,000. This represented a $1,126,000 increase or 17.1% higher than the
$6,580,000 in sales recorded for the 1999 fiscal year. The primary increase was
an increase on the company's proprietary line of Morrison products by $915,000
or 37.8% increase to $3,337,000 for the 2000 fiscal year, versus Morrison sales
of $2,422,000 for the 12 month period ended October 31, 1999. This increase was
a growth in served markets and a change in personnel calling on our clients.
Additionally, platform/stake body/topper assemblies and a line of tool boxes
introduced as new products during fiscal 1999 were available to customers for
all of fiscal 2000. Sales of these items totaled $360,000 in fiscal 2000 and
$156,000 in fiscal year 1999. Management continues to try to improve its field
personnel responsible for calling on its customer base. Sales to our largest
customer increased $390,000 or 9.8% over 1999 results due to further integration
in the customer's product lines.

                                    PAGE 10
<PAGE>


The fourth quarter generated adjusting entries to the financial statements of
approximately $182,000. These adjustments were due to the Company's reduction in
accounting accruals resulting from control policies and a better overall
understanding of the Company's need in markets it serves. Management will
continue to implement programs to reduce costs and enhance operating efficiency
in the 2001 fiscal year.

As the company began operating for fiscal year 2000 our most important goals
continued to be improved plant manufacturing controls and to increase our
Morrison sales volume. These objectives were achieved in fiscal 2000 by the
hiring of key operating personnel who understand material control and proper
productions planning systems.

The Morrison sales volumes did increase by $915,000 over fiscal 1999 which
represents a 37.8% overall increase in the product line through the combined
efforts of the CEO and the replacement of a sales person in our central
division. Today the company is still operating with a sales force of three
commission sales agents. The Company has completed its new product literature
and has expanded its advertising campaign. In Fiscal 2001 the company will
continue to pursue larger accounts to reduce Danzer's dependence on its largest
customer.

Gross profits for the twelve months ended October 2000 totaled $1,687,461 a
14.6% increase in comparison to the gross profit of $1,471,912 realized for the
1999 fiscal year. Gross profit margins were flat at 22% in fiscal 1999 and in
fiscal 2000. Management expected to experience an increase in gross profit
margin, but higher material costs, labor cost and production problems kept this
from occuring. The company increased prices on some of the Morrison line items
twice in fiscal 2000. The company did not increase prices on the majority of the
product sent to its largest customers for fiscal 2000, but has put in place an
increase for product shipped after December 31, 2000. The Company is also
focusing on certain manufacturing processes in an effort to improve gross profit
margins.

The Company dramatically increased its selling, general and administrative
expenses in fiscal year 2000. In comparison to the Company's 1999 results,
selling, general and administrative expenses were $1,374,513 a 38% increase from
the $993,495 in like expense for the twelve months ended October 31, 1999. This
increase resulted from the increase in sales volume, an unusual high rate of bad
debt expense which included a major distributor filing bankruptcy, and
additional recruitment expense incurred due to turnover of professional
employees. Interest expense decreased by $31,369 to $196,434 a reduction of
13.8% for the twelve months ended October 31, 2000 in comparison to fiscal year
1999. This reduction was the direct result of the conversion of the Fremont
Financial Corporation Loan to Bank of America/Wells Fargo.

Fiscal 1999 Compared to Fiscal 1998

For the twelve month period ending October 31,1999 the Company reported sales of
$6,580,000. This represented a $1,026,000 decrease, or 13.5%, from the
$7,605,000 in sales recorded for the 1998 fiscal year. The primary reason for
this decrease was a reduction in the number of truck bodies sold to the
Company's largest customer. The Company believes that sales to its largest
customer will increase in fiscal 2000 from fiscal 1999 levels.

Truck body sales on the Company's proprietary line of Morrison products
increased $822,000, or 29.8%, to $2,422,000 for the 1999 fiscal year, versus
Morrison sales of $1,600,000 for the twelve month period ended October 31, 1998.
This increase was a result of continued growth in our served markets, a more
focused marketing approach that expanded the number of distributors carrying our
products from 530 to 575 and an expansion of the Morrison product line. A
platform/stake body and a line of toolboxes were introduced as new Morrison
products during the 1999 fiscal year that generated $156,000 in sales.
Management believes it can obtain substantial sales growth in fiscal 2000 from
the growth inherent in the Company's served market, as well as from additional
product offerings.

                                    PAGE 11

<PAGE>


The fourth quarter generated adjusting entries to the financial statements of
approximately $422,000. These adjustments are partially due to the Company's
reduction in its bad debt reserve and other accounting accruals which were
reduced as a result of internal control policies and a better overall
understanding of the Company's needs in the markets it serves. Management will
continue to implement programs to reduce costs and enhance operating efficiency
in the 2000 fiscal year.

As the Company began operating for fiscal year 1999, management had as two of
its most important goals to improve manufacturing controls within the plant and
build Morrison sales volumes by $1 million in an effort to reduce Danzer's
dependence on its largest customer. The manufacturing objective was achieved
through the hiring of Mr. Rudy Temple, the Company's new Director of Operations.
Mr. Temple brings over 20 years of manufacturing experience and executive
management skills to the Company.

Although Morrison sales volume did not increase by $1 million, additional
efforts spent by CEO Mel Williams to sell to large accounts, together with new
products and a new incentive program for marketing personnel allowed the Company
to increase its Morrison volume from $1.6 million to $2.4 million. Although the
Company had hired a national sales manager in 1998 and anticipated expanding its
sales force in fiscal 1999, the national sales manager was ultimately dismissed
and the slowdown in units sold to the Company's largest customer caused Danzer
to put its plan to expand the sales force on hold. Today, the Company maintains
its force of three commissioned sales agents. In fiscal 2000, the Company plans
to publish all new product literature, expand its advertising, participate in
the major NTEA trade show in February 2000 and refine the positioning and makeup
of its sales force. We are also planning to implement a price increase early in
fiscal year ending October 31, 2000.

Gross profits for the twelve months ended October 31, 1999 totaled $1,471,912, a
24% decrease in comparison to the gross profit of $1,941,020 achieved for the
1998 fiscal year. Gross profit margins also declined from approximately 25% in
fiscal 1998 to 22% in fiscal 1999 primarily as a result of the lost revenue from
our biggest customer plus slightly higher material and labor content on the
Morrison product line.

The Company dramatically decreased its selling, general and administrative
expenses in fiscal year 1999. In comparison to the Company's 1998 results,
selling, general and administrative expenses were $993,495, a 36% decrease from
the $1,550,205 in like expense experienced for the twelve months ended October
31, 1998. This reduction resulted primarily from the elimination of a portion of
the Company's administrative work force in response to the change in timing of
purchase orders from Danzer's largest customer, together with reduced volumes of
units ordered from that customer, in the first two quarters of 1999. In addition
to streamlining the administrative work force and operations in general, the
Company was more efficient in the second two quarters of 1999, once production
became more in line with historical results.

Interest expense increased by $27,277 to $227,803, a rise of over 14%, for the
twelve months ended October 31, 1999 in comparison to fiscal year 1998. This
increase was the result of a negotiated change to the DSC Note, together with a
$25,000 loan advanced by Renaissance, the Company's majority shareholder, in an
effort to help the Company's cash flow during the second quarter.

In the period ending October 31, 1998 the Company reported a loss from
discontinued operations of $30,380 due to the sale of the Airline product line
and winding down of the Schindler Elevator business, while no such losses were
taken in fiscal 1999. For the twelve-month period ending October 31, 1999 the
Company reported net income of $294,170 versus net income of $175,240 in the
twelve months ending October 31, 1998, which profit increases were largely
attributable to the Company's improving efficiency in reducing selling, general
and administrative expenses.

Liquidity and Capital Resources
-------------------------------
During the twelve-month period ending October 31, 2000, the Company increased
its working capital significantly. At October 31, 1999 the Company had a working

PAGE 12

<PAGE>

capital deficiency of $201,954. Working capital improved to a positive $259,971
at October 31, 2000. The increase in working capital of $441,623 was primarily a
result of the reduction of the current portion of long term debt by $273,915.
This reduction was a result of securing a new lender and utilizing a portion of
the Company's cash flow to fund operations.

The Company continues to make good strides, in fiscal 2000 the debt to equity
ratio ended the year at approximately 262%. This is a reduction from a debt to
equity ratio of over 362% in fiscal 1999. Even with this improvement the Company
still relies heavily on its working capital line of credit and insider financing
to support its operations. This condition is representative of operations which
have a weakened financial condition due to the high presence of debt relative to
its shareholders' equity. Management believes, however, if its operations
continue on a normal basis, the Company will have adequate cash resources to
meet its operating needs and financial obligations as they come due.

Investing activities utilized $78,187 in cash in fiscal 2000. Capital
expenditures were made to purchase paint booth, computers and CAD software.

The Company and Banc of America Commercial Finance Corporation ("B of A")
entered into a financing agreement effective January 21, 2000 whereby B of A
loaned the Company $600,000 pursuant to a 7-year term loan secured with mortgage
on its plant and a $1.5 million working capital facility secured with a pledge
of the Company's accounts receivable and inventory. These loans were sold to
Wells Fargo Business Credit, Inc. by B of A effective October 2, 2000. At
October 31, 2000 the availability under the working capital facility was
$168,687. The Company believes it was in compliance with all loan covenants
since the inception of the January 21, 2000 loan agreement.

In light of the Company's backlog at October 31, 2000, its projected cash flow
from operations, the market for the Company's products, its reliance on a single
customer for approximately 56% of its sales, and the amount of debt on the
balance sheet, it is anticipated that the Company may need increased sales, and
increase in its profit margin in order to sustain its operations. The Company's
ability to meet certain interest and principal payments, as well as its working
capital needs to execute its backlog and generate sales volume during fiscal
2001, will be dependent upon the success of the Company's efforts to increase
sales volume and improve its gross profit margin.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See "Index to Consolidated Financial Statements on page F- below.


ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information with respect to all of the directors
of the Company.

                                    PAGE 13
<PAGE>


                                    Position with             Director
Name                       Age      Company                   Since
----                       ---      --------                  ---------

Goodhue W. Smith, III      51       Director                  1997

Russell Cleveland          62       Director                  1991

M.E. Williams              61       Director                  1999


Russell Cleveland, a chartered financial analyst, became director of the Company
on April 26, 1991. Mr. Cleveland has for the past eight years been a director,
officer and shareholder of Renaissance Capital Group, Inc., which was the
managing general partner of Renaissance, formerly a business development company
pursuant to the Investment Company Act of 1940. Mr. Cleveland currently serves
on the Board of Directors of Bentley Pharmaceuticals, Inc., Renaissance Capital
Growth & Income Fund III, Inc., Renaissance U.S. Growth & Income Trust, PLC and
Tutogen Medical, Inc. See "Item 13- Certain Relationships and Related
Transactions" herein.

M.E. Williams is the President and Chief Executive Officer of Danzer. Mr.
Williams has over 30 years of experience in manufacturing and 7 years of truck
body manufacturing experience. He was hired as President and Chief Executive
Officer in March 1998 and replaced Mr. William L. Pryor, III as a member of the
Company's Board of Directors in 1999.

Goodhue W. Smith III founded Duncan-Smith Co., an investment banking firm in San
Antonio, Texas, in 1978 and has since such time served as its Secretary and
Treasurer. Mr. Smith is also Director of Citizens National Bank of Milam County,
and Ray Ellison Mortgage Acceptance Co.

Executive Officers

The Company's executive officers are appointed by the Board of Directors and
hold office at the pleasure of the Board until successors are appointed and have
qualified.

Compliance with Section 16 (a) of the Securities Exchange Act of 1934
Section 16 (a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers, and persons who own more than ten percent of the
Company's Common Stock ("10% Shareholders") to file reports of Ownership and
reports of changes in ownership of the Company's Common Stock with the
Securities Exchange Commission ("SEC"). Officers, Directors and Shareholders are
required by SEC regulation to furnish the Company with copies of all forms they
file under Section 16 (a). Based solely on its review of the copies of such
forms received by it with respect to its fiscal year ended October 31, 2000 and
written representations from certain reporting persons that no other reports
were required to those persons, the Company believes that all Section 16 (a)
filing requirements applicable to its officers, directors and 10% Shareholders
were complied with.

ITEM 11.     EXECUTIVE COMPENSATION

Summary and Compensation Table

         The following table sets forth certain information concerning the
compensation paid or accrued by the Company for services rendered during the
Company's fiscal year ended October 31, 2000 and 1999 by the named officers.

                                    PAGE 14

<PAGE>
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                          Annual ($) Compensation
                                    -------------------------------------------
                                                                                        Common
Name and Principal         Fiscal   Salary      Other Annual       All Other             Stock Options
       Position            Year       ($)       Compensation(1)   Compensation(2)            (Shares)
--------------------------------------------------------------------------------------------------

<S>                        <C>      <C>            <C>              <C>                  <C>
M.E. (Mel) Williams (3)    1999     $105,000       $8,386               0                125,000
CEO                        2000      107,609        9,375           3,125

Terry Moore                1999     $ 69,000       $7,667               0
CFO                        2000       54,464        6,750           2,250

Kirby McLaughlin (4)       1999     $ 65,000       $7,188               0                 75,000
Vice President of          2000       66,910        5,212           1,625
Engineering

Mark McGlaughlin           2000     $ 18,250            0               0                      0
CFO
</TABLE>

(1)      Represents cash bonuses paid for fiscal 1999 and 2000.
(2)      Represents bonus paid in stock at $0.05 per share.
(3)      125,000 of Mr. William's options are exercisable at $0.05 per share at
         any time on or before December 2002.
(4)      Mr. McLaughlin's options are exercisable at $0.05 per share at any time
         on or before December 2002.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal year end
Option/SAR Values

The Company had 1,137,500 options outstanding at October 31, 2000. 337,500
options are exercisable at $0.10 per share and expire in October and November
2001 and 600,000 options are exercisable at $0.10 per share and expire April
2004, and 200,000 options are exercisable at $0.05 per share and expire December
2002.

The Company maintains a Stock Option Plan (the "Plan") under which options of
purchase 800,000 shares of the Company's Common Stock, par value $.0001 per
share, have been reserved. Pursuant to the Plan, the Company is permitted to
issue incentive stock options ("Incentive Stock Options") and non-qualified
stock options ("Non-Qualified Stock Options") to employees or directors of the
Company; provided, however, that no incentive Stock Options shall be granted to
a non-employee director. Incentive Stock Options under the Plan are intended to
qualify for the tax treatment accord under Section 422A of the Internal Code of
1986, as amended (the "Code). Non-Qualified Options under the plan are intended
to be options which do not qualify for the tax treatment accorded under Section
422A of the Code.

All directors and key employees of the Company and its subsidiaries are eligible
to participate in the Plan. The Plan is administered by the Board of Directors
of the Company which, to the extent it determines, may delegate its power with
respect to the administration of the Plan to a compensation advisory committee
consisting of not less than three members, at least of whom two shall be
directors for the Company.

Under the Plan, Incentive Stock Options to purchase shares of the Company's
Common Stock may not be granted for less than 100 percent of fair market value
of the Common Stock on the date the Incentive Stock Option is granted; provided,
however, that in the case of an Incentive Stock Option granted to any person
then owning 10 percent of the voting power of all classes of the Company's
stock, the Purchase Price per share of all classes of the Company's stock, the
Purchase Price per share subject to the Incentive Stock Option may not be less
than 110 percent of the fair market value of the stock on the date of the grant
of the option. The option price per share with respect to each Non-Qualified
Stock Option granted under the Plan is to be determined by the Board of
Directors, but may not be less than 85% of the fair market value of the Common
Stock on the date the Non-Qualified Stock Option is granted.

                                    PAGE 15

<PAGE>

Options under the Plan may not have a term of more than 10 years; provided,
however, that an Incentive Stock Option granted to a person then owing more than
10 percent of the voting power of all classes of the Company's stock may not be
exercised more than 5 years after the date such option is granted. In addition,
the aggregate fair market value, determined at the time the options granted, of
the stock with respect to which Incentive Stock Options are exercised for the
first time by an employee in any calendar year under the Plan may not exceed
$100.00.

Compensation of Directors

Directors who are not employees of the Company are entitled to a board meeting
attendance fee of $750 plus reimbursement of expenses. The directors waived all
of these fees for the years ending October 31, 1999 and October 31, 2000.

Goodhue W. Smith, III who was elected as Chairman of the Board at the Company's
December 15, 1997 Board meeting as a requirement under financing provided by
Duncan-Smith Co., of which Mr. Smith is an officer and director, is to be paid
$1,500 per month as compensation.

Employment Agreements

None.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


The following table sets forth, as of October 31, 2000 information concerning
the shares of the Company's Common Stock beneficially owned by (a) each person
or group known to the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Common Stock, (b) each director and nominee, and (c)
all directors and officers as a group. The outstanding voting securities of the
Company as of the record date consisted of 17,588,348 shares of common stock.
Except as otherwise indicated, each person named or included in a group has sole
voting and investment power with respect to his or its shares of Common Stock.

Name and Address of Beneficial      Amount and Nature of         Percent
Owner or Identity of Group          Beneficial Ownership         of Class (1)
--------------------------          --------------------         ------------


Renaissance Capital Partners, Ltd.       11,719,110                 62.0%
8080 N. Central Expressway,
Suite 210, LB 59
Dallas, TX  75206-1857

Richard W. Snyder                         1,946,667                 10.3%
c/o Snyder Capital Corporation
3219 McKinney Ave.
Dallas, TX 75204

Melvin E. Williams                          971,206 (2)              5.1%
17500 York Road
Hagerstown, MD 21740

Russell G. Cleveland                     11,807,110 (3)             62.5%
c/o Renaissance Capital Group, Inc.
8080 N. Central Expressway,
Suite 210, LB 59
Dallas, TX  75206-1857

                                    PAGE 16

<PAGE>

Goodhue W. Smith, III                       813,334 (4)              4.3%
c/o Duncan-Smith Co.
311 Third
San Antonio, Texas  78205

(1) Common Stock which is not outstanding but which a person has a right to
acquire within 60 days of the record date are considered as Common stock
outstanding for purposes of computing the percentage of Common Stock owned by
such person, but such Common stock is not deemed outstanding for purposes of
computing the percentage of Common Stock owned by any other person. The number
of shares used to compute percentage ownership were the shares outstanding at
December 31, 2000, which shares equaled 18,897,515.

(2) Includes 882,500 options to purchase common stock at prices ranging from
$0.05 to $0.10 per share.

(3) Mr. Cleveland owns 88,000 shares individually. Mr. Cleveland is a director,
officer and principal shareholder of Renaissance Capital Group Inc. which was
formerly the managing general partner of Renaissance Capital Partners, Ltd., and
through the Irrevocable Proxy Agreement (described below in the section entitled
"Changes in Control") temporarily has voting control over such shares.

(4) Duncan-Smith Co. owns warrants to purchase 650,000 shares of the Company's
common stock at $0.25 per share on or before August 2002. Duncan-Smith Co. owns
116,667 shares of common stock. Mr. Smith is a principal of Duncan-Smith Co. and
may be deemed to share voting and investment control over such shares.

Changes in Control

Renaissance Capital Partners, Ltd. acquired control of the company on December
31, 1994, pursuant to a Purchase Agreement with the Company (the "Purchase
Agreement") under which Renaissance exchanged $1,600,000 principal amount of the
Company's 12.5% Convertible Debentures (the "Debentures") for 16,000 shares of
the Company's Series B Preferred Stock. The Company also issued Renaissance a
10% Term Note originally due December 31, 1997 in the principal amount of
$211,635.40 (representing interest on the Debentures accrued through September
30, 1994) and paid Renaissance $50,000 (representing interest on the Debentures
from October 1, 1994 through December 31, 1994). At October 31, 1996,
Renaissance converted all of its Preferred Stock, accumulated dividends,
accumulated interest and note payable to common stock at a conversion rate of
$0.25 per share.

As described in Item I above, the Company has received a proposal from Canron to
enter into an agreement pursuant to which the Company would acquire not less
than a majority of the issued and outstanding equity securities of Canron in
exchange for convertible preferred stock of the Company. Although no definitive
agreement between Canron and Danzer has been executed or delivered, it is
expected that any such agreement will contemplate, among other things, that a
shareholders meeting of Danzer will be called to approve a reverse split (the
"Reverse Split") of the Common Shares. In order to facilitate such approval,
Canron, in connection with its continuing discussions with Danzer, has required
that Mr. Cleveland serve as the proxy for the Common Shares formerly owned by
Renaissance Capital Partners, Ltd. ("Renaissance"). Accordingly, an Irrevocable
Proxy Agreement was entered into among Mr. Cleveland, Renaissance and the
Company, which granted an irrevocable proxy (the "Proxy") to Mr. Cleveland to
vote 11,719,110 shares. Although Mr. Cleveland is not contractually obligated to
do so, he currently expects to vote all shares subject to the Proxy in favor of
any transaction approved by the Company's Board of Directors and submitted to
the Company's shareholders.

                                    PAGE 17

<PAGE>

Under the terms of the Proxy dated December 22, 2000 among the Company,
Renaissance and Mr. Cleveland, Mr. Cleveland will vote the Common Shares subject
to the Proxy as he shall determine to be in the best interest of the Company in
connection with any regular or special meeting of shareholders of the Company or
in connection with any solicitation of consents or proxies from shareholders of
the Company occurring during the term of the Proxy. Specifically, Mr. Cleveland
will vote all shares subject to the Proxy in favor of the approval or
ratification of any amendment or amendments to the Articles of Incorporation of
the Company proposed by the Company or its Board of Directors at any time prior
to the first anniversary of the Proxy and relating to (i) any change in the
capital stock of the Company, including, but not limited to, the Reverse Split
or any similar transaction, (ii) any increase or decrease in the authorized
capital stock of the Company, including, but not limited to, any increase in the
authorized shares of Common Shares issuable by the Company, (iii) any change in
the name of the Company or (iv) any other matter recommended by the Board of
Directors of the Company. In the event of the death or incapacity of Mr.
Cleveland, the powers vested in him pursuant to the Proxy shall be vested in his
executor.

The Proxy shall end on the first to occur of (i) the second business day
following the final adjournment of the next regular or special meeting of the
shareholders of the Company; (ii) the consummation of the Reverse Split as a
result of the filing of Articles of Amendment to the Articles of Incorporation
of the Company; (iii) the first anniversary of the Proxy or (iv) the second
business day following delivery of written notice by Mr. Cleveland to the
Company of such termination, if such notice is delivered following June 1, 2001.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On December 31, 1994, Renaissance exchanged its Convertible Debenture for 16,000
shares of the Company's Series B Preferred Stock. The Company also issued
Renaissance a 10% Term Note due December 31, 1996 in the principal amount of
approximately $211,635 for unpaid accrued interest on the Debentures and paid
Renaissance $50,000 (representing interest on the Debentures from October 1,
1994 through December 31, 1994). See Item 12 - "PRINCIPAL SHAREHOLDERS - Changes
in Control".

On October 31, 1996, Renaissance converted all of its Preferred Stock,
accumulated dividends, accumulated interest and note payable to common stock at
a conversion rate of $0.25 per share.

On August 1, 1997, the Company entered into a loan agreement with Duncan-Smith
Co., Trustee, for purposes of executing the DSC Note. Terms of the $650,000 loan
included an interest rate of 11% with payments due quarterly and a final
notoriety on June 15, 2002. Duncan-Smith Co. received a cash fee of $32,500 and
a warrant to purchase 650,000 shares of common stock at $0.25 per share with an
expiration date of August 2002. Subsequently, Goodhue W. Smith, III, a director
and officer of Duncan-Smith Co., was elected Chairman of the Board. In February
1999, Duncan-Smith Co. agreed to temporarily defer principal repayments on the
DSC Note for February and May 1999. In consideration, the Company agreed to
increase the interest rate to 13% until the Company could catch up on the
original payment schedule. Effective January 21, 2000, the Company entered into
the BOACFC Loan and paid down the DSC Note in full.

In December 1997, Renaissance agreed to loan the Company $150,000 pursuant to a
10% promissory note secured by substantially all of the assets of the Company.
In February 1999, Renaissance converted the entire $150,000 principal balance on
the note, plus $17,532 in accrued interest, into 1,675,318 shares of the
Company's common stock, a rate of $0.10 per share.

In February 1999, and in conjunction with the agreement by the DSC Note Holders
to defer principal repayments to the Company, Renaissance lent Danzer $25,000
pursuant to a 13% promissory note maturing December 31, 1999. All principal and
interest were paid to Renaissance as of February, 2000.

                                    PAGE 18

<PAGE>



                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                  ON FORM 8-K.

(a) Documents filed as part of this Annual Report on Form
     10-K:

         (1) Financial Statements.
             --------------------

         See "Index to Consolidated Financial Statements and Financial Statement
         Schedules" on page F-1 herein.

         (2) Financial Statement Schedules Required to be Filed by Item 8 on
         this Form.

                  None

         (3) Exhibits.
             --------
<TABLE>
<CAPTION>
                                                                        Incorporated by Reference
         Exhibit No.       Description                                  or Filed Herewith
         ----------        -----------------------------------          -----------------
<S>      <C>               <C>                                          <C>
         3(i)(a)           Certificate of Incorporation as              Incorporated by reference to
                           amended through   August 18, 1994            Exhibit 3(i) to Registrant's Form
                                                                        10-Q for the period ended July 31, 1994

         3(i)(b)           Certificate of Amendment to Certificate      Incorporated by reference to
                           of Incorporation filed December 30,1994      Exhibit 4.1 to Registrant's Form 8-K
                                                                        dated December 31, 1994

         3(ii)             By Laws                                      Incorporated by reference to
                                                                        Exhibit 3.3 to the Registration
                                                                        Statement on Form S-18 (No.33-18636-NY)
                                                                        (the "Registration Statement").

         4(a)              Stock Certificate                            Incorporated by reference to
                                                                        Exhibit 4.1 to the Registration Statement.

         4(b)              Certificate of                               Incorporated by reference to
                           Amendment to Certificate                     Exhibit 4 of Registrant's Form
                           of Incorporation filed                       10-Q for the period ended
                           August 18, 1994 (with terms of               July 31, 1994.
                           10% Senior Preferred Stock)

         4(c)              Certificate of                               Incorporated by reference to
                           Amendment to Certificate                     Exhibit 4.1 to Registrant's Form
                           of Incorporation filed                       8-K dated December 31, 1994.
                           December 30, 1994 (with terms
                           of Series B Senior Preferred Stock)

         10(a)             Employment                                   Incorporated by reference to
                           Agreement dated                              Exhibit 10(c) to Form 10-K
                           April 16, 1991, between                      Report dated January 28, 1993.
                           Global Environmental Corp.
                           and William V. Rice

                                    PAGE 19
<PAGE>

         10(b)             Global                                       Incorporated by reference to
                           Environmental Corp.                          Exhibit 10(j) to the October
                           Stock Option Plan                            31, 1990 Form 10-K.

         10(c)             Mortgage Note and                            Incorporated by reference to
                           Mortgage Agreement                           Exhibit 10(k) to the October
                           dated April 3, 1990 of Global                31, 1990 Form 10-K.
                           Environmental Corp.
                           with Continental Bank

         10(d)             Convertible                                  Incorporated by reference to
                           Debenture Agreement                          Exhibit 10(c) to Form 10-K
                           in the amount of                             Report dated January 28, 1993.
                           $1,250,000 dated April 25, 1991
                           between Global Environmental
                           Corp. and Renaissance Capital
                           Partners, Ltd.

         10(e)             First Amendment                              Incorporated by reference to
                           dated December 30,                           Exhibit (10j) to Form 10-K
                           1992 to Convertible                          Report dated January 28, 1993.
                           Debenture Agreement in the amount of
                           $1,250,000 dated April 25, 1991
                           between Gobal Environmental Corp.
                           and Renaissance Capital Partners, Ltd.

         10(f)             Convertible                                  Incorporated by reference to
                           Debenture Agreement                          Exhibit (10k) to Form 10-K
                           in the amount of                             Report dated January 28, 1993.
                           $350,000 dated December 30, 1992
                           between Global Environmental Corp.
                           and Renaissance Capital Partners, Ltd. II

         10(g)             Loan and Security                            Incorporated by reference to
                           Agreement dated                              Exhibit 10(h) to Form 10-K Report
                           May 28, 1993 between                         dated January 28, 1994.
                           Danzer Metal Works Co.
                           and Fremont Financial Corporation

         10(h)             Asset purchase                               Incorporated by reference to
                           agreement dated                              Exhibit 10() to Form 10-K Report
                           August 25, 1993 between                      dated January 28, 1994.
                           Morrison Industries L.P.
                           and Global Environmental Corp.

         10(I)             Joint Venture                                Incorporated by reference to
                           Agreement dated                              Exhibit 10(j) to Form 10-K Report
                           December 31, 1993                            dated January 28, 1994.
                           between Global Environmental
                           Corp. and Cadema Corporation.

                                    PAGE 20

<PAGE>

         10(j)             Equipment Purchase and                       Incorporated by reference to
                           Security Agreement dated                     Exhibit 10(k) to Form 10-K Report
                           September 17, 1993                           dated January 28, 1994.
                           between U.S. Amada, Ltd.
                           and The Danzer Metal Works Co.

         10(k)             Equipment Purchase and                       Incorporated by reference to
                           Security Agreement dated                     Exhibit 10(l) to Form 10-K Report
                           September 17, 1993                           dated January 28, 1994.
                           between U.S. Amada, Ltd.
                           and The Danzer Metal Works Co.

         10(l)             Equipment Purchase and                       Incorporated by reference to
                           Security Agreement dated                     Exhibit 10(m) to Form 10-K
                           September 17, 1993                           Report dated January 28, 1994
                           between U.S. Amada, Ltd.
                           and The Danzer Metal Works Co.

         10(m)             Purchase Agreement                           Incorporated by reference to
                           dated December 31,                           Exhibit 99.1 to Registrant's Form
                           1994 between Global                          8-K dated December 31, 1994.
                           Environmental Corp. and
                           Renaissance Capital
                           Partners, Ltd. to exchange
                           $1,600,000 of Convertible
                           Debentures for 16,000 Series B
                           Cumulative Convertible Senior
                           Preferred Stock.

         10(n)             10% Term Note in                             Incorporated by reference to
                           principal amount of                          Exhibit 10(n) to Registrant's Form
                           $211,635 due December 31, 1997.              8-K dated December 31, 1994

         10(o)             Loan and Security Agreement                  Incorporated by reference to
                           dated June 23, 1995 between                  Exhibit 10(o) to Form 10-K
                           Danzer Metal Works Co.                       dated April 1, 1996
                           and Fremont Financial Corporation

         10(p)             Mortgage Note and                            Incorporated by reference to
                           Mortgage Agreement                           Exhibit 10(p) to Form 10-K
                           dated January 25, 1996 of Global             dated April 1, 1996
                           Environmental Corp.
                           with Midlantic Bank

         10(q)             Loan and Security Agreement                  Incorporated by reference to
                           dated May 1, 1996,  between                  Exhibit 10(q) to Form 10-K dated
                           Danzer Industries, Inc                       July 7, 1997
                           and Fremont Financial Corporation

         10(r)             Common Stock Purchase Agreement              Incorporated by reference to
                           between William V. Rice and the              Exhibit 10(r) Form 10-K dated
                           Company dated May 21, 1996                   dated July 7, 1997

         10(s)             Asset Purchase Agreement dated               Filed here herewith as Exhibit
                           November 14, 1997                    `       10(s)

                                    PAGE 21

<PAGE>


         21                List of Subsidiaries                         Incorporated by reference to
                                                                        Exhibit 22 to the October
                                                                        31, 1989 Form 10-K.

         (b)               Reports on Form 8-K
                           Change of Auditors Form 8-K was filed during the last
                           quarter of the fiscal year ended October 31, 1999
</TABLE>


                                    PAGE 22

<PAGE>















               Report of Independent Certified Public Accountants


Board of Directors
Danzer Corporation

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

We conducted our 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

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


/s/ Linton, Shafer & Company, P.A.
Frederick, Maryland
December 13, 2000



                                       F-1

<PAGE>

                       Danzer Corporation and Subsidiaries
                           Consolidated Balance Sheets
                            October 31, 2000 and 1999
<TABLE>
<CAPTION>

                                                                                             2000                   1999
                                                                                       ------------------       ------------
 Assets
 Current assets
<S>                                                                                           <C>                <C>
     Accounts receivable, net of allowances                                                   $  988,194         $  828,812
     Inventories                                                                                 699,524            594,698
     Prepaid expenses and other current assets                                                    38,155             52,240
                                                                                       ------------------       ------------
        Total current assets                                                                   1,725,873          1,475,750

 Property, plant and equipment, at cost, net                                                   1,517,955          1,664,072
 Other assets, including intangibles                                                             142,038            161,174
                                                                                       ------------------       ------------
 Total assets                                                                                 $3,385,866         $3,300,996
                                                                                       ==================       ============

 Liabilities and stockholders' equity
 Current liabilities
     Current portion of long-term debt                                                        $  767,015           $859,278
     Accounts payable                                                                            651,728            390,903
     Accrued salaries and wages                                                                   81,160            173,481
     Accrued expenses, other                                                                     167,953            254,042
                                                                                       ------------------       ------------
        Total current liabilities                                                              1,667,856          1,677,704

 Long-term debt, net of current portion                                                          782,442            908,725
                                                                                       ------------------       ------------
        Total liabilities                                                                      2,450,298          2,586,429

 Commitments and contingencies, see accompanying notes

 Stockholders' equity
 Common stock,  par  value  $.0001  per  share;  20,000,000  Shares  authorized,
      17,760,015 shares outstanding in 2000
      And 17,618,218 shares outstanding in 1999                                                    1,776              1,761
 Preferred stock, $.001 par value, 5,000,000 shares authorized;
      Class of 10% Cumulative Convertible Senior Preferred Stock,
          10,500 shares authorized, no shares issued or outstanding                                    -                  -
      Series B Cumulative Convertible Senior Preferred Stock,
          16,000 shares authorized, no shares issued or outstanding                                    -                  -
 Additional paid-in capital                                                                    5,232,341          5,220,971
 Accumulated deficit                                                                         ( 4,298,549)        (4,508,165)
 Less: Treasury stock, at cost, 95,579 shares in 2000 and 1999                                         -                  -
         Total stockholders' equity                                                              935,568            714,567
                                                                                                                ------------
                                                                                       ------------------       ------------
 Total liabilities and stockholders' equity                                                   $3,385,866         $3,300,996
                                                                                       ==================       ============
</TABLE>

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

                                      F-2

<PAGE>


                       Danzer Corporation and Subsidiaries
                 Consolidated Statements of Stockholders' Equity
               For the Years Ended October 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>

                                                                          2000                1999                 1998
                                                                    ------------------  ------------------   ------------------
 Common shares:
<S>                                                                      <C>                 <C>                  <C>
 Balance, beginning of year                                              $    1,761          $     1,587          $     1,587
   Conversion of Renaissance note and accrued interest into
      common stock (0 in 2000;
      1,675,318 in 1999; 0 in 1998)                                               -                  167                    -
    Shares issued under stock incentive plan (150,000
       in 2000; 72,628 in 1999; 0 in 1998)                                       15                    7                    -
                                                                    ------------------  ------------------   ------------------
 Balance, October 31                                                     $    1,776          $     1,761          $     1,587
                                                                    ==================  ==================   ==================

 Preferred shares:
 Balance, beginning of year                                              $-                  $-                   $-
                                                                    ------------------  ------------------   ------------------
 Balance, October 31                                                     $-                  $-                   $-
                                                                    ==================  ==================   ==================

 Treasury shares:
 Balance, beginning of year                                              $-                  $-                   $-
                                                                    ------------------  ------------------   ------------------
 Balance, October 31                                                     $-                  $-                   $-
                                                                    ==================  ==================   ==================

 Additional paid-in capital:
 Balance, beginning of year                                              $ 5,220,971         $ 5,047,803          $ 5,047,803
    Collection of Rage Note                                                    3,885                   -                    -
    Conversion of Renaissance note and accrued
      interest into common stock                                                    -            167,364                    -
    Shares issued under stock incentive plan                                   7,485               5,804                    -
                                                                    ------------------  ------------------   ------------------
 Balance, October 31                                                     $ 5,232,341         $ 5,220,971          $ 5,047,803
                                                                    ==================  ==================   ==================

 Accumulated deficit:
 Balance, beginning of year                                              $(4,508,165)        $(4,802,335)         $(4,977,575)
    Net income                                                               209,616             294,170              175,240
                                                                    ------------------  ------------------   ------------------
 Balance, October 31                                                     $(4,298,549)        $(4,508,165)         $(4,802,335)
                                                                    ==================  ==================   =================
</TABLE>

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

                                      F-3

<PAGE>


                       Danzer Corporation and Subsidiaries
                      Consolidated Statements of Operations
               For the Years Ended October 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>

                                                                          2000               1999              1998
                                                                    -----------------  -----------------  ----------------
<S>                                                                      <C>                <C>               <C>
 Net sales                                                               $ 7,705,833        $ 6,579,607       $ 7,605,129

 Cost of goods sold                                                        6,018,372          5,107,695         5,664,109
     Gross profit                                                          1,687,461          1,471,912         1,941,020

 Selling, general and administrative expenses                              1,374,513            993,495         1,550,205
     Income from operations                                                  312,948            478,417           390,815
                                                                    -----------------  -----------------  ----------------

 Other income (expense)
     Interest expense                                                       (196,434)          (227,803)         (200,526)
     Interest income                                                           2,070             30,106             2,922
     Other income (expense)                                                   91,032             13,450           (17,971)
                                                                    -----------------  -----------------  ----------------
       Total other income (expense)                                         (103,332)          (184,247)         (215,575)
                                                                    -----------------  -----------------  ----------------
 Net income                                                              $   209,616        $   294,170       $   175,240
                                                                    =================  =================  ================

 Basic earnings per share                                                $     0.01         $     0.02             $0.01
                                                                    =================  =================  ================

 Shares used in computation of earnings per share                         17,733,603         16,753,670        15,774,693
                                                                    =================  =================  ================
</TABLE>


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

                                      F-4

<PAGE>


                       Danzer Corporation and Subsidiaries
                      Consolidated Statements of Cash Flows
               For the Years Ended October 31, 2000, 1999 and 1998
<TABLE>
<CAPTION>

                                                                         2000              1999               1998
                                                                    ----------------  ----------------   ----------------
 Cash flows from operating activities:
<S>                                                                       <C>              <C>                <C>
 Net Income                                                               $ 209,616        $  294,170         $  175,240
 Adjustments to reconcile net income to net
     Cash provided by operating activities:
       Depreciation and amortization                                        339,283           305,983            255,792
       Provision for bad debts                                               64,570           (34,443)            44,160
       Gain on disposition of equipment                                         125                 -            (17,578)
 Changes in operating assets and liabilities:
     Accounts receivable                                                   (223,952)          148,664            418,502
     Inventories                                                           (104,826)         (112,836)           181,127
     Prepaid expenses                                                        14,199           (34,934)           (38,239)
     Other assets, net                                                         (114)           72,273           (160,000)
     Accounts payable                                                       260,825          (267,854)          (201,007)
     Accrued salaries and wages                                             (92,321)           12,000             (6,311)
     Accrued expenses, other                                                (86,089)         (123,671)           (20,892)
                                                                    ----------------  ----------------   ----------------
 Net cash provided by operating activities                                  381,316           259,352            630,794

 Cash flows from investing activities:
     Purchase of property, plant and equipment                              (78,187)          (57,745)          (104,562)
     Proceeds from sale of equipment                                              -                 -             94,000
                                                                    ----------------  ----------------   ----------------
 Net cash used in investing activities                                      (78,187)          (57,745)           (10,562)

 Cash flows from financing activities:
     Deferred financing costs                                               (61,578)          (10,000)                 -
     Net borrowings (payments) on revolving loan                           (107,592)         (105,436)          (614,388)
     Proceeds from issuance of long-term debt                               607,143           150,000            150,000
     Payments of long-term debt                                            (600,494)         (134,786)          (224,777)
     Principal payments under capital lease obligations                    (140,608)         (101,385)                 -
                                                                    ----------------  ----------------   ----------------
 Net cash used in financing activities                                     (303,129)         (201,607)          (689,165)
                                                                    ----------------  ----------------   ----------------
 Net increase (decrease) in cash                                                  -                 -            (68,933)
 Cash, beginning of year                                                          -                 -             68,933
                                                                    ----------------  ----------------   ----------------
 Cash, end of year                                                        $       -        $        -         $        -
                                                                    ================  ================   ================
</TABLE>



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

                                      F-5

<PAGE>


                       Danzer Corporation and Subsidiaries
                Consolidated Statements of Cash Flows (Continued)
               For the Years Ended October 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>

 Supplemental disclosures of cash flows information:
<S>                                                                       <C>              <C>                <C>
 Cash paid for interest                                                   $ 192,874        $  223,790         $  187,906

 Cash paid for taxes                                                      $       -        $        -         $        -


 Non-cash financing activities:
    Long-term debt incurred for the purchase of property,
      Plant and equipment                                                 $ (34,390)       $  (19,461)        $ (577,169)
    Conversion of note payable and accrued interest to
    Renaissance to common stock                                                   -           167,531                -
    Issuance of common stock as part of stock incentive
      program                                                                 7,500             5,811                -

 Non-cash investing activities:
    Purchase of property, plant and equipment via
      financing arrangements                                                 34,390            19,461            577,169

 Non-cash operating activities:
    Conversion of account receivable to note receivable                           -             8,000                  -
</TABLE>

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

                                      F-6



<PAGE>



                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 1.  Description of Business and Change of Name

Danzer Corporation (the "Company"), formerly named Global Environmental Corp.,
was incorporated on October 6, 1987. Effective August 1, 1988, the Company
acquired all of the issued and outstanding common shares of Global Environmental
Holdings, Inc. ("Global Holdings"). On October 7, 1999, the Company changed its
name from Global Environmental Corp. to Danzer Corporation.

Danzer Industries, Inc. ("DII"), a wholly owned subsidiary of Global Holdings,
fabricates metal parts and truck bodies for the service and utility markets. In
1997 and early 1998 DII also designed, manufactured and installed other types of
fabricated metal products. DII's revenues represent virtually 100% of the
Company's revenues and are generated throughout the Eastern and Midwestern
United States. DII owns a manufacturing facility located in Hagerstown,
Maryland.

In a strategic plan developed in 1997, the Company determined that its future
was in the metal fabrication business as it related to the manufacture and
distribution of truck bodies. A strategic direction was established that called
for the phase out of all business that was not associated with truck bodies.
That change in focus was completed on October 7, 1999 with the change in the
Company's name from Global Environmental Corp. to Danzer Corporation.


Note 2.  Summary of Significant Accounting Policies

The accompanying consolidated financial statements present the accounts of
Danzer Corporation and its wholly owned subsidiaries. The entities are
collectively referred to herein as the "Company." All significant intercompany
transactions and balances have been eliminated in consolidation.

The Company uses the equity method of accounting for a 49% owned interest in a
joint venture. The original investment is recorded at cost, adjusted for the
Company's share of undistributed earnings or losses. The operations of the joint
venture are presently immaterial.

Revenue Recognition

Revenues from the manufacture of utility truck bodies and sheet metal products
and fabrications are generally recognized when products are shipped to the
customer.

Fair Value of Financial Investments

The Company believes that the carrying value of its financial instruments, such
as long-term debt (all of which are held for purposes other than trading) are
approximately equal to their fair values.

                                      F-7

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 2.  Significant Accounting Policies (continued)

Concentration of Credit Risk

The Company maintains cash balances at a bank, which at various times throughout
the year exceeded the Federal Deposit Insurance Corporation (FDIC) limit. The
Company performs an ongoing credit evaluation of its customers' financial
condition, and credit is extended to customers on an unsecured basis. Estimated
credit losses are provided for currently through the allowance for doubtful
accounts and actual credit losses are charged to the allowance when incurred.

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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Accounts Receivable

Accounts receivables are earned in the normal course of business and are
unsecured.

The allowance for doubtful accounts is established through charges to earnings
in the form of a charge to bad debt expense. Accounts that are determined to be
uncollectible are charged against the allowance account. Management makes
periodic assessments of the adequacy of the allowance that requires the Company
to recognize additions or reductions to the allowance. It is reasonably possible
that factors may change significantly and, therefore, affect management's
determination of the allowance for doubtful accounts in the near term. The
following schedule details the changes in the accounts receivable reserve
account:
                                           2000         1999         1998
                                        ----------    ---------   ----------
Accounts receivable reserve, beginning  $   75,000    $ 168,266   $  346,000
  Write-offs during the fiscal year       (112,730)     (58,823)    (221,894)
  Provision estimate for uncollectable
        accounts                            99,872       35,600       44,160
  Adjustment of reserve                    (39,921)     (70,043)        -
                                        ----------    ---------   ----------
Accounts receivable reserve, ending     $   22,221    $  75,000   $  168,266

                                      F-8

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 2.  Summary of Significant Accounting Policies (continued)

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market.
Work-in-process and finished goods include purchased materials, direct labor and
allocated overhead. At October 31, 2000 and 1999 inventory is comprised of the
following components:

                                        2000            1999
Raw materials, supplies and          -----------      ------------
        component parts              $  335,037         $  364,397
Work-in-process                         234,447             39,548
Finished goods                          130,040            190,753
                                     -----------      ------------
                                     $  699,524         $  594,698
                                     ===========      ============

Property, Plant and Equipment

Property, plant and equipment are stated at cost and are depreciated on the
straight-line method over the following estimated useful lives:

         Building and improvements          10 to 30 years
         Equipment                           3 to 20 years

Depreciation expense of property, plant and equipment for the years ended
October 31, 2000, 1999 and 1998 included in continuing operations was $258,569,
$254,647 and $244,452 respectively.

Intangible Assets

During 1999, DII completed the purchase of the rights to the Morrison line of
truck bodies as more fully explained in Note 8. The purchase was recorded as an
intangible asset included in Other, non-current, assets on the balance sheet.
The Company is amortizing the rights using the straight-line method over a
4-year period. Accumulated amortization at October 31, 2000 and 1999 was $80,000
and $40,000, respectively.

Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards Number 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed Of," the Company evaluates the carrying value of long-lived assets
whenever significant events or changes in circumstances indicate the carrying
value of these assets may be impaired. The Company evaluates potential
impairment of long-lived assets by comparing the carrying value of the assets to
the expected net future cash flows resulting from the use of the assets.
Management believes that no impairment of long-lived assets has occurred.

                                      F-9
<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 2.  Summary of Significant Accounting Policies (continued)

Major Customers

The following is a list of the Company's customers that represent 10% or more of
consolidated  net sales:

                                    2000            1999            1998
                                -----------     -----------     ----------
Truck body manufacturer             57%              63%             55%


As of October 31, 2000 and 1999, the amounts due from the truck body
manufacturer, which were collected subsequent to October 31, 2000 and 1999, were
approximately $335,000 and $332,000, respectively.

Earnings Per Share

The Company adopted Statement of Financial Accounting Standards No. 128 ("SFAS
128"), "Earnings Per Share", beginning the fourth quarter of 1998. All prior
period earnings per common share were recomputed to conform to the provisions of
SFAS 128. The recomputations did not result in any restatements of earnings per
share previously reported.

Basic earnings per share amounts are computed based on net income (loss),
reduced by dividends earned on preferred stock outstanding and divided by the
weighted average number of shares outstanding. The weighted-average number of
shares used in the computation were approximately 17,734,000 in 2000, 16,754,000
in 1999, and 15,775,000 in 1998.

Diluted earnings per share amounts are based on the weighted average number of
shares calculated for basic earnings per share purposes increased by the number
of shares that would be outstanding assuming exercise of outstanding stock
options and warrants (Note 7). Since the exercise of outstanding stock options
and warrants would be anti-dilutive and would result in a similar calculation as
basic earnings per share, diluted earnings per share have not been presented.

Recently Issued Accounting and SEC Standards

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting and Reporting for Derivative Instruments." This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts,
(collectively referred to as derivatives) and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the balance sheet and measure those instruments at fair value.
This Statement was amended by SFAS No. 137 in June 1999. The adoption of these
Statements is not expected to have a material effect on the Company.

                                      F-10

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 2.  Summary of Significant Accounting Policies (continued)

Recently Issued Accounting and SEC Standards (continued)

In December 1999, the Securities and Exchange Commission (SEC) adopted a rule
that requires a company's independent auditor to review the company's interim
financial information prior to the company filing its quarterly report on Form
10-Q or Form 10-QSB. The rule was effective for all fiscal quarters ending on or
after March 15, 2000. The Company fully complied with all aspects of this rule
during the fiscal year.


Note 3.  Financing Arrangements

During the first quarter of fiscal 1994, the Company entered into a Joint
Venture agreement (the "Agreement") with Cadema Corporation ("Cadema"). The
Agreement was capitalized by Cadema with $350,000 in cash and by the Company
with $1,000 in cash. The Agreement's principal objective is to provide the
partners with current income by contracting for the design and installation of
air pollution control equipment in its name in all areas of the world outside
the United States and its territories. The term of the Agreement expired
December 31, 1998. Income or loss from the Agreement is allocated 51% to Cadema
and 49% to the Company. The Agreement allows the Company, subject to certain
conditions, to acquire Cadema's interest in the joint venture for 875,000 shares
of the Company's common stock or $350,000 in cash or an amount equal to Cadema's
capital account, whichever is greater, subject to certain antidilution
provisions. The Agreement also allows for quarterly distributions of income and
capital to the joint venture partners. The Company had borrowed approximately
$350,000 from the joint venture as of October 31, 1998 (Note 5). Due to the
strategic focus of the Company towards the fabrication and production of truck
bodies and accessories, and not air pollution equipment, it is not anticipated
that the Agreement will provide significant revenue or earnings for the Company
in the future. In addition, management is presently negotiating with the other
party to the Agreement with respect to payment by the Company of the loan due to
the other party.

In September 1994, the Company completed a 10% Cumulative Convertible Senior
Preferred Stock offering whereby 7,550 shares were issued. The Company realized
$662,150 of net proceeds, after placement fees and expenses of approximately
$93,000. The funds were used to expand the Company's Morrison product line and
provide working capital for overall business activity. During 1996 and 1997,
these shares and related accrued dividends were converted to common stock.

In March 1997, the Company received $150,000 from Renaissance Capital Group,
Inc. ("Renaissance") in the form of convertible debt. During 1997, this debt was
converted into 600,000 shares of common stock.

On August 1, 1997, DII borrowed $650,000 from a private company. A portion of
the net proceeds of $603,000 was used to pay-off certain term debt ($174,000)
owed to Fremont Financial Corporation ("Fremont"), with the remainder ($429,000)
available for working capital

                                      F-11

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 3.  Financing Arrangements (continued)

purposes. The Company also entered into an agreement with Fremont redefining the
method of determining the Company's borrowings from Fremont and extending the
term of its agreement with Fremont (Notes 3 and 4).

In November 1997, the Company completed the sale of an operating division and
its associated assets (inventory, property and equipment and customer lists) for
proceeds of $413,000. The Company did not realize a significant gain or loss on
this transaction. In addition, sales attributed to this division in fiscal 1997
approximated $2.6 million.

In December 1997, the Company received $150,000 from Renaissance in the form of
a promissory note (the "Note"). The Note bears interest at 10% per annum and was
payable at maturity (September 30, 1998) along with the principal balance. In
April 1999, $150,000 of this Note and the related accrued interest was converted
to approximately 1,675,000 shares of Company common stock.


Note 4.  Note Payable

Effective May 28, 1993, DII entered into a loan and security agreement (the
"Agreement") with Fremont comprised of a revolving credit facility (the
"Facility") and an equipment term loan (the "Term Loan"). The Agreement was
amended on May 1, 1997, extending the term of the loan to January 31, 1999 and
from year to year thereafter. In 1999, the due date of the loan was extended to
January 31, 2000. The amount available under the Facility is based on a defined
percentage of eligible accounts receivable and inventory. The Company had drawn
$285,965 at October 31, 1999. The maximum amount available under the Facility
was $1,400,000. The Term Loan was repaid in full in 1997. Borrowings under the
Facility accrue interest at prime plus 3.5% (12.0% at October 31, 1999).

Under the terms of the Agreement, borrowings were collateralized by DII's
accounts receivable, inventory and equipment and a junior lien on DII's real
estate. The Agreement provided for certain restrictions including, but not
limited to, the Company's ability to: a) sell, lease, transfer, exchange or
otherwise dispose of any assets except in the ordinary course of business; b)
enter into any merger, consolidation, or acquisition of any other business
organization; c) guaranty or otherwise become in any way liable with respect to
the obligations of any third party; or d) change its ownership by greater than
10%. The Agreement also restricted: payment of compensation and loans and
advances to executives, officers, directors and certain others; capital
expenditures to a specified level; and distributions to DII's Parent.

During fiscal year October 31, 2000, the Company received notification from
Fremont that the Agreement will not be extended at the expiration of the current
term. Therefore, the Agreement terminated on January 31, 2000 at which time the
entire loan amount was due and payable.

                                      F-12

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 4.  Note Payable (continued)

On January 21, 2000, the DII entered into a refinancing agreement with Banc of
America Commercial Finance Corporation ("BACFC") effective January 21, 2000. As
part of the agreement, the DII fully repaid the Fremont Facility and Term loans
as well as the Duncan-Smith Co. note payable.

Under the terms and conditions of this agreement, DII has a "Revolving Loan"
available with a maximum facility amount of $1,750,000, however, not to exceed
85% of eligible accounts receivable. Additionally, the agreement includes an
"equipment advance" and a "real property advance" that are collectively referred
to as the "Term Loan". The Term Loan provides a maximum real property advance of
$600,000, but the agreement does not have an equipment advance provision.

At October 31, 2000, the Company had $178,373 outstanding on the Revolving Loan.
This entire amount was classified as a current liability at year-end. The
Company had an outstanding balance of $542,857 on the Term Loan at October 31,
2000. This amount is payable in equal monthly installments amortized over 84
months payable on the first day of each calendar month commencing March 1, 2000.
The initial maturity date is January 21, 2005. However, the agreement provides
for successive additional terms of three years each unless one party gives
written notice to the other, not less than sixty days prior to the maturity
date, that such party elects not to extend the maturity date. Borrowings under
both the Revolving and Term Loans accrue interest at prime plus 2.25% (11.75% at
October 31, 2000). All obligations are secured by a first and only perfected
security interest in all of the Company's tangible and intangible personal
property as well as a first priority perfected mortgage on the Company's real
property in Hagerstown, Maryland.

The BACFC agreement provides for certain restrictions including, but not limited
to, the Company's ability to: a) merge or consolidate with another person, form
any new subsidiary or acquire any interest in any person; b) acquire any assets
except in the ordinary course of business; c) enter into any transaction outside
the ordinary course of business; d) sell or transfer any collateral or other
assets; e) make any loans, or investments in, any affiliates or other person; f)
incur any debt outside the ordinary course of business; g) pay or declare any
dividends; h) redeem, retire, purchase or otherwise acquire any of the Company's
capital stock or other equity interest; (i) dissolve or elect to dissolve; or
(j) enter into any transaction with an affiliate other than on arms-length
terms.

The BACFC agreement provides only one financial covenant. The Company's
cumulative net cash losses since the January 21, 2000 note inception may not
exceed $200,000. A cash loss is defined as "net income plus depreciation and
amortization less principal payments on debt and non-financed capital
expenditures." The Company was within this limitation through October 31, 2000.

On October 2, 2000, BACFC sold the loan to Wells Fargo. All provisions of the
original loan signed on January 21, 2000 have remained unchanged.

                                      F-13

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 5.  Long-term Debt

At October 31, 2000 and 1999, consolidated long-term debt consists of the
following:
<TABLE>
<CAPTION>

                                                                                      2000                1999
                                                                                -----------------     -------------
<S>                                                                                <C>                   <C>
Revolving note payable to Fremont Financial, due January 31, 2000 (see Note 4)     $     -               $  285,965
Note payable to joint venture; interest-free, principal was due on
December 31, 1998 (See Note 3)                                                     $  345,000            $  345,000

Equipment loans payable; monthly payments currently aggregating
$2,339 through March 2004,including interest 7.86% to 11.25%;
collateralized by certain equipment                                                $   82,604            $   84,443

Terms loans payable to US Amada, Ltd.; monthly payments currently
aggregating $12,668 including interest at 10%; loans due January 2005;
collateralized by equipment                                                        $  400,623            $  505,002

Promissory note payable to Duncan-Smith Co., Trustee in the original
amount of $650,000; original note stated quarterly payments of
41,903 including interest at 11.0% through May 2002; principal payments
were suspended in 1999 due to a lack of cash availability; interest rate
revised to 13.0% with varying principal payments; collateralized by
Deed of Trust on land of DII; a principal of Duncan-Smith is also a
shareholder and director of the Company. Principal was fully repaid
on January 21, 2000 in conjunction with BOFA refinancing.                                -               $  450,370

Promissory note payable to Renaissance; including interest at 13%;
principal and accrued interest due in full on December 31, 1999                          -               $   25,000

Morrison Liquidation buyout of royalty agreement (Note 8); entire
principal becomes due December 31, 1999; interest rate on the buyout is 7.75%            -               $   72,223

Revolving and Term loans payable to Wells Fargo,
due January 21, 2005 (see Note 4)                                                  $  721,230            $     -
                                                                                ----------------- -----------------
                                                                                   $1,549,457            $1,768,003
Less: current portion of long-term debt                                              (767,015)             (859,278)
                                                                                ----------------- -----------------
Total long-term debt                                                               $  782,442            $  908,725
                                                                                ================= =================

</TABLE>

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements



Note 5.  Long-term Debt (continued)

Maturities on long-term debt as of October 31, 2000 are as follows:

                  2001                   $767,015
                  2002                    238,122
                  2003                    239,699
                  2004                    104,749
                  2005                     85,714

The President of Renaissance is also a Director of the Company. Interest expense
incurred with respect to certain Renaissance convertible debt (Note 2) was
approximately $0, $15,000 and $12,000 in 2000, 1999 and 1998, respectively.

A principal of Duncan-Smith Co. is also a shareholder in and Director of the
Company. Interest expense incurred with respect to the $650,000 promissory note
was approximately $602, $61,000 and $61,000 in 2000, 1999 and 1998.


Note 6.  Income Taxes

The Company files a consolidated income tax return for Federal tax purposes. The
Company, Global Holdings and DII each file separate state income tax returns.
The Company accounts for income taxes in compliance with SFAS No. 109,
"Accounting for Income Taxes." Under SFAS No. 109, deferred tax assets and
liabilities are recorded for any temporary differences between the financial
statement and tax bases of assets and liabilities, using the enacted tax rates
and laws expected to be in effect when the taxes are actually paid or recovered.

Total income tax expense (benefit) from continuing operations amounted to $0 in
each of 2000, 1999 and 1998 (effective tax rates of 0%, in each of the three
years) compared to an income tax expense of $71,000, $100,000 and $60,000
respectively, computed by applying the statutory rate of 34.0% to income from
continuing operations. These differences are accounted for as follows (in 000's,
except percentages):
                                                                Percent of
                                2000       1999        1998         Pretax
                             ----------  ---------  ----------   ----------
Computed "expected" tax      $      71   $     100  $      60          34%
Decrease in tax due to
  valuation allowance
  provided for deferred tax        (71)       (100)       (60)        -34%
                             ----------  ---------  ----------   ----------
                             $       -   $       -  $       -           0%


                                      F-15

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements


Note 6.  Income Taxes (continued)

Deferred income tax assets (liabilities) result from differences in the
recognition of revenues and expenses for income tax and financial reporting
purposes.

The net deferred tax assets at October 31, 2000 and 1999 include the following:

                                                2000            1999
                                           --------------  --------------
Deferred tax assets                        $ 1,077,000     $ 1,494,000
Deferred tax liability                        (200,000)       (200,000)
Valuation allowance for net
 deferred tax assets                          (877,000)     (1,294,000)
                                           --------------  --------------
                                           $      -        $      -
                                           ==============  ==============

The Company has recorded a valuation allowance for its entire net deferred tax
asset at October 31, 2000 and 1999 since management believes that it is more
likely than not that the deferred tax asset will not be fully realized.

The tax effect of major temporary differences that gave rise to the Company's
net deferred tax assets at October 31, 2000 and 1999 are as follows:

                                                2000            1999
                                           -------------   --------------
Net operating loss carry forwards          $ 1,050,000     $ 1,440,000
Allowance for doubtful accounts                  9,000          30,000
Accrued expenses                                18,000          24,000
Depreciation                                  (200,000)       (200,000)
                                           -------------   --------------
    Net deferred tax asset                 $   877,000     $ 1,294,000

As of October 31, 2000, the Company has available Federal net operating loss
carryforwards of approximately $2,639,775 that may be applied against future
Federal taxable income. These carryforwards expire at various dates through
fiscal 2017.


Note 7.  Stockholders' Equity

On May 7, 1990, the Company's stockholders approved a stock option plan to issue
both "qualified" and "non-qualified" stock options. Under the Plan, 800,000
options to purchase shares of the Company's common stock may be issued at the
discretion of the Company's Board of Directors. The option price per share is
determined by the Company's Board of Directors, but in no case will the price be
less than 85% of the fair value of the common stock on the date of grant.
Options under the Plan will have a term of not more than ten years with
accelerated termination upon the occurrence of certain events.

                                      F-16

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 7.  Stockholders' Equity (continued)

In April 1998, the Company granted 600,000 stock options, exercisable at $.10
per share, to its President. The options vest over two years and expire in April
2004. No options have been exercised as of October 31, 2000.

In September 1998, the Company adopted a qualified incentive stock option plan
under Section 422 of the Internal Revenue Code. Options granted under the Plan
will be granted at prices not less than fair value of the Company's stock at the
date of grant, have a term not more than ten years and have other restrictions
as determined by statute.

In September 1998, the Company granted a total of 604,500 stock options,
exercisable at $.10 per share, to certain employees. The options expire November
2001. As a result of voluntary termination, 75,000 options expired in 1999 and
192,000 options expired in 2000. No options were exercised as of October 31,
2000.

Compensation expense that would have been recorded with respect to stock options
and warrants issued in accordance with the basis of fair value pursuant to SFAS
No. 123, if the Company had so elected, would have been approximately $22,500 in
2000 ($.05 per share), $0 in 1999, and $45,000 (less than $.01 per share) in
1998.

As of and for the year ended October 31, 2000, 450,000 stock options were
issued; 1,137,500 options were outstanding and 342,000 were terminated. As of
October 31, 1999, there were no stock options issued; 1,129,500 options were
outstanding and 75,000 options terminated. As of October 31, 1998, there were
1,204,500 options issued and outstanding and 25,000 options were terminated.

During 1994, the Company completed a private placement offering by selling 7,550
shares of its 10,500 authorized shares of 10% Cumulative Convertible Senior
Preferred Stock (the "10% Senior Preferred Stock") at a stated value of $100 per
share. The Company raised $662,150, net of placement fees of $92,850 as a result
of the offering. Commencing September 30, 1994, dividends were cumulative,
payable quarterly in arrears at an annual rate of $10 per share. Total dividends
declared and/or accrued were $75,504 in 1996. The 10% Senior Preferred Stock was
voting and convertible into the Company's Common Stock. Effective April 30,
1995, the Company registered the shares of common stock issuable upon conversion
of the Senior Preferred Stock under the Securities Act of 1933. During 1997 and
1996, all such preferred shares and related accrued dividends were converted to
common stock at a conversion rate of $.25 per share.

In 1997, the Company converted $150,000 of convertible debt issued in 1997 and
payable to Renaissance into 600,000 shares of common stock. In April 1999, the
Company converted $150,000 of the Renaissance note payable (Notes 3 and 5) and
related accrued interest into approximately 1,675,000 shares of Company common
stock.

                                      F-17

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 7.  Stockholders' Equity (continued)

The Company issued warrants to purchase common stock to several parties. The
following table summarizes the outstanding warrants for the year ended October
31, 2000 and 1999:
                           Outstanding                             Outstanding
                           Warrants                  Warrants        Warrants
                           October 31    Exercise    Expired in      October 31,
                             1999          Price     Fiscal Year       2000
                           -----------   --------    -----------   -------------
Consulting agreement,                    $.50
effective November 2, 1994               subject to
expiring November 1, 1999    100,000     adjustment     100,000        -

Financing agreement,                     $.25
effective August 1997,                   subject to
expiring in August 2002      650,000     adjustment        -         650,000

Former President, upon                   $.25
resignation in March 1998                subject to
expiring in March 2001       100,000     adjustment        -         100,000


Note 8.  Commitments and Contingencies

The Company leases certain equipment under operating leases expiring at various
times through July 2001. Rent expense was approximately $24,000, $65,000 and
$85,000 for the years ended October 31, 2000, 1999 and 1998, respectively. The
following is a schedule of future minimum rental payments under operating leases
as of October 31, 2000:

                  2001                  $12,211

Certain of the Company's employees are currently represented by the United
Brotherhood of Carpenters and Joiners of America, Local Union No. 340 whose
contract is in effect to February 2003. The contract contains provisions that
affect compensation to be paid to employees included in the Union.

During 1998, the Company implemented an incentive bonus plan (the "plan") for
certain members of management. The plan provides for annual incentives
calculated as a percentage of the individual employee's salary. The expense for
2000, 1999 and 1998 amounted to approximately $22,500, $33,000 and $28,000,
respectively.

                                      F-18

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 8.  Commitments and Contingencies (continued)

Danzer has a contributory defined benefit pension plan covering all eligible
employees who have elected to participate in the Plan. It is the Company's
policy to fund pension costs as determined by the Plan's actuary. The weighted
average discount rate and expected rate of return on long-term assets used in
determining the actuarial present value of the projected benefit obligation were
7% each for the Plan's year ended December 31, 1999. The actuarial information
included below, which is as of January 1, 2000, is for the Plan's fiscal year
ended December 31, 1999, and is the most recent available information.

Pension expense for the year ended December 31, 1999, was as follows:

         Benefits earned (service cost)                      $   2,254
         Actual return on plan assets                          (22,399)
         Other items                                              (177)
         Interest expense                                       22,858
                                                              --------
                  Total pension expense                      $   2,536
                                                              ========

A summary of the status of the Plan as of December 31, 1999 is as follows:

         Projected benefit obligation:
             Vested                                          $(351,656)
             Non-vested                                              -
                                                             -----------
                                                              (351,656)
         Plan assets at fair value                             344,998
                                                              --------
         Funded status                                          (6,658)
         Unrecognized net actuarial loss                       (26,380)
         Deferred transition gain                               51,439
                                                              ----------
         Accrued pension cost                                $ (18,401)
                                                              ==========

The Company also has a defined contribution 401(k) plan which permits voluntary
employee contributions up to 15% of compensation and which provides Company
matching contributions of 25% to 50% of employee contributions not to exceed 6%
of employee compensation. 401(k) plan expense for each of the years ended
October 31, 2000, 1999 and 1998 was approximately $11,000, $7,000 and $6,000,
respectively

On August 25, 1993, the Company entered into a royalty agreement structured as
an asset sale and purchase agreement (the "Agreement") with Morrison Industries,
L.P., DIP, a Delaware Limited Partnership, (the "Seller"), to buy certain
"Intangible" and "Tangible" assets of the Seller, as defined. In consideration
of the sale, the Company was required to pay monthly to the Seller, 5% of
"Qualified Revenues" as defined, during years 1 through 5 of the Agreement and 2
1/2% of Qualified Revenues, up to $2,000,000 and 5% of Qualified Revenues in
excess of $2,000,000 during years 6 through 10 of the Agreement. In addition,
the Agreement stipulated certain annual and quarterly minimum sales levels and
requires the Seller to enter into a non-

                                      F-19

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 8.  Commitments and Contingencies (continued)

compete agreement indefinitely. During 1998, the Company entered into an
agreement to buyout the remaining obligations of the original agreement. This
buyout agreement releases the Company from the payment of any future royalties
and other requirements. The Company is required to pay $200,000 in consideration
for the buyout, to be paid $50,000 in March 1999, monthly installments of
$11,111 from April 1999 through November 1999 and the remaining unpaid balance
in December 1999. The $200,000 will be amortized over the remaining five years
of the original agreement through 2003. At October 31, 2000, the $80,000
unamortized portion is included in "other assets" in the accompanying balance
sheets. Royalty expense for 2000, 1999 and 1998 was $40,000, $40,000 and
$54,000, respectively.


Note 9.  Related Parties

During 2000, 1999 and 1998, the Company paid a total of $23,000, $39,000 and
$54,000, respectively, in management fees to two companies, principals of which
are Directors of the Company.


Note 10.  Material End of Year Adjustments

Operating results in the fourth quarter of fiscal year 1999 include material end
of year adjustments that result in $(5,127) of Selling, General and
Administrative expenses in the fourth quarter. The significant changes causing
the material adjustment include Management's assessment of the collectibility of
accounts receivable in relation to the recorded allowance, revisions of certain
estimates related to legal fees and other costs and adjustments of recorded
balances based on more complete information.


Note 11.  Parent Company Financial Statements

The financial statements of the Parent Company (Danzer Corporation) include
assets comprised of investments in and advances to subsidiaries. All of the
Company's common and preferred stock and certain amounts of long-term debt and
accrued expenses are also recorded on the Company's balance sheet. Substantially
all of the Company's equity relates to its investment in its subsidiary.

The Company's only significant source of revenue and cash available to pay
interest and principal on debt and corporate overhead results from management
fees charged to its subsidiary. Such management fees are limited due to the lack
of profitability and positive cash flow of its subsidiary as well as certain
restrictions on the ability of its subsidiary to pay distributions or dividends
to the Company. Therefore, available cash to pay interest and principal on debt
and/or dividends on common stock is severely constrained.

                                      F-20

<PAGE>

                       Danzer Corporation and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 12.  Subsequent Event

In October 2000, the Company announced it was in discussions with Canron
Corporation ("Canron") about entering into an agreement in which the Company
would acquire Canron. The transactions would result in Canron shareholders
owning approximately 91% of the fully diluted equity interests of Danzer if all
Canron shareholders accepted the offer. Canron, headquartered in Oak Brook,
Illinois, is a leading steel fabricator and erection company with approximately
$220 million in gross revenue. An agreement is expected to be complete in the
first quarter of fiscal year 2001.


Note 13.  Reclassifications

Certain immaterial reclassifications have been made to the 1999 and 1998
financial statements in order to enhance the comparability to the 2000
presentation.


                                      F-21

<PAGE>



                                   SIGNATURES


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


                                  DANZER CORP.


                             By:     /s/ M. E. Williams
                             -----------------------------------
                             M. E. Williams
                             President, Chief Executive Officer and Director


January 19, 2001



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.


January 19, 2001
                             By: /s/ Mark McGlaughlin
                             ---------------------------
                             Mark McGlaughlin
                             Chief Financial Officer

January 19, 2001
                             By: /s/ Goddhue W. Smith III
                             ----------------------------
                             Goodhue W. Smith III, Director

January 19, 2001
                             By: /s/ G. Russell Cleveland
                             ----------------------------
                             G. Russell Cleveland, Director


                                    PAGE 23

<PAGE>