U.S. Securities and Exchange Commission
                    Washington, DC 20549


                       CONFORMED COPY

                        FORM 1O K SB


[ X ] ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
                          EXCHANGE
                            ACT OF 1934

           For the fiscal year ended June 30, 1999

                 Commission File No. 0-22678

                         XAIBE INC.



          NEVADA                                    76-0594907
(State or other jurisdiction
of incorporation                                  (I.R.S. Employer
or organization)                                   Identification Number)

2400 Loop 35, #1502, Alvin Texas                                 77512
(Address of principal executive office)                       (Zip code)

Issuers telephone number:                                 (281) 331-5580


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


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



     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the registration was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes X   No____





     Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant=s knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10K SB or any amendment to this
Form 10K SB. [ X ]




     State issuer=s revenues for its most current fiscal year.     $-0-

     State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a
specific date within the past 60 days.  As of December 31, 1999:
$0.00

     Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after distribution of securities under a plan confirmed by a court.
Yes______    No______ Not applicable.

     The number of shares outstanding of each of the issuer=s classes
of common equity, as of the latest practicable date.
                     1,500,000 SHARES COMMON STOCK







This Form 10K SB consists of 7 pages.




                      TABLE OF CONTENTS

                  FORM 10K SB ANNUAL REPORT

                         XAIBE INC.
Facing Page
Index
                                                            Page

PART I

Item   1  Description of
          Business                                          1
Item   2       Description of
          Property                                          2
Item   3       Legal
          Proceedings                                       2
Item   4       Submission of Matters to a Vote of Security
          Shareholders                                      2

PART II

Item   5       Market for the Registrant=s Common Equity
               and related Stockholder Matter               2
Item   6       Managements Discussion and Analysis of
               Financial Condition and Results of
               Operations                                   2
Item   7       Financial Statements                         3
Item   8       Changes in and Disagreements on Accounting
               and Financial Disclosure                     3

PART III

Item   9  Directors, Executive Officers, Promoters
             and Control persons, Compliance with
             Section 16(a) of the Exchange Act              4
Item 10   Executive Compensation                            5
Item 11   Security Ownership of Certain Beneficial Owners
          and Management                                    5
Item 12   Certain Relationships and Related Transactions    6
Item 13   Exhibits and Reports on Form 8-K                  6

Signatures                                                  7







                           PART I

Item 1.        Description of Business

     (1)  General Development of Business


XAIBE INC. (the Company or Registrant) was incorporated under the laws
of  the  State  of  Nevada  on July 17, 1998,  and  is  in  the  early
developmental  and  promotional stages.  To date, the  Company's  only
activities  have  been  organizational,  directed  at  acquiring   its
principal  asset,  raising  its initial  capital  and  developing  its
business  plan.  The Company has not commenced commercial  operations.
The Company has no full time employees and owns no real estate.

     (2)  Narrative Description of Business

The  Registrant  acquired from David R. Mortenson, an officer  of  the
Company, the rights to distribute and produce an oxygen enriched water
product  for fish farming, aquaculture, mariculture, the husbandry  of
poultry,  and for remediating animal waste from dairies,  feedlots  of
all  kinds,  and for other similar uses.  This agreement  is  for  the
State  of  Mississippi.   Mortenson acquired  these  rights  from  the
inventors   of  the  product,  N.  W.  Technologies,  Inc.   under   a
distribution agreement.  This technology promises to shorten  time  to
market  for farm raised sea food and poultry and to cut costs  in  the
processing  of  animal waste, and at the same time making  this  waste
less  harmful to the environment.  While proprietary and not patented,
this process is virtually impossible to reverse engineer.  The Company
will "black box" the generator of this product to maintain control.


     General Business Plan

Background:  This project is the result of technology developed  by  a
Houston   Texas   based   Company,  N.  W.   Technologies,   for   the
bioremediation of oil spills.  N. W. Discerned that creating a contact
emulsifier, acting as a host for microbes, would speed up the  process
of  bioremediating  this  spilled  oil.   By  breaking  the  oil  into
colloidal (microscopic) particles, the microbes have increased surface
area (better access to the food source) and thus could consume spilled
oil much faster.

In  spite of this better access to the food source, the microbes still
need  a  ready supply of oxygen.  Below six to twelve inches  of  soil
depth,  depending on soil type, the oxygen exchange is  virtually  non
existent,  yet many oil spills reach far below that level.  A  process
called sparging utilizes perforated pipes placed in the affected  area
that  have  air  pumped  into  them  that  is  released  through   the
perforations.  This is an expensive process to implement and may cause
some  of  the  volatile compounds to be released cause  secondary  air
pollution.   To  counter  this problem, N. W. Technologies  created  a
product called Biocatalyst.

Biocatalyst is a water product with oxygen organically bonded  to  the
water  molecule.   When the microbe's extra-cellular enzymes  come  in
contact  with  the water/oxygen molecule structure, they release  this
oxygen, making it available to the microbes.  This process provides an
inexpensive way to provide the microbes with oxygen at any  depth.  N.
W.  Technologies and their distributors/applicators have  proven  that
the  use of this product substantially speeds up the remediation times
often  by  a  factor of three to ten times.  N. W.  Has  ceased  using
ordinary   water   in  the  formulation  of  their  products   relying
exclusively  on Biocatalyst, as Biocatalyst does everything  that  the
water does and provides the extra oxygen needed when microbes are pre-
mixed with their emulsifiers.

  Since  N.  W.  Technologies  only  use  for  this  product  was  for
bioremediationof oil spills, Mr. Mortenson was successful in obtaining
the  right  for  use  of this product for aquaculture,  fish  farming,
mariculture  the husbandry of poultry, and the remediation  of  manure
ponds, and for aquariums.

The  Technology:  While the technology for producing this  product  is
proprietary, the process is organic, and uses any water source.   Once
a   generator  is  set  up  and  producing,  production  can  continue
indefinitely provided that water is available (minimum of  15  gallons
per  hour,  maximum  30  gallons  per hour),  that  the  generator  is
protected from freezing, and provided that the Companies 'biomass'  is
added  5  days  per week.  When stored for use in beverages  or  other
products a dilution factor of  two-to-one must be applied immediately,
to  insure  long-term stability.  This dilution is also required  when
used  to  water  poultry.   When discharged  immediately  into  manure
remediation  ponds  or into ponds or tanks for raising  seafood,  that
dilution occurs naturally.

As part of a production package, the Company will furnish to end-users
the  generator,  the  initial culture to create  the  oxygen  enriched
water,  and a regular supply of "biomass" to feed the generator.   The
client  will  supply  a source of usable water, electrical  power  and
staff   to  feed  and  operate  of  the  generator(s).   As  currently
configured,  each generator can produce 720 gallons of  raw  undiluted
product  per  day.   Where more than this volume is  needed,  multiple
generators can be supplied.

The  Equipment: The equipment needed to build a generator is  standard
off  the  shelf  tankage,  pumps  and plumbing  supplies.   These  are
inexpensive and the generator only uses a six-foot by ten-foot  print.
Total cost of an industrial grade generator is less than $5,000.00 per
unit.   These units should give years of trouble free service provided
they are not abused, burned or exposed to freezing conditions.

Markets:   The   Company's  main  target  markets  are:   Aquaculture,
Mariculture  and  Fish farming.  Fish farming, long used  in  Asia  is
becoming one of the key sources of protein around the world.   In  the
US,  particularly  in  southern states such  as  Mississippi,  catfish
farming,  crawfish farming and the raising of rainbow trout  have  led
this  market.   Along the gulf coast, shrimp farming is  also  rapidly
gaining acceptance.  Virtually every state game department also raises
various  varieties  of game fish to release into public  waters.   The
single largest problem encountered in fish farming is oxygen exchange.
Utilizing  one  or  more of the Companies generators  can  solve  this
oxygen  exchange problem quickly and economically.  The  company  will
lease  the  units needed on an annual basis and supply the Biomass  as
required.

Husbandry  of  Poultry.  A study done in Washington State demonstrated
that  using  oxygen-enriched water had significant economic  benefits.
In  this study, fryers came to butcher weight one day sooner (in a six
week  life  span) with 5% less feed, and weighed 5% more using  oxygen
enriched  water.   This market offers a twofold  opportunity  for  the
Company:  first is the manufacture of the product for the chickens  to
drink,  second  is  the  use of the product  to  accelerate  microbial
degradation of the manure.

Aquariums. The pet market for fish is substantial.  The company  plans
to  generate  and distribute our oxygen enriched product  through  pet
stores  and  chains  for  use in aquariums  -  both  small  and  large
facilities.   The  extra  oxygen will enable all  bacteria  to  remain
aerobic  (oxygen users) that help produce a healthful environment  for
the fish and aquatic life.  Most of the product will be distributed in
gallon  containers for individual use, however, the Company may  lease
generators for large facilities such as Sea World.

Because  the  Company  presently has little or no  overhead  or  other
material  financial  obligations, management of the  Company  believes
that  the  Company=s short term cash requirements  can  be  satisfied.
What  little  cash might be needed in the future could be supplied  by
the  issuance of the Company=s common stock or by loans from directors
or shareholders.

Item 2    Description of Property

An officer of the Registrant provides office facilities at 2400 Loop 35,
#1502,  Alvin,  TX  77511.  There is no charge  for  the  use  of  these
facilities.   Th  Company maintains no other office  and  owns  no  real
estate.

Item 3    Legal Proceedings

     There are no legal proceedings in which the Company is involved.

Item 4    Submission of Matters to a Vote of Security Holders

     There  have  been  no matters submitted to a vote of  the  security
holders during the fourth quarter of the fiscal year ended December  31,
1999.


                           PART II

Item 5    Market for Common Equity and Related Stockholder Matters

     There is no public trading market for the Company=s securities.

Item 6    Management Discussion and Analysis or Plan of Operation

     Managements Discussion and Analysis of Financial Condition and
Results of Operations.

     Liquidity and Capital Resources

     The Company is a development stage company and has not had any
revenues to date.  The Company had no revenues during 1999.  The ability
of the Registrant to achieve its operational goals will depend upon its
ability implement its business plan.   Additional capital is needed to
continue or expand its operations, but there is no assurance that such
capital in equity or debt form will be available.  David R. Mortenson
has put a moratorium on the minimum purchase requirements and other
payments in an effort to assist the Company in getting into business.

Results of Operations

     The Company is a development stage company which generated no
revenue during  the past year.  The Company accumulated a deficit of
approximately

Item 7    Financial Statements

     The audited Financial Statements for the fiscal year ended June
30, 1999 are attached hereto and incorporated herein by reference.

Item 8    Changes and Disagreements with Accountants on Accounting
          and Financial Disclosures

     There have been no changes or disagreements with the Company=s
independent outside auditor.





       (The remainder of this page was intentionally left blank)




























                                                                Page 3
                               Part III

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

     The Directors and Executive Officers of the registrant are as
follows:

Name                          Age    Position                 Period of Service

John T. Bauska                47     President and Director   7/98 to present
4741 Ashley Lake Drive
Kalispell, MT 59901

Dorothy Mortenson             50     Director& Secretary      10/98 to present
2400 Loop 35, #1502
Alvin, TX 77512

     The Directors of the Company hold office until the next annual
meeting of he shareholders and until their successors have been
elected and have qualified.  There is no family relationship between
and executive officer and director of the Company.

Business Experience.

John T. Bauska.  Mr. Bauska, who is the Company's President, has
served as an officer and director of the Company since its inception.

     Mr. Bauska is currently self-employed as a business consultant,
providing consulting services relating to
mergers and acquisitions in a wide variety of fields.  From 1995 to
the present Mr. Bauska has served as president of Canadex Ventures,
Inc., a Florida corporation engaged in the development of oil and
mineral resources.  From 1993 to the present, he has served as a
director of  Bahalil, S.A. of Paris and Damascus, Syria.  Bahalil is
an international arms dealer as well as a thriving construction
concern.  Since 1991, Mr. Bauska has served as president of Stratco,
Inc., Kalispell, Montana, which is involved in arms sales,
import/export of arms and accessories as well as weapons design,
manufacture and finance.

Dorothy Mortenson.  Mrs. Mortenson, who is the Company's Secretary,
has served as an officer and director of the Company since its
organizational meeting on October 6, 1998.

From 1997 to the present, Mrs. Mortenson, together with her husband,
David R. Mortenson, has been engaged as a consultant, assisting small
emerging companies with marketing and sales.  Also in 1997, the
Mortensons formed Safeco Products, Inc., a Texas corporation that
markets and distributes health supplements. .  From 1990 to 1997 Mrs.
Mortenson assisted her husband in various enterprises in the country
of Belize.





Item 10   Executive Compensation

     During the year ended December 31, 1999, the officers of the
Company received no salary or benefits.  At the present time none of
the officers or directors receives any salaried compensation for their
services. The Company has no formal policy or plan regarding payment
of salaries, but should it pay them, it would be in conformance with
general business considerations as to the payment of same, such as the
desire to compensate officers and employees for time spent on behalf
of the Company.

     No retirement, pension, profit sharing, stock option or insurance
programs or similar programs have been adopted by the Registrant for
the benefit of its employees.

     No executive officer or director of the Company holds any option
to purchase any of the Company=s securities.

Item      11   Security Ownership of Certain Beneficial Owners and
Management

     (1)  Security ownership of certain beneficial owners

     The following table sets forth information, as of December 31,
1998, of persons known to the Company as being the beneficial owner of
over 5% of the Company=s Common Stock.

Title          Name and Address of     Amount and Nature    Percent
of Class       Beneficial Owner        Of Beneficial        of
                                       Ownership            Class

Common         John T.Bauska           250,000              15.63
               4741 Ashley Lake Drive
               Kalispell, MT 59901

Common         David R.Mortenson       350,000              21.88
               2400 Loop 35, #1502
               Alvin, TX 77511

Common         Joshua D.Smetzer        100,000              06.25
               2101 Mustang Road
               Suite 113
               Alvin, TX 77024

Common         Marie M. Charles        100,000              06.25
               PO Box 4456
               Pasadena, TX 77503

Common         Joshua J. Mortenson     100,000              06.25
               808 Cemetery  Road
               Alvin, TX 77511

Common         Roy Donovan Hinton Jr.  100,000              06.25
               9200 Alameda Genoa Road
               Houston, TX 77075


          (b) Security Ownership of Management as of December 31, 1995

Title     Name & Address of             Amount & Nature    Percent
of Class  Beneficial Owner              Of Beneficial      of
                                        Ownership          Class

Common    John T. Bauska                250,000            15.63.
          4714 Ashley Lake Drive
          Kalispell, MT 59901

          Dorothy Mortenson *             -0-
          2400 Loop 35, #1502
          Alvin, TX 77511

     * Dorothy Mortenson is the wife of David R. Mortenson who holds
350,000 shares of Common Stock.

Item 12   Certain Relationships and Related Transactions

     None

Item 13   Exhibits and Reports for Form 8-K

     There are no Exhibits or Reports on Form 8-K



                              SIGNATURES

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

XAIBE INC.

By:    /S/   John T. Bauska
Date: March 31, 2000
     John T. Bauska, Director and President


By: /S/  Dorothy Mortenson
Date: March 31, 2000
          Dorothy Mortenson, Director and Secretary













                               EXHIBIT A









                                REPORT
                                  OF
                          INDEPENDENT AUDITOR



                          XAIBE, INC.

                (A Development Stage Enterprise)






     FINANCIAL STATEMENTS

               For the Period from July 17, 1998
                   (Inception) through June 30, 1999






















                    Janet Loss, C.P.A., P.C.
                      Certified Public Accountant
                   1780 South Bellaire Street
                              Suite 500
                     Denver, Colorado 80222

Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 South Bellaire Street
Suite 500
Denver, Colorado 80222
(303) 782-0878




                              XAIBE, INC.
                   (A Development Stage Enterprise)

                     INDEX TO FINANCIAL STATEMENTS



                       TABLE OF CONTENTS



ITEM                                                         PAGE

Independent Auditor=s Report                                    1

Balance Sheet, June 30, 1999                                    2

Statement of Operations, for the
Period from July 17, 1998 (Inception)
Through June 30, 1999                                           3

Statement of Stockholders Equity (Deficit),
For the period from July 17, 1998 (Inception)
Through June 30, 1999                                           4

Statement of Cash Flows, for the
Period from July 17, 1998 (Inception)
Through June 30, 1999                                           5


Notes to Financial Statements                                   6
                     INDEPENDENT AUDITOR=S REPORT



                          Board of Directors
                              XAIBE, Inc.
                          2400 Loop 35, #1502
                            Alvin, TX 77511

                                 Sirs:

I have audited the accompanying Balance Sheet of Xaibe, Inc. (A Development
Stage Enterprise) as of June 30, 1999 and the Statements of Operations,
   Stockholders= Equity, and Cash Flows for the period July 17, 1998
(Inception) through June 30, 1999.  These financial statements are the
 responsibility of the Company=s management.  My responsibility is to
 express an opinion on these financial statements based on my audits.

My examination was made in accordance with generally accepted auditing
standards.  Those standards require that I plan and perform the audits to
obtain reasonable assurance as to 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.  I believe that our audit
             provides a reasonable basis for our opinion.

In my opinion, the financial statements referred to above present fairly,
   in all material respects, the financial position of Xaibe, Inc.(a
development stage enterprise) as of June 30, 1999, and the results of its
operations and changes in its cash flows for the period from July 17, 1998
(Inception) through JUNE 30, 1999, in conformity with generally accepted
                        accounting principles.



                        Janet Loss, C.P.A., P.C.
                              June 6, 2000













                                  Page 1
                                XAIBE, INC.
                     (A Development Stage Enterprise)

                               BALANCE SHEETS

                               JUNE 30, 1999


                                  ASSETS


CURRENT ASSETS:
  Cash in checking                              $     2,437


OTHER ASSETS:
  License Rights                                      1,000


TOTAL ASSETS                                     $    3,437



                   LIABILITIES AND STOCKHOLDERS EQUITY



CURRENT LIABILITIES:
   Accounts payable                              $      500

STOCKHOLDERS EQUITY:
  Common stock, $0.001 Par
  Value, 10,000,000 shares
  Authorized, 1,600,000 shares
  Issued and outstanding                              1,600

  Additional Paid-In capital                         19,900

  Retained earnings (Deficit)                      (18,563)

  Total Stockholders= Equity                          2,937

TOTAL LIABILITIES AND
STOCKHOLDERS= EQUITIES                          $     3,437

           The accompanying notes are an integral part of these
                           financial statements.
                                   Page 2

                                XAIBE, INC.
                     (A Development Stage Enterprise)

                     CONDENSED STATEMENT OF OPERATIONS


                 For the period July 17, 1998 (Inception)

                             Thru June 30, 1999





REVENUES:                                                 0



OPERATING EXPENSES:

  Office expenses                                       558
  Management fees                                     5,000
  Legal and Accounting Fees                           3,000
  Consulting fees                                     5,000
  Filing fees                                         5,005


  Total Operating Expenses                           18,563

NET (LOSS)                                      $    18,563

NET (LOSS) PER

SHARE OF COMMON STOCK                           $     (.01)

Weighted Average
Number of shares
Outstanding                                         1500000




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



                                  Page 3

                                XAIBE INC.
                     (A Development Stage Enterprise)

                     STATEMENT OF STOCKHOLDERS EQUITY
               For the Period from July 17, 1998 (Inception)
                           Through June 30, 1999


<TABLE>
<CAPTION>

                                                 DEFICIT
                                                 ACCUMULATED
               COMMON STOCK   COMMON  ADDITIONAL DURING THE    TOTAL
               NUMBER OF      STOCK   PAID - IN  DEVELOPMENT   STOCKHOLDERS
               SHARES         AMOUNT  CAPITAL    STAGE

<S>            <C>            <C>     <C>        <C>           <C>
BALANCES
JULY 17, 1998  0              0       0          0             0


OCTOBER 6,
1998, SHARES
ISSUED FOR
ORGANIZATIONAL
COSTS          500,000        500     0          0             500



MAY 28
1999, SHARES
ISSUED FOR
LICENSE
AGREEMENT      1000000        1000    0          0             1,000


MAY 31, 1999
SHARES ISSUED
FOR CASH       100,000        100     19900      0             20,000


NET (LOSS) FOR
THE PERIOD
ENDED JUNE 30,
1999           0              0       0          (18563)       (18563)


BALANCES
JUNE 30,
1999           1600000        1,600   19900      (18563)        (2,937)


</TABLE>


 The accompanying notes are an integral part of these Financial Statements





                                  Page 4
                                XAIBE, INC.

                     (A Development Stage Enterprise)


                          STATEMENT OF CASH FLOWS

               For the period from July 17, 1998 (Inception)


                           Through June 30, 1999




                         CASH FLOWS FROM OPERATING
                                ACTIVITIES:


    Net loss for the period                $   (18,563)

    ADJUSTMENTS TO RECONCILE

    NET (LOSS) TO CASH FLOW FROM

    OPERATING ACTIVITIES:

    Net increase in accounts payable                500

    Net cash provided (Used)
    By operating activities                     (18,063)

    CASH FLOWS FROM FINANCING


    ACTIVITIES:

        Issuance of
         Common stock                            21,500


    CASH FLOWS FROM INVESTING

    ACTIVITIES
         Purchase of
         Technology                              (1,000)


NET INCREASE IN CASH                              2,437


    CASH, BEGINNING OF PERIOD                         0

    CASH, END OF PERIOD                     $     2,437


      The accompanying notes are an integral part of these
      Financial Statements.


                                  Page 5
                                XAIBE INC.
                      (A Development Stage Enterprise)

                       NOTES TO FINANCIAL STATEMENTS
                                June 30, 1999


            NOTE I  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                     Development Stage Activities

  The Company was incorporated under the laws of the state of Nevada
  in July 17, 1998, and is in the early developmental and promotional
       stages.  To date, the Companys only activities have been
  organizational directed acquiring its principal asset, raising its
initial capital and developing its business plan.  The Company has not
                   commenced commercial operations.

                           Accounting Method

    The Company records income and expenses on the accrual method.

                            Fiscal Year-End

     The Company has elected the fiscal year-end to be June 30th.

                      NOTE II  LICENSE AGREEMENT

  This agreement was made and entered into May 28, 1999 by David R
Mortenson & Associates, (Grantor) and Xaibe, Inc. (Licensee).  The
Company has obtained the rights to market and manufacture the oxygen-
enriched water known as Biocatalyst now manufactured by NW
Technologies, Inc. (NW) for which the product Grantor holds the
exclusive rights as evidenced by the Distribution Agreement between NW
and Grantor dated the 26th of March, 1998.

                                Page 6
    NOTE III  PRIVATE PLACEMENT
  The Company offered a private placement of 100,000 shares of the
Companys common stock by means of a private placement at $.20 per
share pursuant to Regulation D Code 504.