U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549


FORM 10-KSB
Amendment No. 1

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

For the fiscal year ended May 31, 1999

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT

For the transition period from ________ to _________

Commission FILE NO. 0-29834


ENVIRONMENTAL PRODUCTS GROUP, INC.

(Exact name of Small Business Issuer as specified in its charter)


DELAWARE						22-3639092

(State or other jurisdiction of		(IRS Employer ID No.)
incorporation or organization)


3325 North Service Road, Unit 105
Burlington, Ontario L7N 3G2 Canada

(Address of Principal Executive Offices)

(905) 332-3110
(Issuer's Telephone Number, including area code)

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

Securities registered pursuant to Section 12(g) of the Exchange Act: Common
Stock, $.001/share par value

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 other 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 ____  No X

Check if there is no disclosure of delinquent filers in response to Item
 405 of Regulation S-B
contained in this form and no disclosure will be contained, to the best
of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
 Part III of this Form 10-KSB or
any amendment to this Form 10-KSB. ____

State the issuer's revenues for its most recent fiscal year. ___-0-__

State the aggregate market value of the voting and non-voting common
 equity held by nonaffiliates
computed by reference to the price at which the common equity was
sold, or the average bid and asked
price of such common equity, as of a specified date within the past
60 days. $7,753,586

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the
latest practicable date:  12,357,623

Transitional Small Business Disclosure Format (check one):

Yes ____ No X


PART I

Item 1. Description of business.

Environmental Products Group, Inc. ("Company") was originally incorporated
December 1, 1976 as Axelson Advertising and Research, Inc. in the State of
Utah.
The Company was merged into District Corporation, a Nevada corporation, formed
November 14, 1990 and was subsequently merged into Environmental Satellite
Corporation, a Delaware corporation, formed on September 26, 1990. The
Company's
name was changed to Versatech Environment Group, Inc. on July 9, 1993 and
changed to Environmental Products Group, Inc. on October 21, 1998.

1. Recent Consolidation

In November 1998 the Company, through a number of transactions, acquired
Formulated Mouldings (Canada) Inc. ("FMCI"), Environmental Shelter Corporation
Inc. ("ESC") and Environmental Fuel Technology, Inc. ("EFT"). In addition, the
Company also purchased a promissory note of FMCI from The Reclamation
(US) Corp.
The terms and conditions of these transactions are as set forth below.

EFT owned all right, title and interest in and to proprietary information
concerning the production of fuel from scrap containerboard waste and other
material. The Company acquired that know-how by way of an agreement and plan of
reorganization (the "EFT Plan"). Under the terms of the EFT Plan, the Company
issued 544,500 shares of its voting common stock to the shareholders of EFT in
exchange for all of the outstanding shares of EFT common stock. Under the EFT
Plan, EFT is now a wholly owned subsidiary of the Company. Certain officers of
the Company were also officers and/or shareholders of EFT (see Item 11 herein
for further details).

ESC owned all right, title and interest in and to proprietary technology and
know-how regarding the production of extruded plastic sheeting from scrap
diaper
and other materials. These materials were then designed to be used in
connection
with plastic shelters. The Company acquired this technology by way of an
agreement and plan of reorganization (the "ESC Plan"). Under the ESC Plan, the
Company issued 665,000 voting common shares in exchange for all of the
outstanding common stock of ESC thereby causing ESC to become a wholly owned
subsidiary of the Company. Certain officers of the Company were also officers
and/or shareholders of ESC (see Item 11 herein for further details).

FMCI owned all right, title and interest in and to proprietary information
concerning the production of extruded plastic moldings from scrap diaper and
other material. The Company acquired that know-how by way of an agreement and
plan of reorganization (the "FMCI Plan"). Under the terms of the FMCI Plan, the
Company issued 7,180,426 shares of its voting common stock to the shareholders
of FMCI in exchange for all of the outstanding shares of FMCI common stock.
Under the FMCI Plan, FMCI became a wholly owned subsidiary of the Company.
Certain officers of the Company were also officers and/or shareholders of FMCI
(see Item 11 herein for further details).

The Company also purchased a promissory note made by FMCI in the principal
amount of $885,636.12 (Canadian). FMCI borrowed this money from The Reclamation
(US) Corporation for a variety of purposes, including without limitation,
working capital and research and development of its extruded plastic molding
products. The Company issued 2,859,878 shares of its voting common stock to
purchase the promissory note and subsequently cancelled the note in
exchange for
the acquisition of FMCI's technology. Certain officers of the Company
were also officers and/or shareholders of The Reclamation (US) Corporation.

As a result of the foregoing transactions, the Company owned FMCI, EFT and
ESC. All of these companies are involved in the business of producing moldings,
fuel and shelter, respectively, from recycled plastic materials.

In May of 1999, the Company received the intellectual property rights,
technology
and know-how relative to the production of moldings from recycled
 plastic from FMCI.
FMCI transferred the technology in full payment of the promissory
note that the Company
purchased from The Reclamation (U.S.) Corp. in November of 1998.
  Shortly after the note
was paid, the Company sold all of the common stock of FMCI to
a third party for $100 (U.S.).

Thus, the Company is not in a position to expand its abilities and
technologies in
the use of recycled plastic materials for plastic moldings.

2. Products
The Company does not currently have any physical products to sell
nor any immediate
plans to produce such products.  The Company does maintain the
technology and know-how
to produce moldings, fuel and housing/shelter from recycled
plastics for future production.
The Company is in a transition period as it redirects
 towards new environmentally safe
ventures and products, such as fuel efficient engines and alternative fuel
engines.
The Company will be seeking additional private funding during its transition
phase but
 no assurance can be given that it will be successful in finding additional
 funding on terms
it deems reasonable and economical or at all.  Other than fundraising, the
Company will
 spend its energies during the transition period on developing new
environmentally
sensitive products to add to its existing product base.

Additional funding will be needed by the Company in the near
future as the Company
does not generate any cash flow at the present time.

The Company currently employs 4 people on its staff (3 executive people and 1
administrative person).

3. Competition
The Company cannot determine, at this time, its competition since the Company
is in a transition phase.

4. Pricing
The Company's pricing policies with respect to products will be
determined in the
future based on the current market conditions at the time the
Company distributes new
products, if any.

5. Marketing
The Company has not undertaken any marketing at this time due to its being in
a transition phase and funding.

6. Manufacturing
The Company has no manufacturing facility at the present time.

Item 2. Description of Property.

The Company's executive offices are located at 3325 North Service Road, Unit 105
Burlington, Ontario Canada. The executive offices are comprised of 11 rooms
covering 5,000 sq.ft. All general, sales and administrative oversight of the
Company is conducted out of these offices. The offices are leased on a two-year
basis and expire in January of 2002. Rent is $1,200 (US) per month.

Item 3. Legal Proceedings.

The Company is not involved and has not been involved in any litigation and, to
the best of its knowledge, is not aware of any facts that would likely lead to
litigation. Further, management is not aware of any threatened litigation.

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

There were no items submitted to a vote of security holders during the fourth
quarter of the fiscal year ended May 31, 1999.

PART II

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

The Company's common stock is not traded on any recognized securities
exchange.  Therefore, no bid and ask prices are available.

The number of record holders of shares of the Company's
common stock as of August 28, 2000 is 403.  The aggregate
number of shares of
the Company's common stock issued and outstanding as of August
28, 2000 was 12,357,623.

The Company has not paid or declared any dividends on
its common stock since its inception.  Due to its present
financial status it is
not contemplated that any dividends will be declared
or paid on the Company's
common stock in the foreseeable future.

In November 1998 the Company, through a number of transactions, acquired
Formulated Mouldings (Canada) Inc. ("FMCI"), Environmental Shelter Corporation
Inc. ("ESC") and Environmental Fuel Technology, Inc. ("EFT"). In addition, the
Company also purchased a promissory note of FMCI from The Reclamation (US)
Corporation and also issued common stock to FMCI employees. The terms and
conditions of these transactions are as set forth below. Any shares issued
under
Regulation D of the 1933 Act (hereafter defined)as discussed below were
accompanied
 by the filing of a notice on Form D with the Securities and Exchange
Commission.


EFT owned all right, title and interest in and to proprietary information
concerning the production of fuel from scrap containerboard waste and other
material. The Company acquired that know-how by way of an agreement and plan of
reorganization (the "EFT Plan"). Under the terms of the EFT Plan, the Company
issued 544,500 shares of its voting common stock to the shareholders of EFT in
exchange for all of the outstanding shares of EFT common stock. The book value
of EFT was $544.50. No general solicitation or general advertising was used in
the
offer or sale of the shares.  The shares are "restricted" securities as
that term
 is
defined
in Rule 144 under the 1933 Act (hereafter defined).   The shares were issued
based upon
 Rule 504 promulgated
under the Securities Act of 1933 as amended as well as Section 4(2) of said act.

ESC owned all right, title and interest in and to proprietary technology and
know-how regarding the production of extruded plastic sheeting from scrap
diaper
and other materials. These materials were then designed to be used in
connection
with plastic shelters. The Company acquired this technology by way of an
agreement and plan of reorganization (the "ESC Plan"). Under the ESC Plan, the
Company issued 665,000 voting common shares in exchange for all of the
outstanding common stock of ESC. The book value of ESC was $665.00. No
 general solicitation or general advertising was used in the offer or sale of
the
 shares.
The shares are "restricted" securities as that term is defined in Rule 144 under
 the 1933
 Act (hereafter defined).  The shares
were issued based upon Rule 504 promulgated under the Securities Act of 1933 as
amended as well as Section 4(2) of said act.

FMCI owned all right, title and interest in and to proprietary information
concerning the production of extruded plastic moldings from scrap diaper and
other material. The Company acquired that know-how by way of an agreement and
plan of reorganization (the "FMCI Plan"). Under the terms of the FMCI Plan, the
Company issued 7,180,426 shares of its voting common stock to the shareholders
of FMCI in exchange for all of the outstanding shares of FMCI common stock. The
book value of FMCI was $324,281.25 Canadian or $214,025.63 (US). No general
solicitation or general advertising was used in the offer or sale of the
 shares.
The shares
 are "restricted" securities as that term is defined in Rule 144 under the 1933
Act (hereafter
 defined).   The
shares were
issued based upon Rule 504 promulgated under the Securities Act of 1933 as
amended as well as Section 4(2) of said act.

The Company also purchased a promissory note made by FMCI in the principal
amount of $885,636.12 (Canadian) ($584,519.76 (US)). FMCI borrowed this money
from The Reclamation (US) Corporation for a variety of purposes, including
without limitation, working capital and research and development of its
extruded
plastic molding products. The Company issued 2,859,878 shares of its voting
common stock to purchase the promissory note and later extinguished the note in
exchange for the transfer of technology from FMCI as security for the note. No
general
solicitation or general advertising was used in the offer or sale of the
shares.
The
shares
 are "restricted" securities as that term is defined in Rule 144 under the 1933
 Act
hereafter
 defined).  The
shares were issued based upon Rule 504 promulgated under the Securities Act of
1933 as amended as well as Section 4(2) of said act.

The Company issued 472,000 shares of common stock to employees
of FMCI on November 22, 1998. These shares were issued to acknowledge loyal,
good and faithful
service on the part of those employees. No general solicitation or general
advertising
was used in the offer or sale of the shares.  The shares are "restricted"
securities
as that
term is defined in Rule 144 under the 1933 Act (hereafter defined).  The shares
 were issued
based upon Rule
504 promulgated under the Securities Act of 1933 as amended as well as Section
4(2) of said act.

Finally, Blaine Froats had advanced a series of loans to the Company
from 1993 through 2000 totaling $575,037.  On May 31, 2000, the Company
offered, and Mr. Froats agreed to accept, 575,037 shares of common stock
of the Company in full payment of the indebtedness. No general solicitation
or general
advertising was used in the offer or sale of the shares.  The shares are
"restricted" securities
as that term is defined in Rule 144 under the 1933 Act.  The shares were issued
 based upon Section 4(2) of said act.

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

It is the intention of management to terminate the Company's involvement in
the manufacture and distribution of its plastic trim line of products.
 It is for that reason
that its manufacturing pilot plant was shut down and the subsidiary (Formulated
Mouldings (Canada) Inc.) sold.


The Company will begin to search for more suitable business premises.
These premises will house executive and administrative staff.
In the meantime, the
Company's executive staff will share premises with another company
 in Burlington,
Ontario, Canada.



Having completed the research and development of a
complete line of household trim products that can be made
from reclaimed scrap plastics, the Company is seeking potential
candidates for the licensing of the manufacturing and
distribution of this line.  The Company does not anticipate generating
any significant revenue, if any, from the licensing of the plastic trim.

The past year has seen the Company rotate away from reliance on
sales of plastic trim to other environmentally friendly products.
A concentrated effort has begun in this area of corporate
activity.

During this period and for the ensuing year the Company anticipates
 that it will
need to raise some additional capital primarily through debt. A major
shareholder and
officer has agreed to lend the necessary operational funds required
 during the ensuing
year.  If any funds are received as a result of the license program,
such funds will be
used to either repay the debt or used for working capital.  The
Company believes that
the funds available to it from the officer will be sufficient to allow
it to operate over the
next twelve months. Once the Company is in a
position to develop the next generation of environmental products, it
will need to raise $500,000 dollars (US) to begin the development and
marketing of the product.  No assurance can be given that it will
be successful in finding additional funding on terms it deems
reasonable and economical or at all.


A base staff will be required to handle operations and this will
 be limited to a
maximum of five people which will include executive staff.

Item 7. Financial Statements

ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY
AUDITED FINANCIAL STATEMENTS
MAY 31, 1999, 1998 and 1997


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY

TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS		Page 1

FINANCIAL STATEMENTS

BALANCE SHEET								Page 2

STATEMENT OF OPERATIONS	AND RETAINED EARNINGS (DEFICIT)	Page 3

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY			Page 4

STATEMENT OF CASH FLOWS							Page 5

NOTES TO FINANCIAL STATEMENTS						Pages 6-9



INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Environmental Products Group, Inc. (Formerly
Versatech Environment Group, Inc. and
Environmental Satellite Corporation)
Burlington, Ontario, Canada L7N3G2

We have audited the balance sheet of Environmental Products Group, Inc.
(A Development Stage Company) (formerly Versatech Environment Group, Inc.
and Environmental Satellite Corporation) as of May 31, 1999 and the related
statements of operations, changes in shareholders' equity and cash flows for
the year then ended and accumulated deficit since inception.  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 audit.  The financial statements of
Environmental
Products Group, Inc. as of May 31, 1998 and 1997 were audited by another
 auditor
whose report dated  September 30, 1999 expressed an unqualified opinion
on those
statements.

We conducted our audit in accordance with generally accepted auditing
standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance
 that 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 audit provides
 a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above presents
fairly, in all
material respects, the financial position of Environmental Products
Group, Inc. as of May
31, 1999, and the results of its operations and its cash flows for
the year then ended and the accumulated deficit since inception in
conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared
assuming that the
Company will continue as a going concern.  As shown in the
financial statements, the
Company has experienced severe liquidity problems.  Those
conditions raise substantial
 doubt about the Company's ability to continue as a going concern.
 The financial
statements do not include any adjustments that might result
from the outcome of this
uncertainty.




GENTILE WIENER PENTA & COMPANY CPAs PC
July 18, 2000
Pleasantville, New York

INDEPENDENT AUDITORS REPORT



To the Board of Directors and Stockholders of
 Environmental Products Group, Inc.
 (Formerly Versatech Environment Group, Inc.
      and Environmental Satellite Corporation)
3325 North Service Rd.
Burlington, Ontario, Canada L7N3G2


I have audited the balance sheets of Versatech Environment Group, Inc.
(A Development Stage Company) (Formerly Environmental Satellite Corporation)
as of May 31, 1998, 1997 and 1996 and the related statements of operations and
shareholders' equity and of cash flows for the years then ended.  These
financial
 statements are the responsibility of the Company's management.  My
 responsibility
is to express an opinion on these financial statements based upon my audit.
 I conducted
my audit in accordance with generally accepted auditing standards.  Those
standards
require that I plan and perform the audit to obtain reasonable assurance that
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 my audit provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above presents fairly, in
all
material respects, the financial position of VERSATECH ENVIRONMENT
GROUP, INC. as
 of May 31, 1998, and the results of its operations and of cash flows for the
years then
 ended    in conformity with generally accepted accounting principles.  Pages
 related to
Statement of Changes in Stockholders' Equity from December 31, 1987 to May 31,
1995,
  "unaudited" and shown for informational purposes only.

The Company has not commenced operations and is considered a "Development
 Stage Company."
Additionally, the Company has not received adequate funding to date which
 raises
doubt about  its ability as a going concern.

GERALD R. HINSHAW
Certified Public Accountant

Minooka, Illinois
September 30, 1999

-1-


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC.
and ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY

BALANCE SHEET
MAY 31, 1999, 1998, and 1997

							1999		1998		 1997

ASSETS
Current Assets
Cash in Bank				     $ 1,912     $  0	       $  0
Other Assets

Technology Rights, Research and Development Costs
(Note 3)		     				592,909	-0-	-0-

TOTAL ASSETS		        		594,821	-0-	-0-

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable/accruals (Note 4)	      21,464	21,464	18,964
Other Liabilities
Loans/advances due shareholders
(Note 5)				          	33,050	21,050	17,050

TOTAL LIABILITIES	          			54,514	42,514	36,014

Stockholders' Equity (Note 1)
Capital Stock
Preferred stock - 5,000,000 shares authorized
at $.01 per share.  No (0) shares issued and
outstanding.					     0		0	      0
Authorization of shares rescinded on
October 21, 1998 (Note 1)
Common Stock - 20,000,000 shares authorized
at $.001 per share, 11,782,586 shares issued and
outstanding at $.001 per share at May 31, 1999;
60,782 shares issued and outstanding at $.001
per share at May 31, 1998 and 1997- ADJUSTED
FOR 1 FOR 10 REVERSE SPLIT OCCURRING
ON OCTOBER 21, 1998 (Note 1)			11,782	     61	     61

Additional Paid-in Capital (Note 1)	      625,179      43,519	 43,519
Deficit Accumulated During Development
Stage							(96,654)	(86,094)	(79,594)
Total Stockholders' Equity		      540,307	     (42,514)		(36,014)

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	         		540,307		-0-	-0-

"See auditors' report"
-2-


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY



STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
For the years ending MAY 31, 1999, 1998 and 1997





		ACCUMULATED EARNINGS (DEFICIT)
			SINCE INCEPTION		1999		1998		1997


Revenues			$ -0-			$ -0-		$ -0-		$ -0-

Expenses			96,654		10,560	  6,500		   2,000

Net Income (Loss)		(96,654)		   (10,560)	  (6,500)		   (2,000)

Earnings (Loss) Per Share  (.03)		   (.002)	  (.11)		   (.03)

---------------------
For Information Only
Weighted Average Number
 Of Shares Outstanding	 	2,999,028		6,437,005	60,782 	60,782
(as reflected for 1-for-10 reverse stock split)
See Note 1.



"See auditors' report"
-3-








ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED MAY 31, 1999, 1998 and 1997

PREFERRED STOCK - No (0) shares issued and outstanding out of 5,000,000 shares
authorized.  Authorization of shares rescinded on October 21, 1998.

COMMON 	   Common Stock		Additional
 STOCK	No. of			   Paid-in				Accumulated
   ONLY	shares	Amount	   Capital	   	Total		Deficit

Totals as of
May 31, 1996 (UNAUDITED)
		607,817     $608		$   42,972	    $ 43,580	$(77,594)

Losses for period
6/1/96 to 5/31/98
        		  (8,500)

Totals as of May 31,
         1998
		607,817	 608 		     42,972		 43,580	 (86,094)

NAME CHANGED TO ENVIRONMENTAL PRODUCTS GROUP, INC. (October 21, 1998)

Adjustment to financial
statements reflecting 1 for
10 reverse stock split on
10/21/98
   		(547,035)	(547)            547                0

The Reclamation (U.S.)
Corp for FMCI Note
(November 20, 1998)
       	2,859,878   2,860		 581,660		584,520

FMCI
(November 20, 1998)
 		7,180,426	7,180 	     	 0            7,180
ESC
(November 20, 1998)
          	  665,000	  665	     		 0		    665
EFT
(November 20, 1998)
          	  544,500     544 		 0              544
Employees
(November 22, 1998)
          	  472,000	  472   		 0		    472

Loss for fiscal year
6/1/98 - 5/31/99										(10,560)

Totals as of
May 31, 1999
           11,782,586 $11,782       $625,179         $636,961



"See auditors' report"
-4-


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY


STATEMENT OF CASH FLOWS
For the Years Ending MAY 31, 1999, 1998 and 1997

					Accumulated
					Deficit		1999		1998     1997

CASH FLOWS FROM OPERATING
ACTIVITIES
Net Income (Loss)			$(96,654)		$(10,560)		$ (6,500)    $ (2,000)

Net Cash Provided (Used) By
Operating Activities		(96,654)		(10,560)			  (6,500)		        (2,000)

CASH FLOWS FROM INVESTING
ACTIVITIES
Increase in
Research and development
 Costs				(295,646)	-0-			         -0-		        -0-
Increase (Decrease)
 in accounts payable	    65,516		       -0-		 2,500       2,000

Net Cash Provided (Used) By
Investing Activities		65,516		-0-			2,500                 2,000

CASH FLOWS FROM FINANCING
ACTIVITIES
Loans from shareholder		33,050		12,000		    4,000		       -0-

Net Cash Provided (Used) By
Financing Activities		33,050		12,000	         4,000		       -0-

Net Increase (Decrease)
in Cash 				 1,913		1,913*			  -0-		       -0-

Cash - Beginning of Year	    -0-		   -0-			-0-			  -0-

Cash - End of Year		 $1,913		$ 1,913*           $  -0-                $  -0-


"See auditors' report"
-5-



ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY


NOTES TO FINANCIAL STATEMENTS
MAY 31, 1999, 1998 and 1997




NOTE 1 -	ORGANIZATION

The Company was incorporated on September 26, 1990 under the laws of the
State of Delaware.  On November 19, 1990, the Company merged with District
Corporation, a company incorporated under the laws of the State of Nevada, in a
share for share stock exchange wherein the shareholders of District Corporation
exchanged their shares of stock for those of Environmental Satellite
Corporation,
leaving Environmental Satellite Corporation as the surviving corporation.
This exchange
was accounted for as a tax-free reorganization under Section 368(a)(1)(c),
 or 338H-10, the
Internal Revenue Service Code, 1986, as amended. This method provides
 for a tax-free
exchange of assets, subject to liabilities, for common stock.  District
Corporation originally
merged with Axelsen Advertising and Research, Inc., a Utah
corporation incorporated on
December 1, 1976, on November 14, 1990.

On June 12, 1993, the shareholders consented to changing the
Company's name
to VERSATECH ENVIRONMENT GROUP, INC..  The Company
also decided that it
will be in the business of the manufacture and sales of more
environmentally friendly
products for the construction and automobile industries.

On October 21, 1998, the Company changed its name to ENVIRONMENTAL
PRODUCTS GROUP, INC..  On the same date, the Company amended its
Certificate of Incorporation to rescind the authorization to issue preferred
shares
and to reduce the number of authorized common shares it could issue from
200,000,000 with par value of $0.001 per share to 20,000,000 with a
par value
 of
$0.001 per share.

On November 20, 1998, the Company acquired all the outstanding shares of
Formulated Mouldings (Canada) Inc. (FMCI), Environmental Shelter Corporation
(ESC) and Environmental Fuel Technology, Inc.(EFT).  These companies were
purchased by issuing 11,249,804 shares of the Company's common stock.  The
foregoing shares issued by the Company were issued pursuant to an exemption
from registration (Section 4(2) under the Securities Act of 1933, as amended



-6-


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY


NOTE 1 -	ORGANIZATION (continued)


("Act") and Rule 504 promulgated under the Act.  As a result, the shares issued
by the Company are "restricted" within the meaning of the Act and the rules and
regulations promulgated thereunder.  The shares cannot be sold or otherwise
transferred without a registration under the Act or an exemption from
registration.
 Rule 144 promulgated under the Act requires, among other things, a holding
period of one year from the date of receiving full consideration for the shares.

On May 28, 1999, the Company sold the operations of FMCI for $100.00. The
sale did not include any of the right, title and interest in and to the
proprietary
information and technology concerning production of extruded plastic
moldings from
scrap diaper and other material.

The Company is considered a development stage company as defined in
Statement of Financial Accounting Standards No. 7, "Accounting and Reporting
by Development Stage Enterprises."


NOTE 2 -	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.	The accrual method of accounting is employed to meet generally accepted
accounting principles (GAAP).

B.	Technology rights and research and development costs  (see Note 3) -
Technology rights and research and development costs will be amortized
over sixty (60) months using the straight line method of amortization,
upon commencement of operations.  Organization costs were amortized over sixty
 (60) months using the straight line method of amortization, from 1990 to 1995.
 The
Company is presently considered
a "Development Stage Company", per SFAS No. 7.

C.	Income Taxes - No provision for income taxes has been made because the
Company had not commenced operations as of May 31, 1999.

D.	Accounts Payable/Accruals  (See Note 4).

E.	Loans/Advances due Shareholders  (See Note 5).

F.	Capital Stock/Additional Paid-in Capital  (See Statement of Changes in
Stockholders' Equity ( See page 4/Note 1).

G.	Contingencies  (See Note 6).


-7-



ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY




NOTE 2 -	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

H.	Commitments (See Note 7).

I.	Litigation - There is no pending litigation as represented by the
corporation's management.


NOTE 3 -	ORGANIZATION COSTS/TECHNOLOGY AND INFORMATION
 RIGHTS AND RESEARCH AND DEVELOPMENT COSTS

Organization costs of $43,580 were amortized over a sixty (60) month period
 from
1990 to 1995.  Technology rights and research and development costs are made
up of
the following items:

					1999		  	  1998		1997

Research and Development Costs    -0-		-0-			-0-
Technology and information
rights	          		592,909	      -0-		-0-
Total 	592,909		-0-	          	-0-


NOTE 4 -	ACCOUNTS PAYABLE/ACCRUALS

Accounts payable/accruals are made up of the following items:

				  1999		1998		     1997

Accounting/audit fees	 4,500		4,500		  	4,000
Legal fees			 2,000		2,000		  	1,000
Filing fees			11,200	     11,200		     10,200
Stock transfer agent
fees		             3,764		3,764			3,764
Total - accounts
payable/accruals        21,464	     21,464		     18,964



-8-


ENVIRONMENTAL PRODUCTS GROUP, INC.
(Formerly VERSATECH ENVIRONMENT GROUP, INC. and
ENVIRONMENTAL SATELLITE CORPORATION)
A DEVELOPMENT STAGE COMPANY




NOTE 5 -	LOANS/ADVANCES DUE SHAREHOLDERS

A shareholder has advanced a series of loans to the Company from 1993 through
1999 totaling $33,050.  No terms of repayment or interest have been established
as of the report date.


NOTE 6 -	CONTINGENCIES

These financial statements have been prepared on the basis of accounting
principles applicable to a going concern.  The ability of the Company
 to continue
 is dependent on its ability to raise working capital and realize
 profitable operations.


NOTE 7 -	COMMITMENTS

Stock options for 400,000 shares of common stock, held by shareholders and
directors, exercisable at $.50 (fifty cents) per share, will expire on November
30, 1999.  All restrictions on common stock issued pursuant to exemptions from
registration under the Securities Act of 1933, as amended, has expired, except
 for
 the shares
issued pursuant to the acquisition of FMCI, ESC and EFT (See Note 1).

The Company had no other commitments as of the report date.

ITEM 8.	Changes in and disagreements with accountants.

The Company's accountant and auditor is Gentile, Wiener, Penta & Co., CPAs,
P.C., Pleasantville, New York for the year ended May 31, 1999.  Gerald R.
Hinshaw, CPA, was the Company's auditor for the years ended May 31,
1997 through
1998, inclusive. The Company has no present intention to change accountants.
At no time have there been any disagreements with such accountants
regarding any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.

In April, 2000, the company engaged Gentile, Wiener, Penta & Co., CPAs, P.C. as
its independent accountants and decided not to engage its former accountants,
Gerald R. Hinshaw, CPA and Tinkham & Associates.  The decision to change
accountants was approved by the Company's Board of Directors.

Gerald R. Hinshaw's and Tinkham & Associates' reports on the financial
statements for either of the years ended May 31, 1997 or 1998 did not
contain an
adverse opinion or disclaimer of opinion, and were not modified as to
uncertainty, audit scope or accounting principles.  There were no unresolved
matters with Gerald R. Hinshaw or Tinkham & Associates on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to their respective satisfaction,
would have caused them to make reference to the subject matter of the
disagreement in connection with their report.



PART III

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

The following table sets forth the identity of all officers and directors of
 the
Company, their titles and when their term as directors, if any, expires.

Name		Title as Director		Title as Officer	Term as
									Director Expires


Blaine C. Froats Chairman of the Board	CEO		May 31, 2001

Sean Froats		Director		Secy/Treasurer 	May 31, 2001

The following table sets forth the identity of all key personnel who are not
officers or directors of the Company and their titles.

Name/Address/Occupation				Title

None

Business Experience of Directors, Officers and Significant Employees

Sean Froats - Sean Froats, Secretary/Treasurer of the Company was born on
February 26, 1971 in Canada.  Mr. Froats began his employment career in 1989
with Price Club (Canada) in sales and marketing.  In December 1994 Sean Froats
began working for Canadian Imperial Bank of Commerce ("CIBC") as a customer
service representative.  His primary duties at CIBC involved collection
matters.
From June 1995 to the present, Mr. Froats worked for EFT, ESC and FMCI.  His
primary duties at these companies included day-to-day oversight of
marketing and
sales.  Now Mr. Froats' principal responsibilities are as administrative
assistant to the Chairman and the President. Mr. Froats has a wife and one
child.

Blaine Froats - Blaine Froats, Chairman and CEO of the Company was born May 16,
1937.  Over the past ten years Mr. Froats has devoted his full time to
developing the process and technological know-how which forms the basis of the
Company's business.  He accomplished this while CEO of ESC, EFT, FMCI and
Environmental Plastics Corporation.  Mr. Froats is responsible for general
administrative matters at the Company and significantly involved in the
planning
and development for the Company and its products.  Blaine and his wife
reside in
Ontario.


Involvement in Certain Legal Proceedings

No officer or director of the Company has been the subject of any order,
judgment or decree of any court of competent jurisdiction or any regulatory
agency enjoining him or her from acting as an investment advisor, underwriter,
broker or dealer in the securities industry or as an affiliated person,
director, or employee of an investment company, bank, savings and loan
association or insurance company or from engaging in or continuing any conduct
or practice in connection with any such activity or in connection with the
purchase and sale of any securities. Nor has any such person been the
subject of
any order of a state authority barring or suspending for more than sixty (60)
days, the right of such person to be engaged in such activities or to be
associated with such activities.

During the past five years no present or former officer, director or person
nominated to become a director or officer of the Company:

1. was a general partner or officer of any business against which any
bankruptcy
petition was filed, either at the time of the bankruptcy or two years prior to
that time;

2. was convicted in a criminal proceeding or named subject to a pending
 criminal
proceeding (excluding traffic violations and other minor offenses);

3. was subject to any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his
 involvement
in any type of business, securities or banking activities;

4. or was found by a court of competent jurisdiction (in a civil action), the
Securities and Exchange Commission of the Commodities Futures
Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.


Family Relationships

There are no family relationships between the directors or officers of the
Company, either by blood or marriage, except as follows: Sean Froats is an
officer and director of the Company. Sean Froats is Blaine Froats', an officer
and director of the Company, son.


Section 16(a) Beneficial Ownership Reporting Compliance

There were no directors, officers, beneficial owners of more than 10%
of any class of equity securities of the registrant registered pursuant
 to Section
12 that failed to file a timely report required by Section 16(a) of the
Exchange Act
during the fiscal year ended May 31, 1999 or prior fiscal years.  The
foregoing
statement is based solely on a review of Forms 3, 4 and 5, as
amended, furnished
to the registrant under Rule 16a-3(e) during the fiscal year covered
 by this report.

Item 10. Executive Compensation

No officer or director or key personnel of the Company has had aggregate
compensation exceeding $50,000 (US) per year over the past 10 years.

There are no annuity, pension or retirement benefits proposed to be paid to
officers, directors or employees of the Company in the event of retirement at
normal retirement date pursuant to any existing plan provided or contributed to
by the Company or any of its subsidiaries.

Blaine Froats - Annual Salary - $ 40,000
Sean Froats    - Annual Salary - $ 40,000

No remuneration, other than as set forth above, for Blaine Froats and Sean
Froats, is expected to be paid in the future, either directly or indirectly, by
the Company to any officer, director or key person under any plan presently
existing.

The Company does not have written employment agreements with any of its
officers
or employees. Neither does the Company have a bonus plan. However, the Company
intends to enter into written employment agreements with its officers and key
employees in the future. Also, the Company intends to implement a stock bonus
plan in the future. The terms and conditions of such plan and employment
agreements are subject to the approval of the Company's board of directors in
their sole discretion.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

Principal owners of the Company (those who beneficially own directly or
indirectly 5% or more of the common stock presently outstanding) starting with
the largest common stockholder, as of August 15, 2000 are:

Name/Address/	Number of Shares		Percentage of 	Class of Shares
Occupation			Now Held		the Total

First Flotilla (BWI) Inc.
200 North Service Rd.W. Suite 212
Oakville ON L6J 2Y1
				4,000,000 (1)	33.36%		Common
Blaine C. Froats
1901 Pilgrims Way,
Suite 905
Oakville ON L6M 2X2
				4,231,595 (1)	34.24%		Common

Sean Froats
1580 Parish Lane
Oakville, ON L6M 3E2	4,376,421
				200,000 Option
				@ .50 per share
				exp. Nov. 30,
1999 (1)		35.41%		Common

Marilyn Froats
1901 Pilgrims Way,
Suite 905
Oakville ON L6M 2X2
				4,231,595(1)	34.24%		Common

Jason Froats
155 Commerce Valley Dr
East
Thornhill ON L3T 7T2
				4,501,150(1)	36.42%		Common

J. Patrick & Marie
Keenan
8 Bedford Drive
Newtonville, NY		741,487		6.00%			Common


(1):Marilyn Froats, Jason Froats, Blaine Froats and Sean Froats are shareholders
 in the Froats family
holding company being First Flotilla (BWI) Inc. which is the record owner of
4,000,000 common shares.  Blaine Froats, Marilyn Froats, Jason Froats and Sean
Froats own directly 229,000, 2,595, 501,150 and 376,421 common shares
separate of the family holding company, respectively.

* -- Includes shares purchasable under common stock options.

The number of shares beneficially owned by officers and directors, both
individually and as a group, as of August 15, 2000 is:

Name/Address/	Number of Shares		Percentage of 	Class of Shares
Occupation			Now Held		the Total

Blaine C. Froats
1901 Pilgrims Way,
Suite 905
Oakville ON L6M 2X2
				4,231,595 (1)	34.24%		Common

Sean Froats
1580 Parish Lane
Oakville, ON L6M 3E2	4,376,421
				200,000 Option
				@ .50 per share
				exp. Nov. 30,
1999 (1)		35.41%		Common


All officers and
directors 			4,605,421 (1)		37.26%		Common
as a group (2 persons)

(1):  Marilyn Froats, Jason Froats, Blaine Froats and Sean Froats are
 shareholders
in the Froats family
holding company - First Flotilla (BWI) Inc. which is the record owner of
4,000,000 common shares.  Blaine Froats, Marilyn Froats, Jason Froats and Sean
Froats own directly 229,000, 2,595, 501,150 and 376,421  common shares
separate of the family holding company, respectively.

-- Include shares purchasable under common stock options.


Item 12. Certain Relationships and Related Transactions

Blaine Froats, an officer and director of the Company and direct owner of
229,000 common
shares, was also a founder of FMCI, EFT and ESC. The Company recently acquired
each of these companies on terms established by Blaine Froats. While management
believes that the terms of acquisition were fair, no independent valuation was
performed by or on behalf of the Company. Mr. Froats and his family through
their private holding company First Flotilla (BWI) Inc. received control over
4,000,000 shares of common stock of the Company as a result of the acquisitions.

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

There were no reports filed on Form 8-K during the fiscal year ended
May 31, 1999.

INDEX TO EXHIBITS

The exhibits to be filed with this Form 10-KSB are hereby incorporated
by reference from the exhibits filed with issuer's filing on Form 10-SB,
as follows:

2 (i)

A. Certificate of Incorporation of the Company, as amended
B. Certificate of Incorporation of FMCI, as amended
C. Certificate of Incorporation of EFT, as amended
D. Certificate of Incorporation of ESC, as amended

2. (ii)

E. Bylaws of the Company
F. Bylaws of FMCI
G. Bylaws of EFT
H. Bylaws of ESC

3.

I. Specimen Common Stock Certificate

6.

J. Lease Agreement dated  May 1997 by and between Fairgate Centre Ltd. and The
Reclamation (US) Corporation.
K. Agreement and Plan of Reorganization between the Company and FMCI dated
November 20, 1998
L. Agreement and Plan of Reorganization between the Company and EFT dated
November 20, 1998
M. Agreement and Plan of Reorganization between the Company and ESC dated
November 20, 1998
N. Bill of Sale for FMCI by and between the Company and Michael Hewitt dated
May 28, 1999.
O. License Agreement by and between the Company and T.A. Drummond Metal
Products Ltd. dated May 31, 1999.

16.
P. Letter from Gerald R. Hinshaw, CPA regarding change in certifying accountant.
Q. Letter from Tinkham & Associates LLP regarding change in certifying
accountant.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this registration statement to be signed on its behalf by the
undersigned,
thereunto duly authorized.


					ENVIRONMENTAL PRODUCTS GROUP, INC.



					By:BLAINE C. FROATS
					Blaine C. Froats, Chairman/CEO

February 20, 2001

In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities
and on the dated indicated.


					By:BLAINE C. FROATS
					Blaine C. Froats, Chairman/CEO

February 20, 2001

					By:SEAN FROATS
					Sean Froats, Secy/Treasurer/Director/Principal Financial Officer

February 20, 2001