<PAGE>   1
                                   Form 10-QSB

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

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



                 For the quarterly period ended October 31, 1996
                                                ----------------


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

            For the transition period from             to
                                           -----------    ------------

            Commission file number  93-67656-S
                                    ----------

                        LEADING-EDGE EARTH PRODUCTS, INC.
           ----------------------------------------------------------
           (Name of small business issuer as specified in its charter)

          Oregon                                                   93-1002429
         ---------------------------------------           -------------------
         (State of incorporation or organization)         (IRS Employer ID No.)

         319 Nickerson St. #186, Seattle, WA               98109
         ---------------------------------------------------------
         (Address of principal executive offices)       (Zip Code)

                                  800-788-3599
                            -------------------------
                            Issuer's telephone number

  ------------------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed since last
                                report)

   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 registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days    X 
                                                                  ------- ------
                                                                  Yes      No

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12,13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes....... No.......

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 30,017,951 as of January 15,
1997

     Transitional Small Business Disclosure Format (check one):
Yes...........    No......X....


<PAGE>   2



                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A Development Stage Enterprise)

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS

Interim Financial Statements for the periods ending October 31, 1996, and 1995
are attached hereto.

ITEM 2.  PLAN OF OPERATION

The Company has yet to generate revenues from the sale of building panels. No
revenues were earned in fiscal 1994/1995; however, $294,324 were earned in
fiscal 1995/1996, primarily in the form of License revenue from the Agile
license. Additional sums are expected from Agile, (see exhibits to 10-KSB for
year ended April 30, 1996). The operations of the Company, since inception, have
been focused on research and development. No independent research and
development activities by the Company are planned in fiscal 1996/1997, although
the Company reserves the right to resume such activities at any time. No
significant purchase of any equipment by the Company is expected during fiscal
1996/1997, and no significant change in the number of employees of the Company
is expected. However; the Company sold $11,000 of production equipment during
the quarter and possibly may sell additional equipment the future.


Management of the Company intends to concentrate its efforts to support its
consulting obligations to Agile under the Agile License (see exhibits to 10-KSB
for year ended April 30, 1996) during 1997; however, in the event that
additional research and development or other related activities by the Company
appear desirable after the Company's review of Agile's progress under the Agile
License, such related activities may be undertaken. No budgets have been
established therefore. The Company management and directors believe, to the
extent that Agile is successful in its operation, it will benefit the Company
due to the Company's equity ownership interest in Agile. The Company believes
Agile's technological and business successes will enable the Company, per the
December 4, 1995 Agreement, to build other plants similar to Agile's, throughout
the United States and the world, or engage in direct operations, or joint
ventures or otherwise participate with Agile in such activities.

The Company approved on December 4, 1995, and entered into a comprehensive
license agreement with Grant Record, WLP, Agile and Agile Investment Corporation
("A.I.C.") under which the Company non-exclusively licensed Agile to
manufacture, market and sell products based on the Company's: composite building
system concepts, patents, patents pending, pending patent applications, trade
secrets and future product developments (jointly or independently accomplished).
The license is for fifty years for the, U.S.A. with exclusive rights for up to
three-years, (subject to achieving a $1.0 million initial investment within one
year of the closing). Agile realized the specified investment level during the
first half of calendar 1996. Agile also acquired the right to manufacture,
exclusively, within a 500-mile radius of Williamsport, PA (the "Home
<PAGE>   3
Territory"), for the term of the License. LEEP has the right to continue to use
the technology, as well as enhancements and improvements made by Agile, subject
to the exclusive rights period. Company personnel are to be available, on
notice, for three years to consult with Agile to implement and develop the
technology, at a cost to Agile of $500 per day, plus expenses. License and
consulting revenues for the quarter ending October 31, 1996, and October 31,
1995, were $46,000 and $50,000, respectively.

As of December 31, 1996, $202,500 has been remitted by Agile to the Company for
payment of fees due upon receipt of capitalization into Agile. $22,500 is still
due the Company based on capital received by Agile. $24,500 has been paid to the
Company for consulting services due the Company under the December 4, 1995
Agreement, and $143,500 is still due the Company. The Company has agreed to
temporarily defer a portion or portions of the consulting fees due from Agile
under the December 4, 1995 Agreement, and reserves the right to demand such
amounts at any time.

The Company is owed $50,000 per month from Agile, beginning at the time Agile
receives an aggregate amount of $4.0 million in capitalization. Agile has
received approximately $2.4 million in capitalization as of December 31,1996.
The State of Pennsylvania has committed to loan and grant Agile an aggregate of
$3.0 million at the time Agile receives an aggregate total of $7.0 million of
capitalization. During December 1996, the $3.0 million State offer expired.
However; Agile management believes that the State of Pennsylvania will renew the
offer. The Company believes that debt and equity sources are available to Agile,
whereby Agile should obtain more than the above cited $7.0 million
capitalization. Based on Agile attaining the $4.0 million aggregate total
capitalization level, management believes the Company should begin receiving its
$50,000/month License payment in 1997; however, no assurances can be made that
this will happen.

Agile, at December 31,1996, had approximately $500,000 in trade and other
short-term debt. Approximately one-half of this amount was consolidated under
the Bank line discussed herein and longer-term notes. Agile is seeking bridge
financing assistance to ensure orderly operations until larger financing is
completed. No assurances can be made that bridge or other classes of
capitalization will be finalized.

The bank line which consolidated debt in December 1996, was also used to secure
a fully operational polyisocyanurate expansion foam panel lamination production
line. Agile plans to begin immediate manufacturing operation on the new line.

The Company has limited cash reserves. The Company anticipates administrative
and other overhead in the twelve months ending April 30, l997, of $600,000 (cash
and non cash items combined). It is anticipated that this amount can be raised
by private equity and/or debt placement by itself and/or A.I.C., in the event
the $50,000/month license payments required by the Agile License Agreement are
delayed. There can be no assurance that these positive results will be attained.
<PAGE>   4
The Company financed it's cost of operations from the exercise of stock options,
the sale of equipment and loans to the Company. For further analysis, see the
Company's "Statements of Cash Flows".

Legal and professional fees increased from $19,019 during the quarter ended
October 31, 1995, to $55,294 for the quarter ended October 31, 1996. This
increase is due primarily to the fees associated with the Company's audit which
were higher than usual because of issues associated with the Company's
investment in Agile and A.I.C.

Write down of assets increased from zero to $47,534 during the quarter ended
October 31, 1996, from the same quarter of the previous year. All property and
equipment assets have been written down to zero as the Company has determined
that assets not sold, would not be used in future related activities. The
Company did receive $11,000 for selling some production equipment which is
included in other income. Additionally, interest income represents primarily
interest earned on a note assigned to the Company.

R&D expense is in line with the previous year. During fiscal 1995/1996 the
Company's efforts were turned more to the task of identifying a financial
partner with whom it could complete the next phase of Production Engineering and
Building System Development. Expenses were shifted toward G&A and fixed overhead
was reduced. However; license fees increased to $8,000 for the period ending
October 31, l996, from zero in the same period of the pervious year. This
increase represents payment under a licensing agreement entered into by the
Company for the right to use Polymag proprietary magnesiumoxide technology and
to receive one year of consulting. The Company obtained the right to use the
technology by issuing a note to a stockholder for $25,822, thereby, canceling an
obligation incurred by Grant Record, in the same amount, which he had used to
purchase the rights from the inventor.


Contract salaries increased from $15,000 during the quarter ended October 31,
1995 to $31,137 during the current quarter. This increase represents the amount
incurred under a consulting agreement for the Company's chief financial officer.


                           PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

On July 27, 1995, the Company filed an action against Timothy J. Metz in the
Superior Court of the State of Washington for King County, Cause No. 95-2-19488.
Mr. Metz is a former officer of the Company. The Company alleges that Mr. Metz
breached his contract with the Company. The Company seeks: monetary damages
against Mr. Metz; an injunction enjoining Metz from violating the
confidentiality provisions of the contract; and a declaratory judgement that
Mr. Metz is not entitled to anything under his contract. On August 23, 1995,
Mr. Metz filed his answer to the Company's action, and in addition filed a
counterclaim against the Company and added Grant

<PAGE>   5
Record as a third party defendant. In his counterclaim, Mr. Metz seeks to
establish co-ownership and rights to certain patents involving building panels
and means for joining such panels. Mr. Metz also alleges he was wrongfully
terminated, and seeks damages of $395,000 in connection therewith.
Additionally, Mr. Metz seeks unspecified damages, which he seeks to have
trebled, plus attorney fees. Mr. Metz sought to remove the Company's action
against him and his counterclaim and third party complaint to the United States
District Court for the Western District of Washington. His removal petition is
filed in United States district Court, Cause No. C95-1302. The Company resisted
the removal petition, and requested that the matter be heard in the same court.
The United States District Court granted the Company's motion to remand to the
state court, and ordered that all proceedings in the United States District
Court pertaining to the patent litigation be stayed until the state court case
is resolved. Because of a personal tragedy, Mr. Metz has not been able to
respond to the discovery requested of him by the Company. The Company has not
used and does not use the technology to which Mr. Metz claims rights. Although
the suit has been pending for over a year, no discovery has taken place. Based
on the Company's knowledge of Mr. Metz's claims, the Company is of the opinion
that it has meritorious defenses and intends to defend vigorously against the
claims brought by Mr. Metz.

The Company has made demands to Harvey and Gary Bryant (Bryant Investment
Company, Las Vegas, NV) for their return to the Company of, respectively,
250,000 shares each of the common, restricted stock of the Company due to
nonperformance on an earlier (1994) undertaking in which Bryant Investment
Company committed to raise a minimum of $1.0 million for the Company. To date,
Bryant Investment Company has not responded to the Company's demands to return
the stock and the company is contemplating legal action to retrieve and cancel
the shares.

One of WLP's founding directors and note holder was recently dismissed from the
WLP and Agile Boards by the WLP shareholders, due to an apparent loss of
confidence on the part of the director and business differences. Legal action is
pending between the director and WLP.


ITEM 2.      CHANGES IN SECURITIES

There have been no changes in instruments defining the rights of holders of any
class of securities.


ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

None

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

On October 14, 1996, at the annual meeting of shareholders, A. Charles Bush and
Richard M. Pell, in addition to the incumbent Board of Directors, were elected
to serve as directors of the Company until the next annual meeting. Each of the
director nominees (7 persons) received 23,731,293 votes for and 15,337 votes
against election to serve as director, with no votes
<PAGE>   6
withheld.

At the same meeting, management was given the authority to consider moving its
audit responsibility to the East Coast, to be more consistent with managements'
location. 23,497,202 votes in favor and 15,200 votes against were cast, with
234,228 votes withheld.

ITEM 5. OTHER INFORMATION

Matters discussed herein, contain forward looking statements that involve risk
and uncertainties. The Company's results may differ significantly from results
indicated by forward looking statements. Factors that might cause some
differences, include, but are not limited to:

-    Changes in general economic conditions, including but not limited to
     increases in interest rates, and shifts in domestic building construction
     requirements;

-    Changes in government regulations effecting customers, the Company, or
     Agile;

-    Risks generally involved in the construction business, including weather,
     fixed price contracts and shortages of materials or price competitive
     labor;

-    Competition;

-    The ability of Agile to successfully bring the products from Development
     Stage into full and profitable Production Stage;

-    The Company and/or Agile's ability to raise sufficient debt and equity
     capital to perfect Agile's business plans and to enable Agile to continue
     in existence;

-    The occurrences of incidents which could subject the Company to liability
     or fines;

-    Agiles ability to obtain the sales orders necessary to support the
     production intended by the Agile Business Plan.


ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

(a)          Exhibits
                    27 Financial Data Schedule (for SEC use only)


(b)          Reports on Form 8-K
                      None


<PAGE>   7




                                   SIGNATURES


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



                                              LEADING-EDGE EARTH PRODUCTS, INC.
                                              --------------------------------
                                                       (Registrant)



Date:        JANUARY 21, 1997                 By:      GRANT C. RECORD
             ----------------                          ---------------
                                                       Grant C. Record
                                                       President and Secretary





<PAGE>   8






                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          INTERIM FINANCIAL STATEMENTS

                            OCTOBER 31, 1996 AND 1995

                                   (Unaudited)





<PAGE>   9

                       LEADING-EDGE EARTH PRODUCTS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

<TABLE>
<CAPTION>

              CONDENSED BALANCE SHEETS                OCTOBER 31, 1996 AND APRIL 30, 1996
-----------------------------------------------------------------------------------------------
                                                               31-OCT-96           30-APR-96
-----------------------------------------------------------------------------------------------
<S>                                                        <C>                 <C>
ASSETS
CURRENT ASSETS:
   CASH                                                          $2,117              $5,700
   RECEIVABLES FROM AGILE BUILDING TECHNOLOGY INC.             $139,319             $68,125
   INVENTORY                                                     $4,778              $4,778
   PREPAID EXPENSES AND DEPOSITS                                     $0             $38,401
                                                             ----------          ----------
             TOTAL CURRENT ASSETS                              $146,214            $117,004

PROPERTY, PLANT AND EQUIPMENT                                    $3,161             $50,695
   LESS ACCUMULATED DEPRECIATION                                 $3,161              $3,161
                                                             ----------          ----------
             NET PLANT AND EQUIPMENT                                 $0             $47,534

OTHER ASSETS:
   NOTE RECEIVABLE                                             $275,000                  $0
   ACCRUED INTEREST                                              $6,875                  $0
   INTANGIBLE ASSET                                             $25,822                  $0
                                                             ----------          ----------
             TOTAL OTHER ASSETS                                $307,697                  $0
                                                             ----------          ----------
             TOTAL ASSETS                                      $453,911            $164,538

=============================================================================================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
   NOTES PAYABLE                                                     $0             $40,000
   ACCOUNTS PAYABLE                                             $90,861            $108,525
   ACCRUED CONTRACT SALARY                                     $276,293            $242,377
   ACCRUED ROYALTIES AND INTEREST PAYABLE                       $45,987             $59,418
   LOANS FROM SHAREHOLDER                                      $262,917            $177,798
                                                             ----------          ----------
             TOTAL CURRENT LIABILITIES                         $676,058            $628,118

SHAREHOLDERS' EQUITY (DEFICIT):
   COMMON STOCK, NO PAR VALUE                                $4,013,809          $3,470,409
   NOTE RECEIVABLE FROM SHAREHOLDERS                          ($208,784)          ($128,784)
   DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE             ($4,027,172)        ($3,805,205)
                                                             ----------          ----------
             TOTAL SHAREHOLDERS' EQUITY                       ($222,147)          ($463,580)
   ADJUSTMENT                                                ----------          ----------
             TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $453,911            $164,538
==============================================================================================
</TABLE>


<PAGE>   10

                      LEADING-EDGE EARTH PRODUCTS, INC.
                       (A DEVELOPMENT STAGE ENTERPRISE)

<TABLE>
<CAPTION>
                   STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED OCTOBER 31, 1996 AND OCTOBER 31, 1995
----------------------------------------------------------------------------------------------------------------------------
                                                                                                           PERIOD FROM
                                                                                                           DEC. 23, 1991
                                             THREE MONTH ENDED              SIX MONTHS ENDED             (INCEPTION)THRGH
                                             10/31/96          10/31/95     10/31/96         10/31/95        10/31/96
----------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                <C>          <C>             <C>            <C>         
INCOME:                                                                                                               
  LICENCE AND CONSULTING REVENUES             $46,000           $50,000     $165,125          $75,000        $437,000 
  INTEREST                                     $6,881                $0       $6,951                          $15,076 
  OTHER                                       $15,103                $0      $16,464               $0         $30,786 
                                            ---------        ----------   ----------       ----------     ----------- 
  TOTAL INCOME                                $67,984           $50,000     $188,540          $75,000        $482,862 
                                                                                                                      
RESEARCH AND DEVELOPMENT EXPENSES:                                                                                    
  SALARIES                                         $0            $5,803           $0           $8,183        $418,827 
  SUPPLIES/SHIPPING                                $0            $2,479         $301           $3,745         $91,130 
  PROFESSIONAL FEES                                $0           $23,617       $2,083          $23,617        $162,583 
  LICENSE FEES                                 $8,000                $0      $18,000               $0         $18,000 
  TRAVEL                                           $0                $0           $0               $0         $11,418 
  RENT                                             $0                $0           $0             $249         $37,715 
  LEGAL                                        $1,358            $1,065       $5,154          $13,065         $24,080 
  DEPRECIATION                                     $0              $522           $0           $1,044          $6,264 
  UTILITIES                                      $162              $412         $162             $729          $6,371 
  WRITE-DOWN OF ASSETS                        $47,534                $0      $47,534               $0        $147,675 
                                            ---------        ----------   ----------       ----------     ----------- 
  TOTAL RESEARCH AND DEVELOPMENT              $57,054           $33,898      $73,234          $50,632        $924,063 
                                                                                                                      
GENERAL AND ADMINISTRATIVE EXPENSES:                                                                                  
  CONTRACT SALARIES                           $31,137           $15,000      $65,217          $51,000      $1,254,875 
  RENT                                         $3,011            $2,751       $7,962           $9,572         $71,824 
  DEPRECIATION                                     $0              $678           $0           $1,356          $7,912 
  OFFICE SUPPLIES                              $3,498              $796       $5,030           $3,840         $45,579 
  POSTAGE AND SHIPPING                         $1,631            $2,704       $2,981           $3,549         $20,418 
  TELEPHONE                                    $2,105            $6,202       $6,935           $7,617        $116,979 
  TRAVEL AND ENTERTAINMENT                     $2,726           $22,974      $10,948          $31,393        $153,840 
  RELOCATION                                   $3,403                $0       $3,403               $0         $18,572 
  PAYROLL AND PAYROLL EXPENSES                     $0                $0      $14,375               $0         $17,410 
  LEGAL AND PROFESSIONAL                      $55,294           $19,019      $77,289          $34,262        $858,190 
  STOCKHOLDER COSTS                            $3,578            $1,962       $4,436           $3,706         $41,738 
  INTEREST AND BANK CHARGES                    $9,072            $6,780      $16,022          $13,922        $125,616 
  PROMOTION & CORP. DEVELOPMENT                $3,232            $5,742     $120,434           $5,742        $316,179 
  INSURANCE                                        $0            $2,783           $0           $4,474          $7,865 
  OTHER                                        $1,174              $180       $2,241             $210         $18,976 
                                           ----------        ----------   ----------       ----------     ----------- 
  TOTAL GENERAL AND ADMINISTRATIVE           $119,861           $87,571     $337,273         $170,643      $3,075,973 
                                                                                                                      
ROYALTIES AND ROYALTY BUYOUT EXPENSE               $0                $0           $0               $0        $510,000 
  NET LOSS                                  ($108,931)         ($71,469)   ($221,967)       ($146,275)    ($4,027,174)
                                           ----------        ----------   ----------       ----------     ----------- 
LOSS PER COMMON SHARE                           (0.00)            (0.00)       (0.01)           (0.01)          (0.23)
WEIGHTED AVERAGE SHARES OUTSTANDING        29,871,755        16,558,977   29,871,755       16,558,977      17,242,444 
=======================================================================================================================     
</TABLE>

<PAGE>   11




                      LEADING-EDGE EARTH PRODUCTS, INC.
                       (A DEVELOPMENT STAGE ENTERPRISE)

<TABLE>
<CAPTION>
              CONDENSED STATEMENTS OF CASH FLOWS FOR THREE AND SIX MONTHS ENDED OCTOBER 31, 1996 AND OCTOBER 31, 1995
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 PERIOD FROM
                                                                                                                 DEC. 23, 1991
                                                       THREE MONTHS ENDED        SIX MONTHS ENDED              (INCEPTION)THRGH
                                                   10/31/96       10/31/95        10/31/96          31-OCT-95     31-OCT-96
-------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>              <C>             <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  NET LOSS                                          ($108,931)      ($71,469)       ($221,967)    ($145,779)     ($4,027,172)
ADJUSTMENTS TO RECONCILE NET LOSS TO CASH
FLOWS USED IN OPERATING ACTIVITIES:
  NONCASH COMPENSATON EXPENSES RELATED TO
     NONQUALIFIED STOCK OPTIONS GRANTED                    $0             $0               $0            $0       $1,199,339
  DEPRECIATION                                             $0         $1,200               $0        $2,400          $14,176
  WRITE-OFF OF LONG-TERM ASSETS                       $47,534             $0          $47,534            $0         $158,089
  NONCASH COMPENSATION EXPENSES
      RELATED TO STOCK GRANTS                              $0             $0          $90,900            $0         $675,648
  ACCRUED ROYALTY OBLIGATION                               $0             $0               $0            $0         $200,000
  CHANGES IN OPERATING ASSETS AND LIABILITIES:
  RECEIVABLES                                        ($50,069)            $0         ($71,194)           $0        ($139,319)
  INVENTORY                                                $0             $0               $0            $0          ($4,778)
  PREPAID EXPENSES AND DEPOSITS                        $5,276             $0          $38,401        $1,000               $0
  ACCOUNTS PAYABLE                                    $51,917        $13,836         ($17,664)      $14,048         $397,760
  ACCRUED SALARY OBLIGATIONS                          $18,917        $15,000          $33,916       $51,000         $276,293
  ACCRUED INTEREST RECEIVABLE                         ($6,875)            $0          ($6,875)           $0          ($6,875)
  ACCRUED ROYALTIES AND INTEREST PAYABLE             ($20,129)        $6,850         ($13,432)      $13,425         $219,021
                                                     --------       --------        ---------     ---------      -----------
            NET CASH USED                            ($62,360)      ($34,583)       ($120,381)     ($63,906)     ($1,037,818)

CASH FLOWS FROM INVESTING ACTIVITIES:
  EQUIPMENT PURCHASES                                      $0        ($5,757)              $0       ($8,598)       ($170,064)
  INVESTMENT IN SUPPLIER                             ($25,822)            $0         ($25,822)           $0         ($26,822)
  PMTS ON NOTES RECEIVABLE FM STOCKHOLDERS                 $0             $0               $0            $0           $6,500
                                                     --------       --------        ---------     ---------      -----------
            NET CASH USED IN INVESTING               ($25,822)       ($5,757)        ($25,822)      ($8,598)       ($190,386)

CASH FLOWS FROM FINANCING ACTIVITIES:
  SALE OF COMMON STOCK                                $72,500             $0          $72,500            $0         $442,500
  EXERCISE OF STOCK OPTIONS                           $25,000             $0          $25,000            $0          $67,537
  EXERCISE OF CLASS A WARRANTS                             $0             $0               $0            $0           $3,300
  CONTRIBUTED CAPITAL                                      $0             $0               $0            $0         $100,910
  PROCEEDS FROM NOTES PAYABLE                              $0             $0               $0            $0         $197,500
  PROCEEDS FROM LOANS FROM STOCKHOLDERS               $34,323        $50,800         $128,620      $135,275         $707,953
  PAYMENTS ON NOTES PAYABLE                                $0             $0               $0            $0         ($53,500)
  PAYMENTS ON LOANS FROM STOCKHOLDERS                ($43,500)            $0         ($83,500)     ($50,850)       ($235,879)
                                                     --------       --------        ---------     ---------      -----------
            CASH PROVIDED BY FINANCING                $88,323        $50,800         $142,620       $84,425       $1,230,321

            NET CHANGE IN CASH                           $141        $10,460          ($3,583)      $11,921           $2,117

CASH AT BEGINNING OF PERIOD                            $1,976         $1,848           $5,700          $387               $0
                                                     --------       --------        ---------     ---------      -----------
CASH AT END OF PERIOD                                  $2,117        $12,308           $2,117       $12,308           $2,117
================================================================================================================================
</TABLE>




<PAGE>   12

                        LEADING-EDGE EARTH PRODUCTS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)

                          NOTES TO FINANCIAL STATEMENTS
                           OCTOBER 31, 1996, AND 1995
                                   (UNAUDITED)
1. GENERAL

The interim financial statements have been prepared by the Company without audit
and are subject to normal recurring year-end adjustments. Certain information
and footnote disclosure normally included in financial statements prepared in
accordance with generally accepted accounting principles has been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments, (all of which are of a normal recurring
nature), necessary to present fairly the financial position of the Company as of
October 31, 1996, and the results of operations for the three and six months
ending October 31, 1996 and 1995. It is suggested that these interim statements
be read in conjunction with the financial statements and notes thereto contained
in the Company's audited financial statements for the years ended April 30, 1996
and 1995. The results of operations for the three and six months ended October
31, 1996 and 1995 are not necessarily indicative of the results to be expected
for the full year.

2.  INCOME TAXES

The Company has no taxable income to date; therefore, no provision for income
taxes has been made. The deficit accumulated during the development stage is
generally available to offset future taxable income.

3.  NET LOSS PER COMMON STOCK

Net loss per common share is computed based on the weighted average number of
common shares and common share equivalents outstanding. When dilutive, stock
options are included as common share equivalents using the treasury stock
method.

4.  CONTINUING EXISTENCE

The Company has yet to produce and sell its products. The burden of trade debt
has been substantially reduced by equity advances made by WLP, license fee
income, and intermediate term loans. Its ability to continue in existence is
dependent upon obtaining sufficient funding to begin manufacturing operations
with Agile and achieve a positive cash flow in which the Company can
participate. Management believes that sufficient funding and operational success
will be achieved to allow the Company to realize planned business objectives,
but at this time it is not assured.


5.  ISSUANCE OF SECURITIES




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On August 10, 1996 a former officer of the Company exercised options to purchase
50,000 rule 144 restricted shares in exchange for a $3,500 reduction of a note
payable by the Company.

On August 22, 1996, the Company issued a total of 100,000 shares of restricted
common stock in exchange for the cancellation of $69,000 in loans and accrued
interest from stockholders. Additionally, the Company issued 275,000 shares of
restricted common stock in exchange for a note payable from A.I.C. in favor of a
shareholder for $275,000. The note was assigned to the company by the
shareholder who lent the money to A.I.C. A.I.C. will deliver 275,000 shares of
the Company's common stock held by A.I.C. for the note. The Company has recorded
a note receivable from A.I.C. in the amount of $275,000.

On June 18, 1996, the Company entered into a consulting agreement with its chief
financial officer and agreed to issue him options on October 1, 1996, to
purchase 50,000 shares at $.75 per share and 50,000 shares at $1.00 per share.

On October 3, 1996, a former employee of the Company exercised an option to
purchase 50,000 shares of common stock for $25,000 in cash

6.  AGILE FEE

In accordance with the Pennsylvania Agreement, $46,000 in License fees were
accrued during the quarter from Agile. Fees from Agile are expected to continue
accruing until Agile's cash flow improves.

7.  INVESTMENTS IN AFFILIATES

The Company has a 35% interest in Agile with the remaining 65% interest held by
WLP. This investment is accounted for using the equity method. Any asset or
equity distributions from Agile will be made in accordance with the respective
ownership interests. Agile is a development stage enterprise established to
manufacture building panels using technology developed jointly and/or
independently by the Company and/or Agile. The Company has recorded no value
related to this investment due to the indeterminable values related to the
Company's common stock and technology given or the common stock of Agile
received in the investment transaction.

A.I.C. is an enterprise whose primary asset (Company stock) is used as security
to support Agile and the Company's operation using the investment to secure
loans, sell and or otherwise use as required for financing purposes for five
years. The respective ownership interest of the Company decreases at a specified
rate as WLP, A.I.C. and/or the Company contribute operating capital or financing
to Agile. No value has been recorded by the Company related to the investment in
A.I.C. due to the indeterminable values related to the Company's common stock
given or the common stock of A.I.C. received in the investment transaction.

8.  AGILE AND A.I.C. REPORTED NET LOSSES


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Both Agile and A.I.C. report substantial net losses as a result of shares issued
to WLP for services rendered. These services are associated with work done by
principles of WLP and was required to make the Agreement possible. The Company
has not recognized its proportionate share of Agile's and A.I.C.'s net losses as
the Company has no obligation to fund any such losses and carries its investment
in Agile and A.I.C. at zero.

9.  PROPERTY AND EQUIPMENT

All property and equipment assets have been written down to zero as the Company
has determined that assets not sold, would not be used in future related
activities. The Company did receive $11,000 for selling some production
equipment which is included in other income. There is a possibility that some
more equipment will be sold at a future date.

10.  INTANGIBLE ASSETS

On August 29, 1996, the Company assumed an agreement entered into by Grant
Record on March 30, 1996. In this agreement, the inventor disclosed certain
proprietary information for the use of Magnesium Oxide Technology (MgO) and the
Company received an exclusive and assignable right to the licensed technology,
including enhancements made by the licensee. The MgO technology is valuable to
the Company for control of odors produced in processing. The Company obtained
the right to use the technology by issuing a note to a stockholder for $25,822,
thereby, canceling an obligation incurred by Grant Record, in the same amount,
which he had used to purchase the rights from the inventor.

11.  SUBSEQUENT EVENTS

75,000 shares reserved for future services by a vendor were issued on December
10, 1996.