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

                                   FORM 10-KSB
(Mark One)

[X]     ANNUAL  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934
                                  For the fiscal  year ended  December 31, 1999.


[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
        ACT OF 1934

                                  For the transition period from_______to_______
                                  Commission file number _______________________


                  INNOVATIVE HOLDINGS AND TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)


           Colorado                                        74-2929034
---------------------------------              ---------------------------------
   (State of Incorporation)                    (IRS Employer Identification No.)



100 South Orange Ave., Ste. 100, Orlando, FL                 32801
--------------------------------------------   ---------------------------------
(Address of principal executive offices)                   (Zip Code)



Issuer's telephone number,(   407     )     481       -      8900
                           -----------  -------------   -------------


Securities to be registered under Section 12(b) of the Act:  None

         Title of each class                   Name of each exchange on which
         to be so registered                   each class is to be registered



---------------------------------              ---------------------------------


---------------------------------              ---------------------------------

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


         Title of each class                    Name of each exchange on which
         to be so registered                    each class is to be registered


Common Stock, par value $0.0001                            OTC BB
---------------------------------              ---------------------------------


---------------------------------              ---------------------------------

     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. Yes     No
                                                                       ---   ---


<PAGE>

                                     PART I


Item 1.       Description of Business.

         (a)  Forward-looking  Statements.  Certain statements in this Form 10SB
Registration  Statement,  particularly under Items 1 and 2, constitute "forward-
looking statements" with the meaning of the Private Securities Litigation Reform
Act of 1995. These  forward-looking  statements involve known and unknown risks,
uncertainties, and other factors which may cause the actual results, performance
or  achievements  of the  Company  to be  materially  different  from any future
results,   performance   or   achievements,   expressed   or   implied   by  the
forward-looking statements.

          (b) Business  Development.  Innovative  Holdings & Technologies,  Inc.
(the  "Company")  was  incorporated  under the laws of the State of  Colorado on
January 7, 1987. The Company has one operating subsidiary named Xtreme Telemetry
Systems, Inc. (XTS), a Florida corporation.

         (c) Business of Issuer.  The company is in the  business of  acquiring,
creating  and   developing   high   technology   companies  with  promising  new
technologies  and  applications.  The  Company  does not intend to combine  with
private  companies  in  manners  which may  cause it to be deemed an  investment
company subject to the Investment Company Act of 1940.

          In January, 1999, the Company,  through its XTS subsidiary,  commenced
the  development  of  the  Xtreme  Telemetry  System,  a  high  technology  data
acquisition   and  delivery   system  for  broadcast   television  and  Internet
applications.  The XTS System  incorporates  exclusive  sensor  technologies  to
gather data from biological,  mechanical and environmental sources. This data is
then  wirelessly  transmitted  from  its  source,  by way of  XTS's  proprietary
software and hardware,  to broadcast  applications  on TV or the Internet.  This
broadcast information is graphically displayed on TV or Internet screens,  which
also serves as a "billboard",  offering unique opportunities for advertisers and
sponsors to display their messages.

          In October 1999,  the Company began the  development of a new Internet
sports and entertainment  network that will offer alternative sports information
and  entertainment.  The concept will incorporate the XTS System telemetry data,
along with special events, celebrity features, e-commerce, chat rooms, web cams,
virtual games and news and information.

          The  Company  is  currently  in  discussions  with a number  of sports
entities  worldwide for the purpose of telemetry data  acquisition (via XTS) and
broadcast delivery  including soccer,  football,  auto racing,  golf and extreme
sports.

          Anticipated   revenues   will  be   generated   through   sponsorship,
advertising and sales of telemetry content to TV and Internet providers.

          The Company will offer content and information  similar to many sports
and entertainment  venues on the Internet,  but will be unique in offering XTS's
telemetry  to a  global  audience.  It is  management's  belief  that  there  is
currently no direct competition to the Company's telemetry technology.

          The Company is developing propriety software and hardware applications
which have not yet been patented or copyrighted.

Employees

          The Company  employed three full  employees,  and uses the services of
six consulting firms/individuals on an as-needed basis.

<PAGE>

Item 2.       Description of Property.

         The Company owns no real  property.  It subleases  2,778 square feet of
office space from Metcalf Limited  Partnership.  The premises are located at 100
South Orange Ave., Suite 300, Orlando,  Florida.  The lease commenced on July 1,
1999 and ends on the last  effective day of the Lease,  October 1, 2002,  unless
terminated  sooner,  as set forth in the lease  agreement.  The monthly  rent is
currently $3,472.50.


Item 3.       Legal Proceedings.

         The  Company  is  not a  party  to  any  pending  or  threatened  legal
proceedings.


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

         No matter was submitted to a vote of the security holders,  through the
solicitation  of proxies or otherwise,  during the fourth  quarter of the fiscal
year covered by this report.


                                     PART II


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

(a)      Market Information.

         The  Company's  common stock trades  Over-the-Counter  (OTC) on the OTC
Bulletin  Board under the symbol  IHTL.  Table 3 sets forth the high and low bid
information for each fiscal quarter within the last two years.  These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

Table 3.

Bid Information
--------------------------------------------------------------------------------

Fiscal Quarter Ended                        High                       Low
--------------------------------------------------------------------------------


December 31, 1999                           0.22                       0.12
September 30, 1999                          1.02                       0.16
June 30, 1999                               0.84                       0.375
March 31, 1999                              1.22                       0.325
December 31, 1998                           0.78                       0.27
September 30, 1998                          0.79                       0.30
June 30, 1998                               0.75                       0.08
March 31, 1998                              0.17                       0.09
December 31, 1997                           0.28                       0.01
--------------------------------------------------------------------------------

(b)      Holders.

         The Company has approximately  2,234 active  shareholders of its common
stock holding 23,124,884 common shares.

(c)      Dividends.

          No dividends  have been declared or paid to date and none are expected
to be paid in the forseeable  future.  There are no restrictions  imposed on the
Company which limit its ability to declare or pay dividends on its common stock.

<PAGE>

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

         The following  discussion  and analysis  should be read in  conjunction
with  "Selected  Consolidated  Financial  Data" and the  Company's  Consolidated
Financial Statements and Notes thereto included elsewhere in this document.

Overview

         Since its  inception  in 1987,  the  Company's  purpose  is to  conduct
offerings of its  securities to raise  capital to acquire  businesses in various
industries.  For the period from January 9, 1987  (inception)  to September  30,
1990, the Company  incurred a total net loss of  $1,840,993.  During this period
the Company devoted substantially all of its efforts to establish and organize a
television cablecast facility. However, by the end of 1990 the operations of the
Company ceased.

         From  December 1990 through  October 1997,  the Company did not operate
any businesses and was inactive.

         In  November  of 1997,  the  Company  changed  its  name to  Innovative
Holdings & Technologies,  Inc. The Company considers its role to be an incubator
of high  technology  companies  and  began  its  search  for  suitable  business
acquisitions.  In the second quarter of 1998, the Company signed an agreement to
acquire BioCam Company,  Inc. (BioCam),  a developer of telemetry  technology in
the amount of $1,000,000. This was paid for by issuance of convertible preferred
stock and restricted  common stock.  The Company began supporting the operations
of BioCam financially and funded approximately  $350,000, in 1998. By the end of
1998, the principals of BioCam rescinded on their agreement with the Company and
the relationship was terminated.

         On January 8, 1999, the Company  incorporated Xtreme Telemetry Systems,
Inc. (Xtreme) and is its soles stockholder. Xtreme is continuing the development
of a  product  on the  cutting  edge of  communications  technology.  Xtreme  is
finalizing the development of a real time telemetric  monitoring  device,  which
will be  marketed  initially  in the sports and  entertainment  industries.  The
device will monitor  performance  and transmit the data by broadcast or over the
internet. In September, 1999, the Company secured the services of specialists in
computer software development.  The alpha-beta testing of the software commenced
in the fourth quarter,  1999. The products under  development  were completed in
January, 2000.

         Marketing efforts commenced in January,  2000. Revenues are anticipated
through the sale of  advertising  at Xtreme's web site and through the promotion
of  sponsorships  by   organizations   and  other  related  to  the  sports  and
entertainment industries.

Results of Operations

         The  following  table sets forth,  for the periods  indicated,  certain
items from the Company's Consolidated  Statements of Operations,  expressed as a
percentage of total expenses.

Results of Operations
                                                   Year Ended December 31,

                                                    1998             1998

Revenues                                             0.0%             0.0%

Expenses:
  General and Administrative                        70.2%            24.0%
  Research and Development                          28.9%            74.8%
  Interest Expense                                    .9%              .2%
         Total Expenses                              100%             100%

Net Loss                                             100%             100%

Revenues

<PAGE>

          The Company had no revenues for the years ended  December 31, 1999 and
1998. Revenues are expected to commence during April, 2000.

General and Administrative

          General and  administrative  expenses have  increased from $111,641 in
1998 to  $429,735 in 1999.  The  increase in these  expenses  resulted  from the
purchase of Xtreme and Company's  dedicated  support to develop  their  business
operations.  The  reduction of general and  administrative  expenses in 1998 was
primarily attributable to a decrease in consulting fees.

Research and Development

          Research and development  expenses  decreased from $348,250 in 1998 to
$177,253  in  1999.  The  decrease  was  largely  due to  expenditures  made for
consulting  services  related to the development of the telemetry  system in the
amount of $348,250, in 1998. Research and development expenses are not recurring
expenses, estimated research and development costs through the completion of the
telemetry system in April 2000 will be approximately $200,000.

Interest Expense

          Interest  expense is due from personal loans made to the company.  The
amounts from 1998 to 1999 have not varied considerably.

Liquidity and Capital Resources

          The  Company  requires  capital   principally  for  the  financing  of
operations  and  the  development  of  their  wholly  owned  subsidiary,  Xtreme
Telemetry  Systems,  Inc.  To date,  the  company has  financed  its  operations
primarily through the sale its of equity  securities.  During 1999 and 1998, the
Company generated $616,000 and $350,000,  respectively, from the issuance of its
stock. In addition,  the Company received $96,700 from notes and loans, in 1998.
The Company had working capital of ($241,885) as of December 31, 1999,  compared
to ($248,795) as of December 31, 1998.

          As stated in the  Company's  Consolidated  Financial  Statements,  the
Company's  ability to continue as a going concern is dependent  upon issuance of
stock and attaining  profitable  operations.  The  deficiency in operating  cash
flows is  expected to  continue  until such time that the Company  will begin to
generate cash flows from the  telemetry  data in the form of  advertisement  and
sponsorship  sales.  Operations  are  expected  to begin  in April  2000 and the
research and development  costs will cease.  Until such time, the Company issued
stock in the amount of $500,000 under a subscription receivable.  It is expected
that these funds will  facilitate  the  management of the  Company's  cash flows
until the time it begins to generate cash flows from its  operations.  There can
be no assurance the additional financing will be attained or that the operations
will be profitable.  Such inability would have a material  adverse effect on the
Company's business, operating results and financial condition.

          Net cash used in  investing  activities  was $24,791  for 1999.  These
expenditures  primarily  related to investments in the Company's  administrative
facility.  The  Company  currently  has no specific  commitments  with regard to
capital  expenditures with the exceptions of purchasing  computer  equipment and
sensors.  The Company's future capital  requirements will, depend on its ability
to acquire complementary business ventures, products or technologies.

<PAGE>

          The Company  believes  that its current cash balances will not provide
the  liquidity  necessary  to  satisfy  the  Company's  working  capital  needs.
Inflation

          Inflation  has not had a  significant  impact on the Company since its
inception  nor is it expected to have a  significant  impact in the  foreseeable
future.

Recent Accounting Pronouncements

          In March 1998, the American  Institute of Certified Public Accountants
issued  Statement of Position 98-1  "Accounting  for Costs of Computer  Software
Developed  or Obtained for Internal  Use." SOP 98-1 is effective  for  financial
statements  for years  beginning  after  December  15, 1998.  SOP 98-1  provides
guidance  over  accounting  for  computer  software  developed  or obtained  for
internal use,  including the  requirement  to capitalize  and amortize  specific
costs.  The  adoption  of this  standard  did not have a material  effect on its
capitalization policy.

Impact of Year 2000

          The Company  understands the impact of the Year 2000 (Y2K) issue.  The
Y2K issue will not affect the Company's  current internal  structure because its
internal  computers  are  used  for  administrative  purposes  and  they are Y2K
compliant.  The Company has hired an outside consultant to develop the software,
which  provides  real time  telemetry  that will store and  report on data.  The
outside consultant represents and warrants that the software is Y2K compliant.

          The  Company  cannot  predict  the  effect of the Y2K  problem  on its
customers and third parties. The Company has not yet established any contingency
plans but will  develop  such plans as needed once it  identifies  the scope and
magnitude of any compliance  issues with third parties and customers.  There can
be no  assurance  that the  systems of other  companies  on which the  Company's
system rely or interface will be timely converted.


Item 7.       Financial Statements.

         The  required  financial  statements  are  included  in  this  document
starting at Page F-1.


Item 8.       Changes  In  and  Disagreements With Accountants on Accounting and
              Financial Disclosure.

         There  have  been no  changes  or  disagreements  with  accountants  on
accounting or financial  disclosure  during the Company's two most recent fiscal
years.


                                    PART III

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





<PAGE>

The following table sets forth the officers and directors of the Company.

Name                             Position                                 Age
--------------                   -------------------                      ---
Helmuth Wyzisk                   President, Director                       43

Peter Quilty                     Secretary                                 44

(a)      Identify Directors and Executive Officers.

          The Company's one director is Mr.  Helmuth  Wyzisk.  Mr. Wyzisk is the
President  and Chief  Executive  Officer.  Mr.  Wyzisk has served in his present
capacities  since  November  1997.  From  1995  through  1997 he  served  as the
President of Celesta  Corporation.  Celesta offered financial and other business
services  to its  customers.  Prior to 1995,  Mr.  Wyzisk was  President  of ELF
Investments,  a company providing contract  negotiation and acquisition services
to its customers.

          Mr. Peter  Quilty is the  Secretary  and  Controller.  Mr.  Quilty was
employed  with the Company in June 1999.  Prior to this  employment,  he was the
Controller for Sound Money Investors and Florida Running, Inc. magazines.

(b)      Identify  Significant  Employees.  The  Company  has   no   significant
         employees, as that term is defined, other than its executive officers.

(c)      Family Relationships.  None.

(d)      Involvement  in  Certain  Legal  Proceedings.  None  of  the  Company's
         directors,  officers,  promoters or control persons, if any, during the
         past five years was, to the best of the Company's knowledge:

1.       A  general  partner  or  executive  officer  of a  business  that had a
         bankruptcy  petition  filed by or  against it either at the time of the
         bankruptcy or within the two years before the bankruptcy;
2.       Convicted  in a  criminal  proceeding  or  been  subject  to a  pending
         criminal  proceeding  (excluding  traffic  violations  and other  minor
         offenses);
3.       Subject to any order,  judgement, or decree, not subsequently reversed,
         suspended  or  vacated,   of  any  court  of  competent   jurisdiction,
         permanently or temporarily enjoining,  barring, suspending or otherwise
         limiting his or her involvement in any type of business,  securities or
         banking activities; and
4.       Found by a court of competent  jurisdiction  (in a civil  action),  the
         Securities  and Exchange  Commission or the Commodity  Futures  Trading
         Commission  to  have   violated  a  federal  or  state   securities  or
         commodities law, and the judgement has not been reversed,  suspended or
         vacated.


Item 10.      Executive Compensation.

         The Company has two  executive  officers.  Mr.  Wyzisk has been paid no
compensation during 1998 and 1999. Mr. Wyzisk was paid executive compensation in
the form of common  stock for the years 1994  through  1997 with the issuance of
6,000,000 common shares.  This compensation was valued at $300,000 or five cents
per share.  The company has granted stock options to its President to acquire up
to Ten Million  (10,000,000)  common shares for purchase price of $500,000.  The
option is exercisable commencing on June 1, 2000 and expires on March 9, 2003.

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

         Table 1 lists the persons who are known to the Company to be the owners
of more than five  percent  of the  Company's  equity  shares  according  to the
stockholder  list  provided by the  Company's  transfer  agent as of November 8,
1999.

<PAGE>

(a)      Beneficial Ownership of more than 5%.

         Table 1.

     (1)                 (2)                        (3)                  (4)
Title of Class     Name and Address          Amount and Nature        Percent of
                                                                         Class
--------------     ---------------------     -----------------        ----------
  *Common          Helmuth Wyzisk                 7,392,500             31.9%
   Common          Trinity Funding                1,666,666              7.2%
   Common          Bodden & Company               1,666,666              7.2%
   Common          Multilink Investments          1,666,668              7.2%

(b)      Security Ownership of Management.

         Table 2.

     (1)                 (2)                        (3)                  (4)
Title of Class     Name and Address          Amount and Nature        Percent of
                                                                         Class
--------------     ---------------------     -----------------        ----------
  *Common          Helmuth Wyzisk                 7,392,500             31.9%

(1)      Changes  in  Control.  Management  is  unaware  of any facts that would
         effect a change in the  control  of the  Company as of the date of this
         Form 10 SB filing.
(2)


Item 12.      Certain Relationships and Related Transactions.

(a)      Transactions with Management and Others.

         Except  as  otherwise  set  forth  in  this  document,   no  member  of
management,  executive  officer,  director,  nominee  for a director or security
holder who is known to the  Company to own of record or  beneficially  more than
five percent of any class of the Company's voting securities,  nor any member of
the  immediate  family of any of the  foregoing  persons,  has had any direct or
indirect  material interest in any transaction to which the Company was or is to
be a party.

         The Company retains the services of a marketing company whose principal
owner is the controlling  shareholder of the Company.  During 1999,  payments of
$20,000 were made to this related company.

(b)      Certain Business Relationships.

         During 1997 and 1998 and prior to July 1, 1999 the Company's operations
were  based  at the  offices  of a  shareholder.  Payments  were  made  to  this
shareholder for rent,  administrative and miscellaneous  services.  During 1998,
50,000 shares were issued to and $53,800 was paid to this  shareholder.  For the
eight months ended  August 31, 1999,  payments in the  aggregate of $60,387 were
made to this shareholder.

          On  March  10,  1998,  the  Company  granted  an  option  to  purchase
10,000,000 shares of its common stock to the controlling  shareholder at a price
of at $.05 per  share.  On March  10,  1998 the  Company  granted  an  option to
purchase  2,000,000  shares of its common stock to a  shareholder  at a price of
$.05 per share.  On March 10,  1998,  the Company  granted an option to purchase
8,000,000  shares of its common stock to a consultant  of the Company at a price
of $.05 per share.  The options are  exercisable  commencing on June 1, 2000 and
expire on March 9, 2003.

(c)      Indebtedness of Management.

         No member of the  Company's  management  is or has been indebted to the
Company since the beginning of the Company's last fiscal year.

<PAGE>

(d)      Transactions with Promoters.

         The  Company's  promoters  have not received,  directly or  indirectly,
anything of value from the Company, nor are they entitled to receive anything of
value from the Company.

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

         (a) Exhibits

         3.1*     Articles of Incorporation and amendment filed as an exhibit to
                  the  Company's  registration  statement on Form 10-SB filed on
                  December __, 1999 are  incorporated  in this annual  report by
                  reference.
         3.2*     By-Laws  filed as an  exhibit  to the  Company's  registration
                  statement  on Form  10-SB  filed  on  December  22,  1999  are
                  incorporated in this annual report by reference.
         27       Financial data schedule
         ---------------
         * Previously filed

         (b) There were no reports on Form 8-K filed by the  Company  during the
quarter ending December 31, 1999.

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

Dated: March 28, 2000


INNOVATIVE HOLDINGS & TECHNOLOGIES, INC.

/s/  Helmuth Wyzisk
-------------------
By:  Helmuth Wyzisk
Title: President


         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 dates indicated.




/s/  Helmuth Wyzisk                                           March 28, 2000
---------------------------
By:  Helmuth Wyzisk
Title: President, Director


/s/  Peter Quilty                                             March 28, 2000
---------------------------
By:  Peter Quilty
Title: Secretary, Controller



<PAGE>


                   INNOVATIVE HOLDINGS AND TECHNOLOGIES, INC.

                                 AND SUBSIDIARY

                       CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998



<PAGE>


                                TABLE OF CONTENTS
                                -----------------

                                                                           Page
                                                                           ----

Independent Auditors' Report..................................................1

Consolidated Financial Statements

 Consolidated Balance Sheets..................................................2

 Consolidated Statements of Operations........................................3

 Consolidated Stetements of Changes in Stockholders' Equity (Deficit).........4

 Consolidated Statements of Cash Flows........................................5
 .
Notes to Consolidated Financial Statements.................................6-12




<PAGE>

DiRocco Dombrow, P.A.
3601 West Commercial Blvd.
Suite 22
Fort Lauderdale, FL 33309
Tel: 954-731-8181


                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Innovative Holdings & Technologies, Inc. and Subsidiary

We have  audited the  accompanying  consolidated  balance  sheets of  Innovative
Holdings & Technologies,  Inc. and Subsidiary (a State of Colorado  corporation)
at  December  31,  1999 and  1998 and the  related  consolidated  statements  of
operations,  changes in  stockholders'  equity  (deficit) and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audit.

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  about  whether  the  consolidated  financial  statements  are free of
material misstatement.  An audit includes,  examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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 consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Innovative Holdings
&  Technologies,  Inc. and  Subsidiary  at December  31, 1999 and 1998,  and the
results of its  operations and cash flows for the years then ended in conformity
with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 14 to
the  consolidated  financial  statements,  the Company's  significant  operating
losses raise substantial doubt about its ability to continue as a going concern.
Management's  plans  regarding  those matters also are described in Note 15. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.



March 16, 2000

DiRocco Dombrow, P.A.


                                       1

<PAGE>

            INNOVATIVE HOLDINGS AND TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                    Year Ended December 31,
                                               --------------------------------
                                                   1999                 1998
                                               -----------          -----------


Current assets
  Cash                                         $     2,011          $     4,303
  Prepaid expenses                                   3,681                    -
  Note receivable                                   10,250                    -
                                               -----------          -----------
   Total current assets                             15,942                4,303

Investments                                              -            1,000,000
Property and equipment                              23,121                    -

Other assets                                         4,263                    -
                                               -----------          -----------
   Total assets                                $    43,326          $ 1,004,303
                                               ===========          ===========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities
  Accounts payable and accrued
    expenses                                   $    25,826          $    18,148
  Withholding taxes payable                        163,250              163,250
  Notes payable                                     25,000               40,000
  Due to affiliate                                  43,751               31,700
                                               -----------          -----------
   Total current liabilities                       257,827              253,098

Long-term debt
  Note payable                                           -               25,000
                                               -----------          -----------
   Total liabilities                               257,827              278,098
                                               -----------          -----------


Stockholders' equity (deficit)
  Preferred stock, $.001 par value,
   50,000,000 shares authorized,
   no shares issued and
   outstanding, respectively                             -                    -

  Common stock, $.0001 par value,
   450,000,000 shares authorized,
   23,124,884 and 21,254,884 issued
   and outstanding, respectively                     2,313                2,126

  Additional paid-in capital                     3,080,619            3,074,780
  Stock subscriptions receivable               (   334,000)                   -
  Deficit                                      ( 2,963,433)         ( 2,350,701)
                                               -----------          -----------
   Total stockholders' equity (deficit)        (   214,501)             726,205
                                               -----------          -----------
   Total liabilities and stockholders' equity  $    43,326          $ 1,004,303
                                               ===========          ===========


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

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                                    Year Ended December 31,
                                               --------------------------------
                                                   1999                 1998
                                               -----------          -----------

Expenses
  General and administrative                   $   429,735         $    111,641
  Research and development                         177,253              348,250
  Interest expense                                   5,744                5,654
                                               -----------          -----------

     Total expenses                                612,732              465,545
                                               -----------          -----------

Net loss                                       $(  612,732)         $(  465,545)
                                               ===========          ===========


Basic loss per share                           $(    0.033)         $(    0.024)
                                               ===========          ===========

Diluted loss per share                         $(    0.028)         $(    0.022)
                                               ===========          ===========





   The accompanying notes are an integral part of these financial statements.
                                       -3-

<PAGE>

<TABLE>

<CAPTION>

            INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

                                      Shares of    Shares of            Additional      Stock                       Total
                                      Preferred      Common               Paid-In   Subscriptions  Accumulated     Equity
                                        Stock        Stock     Amount     Capital     Receivable    (Deficit)     (Deficit)
                                     -----------  -----------  -------  ----------  -------------  -----------  -------------
<S>                                  <C>          <C>          <C>      <C>         <C>            <C>          <C>

Balance at  December 31, 1997               --      6,254,884  $   626  $1,248,780  $        --    $(1,885,156)   $  (635,750)

  Issuance of stock for
   repayment of accrued expenses            --      9,450,000      945     471,555           --           --          472,500

  Issuance of convertible
   preferred stock for investment     20,000,000         --     20,000     980,000           --           --        1,000,000

  Conversion of preferred stock
   to common stock                   (20,000,000)   4,200,000  (19,580)     19,580           --           --             --


  Issuance of stock for services            --        100,000       10       4,990           --           --            5,000

  Issuance of stock in connection
   with March 2, 1998 offering              --      1,000,000      100      99,900           --           --          100,000

  Issuance of stock                         --        250,000       25     249,975           --           --          250,000

  Net loss for the year                     --           --       --          --             --       (465,545)      (465,545)
                                     -----------  -----------  -------  ----------  -------------  -----------  -------------
Balance at December 31, 1998                --     21,254,884    2,126   3,074,780           --     (2,350,701)       726,205

  Cancellation of stock related
   to investment                            --     (4,200,000)    (420)   (999,580)          --           --       (1,000,000)

  Issuance of stock for services            --         50,000        5       9,995           --           --           10,000

  Issuance of stock in connection
   with January 8, 1999 offering            --        950,000       95     449,905           --           --          450,000

  Issuance of stock for repayment
    of notes payable                        --         70,000        7      46,019           --           --           46,026

  Issuance of stock under
    subscriptions agreements                --      5,000,000      500     499,500       (334,000)        --          166,000
 Net loss for the year                      --           --       --          --             --       (612,732)      (612,732)
                                     -----------  -----------  -------  ----------  -------------  -----------  -------------
Balance at December 31, 1999                -      23,124,884  $ 2,313  $3,080,619  $    (334,000) $(2,963,433) $    (214,501)
                                     ===========  ===========  =======  ==========  =============  ===========  =============

</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       -4-

<PAGE>


             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                  Year Ended December 31,
                                             --------------------------------
                                                 1999                 1998
                                             -----------          -----------
Cash flows from operating activities:
Net loss                                     $ ( 612,732)         $ ( 465,545)
Adjustments to reconcile net
      loss to net cash used by
      operating activities:
      Stockholder services credited
       to capital                                 10,000                5,000
       Depreciation                                1,670                  -
      (Increase) decrease in:
          Prepaid expenses                     (   3,681)                 -
          Notes receivable                     (  10,250)                 -
          Other assets                         (   4,263)                 -
      Increase (decrease) in:
          Accounts payable and accrued
            expenses                              13,704               18,148
                                             -----------          -----------
            Net cash used by operating
              activities                       ( 605,552)           ( 442,397)



Cash flows from investing activities:
    Purchases of property and equipment        (  24,791)                 -
                                             -----------          -----------
            Net cash used by investing
              activities                       (  24,791)                 -
                                             -----------          -----------

Cash flows from financing activities:
   Proceeds from notes payable                       -                 65,000
   Proceeds from affiliate                        12,051               31,700
   Proceeds from issuance of stock               616,000              350,000
                                             -----------          -----------
            Net cash provided by financing
              activities                         628,051              446,700
                                             -----------          -----------
Increase (Decrease)  in cash                   (   2,292)               4,303
Cash at beginning of year                          4,303                  -
                                             -----------          -----------

Cash at end of year                          $     2,011          $     4,303
                                             ===========          ===========






   The accompanying notes are an integral part of these financial statements.
                                       -5-

<PAGE>


             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   Organization and Summary of Significant Accounting Policies

     Organization
     ------------

     Innovative Holdings and Technologies, Inc. (the "Company") was incorporated
     in the State of  Colorado  in 1987 as Celesta  Corporation.  The  Company's
     purpose is to raise  capital by sales of its'  common  stock in  registered
     security offerings for the acquisition of businesses.  The Company's office
     is located in Orlando, Florida.

     Subsidiary
     ----------

     On January 8, 1999, the Company incorporated Xtreme Telemetry Systems, Inc.
     (Xtreme)  in  the  State  of  Florida  and  is its  only  shareholder.  The
     transaction  was  accounted for by the purchase  method of  accounting  for
     business combinations.

     The subsidiary is in the business of designing,  developing,  producing and
     selling  telemetric  sensor and  communication  products and services.  The
     subsidiary is in the development stage.

     Consolidation Policy
     --------------------

     The accompanying  consolidated financial statements include the accounts of
     the Company and its wholly owned subsidiary.  Intercompany transactions and
     balances have been eliminated in consolidation.

     Property and Equipment
     ----------------------

     Property and equipment are recorded at cost.  Expenditures  for maintenance
     and repairs are charged to expense as incurred.  Depreciation is calculated
     on a straight-line  basis over estimated useful lives of the related assets
     as follows:

                                                       Years
                                                       -----
                           Furniture                     7
                           Computers                     5

     Depreciation expense was $1,670 for the year ending December 31, 1999.

     Loss Per Share
     --------------

     Basic loss per share excludes any dilutive effects of stock options.  Basic
     loss per  share is  computed  using the  weighted-average  number of common
     shares outstanding  during the period.  Dilutive loss per share is computed
     using the weighted-average number of common shares and the effects of stock
     options during the period.


                                       -6-

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


1.   Organization and Summary of Significant Accounting Policies (Continued)

     Summary of Significant Accounting Policies (Continued)
     ------------------------------------------------------

     Income Taxes
     ------------

     The Company  accounts for income taxes using the asset and liability method
     as required by Statements of Financial  Standards No. 109.  Deferred income
     taxes are recognized for operating losses, if available,  to offset federal
     income  taxes.  An allowance is provided if it is more likely than not that
     the Company will not realize the  benefits of a deferred  tax asset.  As of
     December 31, 1999 and 1998, a valuation allowance has been provided against
     the deferred tax asset. See Note 9.

     Accounting Estimates
     --------------------

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the amounts  reported in the financial  statements
     and accompanying notes. Actual results could differ from those estimates.

2.  Concentration of Risks

     The Company  maintains its cash accounts in one commercial  bank located in
     Orlando,  Florida.  Accounts  in the bank  are  guaranteed  by the  Federal
     Deposit  Insurance  Corporation  (FDIC) up to  $100,000.  At various  times
     throughout the year the Company  maintained  cash balances in the bank that
     exceeded the FDIC limit.

3.  Property and Equipment
                                         December 31, 1999
                                         -----------------

                           Furniture         $  7,082
                           Computers           17,709
                                             --------
                                             $ 24,791
                                             ========

4.  Investment

    In 1998, the Company entered into a business  combination  agreement whereby
    it sought to  acquire  100% of the issued and  outstanding  common  stock of
    BioCam Company,  Inc. (BioCam) by issuing 20,000,000 shares of its preferred
    stock and 200,000  shares of its  restricted  common stock at an agreed upon
    value of $1,000,000 and a commitment to incur $350,000 in operating expenses
    related to BioCam.  In 1998, the Company spent $348,250 in related  research
    and development  costs. The investment is valued at cost because the Company
    does  not  have the  ability  to  exercise  significant  influence  over the
    subsidiary.


                                       -7-

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.   Withholding Taxes Payable

     The  Company   compensates  various  individuals  for  consulting  services
     rendered by issuing common stock.  Back up withholding tax at a rate of 20%
     is being computed for these amounts.

6.   Notes Payable

     Notes payable as of December 31, 1999 and 1998 consisted of the following:

                                          December 31,1999     December 31, 1998
                                          ----------------     -----------------
     Convertible notes payable
      Issued to existing stockholders,
      Interest accrues at 12%                 $     -              $ 40,000

     Note Payable to an
      existing stockholder, interest
      accrues at 12%, matures
      September 26,2000                       $ 25,000             $ 25,000

     The convertible notes payable in the amount of $40,000 and accrued interest
     in the amount of $6,026 was convertible into shares of the Company's common
     stock in 1999. See Note 11.

7.   Due to Affiliate

     The Company  received $31,700 from a related company to be used for working
     capital.  The related company is wholly owned by the Company's  controlling
     stockholder. There are no formal repayment terms.

     The Company is indebted to various  shareholders  in the amount of $12,051.
     There are no formal repayment terms.

 8.  Lease

     The Company is subleasing  office space which commenced on July 1, 1999 and
     expires  October  1,  2002.  The  Company  has the right to  terminate  the
     sublease  with a 210 day  notice  to the  tenant  who is the  lessor of the
     premises. Rent expense for the year ended December 31, 1999 was $22,085.

     Minimum required future rental payments under this lease as of December 31,
     1999, are:


                         2000     $  44,907
                         2001        48,832
                         2002        41,716
                                  ---------
                                  $ 135,455
                                  =========




                                       -8-

<PAGE>

<TABLE>

<CAPTION>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


9.  Income Taxes

       The total deferred tax assets are as follows:

                                     Net Operating Loss Carryforwards     Applicable Tax Rate
                                 ---------------------------------------  --------------------
                                                                                                  Valuation     Amount Per
                                  Federal        State          Total      Federal      State     Allowance    Balance Sheet
                                 ----------    ----------    -----------  ---------    -------   -----------   -------------
<S>                              <C>           <C>           <C>          <C>          <C>       <C>           <C>
Deferred tax assets at
 December 31, 1997                 600,830        93,008         693,838                            (693,838)             -

Changes for the year
 ended December 31, 1998           150,371        23,277         173,648       34%      5.0%        (173,648)             -

                                 ----------    ----------    -----------                         -----------    ------------
Deferred tax assets at
 December 31, 1998                 751,201       116,285         867,486                            (867,486)             -

Changes for the
 year ended
 December 31, 1999                 194,647        30,131         224,778       34%      5.0%         (224,778)            -

                                  ----------    ----------    -----------                         -----------    -----------
Deferred tax assets at
 December 31, 1999             $   945,848  $    146,416  $    1,092,264                          $(1,092,264)   $        -
                                 ==========    ==========    ===========                          ===========    ===========

</TABLE>

     At December 31, 1999, the Company has net operating loss  carryforwards  of
     $2,928,322. These losses will begin expiring in 2002.

     A valuation  allowance has been provided against the deferred tax assets at
     December  31, 1999 and 1998 since it is likely  that the  Company  will not
     realize the benefits of the deferred tax assets.


                                       -9-

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



10.  Loss Per Share

     The following  tables sets forth the  computation of basic and diluted loss
     per share:

                                                  Year Ended December 31,
                                                  ----------------------
                                                     1999        1998
                                                  ----------  ----------
     Numerator:
       Numerator for basic
        and diluted income
        per share-net loss                        $( 612,732) $( 465,545)
                                                  ==========  ==========
     Denominator:
       Denominator of basic
        income per share-
        weighted average
        common shares                             18,679,052  19,025,718

      Effect of dilutive
        securities:
      Stock options based
         on the treasury stock
          method using average
          market price                             2,857,143    1,904,762
                                                  ----------  -----------
     Denominator of diluted
        loss per share                            21,536,195  20,930,480
                                                  ==========  ==========

     Basic loss per share                         $(    .033) $(   0.024)
                                                  ==========  ==========
     Diluted loss per share                       $(    .028) $(   0.022)
                                                  ==========  ==========

11.  Common Stock Transactions

     During 1998, the Company issued 9,450,000 shares of restricted common stock
     for the  repayment  of accrued  expenses in the amount of  $472,500.  These
     accrued  expenses  related to services  performed  by  stockholders  of the
     Company  for  the  reorganization  and  reactivation  of the  Company.  The
     services were valued at fair market value based upon either the open market
     closing  price or a board of directors  designation  as of the date of each
     respective transaction.

     In May 1998, the Company issued 20,000,000 shares of convertible  preferred
     stock in connection with the business  combination  transaction  whereby it
     sought  to  acquire  100% of the  issued  and  outstanding  stock of BioCam
     Company, Inc. (BioCam), a Florida corporation.

     In July 1998,  the Company  converted  the  preferred  stock for  4,200,000
     shares of its restricted  common stock. In July 1999, this  transaction was
     terminated  due to the failure of BioCam's  shareholders  to perform  their
     contractual  obligations.   The  4,200,000  shares  of  common  stock  were
     subsequently cancelled in 1999.

                                      -10-

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


11.  Common Stock Transactions (Continued)

     The Company issued 50,000 and 100,000 shares of its restricted common stock
     in  1999  and  1998,  respectively,   to  individuals  as  compensation  in
     connection with its reorganization  and reactivation of the Company.  These
     transactions were valued at $10,000 and $5,000, respectively, which was the
     fair market  value based upon  either the open  market  closing  price or a
     board  of  directors  designation  as of  the  date  of  each  individual's
     involvement with the Company.

     In 1999, the Company  issued 70,000 shares of its  restricted  common stock
     for repayment of a note payable plus accrued interest. This transaction was
     valued at  $46,026,  which was based on the note  payable  balance due plus
     accrued interest.

     The Company issued 5,000,000  shares if  unreigistered  common stock in the
     amount of $.10 per share for a total of $500,000.  These shares were issued
     under stock  subscriptions  agreements date November 9, 1999, in accordance
     with the terms and  conditions  of the Offering  Document  dated January 8,
     1999. The total collected to date is $166,000.

     The Company authorized shares of unregistered common stock is, as follows:

         700,000 shares issued at $.50 per share on January 8, 1999

         250,000 shares issued at $.40 per share on January 8, 1999

         250,000 shares issued at $1.00 per share on September 17, 1998

         1,000,000 shares issued at $.10 per share on March 3, 1998

     The Company's legal counsel issued an opinion stating that the above shares
     are exempt from  registration  under Section 3(b) of the  Securities Act of
     1993 and 504 of Regulation D.

12.  Other Related Party Transactions

     The Company  retains the services of a marketing  company  whose  principal
     owner is a controlling shareholder of the Company. During 1999, payments of
     $20,000 were made to this related company.

     During 1998 and 1999 the Company made payments to a  shareholder  for rent,
     administrative  and consulting  services.  During 1998,  50,000 shares were
     issued to and  $53,800  was paid to this  shareholder.  For the year  ended
     December 31, 1999,  payments in the  aggregate of $88,098 were made to this
     shareholder.

     On March 10,  1998,  the Company  granted an option to purchase  10,000,000
     shares of its common stock to the controlling  shareholder at a price of at
     $.05 per share.  The option is exercisable  any time after June 1, 2000 and
     will expire on March 9, 2003.

     On March 10,  1998 the  Company  granted  an option to  purchase  2,000,000
     shares of its common stock to a  shareholder  at a price of $.05 per share.
     The option is  exercisable  any time after June 1, 2000 and will  expire on
     March 9, 2003.

     On March 10,  1998,  the Company  granted an option to  purchase  8,000,000
     shares of its common  stock to a  consultant  of the  Company at a price of
     $.05 per share.  The option is exercisable  any time after June 1, 2000 and
     will expire on March 9, 2003.

                                      -11-

<PAGE>

             INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


13.  Cash Flow Information

     During 1998, the Company issued  restricted shares of its common stock as a
     repayment of accrued expenses in the amount of $472,500.

     During 1999:

         The Company cancelled stock related to purchase of an investment in the
         amount of $1,000,000.

         The Company issued restricted shares of its common stock as a repayment
         of notes payable plus accrued interest in the amount of $46,026.

         The Company issued stock under a subscription  receivable in the amount
         of $334,000.

     See Note 11 for further information on the above noted transactions.

14.  Going Concern

     As shown in the accompanying financial statements, the Company incurred net
     losses of $612,732 and  $465,545 for the years ended  December 31, 1999 and
     1998, respectively.  The Company's current liabilities exceeded its current
     assets  by  $241,885   and,   $248,795  at  December  31,  1999  and  1998,
     respectively.  The ability of the Company to continue as a going concern is
     dependent on the development and marketing of products to be offered by its
     subsidiary.  In September 1999, the Company contracted a software developer
     to design and develop the software.  The Company anticipates the completion
     of the  software  by the  end of  1999  and  expects  to  begin  generating
     significant  revenues by April,  2000.  The expected  costs to complete the
     software,   purchase  of  hardware  and  marketing  will  be  approximately
     $500,000. These costs will be funded by the issuance of its common stock in
     the amount of $500,000  under a  subscription  agreement  dated November 9,
     1999. Of the subscribed amount, $166,000 was collected to date. The Company
     feels that the amount  from the  offering  will be  sufficient  to fund the
     completion of the project.  The Company will offer additional shares of its
     common stock to raise capital on an as needed basis.




                                      -12-