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                                UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                             Washington D. C. 20549

                                   Form 10-KSB

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
    ACT OF 1934
                                    For the fiscal year ended July 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 No. 0-10841

                      AMERICAN MILLENNIUM CORPORATION, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

          New Mexico                                      85-0273340
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

303 N. Baker St., Suite 200, Mount Dora, Florida                         32757
------------------------------------------------                      ----------
(Address of principal executive offices)                              (Zip Code)

Issuer's telephone number (352) 735-0116

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

       Title of each class                Name of each exchange which registered
  -----------------------------           --------------------------------------
  Common Stock, $.001 Par Value           Over-the-counter bulletin board

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

Check  whether  the issuer  (1) has 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.
(l) Yes X No__   (2) Yes X No_

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

Revenues for the issuer's most recent fiscal year were $127,366.

The aggregate market value of the 17,690,922  shares held by  non-affiliates  of
the issuer as of November 9, 1999,  computed by using the average of the ask and
bid prices on November 9, 1999, of $.2969 and $.2656 is as follows:

         Average $.2813/share X 17,690,922 shares = $4,976,456

The number of shares  outstanding of the Issuer's common stock as of November 9,
1999, is 17,690,922.  There are  approximately  787 shareholders of record as of
November 9, l999.
<PAGE>
                      AMERICAN MILLENNIUM CORPORATION, INC.
                                   FORM 10-KSB
TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
PART I

Item 1.       Description of Business                                         1
Item 2.       Description of Property                                         6
Item 3.       Legal Proceedings                                               6
Item 4.       Submission of Matters to a Vote of Security Holders             7

PART II

Item 5.       Market for Common Equity and Related Stockholder Matters        7
Item 6.       Management's Discussion and Analysis or Plan of Operation       7
Item 7.       Financial Statements                                            9
Item 8.       Change In and Disagreements with Accountants on
                  Accounting and Financial Disclosure                         9

PART III

Item 9.       Directors, Executive Officers, Promoters, and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act          10
Item 10.      Executive Compensation                                         11
Item 11.      Security Ownership of Certain Beneficial Owners and Management 12
Item 12.      Certain Relationships and Related Transactions                 13

PART IV

Item 13.      Exhibits and Reports on Form 8-K                               13
<PAGE>
                                       1
--------------------------------------------------------------------------------
                                     PART I
--------------------------------------------------------------------------------

FORWARD LOOKING INFORMATION

This Form 10-KSB contains certain forward-looking  statements within the meaning
of the Private  Securities  Litigation  Reform Act of 1995. For this purpose any
statements  contained in this Form 10-KSB that are not  statements of historical
fact should be considered by you to be forward-looking statements. Words such as
"may," "will," "expect,"  "believe,"  "anticipate,"  "estimate" or "continue" or
comparable  terminology  are  intended to identify  forward-looking  statements.
These statements by their nature involve  substantial  risks and  uncertainties,
and actual results may differ materially depending on a variety of factors, many
of which are not within our control.  These factors  include but are not limited
to economic  conditions  generally and in the  industries in which our customers
participate;  competition within our industry,  including  competition from much
larger competitors;  technological advances which could render our products less
competitive or obsolete;  failure by us to successfully  develop new products or
to anticipate  current or prospective  customers' product needs; price increases
or supply  limitations  for components  purchased by us for use in our products;
and delays,  reductions,  or cancellations of orders  previously placed with the
us.

During  the  year  ended  July 31,  1999,  our  operations  were  impacted  by a
significant  decrease in revenues.  The we were unable to reduce costs to offset
the revenue decrease.  In an effort to increase  revenues,  we are attempting to
expand its products to new market niches. Unless we are successful in the effort
to  increase  revenues  in the  future,  we may be  required  to adjust our cost
structure to a level that could be supported  by our  revenues.  There can be no
assurance that we will be able to develop additional markets for our products or
that revenue will remain at current levels or increase in the future.

--------------------------------------------------------------------------------
Item 1. DESCRIPTION OF BUSINESS
--------------------------------------------------------------------------------

HISTORY

American Millennium Corporation, Inc. (AMCI) is a New Mexico corporation (NASDAQ
OTCBB: AMCI, formerly EOPT) organized in 1979 under the name Energy Optics, Inc.
(Energy)  to  develop  various   proprietary  and  patented   technologies  for
industrial  and  consumer  applications.  Energy was  unable to realize  revenue
sufficient  to  maintain  an active  status,  and was  unsuccessful  in securing
funding sufficient to aggressively market these devices and systems. Energy also
was  unable to enlist  the  resources  of a partner  concern  necessary  to take
product development from the prototypical stage into production and then promote
and market its various products through distribution to the end-user.

After  becoming  inactive  and ceasing  all  initiatives  to pursue  funding for
production  and  marketing,  Energy  was  de-listed  from the  NASDAQ  Small Cap
listing.  However, as an inactive  over-the-counter  stock,  Energy's principals
maintained  the corporate  books,  kept Energy in good standing and retained its
status as fully reporting to the Securities and Exchange Commission.

In order to proceed with its acquisition strategy, Energy recognized that it had
to reduce its overwhelming debt. A settlement agreement was reached to eliminate
the  Small  Business  Administration  debt  (including  accrued  interest)  by a
combination  of cash  payments,  issuance of stock and  forgiveness of debt. The
remainder of the debt was  extinguished by forgiveness of some debt and interest
in exchange  for common  stock.  (Most of this debt was to directors of Energy.)
With a clean slate,  Management  believed  that it could pursue its research and
development of products and services.

In June 1997,  Management  began  discussions  with an  unincorporated  business
organization  (UBO) that owned  certain  assets and rights to purchase or assign
purchase  rights  of  certain  other  assets.  These  discussions  lead  to  the
acquisition  in August 1997 of certain of the UBO's business  assets  including
real estate in Tavares,  Florida,  buildings,  equipment and a controlling stock
interest (held by parties related to the UBO) of Lean Protein Foods, Inc. (LPF),
a specialty food company and their  wholly-owned  subsidiary,  Wildwood  Ostrich
Ranch, Inc. (WWOR) in a transaction  totaling  approximately $3.6 million.  This
transaction  was  subsequently  amended on October 10,  1997.  Energy  filed for
foreign  corporation  registration  with the  State of  Florida  and  moved  its
corporate offices from New Mexico to Tavares, Florida

In  September  and  October  1997,  Energy  acquired a total of 80% of  American
Millennium  Corporation (AMC) and 20% of Microgravity Aviation Corporation (MAC)
from the UBO, both of which were development stage  enterprises.  Early in 1998,
Energy discontinued operations of LPF and on July 31, 1998, sold its interest in
LPF to LPF's minority shareholders. Management also negotiated the recessions of
both  the  purchase  contract  for a 20%  stock  ownership  held  in MAC and the
contract for purchase of the real estate in Tavares, Florida.

Under an Agreement  and Plan of Merger dated May 27,  1998,  Energy  merged with
American   Millennium   Corporation,   a   subsidiary   of  which  Energy  owned
approximately  an 80% interest,  with the parent as the  surviving  corporation.
Upon  completion  of the  merger,  we changed  our name to  American  Millennium
Corporation, Inc.

<PAGE>
                                       2


Our corporate  headquarters are located in Mount Dora, Florida with engineering
and operations offices based near Denver, Colorado.

PRODUCTS

Our  recent  activity  has been  focused  on  providing  hardware  and  software
combinations  to facilitate  timely,  accurate,  and cost effective  one-way and
two-way  delivery  of  information.  This can be  achieved  through a variety of
communications  platforms  including  satellite,  cellular  digital packet data,
cellular,  various other radio frequency protocols,  and wireline.  Our business
strategy includes becoming an Applications  Service Provider,  commonly referred
to as an ASP,  that will provide high value  software  and  additional  services
through the Internet.

Through utilization of newly available two-way satellite  communication,  we can
monitor  currently  isolated  facilities and  equipment.  We have activated over
sixty pilot  systems for  satellite  monitoring  of oil and gas  production  and
pipeline  equipment  as well as systems for  monitoring  and  tracking  rail and
highway  vehicles.  Assets that could not be  practically  served by  land-based
communication systems can now utilize satellite monitoring and tracking to yield
significantly better equipment management. This results in increased production,
less product loss and increased capital efficiency for our customers.

We are a value-added reseller for ORBCOMM USA L.P. (ORBCOMM).  ORBCOMM is a "low
earth orbit" satellite company that is a joint venture between Orbital Sciences,
Inc. and  Teleglobe  of Canada,  Inc.  Our  contract  with ORBCOMM  allows us to
provide remote monitoring services to operators of oil and gas wells, intermodal
containers,  and  refrigerated  and flatbed  railcars.  For  example,  by global
position we can determine the location of a particular  refrigerated  railcar as
well as the temperature inside the car, the voltage output of the generator, and
numerous other functions.

Although virtually  inactive at the time, we are also value-added  resellers for
PageMart and American Mobile Satellite.

HOW DOES IT WORK?

1.  Status,  location,  malfunction  or  failure  information  is sent  from the
compressor  Subscriber Communicator to one of the LEOS
2. The LEOS relays the information to an ORBCOMM Gateway Earth Station. In North
America, these are always in view simultaneously.
3. The  information  passes  through the  ORBCOMM  network and on to our service
center for analysis and alert communication to the operator.  If the operator is
large enough to justify its own service  center,  we will guide its  development
and the satellite data will be routed directly to it.

Depending  upon the nature of a  malfunction,  it may be possible  to  implement
corrective  action through  communication  with the compressor SC. In this case,
control  information  is sent to the  ORBCOMM  network  for  routing to the next
appropriate LEOS and hence to the compressor SC. If  "on-the-ground"  service is
required, the failure data is analyzed by the operator to determine needed spare
parts and tools.  Since  travel  times to remote units can be measured in hours,
accurate  information  of this  nature  is of great  value.  We become a key and
ongoing link in the operator's  value chain.  We share in that value by charging
for our engineering, installation, and operating services as well as receiving a
recurring fee for the communication traffic, generated through ORBCOMM.

By way of example,  two units have been  contracted  for by a customer  and were
provisioned  by us to monitor  gas well  compressors  and the  mainline  station
compressor  via the ORBCOMM  satellite  system.  Our customer will receive daily
reports  that the units are  running or not  running,  as well as alarm  reports
whenever the units shut down  unexpectedly.  We provide a secure  website on the
Internet for this customer to view the operating conditions and alarms.

DATA TRANSFER TECHNOLOGY

The data transfer industry has grown exponentially with the increasing speed and
lower costs of microprocessors  that are components of computers,  radio towers,
radio frequency  transceivers of all types, and other radio devices developed to
scan,  store,  and transmit data.  Industry leaders such as Bill Gates and Craig
McCaw and large  technology  firms such as  Motorola,  Boeing,  Loral,  Lockheed
Martin,  Orbital Sciences and others have made substantial financial commitments
totaling  billions of dollars to design and deploy both voice telephone and data
transmission satellite systems.

There is nothing new or innovative about Global Positioning  Systems (GPS). This
technology  has been used by the  military  for  decades  and a handheld  global
positioning  device can be purchased  at a sporting  goods store for under $100.
However, the device only tells the operator's  location.  The ability to monitor
fixed and mobile  assets  from a remote  location,  with  respect  to  location,
direction,  and  speed,  as well as gather  other  pertinent  data and  actually
manipulate  functions,  is a relatively new industry. We believe that monitoring
fixed and moving assets from afar by satellite will become a significant  growth
market  as  indicated  by the  early  results  that  AMCI has seen in its  first
initiatives.  Moreover,  billions of dollars  have been  committed by major high
tech companies to launch communications satellites.

<PAGE>
                                       3


The ORBCOMM  "constellation" of data transmission satellites is expected to cost
approximately  $0.4 billion,  or anywhere from $1.1 billion to $8.7 billion less
to build and  deploy  than any of its  competitors.  Even  though  ORBCOMM  is a
"Little LEO" system comprised of small, low earth orbit  satellites,  we believe
that there are certain key competitive  advantages over the larger,  more costly
systems.  ORBCOMM has launched  all 28 of its  satellites  of its  constellation
meaning that AMCI can solicit,  demonstrate capability for proof of concept, and
sign up subscribers in the present  instead of in the future.  Also,  certain of
the  systems  yet to be deployed  are  budgeted  at  billions of dollars  before
allowing for possible  cost  overruns and time delays.  We believe that the less
costly ORBCOMM system will allow for lower, more competitive  monthly monitoring
charges that will have a broad appeal to more potential subscribers.

NASA has stated in various news  articles  that it sees the space  "industry" as
trending toward less expensive hardware that is more expendable. In the event of
a lost or malfunctioning satellite, a relatively inexpensive satellite is a much
less  critical  financial  event  than  is  the  case  with a  large,  expensive
satellite.

We further  believe  that the rapid  changes in  technology  currently  underway
require a  flexible  approach  in the  design and  deployment  of data  transfer
satellites.  Various  experts in the  telecommunication  industry have predicted
that gross  revenues from the transfer of data will surpass  revenues from voice
communications in the next several years. A constellation of small,  inexpensive
satellites  that can be upgraded to accommodate  improvements in technology has,
in management's opinion, a distinct cost advantage over systems that may rely on
a few geosnychronous  satellites that could become less efficient or obsolete as
technology changes.

We believe  our  overall  competitive  advantage  as a reseller  for the ORBCOMM
system is most closely tied to the  competitive  rates we can currently  charge.
The  cellular  telephone  industry  is an example of the sharp  increase  in the
number of subscribers  who signed up for service when cellular  telephone  rates
fell. The demand curve trends upwards as rates trend downward.  As a result,  we
are currently marketing the ability to provide accurate,  low cost monitoring to
the industries defined in our reseller contract.

OIL AND GAS CUSTOMERS

We have  various  initiatives  underway  with oil and gas  producers  as well as
manufacturers  of gas compressors and control panels for those  compressors.  We
currently  have  several   Subscriber   Communicators  (the  industry  term  for
transceivers,  including those that receive and transmit to and from satellites)
activated and in field trials. These units are currently monitoring a variety of
assets in the United States. As an example,  on May 4, 1999,  Hanover Compressor
Co. accepted our proposal to provide satellite  monitoring of twenty natural gas
compressors installed on gas wells and pipeline stations. We had been monitoring
two remote gas well  compressors for Hanover since March 3, 1999.  Current plans
call for the  installation  of  equipment  to  monitor  an  additional  eighteen
compressors at various sites selected by Hanover.  The eighteen  compressors are
being  monitored  for  Chevron  Corp.  We also plan to market our  products  and
services in the international market place.

Much of oil and natural gas production occurs in largely remote areas far beyond
the economic range of wired or terrestrially based wireless  communication.  Key
to the  operation of these  production  sites are enormous  compressors  used to
extract,  collect, and transfer the oil and gas to transmission  pipelines.  The
malfunction or failure of one of these  compressors is a red-alert event for the
production  operator.  The economic loss can be measured in thousands of dollars
per hour of down time,  resulting in a high value to reducing the duration of an
outage.

To create  this  value,  we can  program  a  commercially  available  Subscriber
Communicator  to relay the vital signs of the  compressor  to the ORBCOMM  LEOS.
This information will include the status of all important  components as well as
the flow and  pressure  data for the  pipeline.  Since  there is a  considerable
variation  of  compressor  package  designs  and  installation   details,   each
installation  requires  customized  programming  and  interfacing  expertise  to
capture the critical information.

CUSTOMERS TRANSPORTING OF HIGH VALUE PRODUCTS

Through proper  programming and interface design, a Subscriber  Communicator can
transmit  information  vital to the successful  delivery of perishable cargo. In
addition  to  temperature  readings,  it can monitor  refrigeration  system fuel
levels and alert for any intrusion into a railcar or container. Importantly, the
SCs have an  additional  feature  installed to  communicate  the location of the
transport. With a GPS (Global Positioning System) module in the SC, the position
of the  railcar  or  container  can be  constantly  monitored.  In  addition  to
providing accurate  logistical  information to the shipper,  this information is
key to the timely repair of a failing  refrigerator and protection of its cargo.
The failing  unit can be  intercepted  at the next  maintenance  location on its
route and be repaired or have its cargo  transferred to a working  refrigeration
unit.

<PAGE>
                                       4


This application  provides another opportunity for us. The stream of information
that flows through the our service center must be properly  integrated  into the
transporter's  existing Information  Technology system. Failure information must
be sent to the appropriate maintenance location and the transport service center
for supervision.  Position data should be available to the shipper at all times.
Intrusion information must alert security services.  All this data should arrive
in correct formats at the right IT server. Further, if communication back to the
Subscriber  Communicator is needed,  transport  personnel  should be able to use
their existing  applications to initiate it. We have an opportunity to configure
and supervise  the  installation  of  off-the-shelf  software  packages that can
manage this  routing  and  formatting.  Further,  we can  operate  such  routing
servers, consolidating the needs of smaller customers.

CUSTOMERS USING RAILROAD CARS

We have completed a testing phase of remote monitoring of a refrigerated railcar
under the  provisions of a contract with Union  Pacific  Railroad,  the nation's
largest rail company.  The original  contract  called for a prototype unit to be
installed on a refrigerated  railcar with cellular  capability for  transmitting
data,  we  anticipate  the data will be  transmitted  via  satellite in the next
phase.  We have  monitored,  via satellite and cellular,  the location of a test
railcar as well as the battery voltage and refrigerated compartment temperature.
We have  installed  the second  generation  of  equipment  on the railcar  which
exceeds the performance of the first generation  equipment and allows us to move
toward the next phase.

The next phase of the contract  involves  the  outfitting  of five  refrigerated
railcars  with  pre-production  models  of  the  our  wireless  equipment.  Upon
successful  completion  of this  phase,  Union  Pacific  has the option to place
orders in increment of 100 units.

INTERMODAL CONTAINER CUSTOMERS

We have held  discussions  with an intermodal  container  corporation  regarding
outfitting a refrigerated  container with a Subscriber  Communicator  to monitor
location and alarm  functions such as door openings and  temperature.  Following
such a test,  we will  submit  a  formal  proposal  for  the  monitoring  of the
corporation's container fleet.

OTHER APPLICATIONS

The above  applications  are examples of a large  variety of related  needs.  In
addition to gas wells,  pipelines also require  monitoring.  Oil wells,  storage
tanks and pumps are remote, critical production assets.  Industrial chemical and
compressed  gas  storage  tanks  present  another   opportunity.   In  addition,
refrigerated railcars,  refrigerated containers and other special cargo vehicles
benefit from an onboard  Subscriber  Communicator and GPS unit.  Complex powered
vehicles such as locomotives,  truck tractors, test vehicles and heavy equipment
can be better managed with LEOS  communication.  Here, in addition to monitoring
and  tracking,  the  Subscriber  Communicator  can  provide  reliable  messaging
services for the equipment operator.

There are  further  benefits  from LEOS  systems  in many  industries  that have
worldwide  operations.  A system  designed for North  American  operation can be
deployed  for  assets   throughout  the  world.   ORBCOMM  is  franchising   the
installation  of ground  stations in all  continents  and  developing  "roaming"
arrangements  that  will  yield a  seamless  worldwide  network.  New  levels of
enterprise asset  management and operational  efficiency are sure to emerge from
this platform.  Thus,  even with a North American  focus,  AMCI can create value
worldwide.

In our role as a developer  of digital,  wireline,  and  wireless  products  and
solutions to the  telecommunications  industry,  we are currently presenting the
uses of its  technologies  with leaders in various  industries.  We believe that
recent   technological   developments   allowing  the  interfacing  of  multiple
communication  platforms  should  position us to emerge as an industry leader in
the field of data transfer.

We believe that a significant  market exists for potential  applications  of our
technology that involve remote  monitoring and systems  function  manipulations.
Customers  can monitor  their  equipment,  production  levels,  and track global
position as well as control functions and have data reported from the particular
asset that can be downloaded  onto a secure  Internet  website which can then be
accessed from anywhere in the world. We provide company  officials,  such as oil
engineers and railroad management,  with the ability to obtain vital information
on a timely and  current  basis at any  location by simply  using  their  laptop
computers  to log-on to a secure  website.  The reports can be available in less
than sixty seconds  after an ORBCOMM  satellite  flies over the monitored  site,
reads, and transmits the data to an ORBCOMM Earth Station.

<PAGE>
                                       5


We will continue to market these services to the rail, intermodal container, and
oil and gas industries with its ORBCOMM reseller  contract.  We will continue to
market  our  various  paging  technology  solutions  to  the  telecommunications
industry with developments to be announced subsequent to patent filings.

The ability to provide  satellite  monitoring for the industries  defined within
our reseller  contract with ORBCOMM means that we are able to charge a specified
rate per month for each asset being  monitored.  The charge can range from a few
dollars  per month  (similar  to paging  rates) to $100 per month,  or even more
(similar to cable  television  rates with premium  channels  and  pay-per-view),
depending  on the amount of data and the  frequency  of reports  required by the
owner of the asset being monitored.

AMERICAN MOBILE SATELLITE

On August 28, 1998, we became a value-added reseller for Reston,  Virginia based
American  Mobile  Satellite  (NASDAQ:  SKYC)  and its  geosnychronous  satellite
system.  They provide  seamless voice,  data, and  point-to-multipoint  dispatch
services to virtually anywhere in North and Central America, the Caribbean,  and
hundreds of miles of surrounding waters. They are the only company authorized by
the FCC to provide L-band (1.5-1.6 GHz) mobile satellite service in the U.S.

We have received a legal opinion that contracting to become a reseller of theses
services does not represent a conflict of interest with ORBCOMM, which prohibits
the us from reselling the services of any other satellite  service that operates
on 1 GHz or lower in radio frequency.

PROPRIETARY TECHNOLOGY APPLICATIONS

We believe that we have now developed certain  proprietary  technologies for the
monitoring  of various  types of assets  utilizing  the ORBCOMM  LEO system.  In
addition to monitoring of data  communications,  we have the ability to remotely
control  functions at the asset  location.  Due to the sensitive and proprietary
nature of this technology as well as our intent to protect us to the extent that
is possible with patent applications, we are unable to disclose specific aspects
of the systems. Nevertheless, we believe that the applications are both valuable
and viable.  We are presently in  discussion  with several  companies  regarding
licensing  and/or joint venture  proposals  within the scope of the technologies
and their respective applications.

We have retained the services of Pittenger and Smith,  a Denver,  Colorado based
patent, trademark, and copyright law firm, to effect these applications.

MARKETING

We believe that a significant  base of recurring  revenues  derived from monthly
satellite and paging  monitoring  charges will build AMCI's value. Our principal
marketing efforts are directed toward the oil and gas, intermodal container, and
railroad  industries which have a need for monitoring of high value assets.  Our
personnel work with  management and engineers in the industries  discussed above
in order to determine their technological  needs, cost objectives and to develop
solutions for their  individualized  asset  monitoring  requirements.  Marketing
efforts are performed by both our personnel and outside sales service providers.
We have and will  continue  through  the year 2000,  to market our  services  at
industry trade shows.

COMPETITION

There are numerous competitors to ORBCOMM's Low Earth Orbit satellite based data
and messaging service.  However,  we are confident that there does not exist, at
present,  any  competiton  of an  immediate  or  formidable  nature for  several
reasons.  First,  geostationary  systems and terrestrial based wireless networks
are regional, not global, in coverage. Secondly, the big Low Earth Orbit systems
such as Iridium  and  Globalstar  must focus on voice  telephony  to build rapid
revenues to service the  multi-billion  dollar  capitalization  costs associated
with their deployment. Also, their electronic architecture makes it expensive to
send data and the end-user equipment is expensive.

Additionally, the majority of the satellite systems in development exist only on
paper and have either not obtained  financing  or  licensing or both.  We do not
believe that any system either  deployed or in development  can compete with the
ORBCOMM/AMCI  ability to provide  the low cost  service for data  transfer,  the
small,  inexpensive  communicators,  or  the  ability  to  provide  global  near
real-time two-way communications.

There is potential  competition from other ORBCOMM resellers who are licensed by
ORBCOMM to market services within the same industries as we have focused.  Also,
ORBCOMM  itself is marketing  its own services to virtually all  industries  via
in-house resellers and employed sales personnel.

We believe that the market is vast and we are protected  with mutual  agreements
of non-disclosure  and  non-circumvent  with ORBCOMM on any initiatives  brought
forward by us.

<PAGE>
                                       6


MANUFACTURING AND SUPPLIERS

We purchase the majority of the components for our subscriber data communicators
from ORBCOMM;  however,  we believe that these components are readily  available
from more than one source of supply at competitive prices. Airtime for satellite
monitoring is also purchased from ORBCOMM.

GOVERNMENT REGULATIONS

As value-added resellers for ORBCOMM,  PageMart,  and American Mobile Satellite,
our  services  and  products  are  subject to the rules and  regulations  of the
Federal  Communications  Commission.  We anticipate no problems in obtaining the
necessary certifications in a timely manner as required.

PERSONNEL

As of July 31,  1999,  we had six full time people all of whom are  directors or
officers  except for one who is the spouse of a director.  None of our personnel
are covered by collective  bargaining  agreements.  Relations with our personnel
are considered good.

--------------------------------------------------------------------------------
Item 2. DESCRIPTION OF PROPERTY
--------------------------------------------------------------------------------

Our corporate offices occupy  approximately 1,400 square feet and are located at
303 North Baker Street,  Suite 200, Mount Dora,  Florida.  The office facilities
were rented in December 1998, under a 10-month sublease rental agreement from an
unrelated  party at a rental  rate of $1,450,  plus sales tax,  per month,  that
expired  September  30,  1999.  The Company is in the process of  negotiating  a
three-year rental agreement with the property owner,  Dream Merchants,  Inc., at
the same monthly  rate.  The Company  will  continue to occupy the facility on a
month-to-month basis until the lease is executed.

Our  engineering  and  operations  facility  near Denver,  Colorado  temporarily
occupies an office  consisting of  approximately  180 square feet. The furnished
office is  leased on a  month-to-month  basis for $150 per month  from  Downtown
Radio of Denver,  Inc. The lessor also provides  general  office  facilities and
services which approximate $300 per month.

The furniture, fixtures and equipment used in the conduct of our business have a
historical  cost  of  approximately  $40,000.  The  majority  of the  furniture,
fixtures and equipment was acquired  used,  but in good  condition.  We also own
monitoring units which are leased to various customers, as well as demonstration
units with a total historical cost of approximately $23,000.

--------------------------------------------------------------------------------
Item 3. LEGAL PROCEEDINGS
--------------------------------------------------------------------------------

In August 1997, we issued 400,000  restricted  shares of common stock to each of
two individuals as part of a Stock and Asset Purchase  Agreement.  The agreement
was amended in October  1997,  to reflect a lower  valuation of the assets to be
acquired in exchange  for the stock  issued.  Accordingly,  it was  necessary to
reduce the number of shares to which  these two  individuals  were  entitled  to
117,275 shares each. A letter was sent for the return of the original  shares in
exchange for issuance of the appropriate  number of shares.  The original shares
were not  returned  and upon  the  expiration  of the  restriction  period,  the
individuals  sought to have the  restriction  removed to enable them to sell the
shares.  Since we  believe  the  shares  were  issued  in  error,  we  sought an
injunction in the Circuit Court of the Fifth Judicial  Circuit,  in Lake County,
Florida to prevent the sale of these shares. A temporary  injunction was granted
on October 27, 1998,  upon the filing of a surety bond in the amount of $150,000
by us. The  individuals  have not  responded to the  summonses  and a motion for
default will be filed.  Legal  counsel  believes the  likelihood of a successful
outcome is high.

In  October  1997,  we  issued  common  stock  totaling  500,000  shares  to two
individuals  under a Consultant  Services  Plan as  compensation  for  marketing
services We then decided to discontinue  relations based on our  dissatisfaction
with the quality of service,  lack of service and other business  reasons.  When
requested  that the stock be  returned,  we  discovered  that the stock had been
sold.  We retained  legal counsel to pursue the matter.  Legal counsel  believes
that there is a strong  likelihood  that we will  obtain a  successful  verdict,
however, collectibility of any verdict or judgement is unknown at this time.

On November 25, 1997, we executed an Equipment Lease Agreement with AT&T Capital
Leasing Services,  Inc.(AT&T).  The term of the agreement was 60 months. We made
only three  payments and on October 20, 1998,  AT&T  repossessed  the equipment.
There is a claim  against us for the balance  due and owing under the  Equipment
Lease Agreement in the sum of $44,607. Based upon the negotiations, an equitable
and favorable  outcome for us appears likely.  Accordingly,  we have recorded an
accrued liability of $20,000 in settlement of this claim.

<PAGE>
                                       7


We are also a party to a  pending  administrative  proceeding  initiated  by the
Securities and Exchange Commission. The Commission alleged various violations of
the Securities  Act of 1933 and the Securities  Exchange Act of 1934 against the
Company,  but has not filed suit. An informal settlement has been reached in the
matter, which, if approved by the Commission, will not require any payments.

--------------------------------------------------------------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------------------------------------

None.

--------------------------------------------------------------------------------
                                     PART II
--------------------------------------------------------------------------------
Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
--------------------------------------------------------------------------------

Our common stock is traded on the NASDAQ  over-the-counter  market. Since May of
1986,  it has been listed in the "pink  sheets" and is  currently  listed on the
National  Association of Securities Dealers' Electronic Bulletin Board under the
symbol  "AMCI,"  formerly  EOPT.  Individual  systems may add other  symbols for
access.  Listed  below  are the  high  and low bid for  each of the  last  eight
quarters after giving retroactive effect to the one-for-ten  reverse stock split
on August 27, 1998. The quotations reflect inter-dealer  prices,  without retail
mark-ups, markdowns or commissions and may not represent actual transactions

FISCAL YEAR ENDED JULY 31, 1999                 HIGH                       LOW
                                                ----                       ---

First Quarter                                  $  1.170                $  .350
Second Quarter                                 $   .700                $  .109
Third Quarter                                  $   .580                $  .250
Fourth Quarter                                 $   .530                $  .200

FISCAL YEAR ENDED JULY 31, 1998                 HIGH                       LOW
                                                ----                       ---

First Quarter                                  $  2.625                $ 2.313
Second Quarter                                 $  1.375                $  .700
Third Quarter                                  $  1.450                $ 1.350
Fourth Quarter                                 $  1.290                $ 1.220

At November 9, 1999, we had 787 shareholders.  We have not paid dividends on our
common stock and do not expect to pay cash dividends in the foreseeable future.

--------------------------------------------------------------------------------
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
--------------------------------------------------------------------------------

It  is  anticipated  that  revenues  from  sales,  leases  and  installation  of
subscriber communicators and airtime for these units will significantly increase
based on  ongoing  contract  negotiations  and  proposals.  Since the end of the
fiscal  year,  we have more than doubled the number of  Subscriber  Communicator
units in the field.

For the last two years,  our time and efforts have been  primarily  dedicated to
research  and  development.  We have  recently  entered  the  deployment  stage.
Applications that were being developed and modified have now reached deployment.

We have entered into an  agreement  with a company in Midland,  Texas to provide
two  Subscriber  Communicator  units  as well as  airtime  for  wireless  remote
monitoring  of a mainline  station and a natural gas well located in the Permian
Basin of West Texas.  That company is one of the nation's  largest single source
providers  of sales,  leasing,  engineering,  fabrication,  and  operator of gas
compression  equipment.  They operate through 13 regional sales offices and with
over 120 technical service representatives located throughout the U.S.

General Motors Corp. recently purchased ten of our Subscriber  Communicators for
testing  purposes.  The units are able to report a vehicle's  global position as
well  as  send  and  receive  e-mail  to the  vehicle's  occupants.  GM's  Truck
Engineering  Group  has been  running  trials  using the units to track the test
vehicles  across  the U.S.  over  the  Internet.  We are  currently  working  on
additional software  applications to meet the needs of GM's engineers for remote
communication with the vehicle itself.

On July 22, 1999, we signed a joint  marketing  agreement  with a  multinational
marketing  firm.  That  firm will  market  our radio  frequency  and  Subscriber
Communicator  technology  in  data  and  voice  delivery.  Some  of the  current
application tests underway include radio frequency wireless reservation services
for a hotel chain, high value asset location and tracking, monitoring trucks and
autos for an insurance company and wireless Internet access.  Other applications
being tested will include  testing  redundant  home security  systems and remote
monitoring and development of wireless Local Area Networks. Most of the activity
is in Central America and the Caribbean.  We subsequently  reported on September
1, 1999,  that this South and  Central  American  representative  marketing  our

<PAGE>
                                       8


satellite technology, would be jointly demonstrating,  with us, the applications
of our new SatAlarm (TM) device as a watchdog over home security  systems at the
ISC International Safety Communications Show in New York City. The SatAlarm (TM)
can be  installed in homes to detect  whenever  phone lines are cut or a loss of
power occurs in conjunction with an unauthorized entry.

We have completed  engineering for remote interfacing with the Frick RWB II Plus
Control Panels.  The panels are  manufactured by Frick  Controls,  Group,  Frick
Company, a division of York International Corp. The Subscriber Communicator with
the custom  application  software permits  communication  with the control panel
using the panel's native ACSII protocol.

A hospital  service group based in Findlay,  Ohio  recently  purchased 26 of our
Subscriber Communicators as well as airtime over the ORBCOMM  satellite  system.
All but one of the  communicators  are being  utilized to track the transport of
contaminated waste inroute to disposal sites.

We have been working under a  cooperative  arrangement  with  Altronic  Controls
(Garland,  TX), a wholely-owned  subsidiary of Altronic,  Inc.  (Girard,  OH) to
create an ORBCOMM-enabled  link to Altronic's new DE-2000 digitial  annunciator.
The DE2000 is the central  control unit for Altronic's new generation of natural
gas  compressor  control  panels.  This project has passed from the  development
stage to pilot  testing with the advent of two field  installations  in October,
1999.  One of these pilot sites is on a compressor  near Ft.  Stockton,  TX. The
product is comprised of an Subscriber  Communicator  with  application  software
that enables it to pass  communication  commands  and  responses to and from the
DE2000  via the  ORBCOMM  system.  Using a website  created  by United  Controls
Corporation  (Huntsville,  AL), live status  information  for the  compressor is
polled on a  regular  basis  and is  available  via the  Internet  using  only a
standard web browser. A demand poll for current or historical information can be
initiated from the website with the results displayed thereon.  'Alarm Shutdown'
events are communicated to the website as they occur and  simultaneously  to our
call center for  notification of operator field  personnel.  The system has been
received very positively by current users and prospective  customers.  Marketing
plans call for the  product  to be  co-marketed  by  Altronic  controls,  United
Controls and us.

RESULTS OF OPERATIONS

Revenues decreased $178,043 (58%) during the fiscal year ended July 31, 1999 and
increased  $306,409  (306%)  during the fiscal year ended July 31, 1998.  Fiscal
year 1998 was the first year in recent  years in which AMCI has had  revenue and
included  primarily  revenues received from joint product  development,  whereas
fiscal  year  1999  included  primarily  revenues  from the  sale  and  lease of
subscriber communicators and very little from joint product development.

Gross  profit  for the year  ended  July 31,  1999 was  $23,802  (19% of  sales)
compared to $205,504  (67%) for the year ended July 31, 1998.  The cost of sales
for fiscal year 1999  consisted  primarily  of units sold and airtime sold while
costs of  sales  for  1998  were  attributable  to the  costs  of joint  product
development  that  were not  necessarily  a true  indication  of the cost of the
product sold.

Selling,  general,  and administrative  expenses decreased by $2,481,538 for the
fiscal year ended July 31, 1999 and increased by $3,707,092  for the fiscal year
ended July 31, 1998. During the fiscal year 1998, significant  expenditures were
made to outside  consultants  for the  promotion  and  marketing  efforts of our
Company and its various  acquisitions.  During  fiscal year 1999,  efforts  were
focused on the marketing of the products. This marketing was performed primarily
by the directors and officers.

Losses from discontinued  operations and disposal of discontinued subsidiary and
equity  investment was $2,238,670 for the fiscal year ended July 31, 1998. These
losses  resulted from the  discontinued  operations and disposal of Lean Protein
Foods,  Inc.  and from the  disposal of its equity  investment  in  Microgravity
Aviation Corporation.

As of July 31, 1999, we had available income tax operating loss carryforwards of
$7,048,300,  tax credits of $22,466 and capital loss carryforwards of $2,328,670
that  can  be  used  to  offset  future  taxable  income,   subject  to  certain
restrictions based on significant ownership changes.

EFFECTS OF INFLATION

We  believe  that  our  revenues  and  results  of  operations   have  not  been
significantly affected by inflation during the three years ended July 31, 1999.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

We understand  that cash  equivalents on hand at July 31, 1999, are not adequate
to meet even our  short-term  capital  needs.  AMCI  continues to have  negative
working capital and a deficiency in assets of approximately  $689,343 for fiscal
year 1999 and  $247,400 for fiscal year 1998.  Working  capital for the past two
years has been  primarily  from loans from related  parties.  The  directors and
officers  have been forced to temporary  forego a portion of their  compensation
because of the poor financial condition of AMCI.

<PAGE>
                                       9


During the year we sold  100,000  shares of our common stock and options for the
purchase of an additional  400,000  shares of our common stock.  Total  proceeds
were $100,000.  We also issued stock for compensation of services rendered under
various consultants' agreements.

On September 24, 1999, we accepted a bridge loan of $50,000 and  authorized  the
issuance of 25,000 shares of  restricted  common stock in payment of interest on
the loan from an individual.

To satisfy cash requirements for the short to mid-term operations we have made a
private  offering  of AMCI  common  stock in  accordance  with  exemptions  from
registration under Regulation D, Rule 506,  Securities Act of 1933. The offering
was made on a "best  efforts"  basis with a maximum of  2,800,000  shares and an
equal number of warrants offered for sale at $.25 per  share/warrant.  Since the
end of our fiscal year we have received stock subscriptions for 2,400,000 shares
of stock with a total subscription price of $600,000.  To date $100,000 has been
received and the balance is  scheduled  to be received on November 19, 1999.  To
date expenses of this offering total approximately $20,490.  Additional expenses
upon final funding are expected to be approximately $30,000.

We  have  no  material  commitments  for  capital  expenditures  and  expect  no
significant  changes in the number of employees.  We will continue to out-source
production and  manufacturing  and major marketing  efforts will be performed by
the officers and directors in their capacity as consultants.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997 the  Financial  Accounting  Standards  Board (FASB) issued SFAS 130
"Reporting  Comprehensive  Income"  effective for fiscal years  beginning  after
December 15, 1997,  with earlier  application  permitted.  SFAS 130  establishes
standards for reporting and display of  comprehensive  income and its components
(revenues,  expenses,  gains, losses) in a full set of general-purpose financial
statements  and  requires  that  all  items  required  to  be  recognized  under
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial statements. SFAS 130 requires an enterprise to classify items of other
comprehensive income by their nature in a financial statement and to display the
accumulated  balance of other  comprehensive  income  separately  from  retained
earnings and additional  paid-in capital in the equity section of a statement of
financial position.  Our adoption of SFAS 130 by us in fiscal 1999 had no inpact
on net income or stockholders' equity.

IMPACT OF THE YEAR 2000 ON OUR INFORMATION TECHNOLOGY SYSTEMS

The  year  2000  issue  results  from  certain  computer  systems  and  software
applications  that  use  only two  digits  (rather  than  four)  to  define  the
applicable year. As a result, such systems and applications may recognize a date
of "00" as 1900  instead of the intended  year 2000,  which could result in data
miscalculations  and  software  failures.   AMCI  has  conducted  a  preliminary
assessment of its key computer systems and software  applications to ensure that
the  integrity  and  accuracy  of its  computer  systems,  embedded  systems and
software  applications  that contain date  sensitive  operations or that involve
date  processing.  To date AMCI has upgraded its accounting  software  (accounts
receivable, accounts payable and general ledger) to be Y2K compliant.

We are in the  process  of  communicating  with  all  key  suppliers,  financial
institutions and customers to identify and coordinate the resolution of any Year
2000 issues that might arise and have. We have been advised by ORBCOMM that they
are  addressing  all  of the  Year  2000  issue  and  that  they  expect  timely
achievement of Year 2000 readiness.

Based on the initial assessment, we believe the cost of addressing the Year 2000
issue should not have a material impact on our financial  position or results of
operations.

--------------------------------------------------------------------------------
Item 7.  FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

Our  financial   statements  are  included  (with  an  index  listing  all  such
statements) in a separate  financial section at the end of this Annual Report on
Form 10-KSB.

--------------------------------------------------------------------------------
Item 8.  CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
--------------------------------------------------------------------------------

None.

<PAGE>
                                       10


--------------------------------------------------------------------------------
                                    PART III
--------------------------------------------------------------------------------
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
--------------------------------------------------------------------------------

EXECUTIVE OFFICERS OF THE COMPANY

Our executive officers, some of whom are also our directors are as follows:

Name                         Title/Position                                  Age

Andrew F. Cauthen            Chief Executive Officer, President, Director     57
Stephen F. Watwood           Vice President of Business Development, Director,
                             Chairman of the Board                            51
Bruce R. Bacon               Vice President of Engineering, Chief Technology
                             Officer, Director                                41
James C. Statham             Chief Operations Officer and Director            46
Shirley M. Harmon            Director                                         53
Renee C. Riegler             Secretary                                        46
Thomas W. Roberts            Treasurer                                        50

Andrew F. Cauthen, 57, President/Chief Executive Officer/Director. Mr. Cauthen's
background  includes 10 years operating  experience as president/CEO for Century
Capital  Property  Management  Corp.  With over one  billion in assets,  Century
Capital had over 200 employees and approximately 45 commercial  properties under
management throughout the United States.  Following his association with Century
Capital, Mr. Cauthen was president of Mac Haik Development of Houston, Texas. He
has been in an  executive  capacity  of  several  companies,  most  recently  as
president and CEO of ZapCom  International,  Inc., a division of Imagitel,  Inc.
Mr.  Cauthen has  broad-based  experience  in strategic  planning,  organization
design and  management.  He has consulted to businesses in real estate  finance,
acquisition, development, joint venture financing, telecommunications,  computer
services,  consumer products, and marketing. His duties include the oversight of
growth areas of corporate operations, focusing on financing, financial services,
budgets, information services, customer support and administration.

Stephen F. Watwood, 51, Vice President of Business  Development/Chairman  of the
Board/Director.  Mr.  Watwood  owned and  operated a successful  commercial  and
residential  construction company for 24 years where he was directly responsible
for project development,  business planning, and management. During that period,
he owned a solar power technology  company and was an early pioneer in designing
and installing  photo-voltaic systems into remote locations. He is considered by
certain of his peers to be an expert in this  technology and, to date, his early
efforts serve as the basis for the status-quo  development of this technology in
Northwest  Colorado.  The  duties  of Mr.  Watwood  include  development  of new
business,  project  management for ongoing  initiatives,  and creating technical
solutions for Subscriber Communicator systems.

Bruce  R.  Bacon,  41,  Chief  Technology   Officer   (CTO)/Vice   President  of
Engineering/  Director.  Mr. Bacon holds a degree in Electrical Engineering from
Montana State University where he was also a graduate research  assistant in the
field of semiconductor  laser frequency stability and linewidth  reduction.  His
most recent  experience is that of lead design  engineer at RadiSys  Corporation
where he was  responsible for electrical  system  architecture  design,  writing
specifications,  digital and analog  circuit  design,  prototype  debug,  design
validation,  and production  release.  He has broad experience in field service,
customer  technical   support,   in-house   technical   training,   new  product
development,  and manufacturing operations. Mr. Bacon's duties include oversight
of manufacturing,  field engineer for development ofSubscriber Communicator, and
senior project  engineer for our initiative  with satellite  monitoring of rail,
container, and petroleum assets in industry.

James C. Statham, 46, Chief Operations Officer  (COO)/Director.  Mr. Statham has
been an independent  businessman  for over 20 years.  He completed the Hotel and
Restaurant  administration  curriculum at Florida State  University  and Leysin,
Switzerland  and  subsequently  owned and operated a restaurant  from 1978 until
1989. In 1989, he formed S&H Foods, Inc., a specialty food company that operated
a food  processing  plant that  produced  a gourmet  specialty  product  sold to
grocery chains, wholesale buying clubs, restaurants,  and foodservice suppliers.
In 1993,  Mr.  Statham  was hired to assist in  capital  formation  for  various
General  Partnerships and Limited  Liability  Companies  involved in a number of
projects  including   wireless   telecommunications,   agribusiness,   and  food
processing.  Mr. Statham's duties include responsibility for public filings with
the U.S. Securities and Exchange  Commission,  shareholder  relation management,
and acting as liaison between our Company and the broker/dealer community.

Shirley M. Harmon,  53,  Director.  Ms.  Harmon  retired from the United  States
Department  of Navy in 1995.  She was a civilian  employee  with 28 years in the
financial  division.  She has held  various  positions  and titles  during  this
employment,  which include the  following:  Budget  Analyst,  and Management and
Analyst for the Ship Parts Control  Center,  financial  evaluating and executing
various budget programs.  Additional  responsibilities included establishing and
maintaining payroll records for over 7,000 government  employees  throughout the
United States and overseas.  After  leaving the  Department of Navy,  Ms. Harmon

<PAGE>
                                       11



took  a  position  with a  private  trust.  Her  responsibilities  included  the
establishment and maintenance of the trust's financial records.

Renee C.  Riegler,  46,  Secretary.  Ms.  Riegler  has over 20 years of  diverse
experience  in  business,   securities,  law,  journalism,  and  administration;
specializing in the management of large volumes of information and documentation
and the creation/organization of new positions,  departments, and companies. She
was  employed  for  over  seven  years  as a  paralegal  specializing  in  civil
litigation.  Ms.  Riegler  has over six  years of  experience  in the  financial
industry specializing in tax advantages  investments.  As a registered principal
with the NASD,  Ms.  Riegler was the vice  president and  designated  compliance
officer for an investment  banking firm with brokerage and  investment  advisory
subsidiaries. She holds a Bachelors of Art degree from the University of Central
Florida.  Ms.  Riegler's  duties include that of general  oversight of corporate
administration issues, securities filings, media communications,  and responding
to investor queries.

Thomas W. Roberts, 50, Treasurer.  Mr. Roberts is licensed as an Attorney at Law
in Ohio.  From 1985 through 1996, he operated as sole  practitioner of a general
law practice in the greater  Cincinnati,  Ohio market.  His experience  included
assistance to clients in commercial law, financing for business  start-ups,  and
contract assistance in all phases of commercial practice. During that period, he
also served on the Board of Directors of Intense  Limited of  Cincinnati,  Ohio,
and equipment leasing company,  where he assisted in normal operations including
pricing and contract decisions.  Additionally, Mr. Roberts is a Certified Public
Accountant in Ohio where, during the same period, he was the owner and President
of Thomas W. Roberts,  C.P.A.,  P.S.C.,  an accounting firm that  specialized in
financial  statement   preparation,   governmental  audits  and  tax  reporting,
financial analysis for business financing,  project  management,  and investment
analysis.  Mr. Roberts has served as Independent  Corporate Counsel for us since
September of 1997.  He was appointed to the position of Treasurer in December of
1997. Mr. Roberts assists us in various legal and accounting matters.

--------------------------------------------------------------------------------
                         Item 10. EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
The following  table  summarizes  the  compensation  earned or paid for services
rendered for the fiscal years ended July 31, 1999, 1998 and 1997:

                                                               Employee
                                                                Stock
Name of Officer or Director       Fiscal Base                 Incentive    Total
Capacity Which Served              Year  Comp(1)    Bonus(2)  Plan (1)(2)   Comp
--------------------------------------------------------------------------------
Andrew F. Cauthen
   President                      1999   $ 15,000   $   --     $   --   $ 15,000
   Chief Executive Officer
   Director

Stephen F. Watwood
   VP Business Development        1999     98,001     80,000    106,500  284,501
   Chairman of the Board          1998     78,000       --         --     78,000
   Director                       1997     78,000       --         --     78,000

Bruce R. Bacon
   VP of Engineering              1999     96,000       --      106,500  202,500
   Chief Technology Officer       1998     43,298       --         --     43,298
   Director

James C. Statham                  1999     98,001    119,750    106,500  324,251
   Chief Operations Officer       1998     92,667       --         --     92,667
   Director                       1997       --         --         --         --

(1)          Includes accrued compensation and the value of common stock issued
             for services
(2)          Includes the value of restricted common stock issued

EMPLOYMENT CONTRACTS

Directors and officers who are active in the management of AMCI are  compensated
as consultants under a Contract for Services, the effective date which coincides
with our fiscal year end. These contracts are approved  annually by the Board of
Directors. Contracts in effect at July 31, 1999 and 1998, respectively, provided
for annual compensation as follows:

                                     1999                1998
                                   --------           ---------
Stephen F. Watwood                 $ 96,000           $ 104,000
James C. Statham                   $ 96,000           $ 104,000
Bruce R. Bacon                     $ 96,000           $  96,000
Renee C. Riegler                   $ 58,000           $  58,400
Phyllis Watwood                    $ 25,500           $  30,000

On July 31, 1999, the above contracts were extended.  The extensions run through
July 31, 2000.

<PAGE>
                                       12


Andrew Cauthen became  President and Chief Executive  Officer on April 13, 1999.
His  two-year  Employment  Contract  was  approved  by the  Board  of  Directors
subsequent to year-end and commenced on August 15, 1999.  The contract  provides
for annual  compensation  of $120,000 for the first year.  Compensation  for the
second year will consist of $180,000,  250,000 shares of restricted common stock
and 250,000 stock options  exercisable at $1.00 per share for a two-year period.
On August  5,  1999,  we issued  100,000  shares  of common  stock for  services
provided but not covered under this contract.

On August 30,  1999,  we  authorized  that,  based  upon  funding,  the  accrued
compensation  of our officers,  directors,  and employees  could be taken in our
restricted common stock in lieu of cash at the individual's preference.

EMPLOYEE STOCK INCENTIVE PLAN

In January  1999,  the Board of  Directors  approved  an outline for an Employee
Stock  Incentive  Plan (ESIP).  The plan provides for  8,100,000  shares of AMCI
restricted common stock to be issued as incentive  compensation.  The plan calls
for twenty-five  (25%) of the shares  available to each participant to be issued
when the  participant  has  concluded  six  months  of  service.  An  additional
twenty-five  (25%) of the available  stock is to be issued when the  participant
has concluded one year of service.  The balance of the available  stock is to be
issued upon completion of one and one-half years of service.

Although the plan was approved by the Board of Directors and the first increment
of  initial  of  stock  issuances  has  been  made,  this  plan has not yet been
formalized. At the request of the Board of Directors, the issuance was waived of
restricted  shares  vested  under the ESIP due and owing after  April 13,  1999,
until further  review at a Board  meeting on or about  January  2000.  Incentive
compensation  has not been accrued for these shares because the value,  which is
based on the price of stock at the date of issue, cannot yet be determined.

--------------------------------------------------------------------------------
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------------------------

The following  table sets forth  information  as of November 9, 1999,  regarding
ownership control of our common stock by each person who beneficially owns 5% or
more of the our common stock, by each of our directors,  and by all the officers
and directors as a group.

Name and Address of               Shares Beneficially                    Percent
Beneficial Owner                         Owned                          of Class

Andrew F. Cauthen                        95,385                            .539%
6125 W. Sam Houston Parkway North
Suite 504
Houston, Texas 77041

Stephen F. Watwood                    1,398,841                           8.330%
17835 RCR 29
Oak Creek, Colorado 80467

Bruce R. Bacon                          555,555                           3.383%
PMB #338
601 16th Street, #C
Golden, Colorado 80401

James C. Statham                        995,000                           6.066%
P.O. Box 211
Cedar Key, Florida 32625

Harto Ltd.                            2,657,495                          16.201%
Victoria House, P.O. Box 1090
The Valley, Anguilla, BWI

Global Investments Ltd., Trustee      3,400,000                          20.727%
Victoria House P.O. Box 1066
The Valley, Anguilla BWI

Mali-Suisse Mining Holdings, S.A.     2,340,000                          14.265%
28 Old Brompton Road, Suite 1119
London, England SW7 3DL

All Officers, Directors and 5%
Shareholders as a Group (9 persons)  11,629,221                          65.552%

<PAGE>
                                       13


--------------------------------------------------------------------------------
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------

See footnote 5 of the 1999 Financial Statements included in this report.
--------------------------------------------------------------------------------

                                     PART IV
--------------------------------------------------------------------------------
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------------------------------------------------------

(A)            Financial Statements and Schedules
The following  financial  statements and schedules are filed with and as part of
this Annual Report on Form 10-KSB:
         Independent Auditors Report
         Balance Sheets
         Statements of Operations
         Statements of Deficiency in Assets
         Statements of Cash Flows
         Notes to Financial Statements
(b)          Exhibits
The following exhibits are filed with this report:
(3.1) Articles of  Incorporation  and Bylaws,  as amended to date of this report
(incorporated by reference Form 8-K filed June 11, 1998, File No. 000-10841-D)
(3.2) Agreement and Plan of Merger dated May 27, 1998 (incorporated by reference
Form 8-K filed June 11, 1998, File No. 000-10841-D)
(27) Financial Data Schedule
(B) No reports were filed on Form 8-K for the quarter ended July 31, 1999.

-------------------------------------------------------------------------------
                                   SIGNATURES
--------------------------------------------------------------------------------
Pursuant to the  requirement 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, hereunto duly authorized.

                      American Millennium Corporation, Inc.

DATED: November 12, 1999                   By: /s/Andrew F. Cauthen
                                              ----------------------------------
                                              Andrew F. Cauthen, President
                                              (Chief Executive Officer)

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


DATED: November 12, 1999                   By:  /s/ Andrew F. Cauthen
                                              ----------------------------------
                                              Andrew F. Cauthen, Director,
                                              President,Chief Executive Officer,
                                              (Chief Executive Officer)

DATED: November 12, 1999                   By:  /s/ Bruce R. Bacon
                                              ----------------------------------
                                              Bruce R. Bacon, Director, Chief
                                              Technology Officer, Vice President
                                              of Engineering

DATED: November 12, 1999                   By:  /s/ Shirley Harmon
                                              ----------------------------------
                                              Shirley Harmon, Director

DATED: November 12, 1999                   By:  /s/ James C. Statham
                                              ----------------------------------
                                              James C. Statham, Director and
                                              Chief Operations Officer

DATED: November 12, 1999                   By:  /s/ Stephen F. Wateood
                                              ----------------------------------
                                              Stephen F. Watwood, Director,
                                              Chairman of the Board, Vice
                                              President of Business Development

DATED: November 12, 1999                   By:  /s/ Renee C. Riegler
                                              ----------------------------------
                                              Renee C. Riegler, Secretary
                                              (Corporate Secretary)

DATED: November 12, 1999                   By:  /s/ Thomas W. Roberts
                                              ----------------------------------
                                              Thomas W. Roberts, Treasurer
                                              (Principal Financial Officer)
<PAGE>
                          INDEX TO FINANCIAL STATEMENTS




INDEPENDENT AUDITOR'S REPORT                                               F - 2

CONSOLIDATED FINANCIAL STATEMENTS

     Balance Sheets                                                        F - 3

     Statements of Operations                                              F - 4

     Statements of Deficiency in Assets                                    F - 5

     Statements of Cash Flows                                              F - 6

     Notes to Financial Statements                               F - 7 to F - 18
                                      F-1
<PAGE>

Dohan and Company                                 7700 North Kendall Drive, #204
Certified Public Accountants                          Miami, Florida  33156-7564
A Professional Association                            Telephone:  (305) 274-1366
                                              Facsimile: (305) 274-1366


                           INDEPENDENT AUDITOR'S REPORT


To the Stockholders and Board of Directors of
American Millennium Corporation, Inc.
Mount Dora, Florida


We  have  audited  the  accompanying   balance  sheets  of  American  Millennium
Corporation,  Inc. at July 31,  1999 and 1998,  and the  related  statements  of
operations,  deficiency in assets and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our audits in  accordance  with  generally  accepted
auditing  standards.  Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  financial   position  of  American   Millennium
Corporation,  Inc.  as of  July  31,  1999  and  1998,  and the  results  of its
operations  and its cash  flows  for the years  then  ended in  conformity  with
generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 10 to the
financial statements, the Company has suffered recurring losses from operations,
has a working  capital  deficiency  and has a  deficiency  in assets  that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described in Note 10. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

As more fully  described in Note 5, American  Millennium  Corporation,  Inc. had
entered into asset  purchase,  sales and recession  contracts with Harto,  Ltd.,
American Global Equity  Services (a trust),  Mali-Suisse  Mining  International,
Ltd.  (all  entities  subject to common  control with and of the  Company),  and
officers of the Company.

                                                   /s/Dohan and Company, PA

Miami, Florida
October 22, 1999







Member:
Florida Institute of Certified Public Accountants
American  Institute of Certified Public  Accountants - Private Companies and SEC
  Practice Sections
SC International - Offices in Principal Cities World-Wide
                                      F-2
<PAGE>

AMERICAN MILLENNIUM CORPORATION, INC.
BALANCE SHEETS
===============================================================================

July 31,                                                 1999             1998
-------------------------------------------------------------------------------
                                   ASSETS
CURRENT ASSETS
  Cash and cash equivalents ......................  $   6,961        $    1,176
  Accounts receivable, less allowance of $640 ....     20,365               -
  Inventory ......................................      5,975               -
  Advances to officers ...........................        -              65,921
  Prepaid expenses ...............................        -              40,375
-------------------------------------------------------------------------------
       TOTAL CURRENT ASSETS ......................     33,301           107,472
-------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT ...........................     51,819            81,582

OTHER ASSETS
  Available-for-sale equity security .............     14,390             3,040
  Security deposits ..............................        500               -
  Deferred tax asset, less valuation allowance of
    $3,385,497 and $2,928,303.....................        -                 -
-------------------------------------------------------------------------------
TOTAL ASSETS .....................................  $  100,010       $  192,094
===============================================================================

                LIABILITIES AND DEFICIENCY IN ASSETS
CURRENT LIABILITIES
  Accounts payable ...............................  $  165,259       $  121,299
  Accrued payroll and related taxes ..............      89,908          166,505
  Accrued expenses and other liabilities .........     321,666           80,012
  Notes payable to officers ......................      91,970           51,178
  Notes payable to related parties ...............      69,885              -
  Note payable to shareholder ....................      12,000              -
  Advances from officers .........................      38,665              -
-------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES ........................     789,353          418,994
-------------------------------------------------------------------------------
LONG-TERM NOTE PAYABLE TO OFFICER ................         -             20,500
-------------------------------------------------------------------------------
TOTAL LIABILITIES ................................  $  789,353       $  439,494
-------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES (NOTE 11)

DEFICIENCY IN ASSETS
  Preferred stock, 10,000,000 shares authorized; none issued
  Common stock, $.001 par value, 60,000,000 shares
    authorized;16,403,472 and 12,329,514 shares
    issued and outstanding .......................      16,404           12,330
  Additional paid-in capital .....................  11,200,570       10,157,022
  Accumulated deficit ............................ (11,917,667)     (10,408,752)
  Accumulated other comprehensive income .........     11,350               -
  Treasury stock .................................         -             (8,000)
-------------------------------------------------------------------------------
TOTAL DEFICIENCY IN ASSETS .......................    (689,343)        (247,400)
-------------------------------------------------------------------------------
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS .......     100,010          192,094
===============================================================================
See accompanying notes
                                      F-3
<PAGE>

AMERICAN MILLENNIUM CORPORATION, INC
STATEMENTS OF OPERATIONS
===============================================================================
For the Years Ended July 31,                            1999             1998
===============================================================================
REVENUES ........................................  $   127,366      $   306,409

COST OF REVENUES ................................      103,564          100,905
                                                    ----------       ----------
    GROSS PROFIT ................................       23,802          205,504
                                                    ----------       ----------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
  Consulting - officers and directors............      933,363          132,770
  Consulting - others ...........................       78,695        2,967,004
  Professional ..................................      253,575          297,513
  Salaries ......................................       32,470          200,357
  Travel ........................................       68,607           47,088
  Telephone and utilities .......................       33,453           20,000
  Depreciation ..................................       11,010           14,412
  Other .........................................       69,179          282,746
                                                    ----------       ----------
    TOTAL SELLING, GENERAL
       AND ADMINISTRATIVE EXPENSES                   1,480,352        3,961,890
                                                    ----------      -----------
LOSS FROM OPERATIONS ............................   (1,456,550)      (3,756,386)
                                                    ----------      -----------
OTHER INCOME (EXPENSES)
  Litigation settlement .........................      (20,000)            -
  Loss on sale and disposal of assets ...........      (38,707)         (13,134
  Other miscellaneous income ....................        6,342              520
                                                    ----------       ----------
    TOTAL OTHER INCOME (EXPENSES) ................     (52,365)         (12,614)
                                                    ----------       ----------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (1,508,915)      (3,769,000)

INCOME TAXES......................................         -                -
                                                    ----------       ----------
LOSS FROM CONTINUING OPERATIONS ..................  (1,508,915)      (3,769,000)
                                                    ----------       ----------
DISCONTINUED OPERATIONS
  Loss from operations of 80% owned discontinued
    subsidiary....................................        -            (162,617)
  Loss on disposal of 80% owned discontinued
    subsidiar.....................................        -          (1,905,053)
  Loss on disposal of 20% owned equity investment.         -            (261,000
                                                    ----------       ----------
    LOSS ON DISCONTINUED OPERATIONS,
       NET OF INCOME TAXES........................         -         (2,328,670)
                                                    ----------       ----------
NET LOSS ........................................   (1,508,915)      (6,097,670)

OTHER COMPREHENSIVE INCOME
  Unrealized gain on available-for-sale
    equity security...............................      11,350              -
                                                    ----------      -----------
COMPREHENSIVE LOSS ............................... $(1,497,565)     $(6,097,670)
                                                   ===========      ===========

BASIC AND DILUTED NET LOSS PER COMMON SHARE BEFORE
 DISCONTINUED OPERATIONS .........................      ($0.11)          ($0.40)
===============================================================================
BASIC AND DILUTED NET LOSS PER COMMON SHARE ......      ($0.11)          ($0.64)
===============================================================================
BASIC AND DILUTED COMPREHENSIVE INCOME
   PER COMMON SHARE ..............................       $0.00              -
===============================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
   SHARES OUTSTANDING (BASIC AND DILUTED) ........  14,215,132        9,528,448
===============================================================================
 See accompanying notes.
                                      F-4
<PAGE>

AMERICAN MILLENNIUM CORPORATION, INC.
STATEMENTS OF DEFICIENCY IN ASSETS
<TABLE>
<S>                                                 <C>     <C>     <C>          <C>            <C>        <C>       <C>      <C>
====================================================================================================================================
                                                                                                     Accumulated
                                                               Additional                                  Other               Total
                                                   Common Stock   Paid-in Accumulated Subscription Comprehensive Treasury Deficiency
Description ..............................         Shares Amount  Capital     Deficit   Receivable        Income    Stock  in Assets
------------------------------------------------------------------------------------------------------------------------------------
Balance July 31, 1997 ........................    877,869 $  878 $ 4,122,784 $ (4,311,082)    (6,500)     $  --   $    --  (193,920)

 Common stock exchanged for 80%
  ownership of Lean Protein
  Foods, Inc. (Note 5) .......................  2,387,495  2,387   2,085,456         --            --        --      --   2,087,843

 Common stock issued  for services ...........  1,369,000  1,369   3,099,395         --           6,500      --      --   3,107,264

 Common stock exchanged for purchase of assets    234,650    235      88,480         --            --        --      --      88,715

 Exchange of common stock in merger ..........  7,190,500  7,191      62,054         --            --        --   (8,000)    61,245

 Automobiles contributed .....................       --     --        19,575         --            --        --      --      19,575

 Capitalization of related party debt ........       --     --       409,548         --            --        --      --     409,548

 Common stock issued in settlement of
  Microaviation Gravity, Inc. claims .........    270,000    270     269,730         --            --        --      --     270,000

 Net loss for the year ended July 31, 1998 ...       --     --          --     (6,097,670)         --        --      --  (6,097,670)
------------------------------------------------------------------------------------------------------------------------------------
Balance July 31, 1998 ....................... 12,329,514 12,330  10,157,022  (10,408,752)         --        --    8,000)  (247,400)

 Common stock issued  for services ...........    174,958    175     153,307         --            --        --      --     153,482

 Common stock issued under employee stock
  incentive plan .............................  1,775,000  1,775     378,075         --            --        --      --     379,850

 Cancellation of treasury stock ..............       --     --        (8,000)        --            --        --    8,000       --

 Common stock assigned from Global
  Investments for debt reduction .............    591,000    591        (591)        --            --        --      --        --
 Common stock issued as compensation .........  1,033,000  1,033     311,457         --            --        --      --     312,490

 Sale of common stock ........................    200,000    200      99,800         --            --        --      --     100,000

 Common stock issued for loan repayment ......    300,000    300     109,500         --            --        --      --     109,800

 Other comprehensive income:
  Change in unrealized gain on security
  available-for-sale, net of tax .............       --     --          --           --            --     11,350    --       11,350

 Net loss for the year ended July 31, 1999 ...       --     --          --    (1,508,915)          --       --      --   (1,508,915)
------------------------------------------------------------------------------------------------------------------------------------
Balance July 31, 1999 .......................16,403,472 $16,404 $11,200,570 $(11,917,667) $      --    $ 11,350  $ --    $(689,343)
====================================================================================================================================
</TABLE>
See accompanying notes.
                                      F-5
<PAGE>

AMERICAN MILLENNIUM CORPORATION, INC.
STATEMENTS OF CASH FLOWS
===============================================================================
For the Years Ended July 31,                           1999             1998
-------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                         $(1,508,915)     $(6,097,670)
  Adjustments to reconcile net (loss) to net
    cash used by operating activities:
   Depreciation .................................       11,204           14,412
   Provision for bad debts ......................         640             --
   Loss on disposal of property and equipment ...       38,707           13,134
   Common stock issued and loss from
     discontinued operations ....................        --           2,328,670
   Common stock exchanged for services ..........      153,482        3,100,764
   Stock issued under employee stock
     incentive plan as compensation .............       379,850           --
   Stock issued as compensation .................       312,490           --
   Note payable issued as compensation ..........        15,000           --
 (Increase) decrease in assets:
   Accounts receivable ..........................       (21,005)          --
   Inventory ....................................        (5,975)          --
   Prepaid expenses .............................        40,375         (40,375)
   Other assets .................................          (500)         (3,040)
 Increase (decrease) in liabilities:
   Accounts payable .............................        43,960         121,299
   Accrued payroll and related taxes ............       (76,597)        166,505
   Accrued expenses and other liabilities .......       307,575          27,116
   Customer deposit .............................          --           (75,000)
                                                     -----------      ----------
 NET CASH USED BY OPERATING ACTIVITIES ..........      (309,709)       (444,185)
                                                     -----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Receipts
 Proceeds from disposal of property and equipment          --             2,600
                                                     -----------      ----------
   RECEIPTS FROM INVESTING ACTIVITIES ...........          --             2,600
                                                     -----------      ----------
Disbursements
 Acquisition of property and equipment ..........       (26,148)         (3,445)
                                                     -----------      ----------
   DISBURSEMENTS FROM INVESTING ACTIVITIES ......       (26,148)         (3,445)
                                                     -----------      ----------
      NET CASH USED BY INVESTING ACTIVITIES .....       (26,148)           (845)
                                                     -----------      ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts
 Proceeds from advances by officers .............        38,665          51,178
 Proceeds from notes payable to officers ........        29,888          20,500
 Proceeds from related parties contributed
   to capital ...................................          --           353,843
 Proceeds from related parties, net .............       166,385          49,030
 Proceeds from note payable stockholder .........        12,000           --
 Proeeds from issuance of common stock ..........       100,000          15,000
                                                     -----------      ----------
   RECEIPTS FROM FINANCING ACTIVITIES ...........       346,938         489,551
                                                     -----------      ----------
Disbursements
 Advances to officers ...........................          --           (65,921)
 Payments on advances by officer, net ...........        (5,296)          --
 Payments on note payables to officers ..........          --            (1,500)
                                                     -----------      ----------
   DISBURSEMENTS FROM FINANCING ACTIVITIES ......        (5,296)        (67,421)
                                                     -----------      ----------
      NET CASH PROVIDED BY FINANCING ACTIVITIES .       341,642         422,130
                                                     -----------      ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS      5,785         (22,900)
CASH AND CASH EQUIVALENTS - BEGINNING ...........         1,176          24,076
                                                     -----------      ----------
CASH AND CASH EQUIVALENTS - ENDING ..............    $    6,961       $   1,176
                                                     ===========      ==========
SUPPLEMENTAL DISCLOSURES:
 Cash paid during the year for:
   Interest .....................................   $     2,039     $       417
   Income taxes .................................   $      --       $      --

 In addition to amounts reflected above,
 common stock was issued for:
   Notes payable to related parties .............   $    96,500     $      --
   Note payable to officer ......................   $    19,300     $      --
   Acquisition of property and equipment ........   $      --       $    88,715

 Advances to officer reduced accrued liabilities    $    65,921     $      --
 Equipment was exchanged for debt reduction .....   $     6,000     $      --
 ===============================================================================
See accompanying notes
                                      F-6
<PAGE>

American Millennium Corporation, Inc.
Notes to Financial Statements


NOTE 1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

American Millennium Corporation,  Inc. (Company), a New Mexico corporation,  was
organized in 1979 and has provided engineering services relating to research and
development   activities  for  outside  parties  as  well  as  internal  product
development.   The  Company  has  developed  various  proprietary  and  patented
technologies for industrial and consumer application.

A controlling  interest  (79.3%) of American  Millennium  Corporation  (AMC),  a
Delaware  corporation,  was acquired in October 1997. The remaining  interest in
AMC was acquired under an Agreement and Plan of Merger dated May 27, 1998,  when
the  companies  merged,  with the  parent  as the  surviving  corporation.  Upon
completion of the merger, the Company changed its name from Energy Optics,  Inc.
to American Millennium Corporation, Inc.

Since the  merger,  operations  have been  focused  primarily  on  hardware  and
software combinations to facilitate timely,  accurate and cost effective one-way
and two-way  monitoring of  information.  This is achieved  through a variety of
platforms including satellite,  cellular,  various radio frequency protocols and
wireline.
Cash and Cash Equivalents

The  Company  considers  all highly  liquid  debt  instruments  with an original
maturity of three months or less at the date of purchase to be cash equivalents.
Inventory

Inventory consists of Subscriber Communicators. Inventory is stated at the lower
of cost, determined on the first-in, first-out (FIFO) method, or market.

Property and Equipment

Property and equipment are stated at cost. Depreciation of equipment is provided
over  estimated  useful lives ranging from five years to seven years,  using the
straight-line  method.  Expenditures  for maintenance and repairs are charged to
expense as incurred.  Major  improvements are  capitalized.  Gains and losses on
disposition of property and equipment are included in income as realized.

Available-for-Sale Securities

The Company  accounts for marketable  securities in accordance with Statement of
Financial  Accounting  Standards No. 115, "Accounting for Certain Investments in
Debt and  Equity  securities."  This  statement  requires  securities  which are
available  for sale to be  carried  at fair  value,  with  unrealized  gains and
losses, net of tax, reported as a separate component of stockholders' equity.

Income Taxes

Income taxes are  computed  under the  provisions  of the  Financial  Accounting
Standards  Board  (FASB)  Statement  109 No. (SFAS 109),  Accounting  for Income
Taxes. SFAS 109 is an asset and liability approach that requires the recognition
of deferred tax assets and liabilities for the expected future tax  consequences
of the difference in events that have been recognized in the Company's financial
statements compared to the tax returns.

Income Tax Credits

Income tax credits will be recognized as a reduction of the provision for income
taxes in the year in which utilized.
                                      F-7
<PAGE>

NOTE 1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentrations of Credit Risk and Economic Dependence

Concentrations of credit risk with respect to receivables  results from the fact
that approximately 58% of accounts receivable at July 31, 1999, was due from two
customers. Further,  approximately 62% of revenues from the sale of products and
services are to three customers,  while approximately 75% of revenues from joint
development  are derived  from one  customer.  Risks  associated  with  industry
concentrations are limited due to the wide variety of customers and markets into
which  the  Company's  products  and  services  are  provided,  as well as their
dispersion  across many different  geographic areas. The Company is economically
dependent on ORBCOMM USA, L.P. (ORBCOMM) for whom it is a value-added  reseller.
ORBCOMM provides  satellite service for the Company's  monitoring devices and is
also  the  supplier  for  the  main   component  of  the  Company's   Subscriber
Communicators.

Use of Estimates

The process of preparing  financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires the use of estimates and  assumptions
regarding certain types of assets,  liabilities,  revenues,  and expenses.  Such
estimates  primarily relate to unsettled  transactions and events as of the date
of the financial statements.  Accordingly,  upon settlement,  actual results may
differ from estimated amounts.
Reclassifications

Certain amounts in the prior year financial  statements  have been  reclassified
for comparative  purposes to conform with the presentation in the 1999 financial
statements.

Research and Development Costs

Research and development costs are expensed as incurred.

Advertising costs

Advertising costs are expensed as incurred.

Basic Net Loss Per Common Share

Basic net loss per common share before discontinued operations and extraordinary
items is computed  by  dividing  the loss  before  discontinued  operations  and
extraordinary  items by the weighted average number of common shares outstanding
during each period.  Basic net loss per common share is computed by dividing the
net loss by the weighted average number of common shares outstanding during each
period.  Available stock options at  July 31,1999,  were  anti-dilutive  and not
considered  common stock  equivalents  for purposes of computing loss per common
share.

Recent Accounting Pronouncements

During the fiscal year ended July 31, 1998,  the Company  adopted FASB Statement
No. 121 (SFAS 121),  "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived  Assets to Be Disposed Of". SFAS 121 requires that impairment  losses
are to be recorded when  long-lived  assets to be held and used are reviewed for
impairment whenever events or changes in circumstances indicate that the related
carrying  amount may not be  recoverable.  When required,  impairment  losses on
assets to be held and used are recognized  based on the fair value of the asset.
Long-lived  assets to be disposed  of, if any,  are reported at the lower of the
carrying amount or the fair value less cost to sell.
                                      F-8
<PAGE>

NOTE 1.  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

During fiscal year 1999,  the Company  adopted FASB Statement No. 130 (SFAS 130)
"Reporting  Comprehensive  Income".  This  statement  establishes  standards for
reporting of comprehensive income and its components (revenues, expenses, gains,
losses) in  financial  statements  and  requires  that all items  required to be
recognized under accounting  standards as components of comprehensive  income be
reported in a financial  statement that is displayed with the same prominence as
other financial statements. Comprehensive income consists of the unrealized gain
on  marketable  securities  and is presented in the  Statements of Deficiency in
Assets.  The adoption of SFAS 130 had no impact on the  Company's  net income or
total stockholders' equity.

In June 1998, the FASB issued SFAS 133,  "Accounting for Derivative  Instruments
and Hedging Activities". This Statement requires companies to record derivatives
on the balance sheet as assets and liabilities, measured at fair value. Gains or
losses  resulting  from  changes  in the  value  of those  derivatives  would be
accounted for depending on the use of the  derivatives  and whether it qualifies
for hedge  accounting.  This statement is not expected to have a material impact
on the Company's  financial  statements.  This statement is effective for fiscal
years beginning after June 15, 1999, with earlier adoption encouraged.

NOTE 2.  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:
                                                             1999        1998
                                                           --------    --------
Office furniture and equipment                             $ 39,963    $ 86,503
Demonstrator Subscriber Communicators                        15,379        --
Subscriber Communicators leased to customers                  7,768        --
Transportation equipment                                       --         7,500
                                                           --------    --------
                                                             63,110      94,003
Accumulated depreciation                                   ( 11,291)   ( 12,421)
                                                           --------    --------
Property and equipment, less accumulated depreciation      $ 51,819    $ 81,582
                                                           ========    ========

Depreciation  expense for the years  ending July 31, 1999 and 1998,  amounted to
$11,204 and $14,412,  respectively.  Of these  amounts,  $11,010 and $14,412 are
included in other selling, general and administrative expenses for July 31, 1999
and 1998,  respectively;  and $194 is included in cost of revenues  for July 31,
1999.

NOTE 3.  AVAILABLE-FOR-SALE EQUITY SECURITY

Archibald Brothers Fine Beverages, Inc. (Archibald) is a closely-held company in
which the Company owns 30,400 shares of common stock. The security is classified
as  available-for-sale  and shares are held in escrow  pursuant to an  agreement
providing  for the sale of shares under an option to a third  party.  Under this
agreement the J.M.  Smucker Company (a minority  shareholder)  has the option to
acquire all remaining  shares of Archibald at a  predetermined  formula price at
the earlier of three years or upon sales reaching $28 million.  Estimated  Gross
Unrealized
                              Fair Value         Gain          Historical Cost
                              ----------     ----------        ---------------
     3,040 common shares
     Archibald Brothers
     Fine Beverages, Inc.       $ 14,390       $ 11,350                $ 3,040

In addition to the 30,400 shares of Archibald's  common stock already owned, the
Company has options to purchase up to 69,600  shares of common stock at $1 on or
before October 31, 2001.
                                      F-9
<PAGE>

NOTE 3.  AVAILABLE-FOR-SALE EQUITY SECURITY (CONTINUED)

The change in net unrealized holding gain on securities  available for sale that
has been included as a separate  component of stockholders'  equity for the year
ended July 31, 1999, was $11,350.

NOTE 4.  ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consisted of the following:

                            1999       1998
                        --------   --------
Professional fees       $ 42,910   $ 42,000
Consulting - officers    252,894     32,150
Royalties                  5,862      5,862
Settlement                20,000       -
                        --------   --------
                        $321,666   $ 80,012
                        ========   ========

NOTE 5.  RELATED PARTY TRANSACTIONS

Notes  payable to officers at July 31, 1999 and 1998,  were $91,970 and $51,178,
respectively.   These  notes  are  unsecured,   due  at  various  dates  through
July 31, 2000,  and provide  for annual  interest at 6%. For the year ended July
31,  1999,  officers  of the  Company  advanced  funds to the  Company  and paid
expenses on behalf of the Company totaling $38,665.

In April  1999,  the  Board of  Directors  authorized  the  issuance  of  50,000
restricted  shares of its common  stock in  settlement  of a note  payable to an
officer/director in the amount of $19,300.

For the years ended July  31,1999,  the Company  received  advances from parties
related by virtue of common control totaling $166,385.  In April 1999, the Board
of  Directors  authorized  the issuance of 250,000  restricted  shares of common
stock to related  parties in payment  of $90,500 of  outstanding  notes  payable
leaving a balance of  $69,885.  Similar  advances  of  $395,148  was  assumed by
Mali-Suisse  Mining  International,  Ltd.  (Mali-Suisse),  a stockholder  in the
Company under an Agreement to Rescind Contract for Deed, dated July 31, 1998.

During the year ended July 31, 1999,  the Company sold various  equipment with a
net book value of $29,600 to a party  related by virtue of common  control.  The
sales  price of $6,000 was  recorded  as a  reduction  of the balance due to the
related party.

In a separate transaction the Company sold a vehicle, in poor condition and need
of repair, to a director of the Company for $1.

Stock for Services

Common stock issued to related  parties are shares have been recorded  using the
lower of the average price on the date issued or maximum offering price unless a
value was otherwise stated, subject to a certain discounts.

During  the year  ended  July 31,  1999,  the Board of  Directors  approved  the
issuance of 710,000 shares of the Company's  common stock to be issued under the
Consultant Services Plan (see Note 9) as compensation for consultation  services
to officers and directors valued at $256,100.

On May 18,  1999,  the Company  authorized  the  issuance to two officers of the
Company,  250,000  shares and 50,000  restricted  shares of its common stock for
services  rendered  beyond the normal  course of  business  as  officers  of the
Company. This stock was valued at $47,700.

During the year ended July 31, 1998,  the Company  issued  10,000  shares of its
common stock under the Consultant Services Plan as compensation for consultation
services to an officer valued at $12,000.
                                      F-10
<PAGE>

NOTE 5.  RELATED PARTY TRANSACTIONS (CONTINUED)

Stock and Asset Purchase

Pursuant to a Stock and Asset  Purchase  Agreement,  dated August 20,  1997,  as
amended on October 10, 1997,  the Company  acquired  assets from ABAC  Services,
Inc., a Nevada  corporation  (ABAC),  American Global Equity Services (Ages), an
unincorporated business trust located in Tavares,  Florida, and three individual
holders  (Holders)  of common  stock of Lean  Protein  Foods,  Inc.,  a Delaware
corporation  (LPF),  in exchange  for the  issuance of  5,263,145  shares of the
Company's common stock.

The assets were comprised of the following:

1. Real  estate  valued at  $1,700,000,  originally  conveyed by Ages to ABAC on
August 1, 1997,  in  connection  with an agreement for deed signed on that date.
The agreement for deed provided for Ages to transfer certain real estate in Lake
County,  Florida  in fee  simple,  once ABAC  provided  1,591,000  shares of the
Company (Energy Optics,  Inc.) as a down payment and satisfies a promissory note
in the original principal amount of $258,900, with interest payable quarterly at
ten  percent  (10%) per annum.  Principal  payments of $64,725  were  payable in
annual installments on December 31st of each calendar year. The note was without
recourse  to any  individual  and was  secured  solely  by the  assets  of ABAC.
However,  in the event of  default,  clear  title to the  property  could not be
obtained.  The Company issued the 1,591,000 shares of its common stock to Global
Investments  Ltd.,  Trustee,  as  instructed  by Ages,  and agreed to accept the
assignment  and the financial  responsibility  to satisfy the note payable.  The
assets were valued based upon an independent valuation for the real estate.

2. Property and equipment  valued at $88,708 was conveyed by ABAC. As instructed
by ABAC,  the Company  issued  634,550  shares of its common  stock to the three
shareholders,  officers  and  directors  of  ABAC,  who were  immediately  named
officers and directors of the Company (two of which subsequently resigned).  The
shares  issued  included  compensation  for  finding  and  acquiring  the  other
properties.

3. A transfer of  2,800,000  shares of LPF,  amounting to an 80%  interest.  The
total  value  of LPF was  estimated  at  $2,609,800,  resulting  in a  value  of
approximately  $2,087,840 being conveyed by the Holders.  The assets were valued
at a negotiated  amount in the case of the common stock of LPF, whose  principal
asset is its wholly-owned subsidiary, Wildwood Ostrich Ranches, Inc. The Company
issued 3,037,495 shares of its common stock to the Holders or their assigns as a
result of this portion of the acquisition.

No affiliated  relationships  existed among the  management or affiliates of the
Company and the management or affiliates of Ages, ABAC or the LPF Holders at the
time of acquisition.

As a result of the  issuance of the  5,263,145  shares of the  Company's  common
stock to purchase the assets, a change in control occurred. After the closing of
the  acquisition of the assets,  the original  stockholders of the Company owned
877,869  shares  (i.e.,  approximately  14% of the total issued and  outstanding
shares),  and  Global  Investments,  Ltd.  (and its  assigns),  ABAC and the LPF
Holders collectively owned 5,263,145 shares  (representing  approximately 86% of
the total issued and outstanding shares).  Also, upon closing the acquisition of
the assets,  the original  Board of Directors of the Company  appointed  the new
members to the Board of Directors,  then resigned.  As a result of the change in
control and  acquisition of the facility,  the executive  offices of the Company
were moved from Las Cruces, New Mexico to Tavares, Florida.
Agreement to Rescind Contract for Deed

Under an Agreement to Rescind  Contract for Deed, dated July 31, 1998, a portion
of the Stock and Asset Purchase Agreement  described above was rescinded.  Under
an  assignment  of  rights,  the real  estate  reverted  to  Mali-Suisse  Mining
International, Ltd. (Mali), an affiliate of the original real estate owner and a
stockholder  of the Company.  The contract  required that Mali return  1,000,000
shares of the  Company's  common stock and assume  liability  for  approximately
$395,148 owed by the Company to a party  related by virtue of common  ownership,
as well as the promissory note in the amount of $258,900 plus unpaid interest in
exchange for retaining 591,000 shares of the original stock issued. Mali assumed
any claims for unpaid rent totaling  $14,400 which would have accrued  resulting
from their use of the real  estate to house the  corporate  offices in  Tavares,
Florida.
                                      F-11
<PAGE>

NOTE 5.  RELATED PARTY TRANSACTIONS (CONTINUED)

Discontinued Operations and Stock Sale

On January 5, 1998, Lean Protein Foods,  Inc.  adopted a plan to discontinue its
operations in the specialty  foods  business which focused on the processing and
marketing of ostrich meat.  As part of this plan,  immediate  arrangements  were
made to sell its equipment. Also, on January 5, 1998, LPF's subsidiary, Wildwood
Ostrich Ranch,  Inc.  adopted a plan to discontinue its operations as an ostrich
ranch.  Immediate  plans  were  made to  begin  disposal  of the  assets  of the
Corporation   including  equipment  and  the  ostrich  herd.  The  loss  of  the
discontinued  operation  for the  year  ended  July 31,  1998,  is  $162,617  as
reflected on the statements of operations under Discontinued Operations.

Under a Stock Sale Contract  dated July 31, 1998, the Company agreed to sell its
stock  interest  in LPF to the  minority  shareholders  of LPF (one of whom is a
director of the Company and the  remainder are  shareholders  of the Company) in
exchange for  one-third  of the gross sales  proceeds for a period of six months
from the date of the agreement, a release from all liabilities of LPF and 30,400
shares of Archibald Brothers, Inc. Fine Beverages, Inc., valued at approximately
$3,040.  These  shares  represent  less  than  1%  ownership  interest  in  that
closely-held  corporation.   The  loss  on  the  disposal  of  the  discontinued
operations  of LPF and its  subsidiary  for the  year  ended  July 31, 1998,  is
$1,905,053 and is reflected on the statements of operations  under  Discontinued
Operations.

Acquisition of American Millennium Corporation

On October 9, 1997, the Company  purchased,  primarily from Global  Investments,
Ltd.,  a  30%   shareholder  of  the  Company,   8,000,000   shares  (valued  at
approximately  $3,500,000)  representing  approximately  80% of the  issued  and
outstanding  stock  of  American   Millennium   Corporation  (AMC),  a  Delaware
corporation,  in exchange for 5,100,000 shares of the Company's common stock. As
the acquisition of AMC was from related  parties,  it was accounted for as if it
were a pooling  of  interests.  Assets and  liabilities  were  reflected  at the
related  parties'  historical  cost.  Subsequently,  the  Company  acquired  the
remaining interest and merged with AMC.

Acquisition of Microgravity Aviation Company, Inc.

On October 10,  1997,  the Company  negotiated  a contract to acquire  2,000,000
shares  (valued  at  approximately  $531,160)  representing  a 20%  interest  in
Microgravity  Aviation Company (MAC) from Harto Ltd.,  (Harto) a 39% shareholder
of the Company at that time, in exchange for  1,000,000  shares of the Company's
common stock.  MAC, a Florida  corporation,  was scheduled to operate the flight
portion of a three-day high-adventure  space-flight experience package. MAC also
planned to offer the use of the DC-9  aircraft to the film and movie  production
community  as a flying film studio for  producing  weightless  scenes for use in
movies, commercials, and corporate videos. The MAC aircraft could also have been
used for conducting microgravity research performed by universities and research
companies. The executive management and consulting staff of MAC was comprised of
highly  credentialed  professionals  including former NASA astronauts as well as
former  airline,  Federal  Aviation  Administration,  and NASA  executives.  The
management  of MAC planned to lease a specially  equipped  NASA aircraft and the
effective  operation of that company was  predicated  upon MAC's ability to take
possession of this aircraft.

After further study and  deliberation,  the Company  decided not to fund further
operations of MAC. Under an Agreement to Rescind Contract,  dated July 31, 1998,
Harto agreed to rescind the transaction in exchange for 270,000 shares of common
stock in  consideration  for certain funds in excess of $270,000  which had been
advanced on behalf of MAC.  The  contract  further  provided  that this stock is
restricted  for a minimum of one year. The original  1,000,000  shares of common
stock issued to Harto were to be canceled and 270,000 shares issued.

NOTE 6.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  amount of the Company's  financial  assets and liabilities at July
31, 1999, approximate fair value due to the short maturity of the instruments.
                                      F-12
<PAGE>

NOTE 7.  INCOME TAXES

Deferred  income  taxes and  benefits for 1999 and 1998 are provided for certain
income and  expenses  which are  recognized  in  different  periods  for tax and
financial  reporting  purposes.  The tax  effects  (computed  at  35%) of  these
temporary  differences and carryforwards that give rise to significant  portions
of deferred tax assets and liabilities consist of the following:

                                                          Current
                                                          Period
                                                1998      Changes        1999
                                            ----------    --------   ----------
Deferred tax assets:
Accrued officers' compensation .            $   42,574    $ 45,939     $ 88,513
Excess tax depreciation over book depreciation     677   (     677)        --
Net operating loss carryforwards             2,047,134     419,771    2,466,905
Capital loss carryforwards                     815,035         --       815,035
                                            ----------    --------   ----------
                                             2,905,420     465,033    3,370,453
Investment credit carryforwards                  5,340   (     417)       4,923
Research credit carryforwards                   17,543         --        17,543
                                            ----------    --------   ----------
                                             2,928,303     464,616    3,392,919
Valuation allowance                         (2,928,303)  ( 457,194)  (3,385,497)
                                            ----------    --------   ----------
   Deferred tax asset                      $     --     $    7,422   $     7422
                                            ----------    --------   ----------
Deferred tax liabilities:
Unrealized gain on available-for-sale
  security                                 $     --     $    3,973   $    3,973
Excess book depreciation over tax
  depreciation                                   --          3,449       3.449
                                            ----------    --------   ----------
   Deferred tax liability                        --          7,422       7,422
                                            ----------    --------   ----------
   Net deferred tax asset (liability)          $ --  $        --    $     --
                                            ==========    ========   ==========

For the year ended July 31, 1999, a $149,587 net operating  loss expired,  while
the Company  generated,  for U.S.  income tax purposes,  a net operating loss of
approximately $1,348,934,  resulting in a total loss carryforward of $7,048,300.
Capital  loss  carryforwards  at July 31,  1999,  were  $2,328,670.  These  loss
carryforwards expire at various dates through the year 2019.

A valuation allowance must be established to reduce deferred income tax benefits
if it is more likely than not that a portion of the deferred income tax benefits
will not be realized. It is Management's opinion that it is more likely than not
that the entire  deferred  tax benefit  may not be  recognized  in future  years
because the  utilization  of the  remaining  carryforwards  is  dependent on the
Company's ability to generate  sufficient taxable income during the carryforward
periods and no further significant changes in ownership.  Therefore, a valuation
allowance equal to the deferred tax benefit has been  established,  resulting in
no deferred tax assets as of the balance sheet dates.

During the year ended July 31, 1998, there were significant ownership changes in
the Company as defined in Section 382 of the Internal  Revenue Code. As a result
of these  changes,  the  Company's  ability  to  utilize  net  operating  losses
available  before the ownership change is restricted to a total of approximately
$1,775,483 per year  (approximately  5.33% of the market value of the Company at
the time of the ownership  change).  Therefore,  substantial  net operating loss
carryforwards will, in all likelihood,  be eliminated in future years due to the
change in ownership.

For the year ended July 31, 1999,  tax credits of $417  expired.  Remaining  tax
credits total $22,466 which expire at various dates through 2005. As a result of
significant  changes in  ownership  as defined  in Section  383 of the  Internal
Revenue Code, the Company's  ability to utilize tax credits available before the
ownership change will be limited.
                                      F-13
<PAGE>

NOTE 8.  DEFICIENCY IN ASSETS

On August 18, 1997,  the Board of Directors  authorized a 1 for 10 reverse stock
split for all of the  issued  and  outstanding  shares of the  Company's  common
stock.  As a result  of the  reverse  stock  split,  the  Companys  issued  and
outstanding  shares of common stock were reduced from 8,779,000 to 877,900.  All
shares issued during the fiscal year 1998 were issued subsequent to the split.

On May 27, 1998, the  shareholders  of the Company  approved the increase of the
Company's  authorized common stock from 25,000,000 shares to 60,000,000  shares.
Additionally,  they approved the issuance  10,000,000  shares of preferred stock
and  authorized the Board of Directors to establish the rights at a future date.
To date those rights and preferences have not been established.

The Company has paid no  dividends  on their common stock and has no plans to do
so.

Stock Issued for Services

During the year ended July 31,  1999,  the Company  issued  1,355,500  shares of
common stock pursuant to a Consultant  Services Plan. The Plan is not subject to
any of the provisions of the Employee Retirement Income Security Act of 1974 and
is not  qualified  under  Sec.  401 of the  Internal  Revenue  Code of 1986,  as
amended.  Forms S-8 have been filed with the Securites  and Exchange  Commission
relative to such  issuances of stock.  Shares have been recorded using the lower
of the average price on the date issued or maximum offering price unless a value
was otherwise stated.

In August 1998, 200,000 shares of the Company's common stock valued at $172,000
were  issued to the  president  of Grant  Douglas  Publishing,  Inc.,  under the
Consultant   Services  Plan,  as  compensation  for  consultation   services  in
connection with new business  opportunities  and promotion of the Company to the
public. Subsequent to the issuance of stock, the Company terminated the services
of to be provided by that company and negotiated,  on October 21, 1998,  for the
return of 297,500 shares of the total 425,000 shares issued. There are 32,500 of
the 297,500 shares which have not yet been returned.

On December 9, 1998,  50,000 shares of the Company's common stock were issued to
the  Company's  legal  counsel  under  the  Consultant  Services  Plan for legal
services.  This stock was valued at $12,000.  In January 1999, 200,000 shares of
the Company's  common stock were issued to the Company's legal counsel under the
Consultant  Services Plan for legal services.  The agreement calls for shares to
be released in increments totaling  approximately $6,000 per month. These shares
were issued during the year for a total value of approximately $109,719.

During fiscal year 1999,  the Company issued a total of 195,500 shares of common
stock under the Consultant Services Plan as compensation for services to various
consultants  valued at $67,903.  Of these shares  150,000  shares were  returned
under a mutual  consent to cancel the agreement for  services.  Shares  returned
were valued at $53,250.

During  fiscal year 1998,  the  Company  issued a total of  1,189,500  shares of
common stock under the Consultant  Services Plan as compensation for services to
various consultants valued at $3,029,004.

In April 1998,  72,000 shares of the  Company's  common stock were issued to the
Company's  legal counsel under the Consultant  Services Plan for legal services.
The  agreement  called  for 6,000  shares to be  released  each month for twelve
months.  The issuance has been recorded at $.83 per share but may be adjusted in
accordance with certain fluctuations of the market price. The unexpended portion
of these  services  was recorded as prepaid  expenses.  This stock was valued at
$59,760.

See Note 8 for stock issued for services for related parties.

Sale of Common Stock

On December  24, 1998,  the Company sold 200,000  shares of common stock at $.20
per share and 400,000  restricted options to purchase common stock at $.15 for a
total of $100,000. (See Stock Options below.)
                                      F-14
<PAGE>

NOTE 8.  DEFICIENCY IN ASSETS (CONTINUED)

Stock Issued under Employee Stock Incentive Plan

On February 18,  1999,  the Company  issued  1,775,000  shares of the  Company's
common stock under Employee Stock  Incentive Plan adopted January 26, 1999. This
stock was valued at $379,850.  Shares have been recorded  using the lower of the
average  price on the date issued or maximum  offering  price unless a value was
otherwise stated, subject to certain discounts.
Stock Options

The Company had granted to Edward N. Laughlin,  former  president,  director and
majority  shareholder,  stock options in return for advancing working capital to
the Company and  providing  prior year bank loan  guarantees.  At July 31, 1998,
there were 16,500  shares under  option at an exercise  price of $2.50 per share
which expired April 5, 1999.

The Company sold 400,000  restricted share options to purchase common stock at a
cost of $60,000 on December 24, 1998. The options are for a period of 24 months.
The  exercise  prices are $1.00 for 200,000  shares and $2.00 for the  remaining
200,000. At July 31, 1999, none of the options had been exercised.

NOTE 9.  BUSINESS COMBINATION

Under an Agreement  and Plan of Merger dated  May 27, 1998,  the Company  merged
with American  Millennium  Corporation,  a subsidiary of which the Company owned
approximately  an 80% interest,  with the parent as the  surviving  corporation.
Upon  completion  of the  merger,  the  Company  changed  its  name to  American
Millennium  Corporation,  Inc.  The merger  was  accomplished  by a  one-for-one
exchange of stock  between the two  companies.  The exchange has been  accounted
for,  in  accordance  with  Accounting  Principles  Board  Opinion  No.  16,  at
historical cost in a manner similar to that in  pooling-of-interest  accounting.

The  8,000,000  shares  of the  subsidiary's  stock  owned by the  Company  were
exchanged for the Company's own stock which was returned to the treasury and are
reflected  on the balance  sheet  using the par value  method for the year ended
July 31, 1998. During the current year, the treasury stock was retired.

NOTE 10.  OPERATING AND ECONOMIC CONDITIONS

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However,  conditions have limited the ability of the
Company to market its products and services at amounts sufficient to recover its
operating and administrative  costs and the Company realized  substantial losses
on  discontinued  operations.  As a result,  the Company has incurred  operating
losses of $1,508,915 and $3,769,000 for the years ending July 31, 1999 and 1998,
respectively,  in addition to losses from discontinued  operations of $2,328,670
for the year ended July 31, 1998.

In addition, the Company has used substantial working capital in its operations.
As of July 31,  1999 and 1998,  current  liabilities  exceed  current  assets by
$756,052 and $311,522, respectively. Cash used by operations for the years ended
July 31, 1999 and 1998, amounted to $309,709 and $444,185, respectively.

Management  anticipates  that revenues from sales,  leases and  installation  of
Subscriber Communicators and airtime for these units will significantly increase
based on  ongoing  contract  negotiations  and  proposals.  Since the end of the
fiscal year, the number of Subscriber  Communicators  in the field has more than
doubled.

On  September  24,  1999,  the  Company  accepted a bridge  loan of $50,000  and
authorized  the  issuance of 25,000  shares of the  restricted  common  stock in
payment of interest on the loan from an individual.
                                      F-15
<PAGE>

NOTE 10.  OPERATING AND ECONOMIC CONDITIONS (CONTINUED)

To satisfy cash requirements for the short to mid-term operations the Company is
making a private  offering of common stock in accordance  with  exemptions  from
registration under Regulation D, Rule 506,  Securities Act of 1933. The offering
is made on a "best  efforts"  basis  with a maximum of  2,800,000  shares and an
equal number of warrants offered for sale at $.25 per  share/warrant.  Since the
end of the fiscal  year,  the  Company  has  received  stock  subscriptions  for
2,400,000 shares of stock with a total subscription  price of $600,000.  To date
$100,000  has been  received  and the  balance is  scheduled  to be  received on
November  19,  1999.  To date  expenses  of this  offering  total  approximately
$20,490. Additional expenses upon final funding are expected to be approximately
$30,000.

The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of  recorded  assets,  or  the  amounts  or
classifications  of liabilities that might be necessary in the event the Company
cannot continue in existence.

NOTE 11. COMMITMENTS AND CONTINGENCIES

Litigation

In October 1997, the Company issued common stock totaling  500,000 shares to two
individuals  under a Consultant  Services  Plan as  compensation  for  marketing
services.   The  Company  then  decided  to  discontinue   relations   based  on
dissatisfaction with the quality of service,  lack of service and other business
reasons.  When requested that the stock be returned,  they  discovered  that the
stock had been sold.  The Company  retained  legal counsel to pursue the matter.
Legal counsel  believes that there is a strong  likelihood that the Company will
obtain a successful verdict, however,  collectibility of any verdict or judgment
is unknown at this time.

In August 1997,  as part of a Stock and Asset  Purchase  Agreement,  the Company
issued 400,000 restricted shares of common stock to each of two individuals. The
agreement  was  amended in October  1997,  to reflect a lower  valuation  of the
assets to be acquired in exchange for the common stock issued.  Accordingly,  it
was necessary to reduce the number of shares to which these two individuals were
entitled to 117,275 shares each. A letter was sent to the individuals requesting
the return of the original  shares in exchange  for issuance of the  appropriate
number  of  shares.  The  original  shares  were  never  returned  and  upon the
expiration  of their  restriction  period,  the  individuals  sought to have the
restriction  removed  to  enable  them to sell the  shares.  Since  the  Company
believes the shares were issued in error,  the Company  sought an  injunction to
prevent the sale of these shares.  A temporary  injunction was issued on October
27,  1998,  upon the filing of a surety  bond in the amount of  $150,000  by the
Company.  The  individuals  have not responded to the summonses and a motion for
default will be filed.  Legal  counsel  believes the  likelihood of a successful
outcome is high.

Rents and Leases

The  Company   occupied   office   facilities   in  Tavares,   Florida  under  a
month-to-month  rental  agreement  with a related party until November 30, 1998.
The Company then subleased its office facilities in Mount Dora, Florida under an
operating  lease that expired  September 30, 1999. The Company is in the process
of  negotiating a three-year  rental  agreement with the property  owner,  Dream
Merchants,  Inc., at the same monthly rate.  The Company will continue to occupy
the facility on a month-to-month basis until the lease is executed.

Total rent expense was $15,762 and $14,400 for the years ended July 31, 1999 and
1998, respectively.

On November 25, 1997,  the Company  executed an Equipment  Lease  Agreement with
AT&T Capital  Leasing  Services,  Inc.(AT&T).  The term of the  agreement was 60
months.  The Company  made only three  payments  and on October 20,  1998,  AT&T
repossessed the equipment.  There is a claim against the Company for the balance
due and owing under the Equipment Lease  Agreement in the sum of $44,607.  Based
upon the  negotiations,  an equitable and  favorable  outcome for the Company is
likley.  Accordingly,  we have  recorded  an  accrued  liability  of  $20,000 in
settlement of this claim.
                                      F-16
<PAGE>

NOTE 11. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Self-insurance

The  Company is  self-insured  for general  liability  and  property  insurance.
Additionally,  the Company has not obtained product liability  insurance to date
due to the cost of such insurance.  ORBCOMM  provides a one year warranty on the
Subscriber  Communicators  which is  passed  along to the  customer.  Management
presently  believes  that there is no material  risk of loss to the Company from
product liability claims against the Company as a distributor.

Year 2000

The  year  2000  issue  results  from  certain  computer  systems  and  software
applications  that  use  only two  digits  (rather  than  four)  to  define  the
applicable year. As a result, such systems and applications may recognize a date
of "00" as 1900  instead of the intended  year 2000,  which could result in data
miscalculations  and software failures.  The Company has conducted an assessment
of its key  computer  systems  and  software  applications  to  ensure  that the
integrity and accuracy of its computer  systems,  embedded  systems and software
applications  that  contain  date  sensitive  operations  or that  involve  date
processing.  To date the Company has upgraded its accounting  software (accounts
receivable, accounts payable and general ledger) to be Y2K compliant.

The Company is in the process of communicating with all key suppliers, financial
institutions and customers to identify and coordinate the resolution of any year
2000 issues that might arise and have.  The Company has been  advised by ORBCOMM
that they are  addressing all of the year 2000 issue and that they expect timely
achievement of year 2000 readiness.

Based on the initial assessment, the Company believes the cost of addressing the
Year 2000 issue  should not have a material  impact on the  Company's  financial
position or results of operations.

Securities and Exchange Commission Proceeding

The Company is a party to a pending  administrative  proceeding initiated by the
Securities and Exchange  Commission.  Although,  the Commission  alleged various
violations of the Securities Act of 1933 and the Securities Exchange Act of 1934
against the  Company,  to date the  Commission  has not filed suit.  An informal
settlement has been reached in the matter which,  if approved by the Commission,
will not require payment.

Employee Stock Incentive Plan

In January  1999,  the Board of  Directors  approved  an outline for an Employee
Stock  Incentive  Plan (ESIP).  The plan  provides for  8,100,000  shares of the
Company's  restricted common stock to be issued as incentive  compensation.  The
plan calls for twenty-five  (25%) of the shares available to each participant to
be  issued  when the  participant  has  concluded  six  months  of  service.  An
additional  twenty-five  (25%) of the  available  stock is to be issued when the
participant  has  concluded  one year of service.  The balance of the  available
stock is to be issued upon completion of one and one-half years of service.

Although the plan was approved by the Board of Directors and the first increment
of stock issuances has been made, this plan has not yet been formalized.  At the
request of the Board of  Directors,  issuance  was waived of  restricted  shares
vested under the ESIP due and owing after April 13, 1999,  until further  review
at a Board meeting on or about January 2000. Incentive compensation has not been
accrued for these shares because the value, which is based on the price of stock
at the date of issue, cannot yet be determined.
                                      F-17
<PAGE>

NOTE 12.  SUBSEQUENT EVENTS

On August 12, 1999, the Company  announced that it had reached an agreement with
Brasil  Wireless  Systems  Company,  SA to jointly solicit sales and engineering
support and to market  communications  technology within South American markets.
The  agreement  calls for a joint  effort  between  the two  companies  to share
hardware,  software and engineering  resources for product deployment within the
designated markets.

The Company  announced on August 18, 1999, that it had entered into an agreement
for  financial  consulting  with Jack  Augsback and Company,  LLC, an investment
banking firm located in West Palm Beach, Florida. That company is a full service
investment banking firm specializing in financial  consulting as well as capital
formation via private placements, secondary offerings, initial public offerings,
and venture  financing.  The  Company,  on  September  10,  1999,  accepted  the
investment  memorandum  as prepared  by Jack  Augsback & Company for the private
offering  being made in accordance  with the exemption from  registration  under
Regulation D, Rule 506 fo the  Securities  Act of 1933 (See Note 10). On October
21, 1999,  the Board of Directors  authorized  the issuance of 350,000 shares of
restricted common stock to five investors pursuant to this offering.

In August  1999,  the  Company  issued  100,000  shares  of common  stock to its
President  and Chief  Executive  Officer and 65,000  shares of common stock to a
consultant for services under its Consultant Services Plan (see Note 8).

On August 24, 1999, the Company  accepted and approved a preliminary  outline of
an agreement with Lindy Amyx for services to be rendered in securing  additional
funding.
                                      F-18
<PAGE>