U.S. Securities and Exchange Commission

                              Washington, Dc 20549

                                   Form 10-KSB



           [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


           For the fiscal year ended December 31, 2000
                                     -----------------



                             LAREDO INVESTMENT CORP.
                             -----------------------
                 (Name of Small Business Issuer in its Charter)


        Nevada                                        77-0517964
----------------------------------          ------------------------------------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
 of incorporation or organization)

        Suite 11405 - 201A Street, Maple Ridge, British Columbia V2X 0Y3
            (Address of principal executive office) Zip/Postal Code

           Issuer's telephone number: (604) 460-8440
                                      --------------


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

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

                                  Common Stock
                                  ------------
                                (Title of Class)


     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  preceding 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days. Yes ( X )
NO ( ).

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

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<PAGE>



     Issuer's revenues for its most recent fiscal year, were $2,309,461.

     Issuer's Common Shares  outstanding at March 31, 2001 was  32,200,000.  The
aggregate  market  value  of  voting  and  non-voting   common  equity  held  by
non-affiliates  as of March  31,  2001  was  $1,818,000,  computed  based on the
average bid and asked price of such common equity as of March 31, 2001.

     Except for the historical  information  contained  herein,  the matters set
forth in this Form 10- KSB are forward looking  statements within the meaning of
the "Safe Harbor" provision of the Private  Securities  Litigation Reform Act of
1995.  These  forward-looking  statements are subject to risk and  uncertainties
that may cause  actual  results  to  differ  materially.  These  forward-looking
statements  speak  only  as of the  date  hereof  and  Laredo  Investment  Corp.
disclaims any intent or obligation to update these forward-looking statements.

Documents Incorporated by Reference:  Certain exhibits



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<PAGE>



Item 1.              Description of Business.

Business Development

Laredo Investment Corp.  ("Laredo") was incorporated under the laws of the State
of Nevada on December 18, 1996.  Laredo ceased all operating  activities  during
the period from December 18, 1996 to July 9, 1999 and was considered dormant. On
July 9, 1999, Laredo obtained a Certificate of renewal from the State of Nevada.
From July 9, 1999 to January 21, 2000, Laredo was in the development stage.

On January 21, 2000,  Laredo  entered  into an  Acquisition  Agreement  with GFR
Nutritionals,  Ltd., a British Columbia  corporation,  (GFR), Richard Pierce and
Lucretia  Schanfarber  (the GFR Majority  Shareholders)  to acquire their shares
representing  100%  of the  outstanding  common  stock  of GFR in  exchange  for
19,000,000  newly issued shares of Laredo's  restricted  common  stock.  GFR was
incorporated in March 1997 as Helm  Developments  Ltd. In June 1998, the Company
formally  changed its name to GFR  Nutritionals  Ltd.  GFR was 100% owned by the
President and CEO,  Richard Pierce from inception until January 17, 2000, when a
10% interest was acquired by Lucretia Schanfarber.  Business operations began in
October  1998  after   acquiring   manufacturing   equipment  and  arranging  to
manufacture nutritional supplements under a private label contract.

On June 21, 2000, Laredo entered into an Acquisition Agreement with Nutritionals
(USA)  Direct.Com,  a  Washington  corporation,  (NDC),  to acquire  100% of the
outstanding common stock of NDC in exchange for $1,000.

On July 12, 2000,  Laredo  entered into an  Acquisition  Agreement  with WST Web
Search Technologies, Inc., a Saskatchewan corporation, (WST), to acquire 100% of
the  outstanding  common  stock of WST in exchange for  10,000,000  newly issued
shares of Laredo's restricted common stock.

On November 1, 2000, Laredo entered into an Acquisition Agreement with Prohealth
Nutritionals Ltd., a British Columbia corporation, (PHN), to acquire 100% of the
outstanding common stock of PHN in exchange for $0.01.

Narrative Description of the Business

Laredo, through its wholly owned subsidiary GFR, is an established  manufacturer
of quality  nutritional  supplement  products.  Laredo  operates a full  service
manufacturing  facility  that  produces  natural-source  nutritional,   vitamin,
mineral,  herbal and sports nutrition products which are sold on a private label
basis to wholesale distributors.

Nutritional  supplements  are being  increasingly  recognized by the medical and
scientific communities as an integral component of a healthy lifestyle.  Much of
the growth in this industry is driven by six key factors:

     o    Positive  publicity - For several  years,  medical  journals  and news
          reports have widely and  consistently  publicized the positive effects
          of  nutritional  supplements.  Many  of  these  reports  focus  on the
          correlation between consumed nutrients and the

                                        3

<PAGE>



     reduced  incidence  of  certain  diseases.  As a  result,  the  nutritional
     supplement industry has experienced greater acceptance and popularity.

     o    Increased  research - The more the scientific  community  learns about
          the human body,  more is proved that an  individual's  diet and health
          are undoubtedly  connected.  Government  agencies,  universities,  and
          private   companies  are  increasing  their  sponsorship  of  research
          assessing the benefits of nutritional supplements and herbs.

     o    Favorable  regulatory  environment - The US Dietary  Supplement Health
          and Education Act (DSHEA) created a set of guidelines  specific to the
          supplement  industry and  established a regulatory  environment  which
          allows  responsible  nutrition  companies  to thrive  and  allows  the
          industry to regulate itself with supervision by the FDA. Health Canada
          has followed suit and defined Good Manufacturing Practices, with which
          compliance in the industry is voluntary.

     o    Mass  market   distribution  -  Nutritional   supplements,   including
          all-natural products,  vitamins,  minerals and herbs, are increasingly
          sold in mass volume  retail  stores.  Due to this new market  channel,
          millions  of  shoppers  are  exposed  to  these  products  as they are
          introduced into the mainstream.

     o    Ageing  of the  population  - The  largest  demographic  group  in the
          history of North America is now turning 50 years old. Over the next 15
          years,  approximately  80 million more "baby  boomers"  will join this
          group of individuals  who are concerned with  preserving  their health
          and  fitness,   directly   increasing   the  demand  for   nutritional
          supplements.

     o    Trend toward  preventative care - The collective health  consciousness
          of the  population  that began  over 20 years ago is gaining  momentum
          and, along with regular exercise, it embraces nutritional supplements.

According to the Nutrition Business Journal,  the US nutrition  industry,  which
includes natural foods, dietary supplements, and natural personal care products,
has grown  14-16%  annually  over the past two years and is  expected to sustain
double digit growth for the near future.  The Nutrition  Business Journal states
that the US nutrition  industry  generated  $23.3  billion of consumer  sales in
1997. Canadian sales tend to approximate 10% of the US market.

Principal  Products:  Laredo  currently  manufactures  70 different  products by
formulation and capsule size.

Principal products that Laredo manufactures are:

           -         Multiple vitamin/mineral product - 90/180 and 360 caps
           -         Methyl sulfonyl methane caps or powder
           -         Glucosamine  sulfate
           -         Devil's claw root extract
           -         St.  John's Wort extract
           -         Kava Kava
           -         Ginkgo Biloba leaf extract
           -         Coenzyme Q10

                                        4

<PAGE>



           -         Echinacea
           -         L-Glutamine
           -         Grapeseed extract
           -         Vitamin C
           -         Garlic Ginseng

Markets:  Established  market  channels  for  nutritional  products  within  the
industry  include  distribution  through health food retail stores,  mass market
retail through department and grocery stores, multi-level marketing, mail order,
health practitioners, and the Internet.

Currently,  Laredo only manufactures nutritional supplements under private label
contracts with wholesale  distributors.  During 2000 and 1999, one private label
customer has comprised 83% and 94%, respectively of Laredo's sales.

Laredo's  primary goal is to achieve a level of annual revenues in excess of $20
million by the fiscal year ended 2001 resulting from expanded  marketing efforts
and vertical  integration  through  acquisitions and expansion into new markets.
Laredo is also pursing opportunities to market direct sales to consumers through
the Internet.

Competition:  The  main  competitors  in the  Canadian  natural  health  product
industry are privately  owned  corporations.  A couple of larger  companies that
manufacture their products for retail distribution are Jamieson Laboratories and
Stanley  Pharmaceuticals.  There are also many companies which  manufacture only
for private label sales.  Many smaller  manufacturers  have their  products sold
strictly in specialty health food and nutrition stores.  NatraCeuticals  Inc. is
the only  publicly  held  natural  health  product  company  in  Canada  and had
approximately $23 million of sales in its 1998 fiscal year.

Natural health product manufacturing has significant cost barriers for new start
up companies.  Start up costs include set up of manufacturing facilities through
purchase of equipment,  acquiring skilled labor and research and  implementation
of processes acceptable to government standards.

Regulation:  In both the US and Canada,  the natural health products industry is
self  regulating.  In Canada,  products are not required to be approved prior to
introduction to the market, however Health Canada has defined Good Manufacturing
Practices, with which compliance is voluntary.  Health Canada has indicated that
stricter  regulations  for  natural  health  products  will be enacted in future
years.

In 1996,  US Congress  enacted the Dietary  Supplement  Health and Education Act
(DSHEA) which included a set of guidelines  specific to the supplement  industry
and established a self regulatory environment for the industry.

Employees:  Laredo currently has 25 employees.  Executive  management and office
administration personnel are comprised of 7 individuals. Operations personnel is
made up of 18 individuals, including the Quality Control Director and Production
Manager.  Future  employees  will be hired as dictated by  increases in business
volume.



                                        5

<PAGE>



Item 2.              Description of Property.

Laredo's  operations  are  located  in a  building  that  is  owned  by a  major
shareholder  and his parents.  The lease agreement is for a two year term ending
January 1, 2002. Under the terms of the lease agreement, the monthly rent charge
is approximately  $3,333 ($5,000  Canadian) and Laredo is responsible for paying
the property taxes,  utility  charges,  and any costs of repair and maintenance.
Any repairs and  maintenance  expenses paid for by the landlords are required to
be  reimbursed  by  Laredo at cost plus 15%.  The  agreement  includes  a 2 year
renewal  option.  All other terms are  consistent  with those  standard to lease
agreements.

Both Laredo's administration office and manufacturing  operations are located in
the same premises.  The total square footage of the building is 10,000. The area
used by manufacturing  currently  comprises 3,625 of that total. In management's
opinion,  the space leased is sufficient to support  operational  growth for the
foreseeable future.  Currently,  production is only run on one shift per day for
five days each week.  Production  shifts can be  increased to a maximum of three
shifts  per day for seven  days each week and still be  accommodated  within the
current space.  The only potential  requirement for additional space could arise
due to stock held on hand as business volumes increase.


Item 3.              Legal Proceedings.

None


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

No matters were  submitted  for a vote of security  holders of Laredo during the
fourth quarter of the fiscal year ended December 31, 2000.



                                        6

<PAGE>



                                     Part II


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

Market Information

Since  December  17,  1999  Laredo's  stock has been  listed for sale on the OTC
Electronic  Bulletin Board under the symbol LRDI. The high and low bid prices of
the Common Stock of Laredo have been as follows:


     Period                              High                    Low
--------------                    ---------------------   --------------------
1st Qtr 2000                      $               4.750   $              1.125
2nd Qtr 2000                                      2.188                  0.875
3rd Qtr 2000                                      1.750                  0.550
4th Qtr 2000                                      0.490                  0.063


The above  quotations  reflect  inter-dealer  prices,  without  retail  mark-up,
markdown, or commission and may not necessarily represent actual transactions.

Holders

There were  approximately  65 holders of  Laredo's  32,200,000  shares of common
stock outstanding as of March 31, 2001.

Dividends

Laredo  has not  declared  any  dividends  since  inception,  and has no present
intention of paying any cash  dividends  on its common stock in the  foreseeable
future. The payment by Laredo of dividends,  if any, in the future, rests within
the  discretion of its Board of Directors  and will depend,  among other things,
upon Laredo's earnings, its capital requirements and its financial condition, as
well as other relevant factors.


Item 6.              Management's Discussion and Analysis.

Plan of Operations

The  Company  is  currently  working  on  securing   additional   private  label
manufacturing  contracts.  The key target for private  label sales are wholesale
distributors  of  health  food  nutrition  products.  Laredo  is  also  pursuing
opportunities for direct sales to consumers through the Internet.

Liquidity and Capital Resources

Laredo's  working  capital  ratio was 0.74:1 as at December 31, 2000 compared to
0.86:1 by December 31, 1999. Key contributing factors for this decrease were the
increase in short term borrowings

                                        7

<PAGE>



which  comprised a $289,943 bank overdraft and a $553,802 note bearing  interest
at 10.5% repayable upon demand in shares or options of Laredo's common stock.

Current liabilities include a $69,248 promissory note payable to a party related
to the  shareholder,  which  bears  interest  at 12%  annually.  These funds are
repayable on demand however, the request for repayment occurring at this time is
not expected.

Laredo has a small  business loan  outstanding  with a balance of $116,606 as at
December 31, 2000. This loan bears interest at 10.15% over a 5 year term.

Laredo anticipates  acquiring an additional $300,000 of manufacturing  equipment
in fiscal  2001 in order to meet  demands  for new private  label  sales.  Plant
renovations  costing  $30,000 are also  expected to be completed in fiscal 2001.
These  expenditures  will be  financed  through  private  placement  of  shares.
Increased  sales volumes will also  necessitate  hiring  additional  operations,
sales and administrative personnel.

Results of Operations


                                                           2000            1999
                                                     ----------      ----------
Sales ..........................................     $2,309,461      $1,669,034
Cost of Sales ..................................      1,559,820       1,213,464
Gross Profit ...................................        749,641         455,570
Gross Profit Margin ............................          32.46%          27.30%
Administrative Expenses ........................        699,994         358,688
Administrative Expenses as a % of sales ........          30.31%          21.49%


For the 12 months ended December 31, 2000,  sales were $640,000 higher than 1999
and are expected to continue to grow during  2001.  During 2000 and 1999 83% and
94%  of  sales,   respectively  were  to  Prairie  Naturals  Inc.,  a  wholesale
distributor for which Laredo manufactures  private label products.  Laredo has a
verbal  arrangement  to  manufacture,  on an  as-ordered  basis,  private  label
products that Prairie Naturals Inc.  distributes under the Prairie Naturals Inc.
name.  Laredo also has an exclusive  written contract to manufacture one product
that Prairie Naturals Inc, distributes for a third party private label.

Operating margins in 2000 were 32.46% of sales revenue,  5.16% higher than 1999.
Cost of  Sales  includes  the  cost  of raw  materials  used  in  manufacturing,
production labor costs and an applicable share of overhead expenses. General and
administrative  expenses  were 30.31% of sales in 2000,  8.82% higher than 1999.
Management attributes the increases in costs of sales to manufacturing equipment
downtime  experienced during 2000. General and administrative cost increases are
due to increased  professional  fees  relating  acquisitions  during  2000,  and
increased marketing costs.

Laredo anticipates  realizing economies of scale as production volumes increase.
Administrative  expenses include advertising expenses which will increase due to
Laredo's plan to expand marketing efforts.




                                        8

<PAGE>



Effect of Inflation

Laredo  does  not  anticipate  any  financial  impact,   whether  beneficial  or
detrimental, as a result of inflation.


Item 7.              Financial Statements.

The following financial statements of Laredo are filed under this Item.

Contents                                                                    Page

Independent Auditor's Report...............................................F - 1

Consolidated Balance Sheets
  December 31, 2000and 1999................................................F - 2

Consolidated Statements of Operations for the
  Years Ended December 31, 2000 and 1999...................................F - 4

Consolidated Statement of Stockholders' Equity for the
  Years Ended December 31, 2000 and 1999...................................F - 5

Consolidated Statements of Cash Flows for the
  Years Ended December 31, 2000 and 1999...................................F - 6

Notes to Consolidated Financial Statements.................................F - 7


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

There have been no  disagreements  with  accountants on accounting and financial
disclosure.


                                        9

<PAGE>



                                    Part III


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

Business Experience Of Management

Richard Pierce, Age 40, President and CEO

Mr. Pierce is the President and Chief Executive Officer of Laredo In his role he
oversees all aspects of operations, administration and financing of Laredo.

Mr. Pierce has almost 15 years experience in the natural health  industry.  From
1997 to 1998,  prior to founding GFR  Nutritionals  Ltd., Mr. Pierce worked as a
Business  Development  Coordinator  for  Integrated  Equity  Management.  He was
involved in marketing bridge financing arrangements to private corporations. For
one year spanning 1996 and 1997, Mr. Pierce worked as an Industry Consultant for
Natraceuticals  Inc. He  specialized  in the  development  and  marketing of new
sports nutrition products.

For ten years prior to joining  Natraceuticals Inc, Mr. Pierce founded and acted
as President  and CEO of NHF  (Nutrion  Health and Fitness  Inc.).  This company
researched,   designed,  formulated,   manufactured  and  marketed  four  sports
nutrition product lines throughout Canada.

In 1983, Mr. Pierce founded  Natural Health  Products and acted as President and
CEO. Natural Health Products designed, formulated, manufactured and marketed the
first sports nutrition line in Atlantic Canada.


Marc Casavant, Age 38, Chief Financial Officer

Mr. Casavant joined Laredo as Chief Financial  Officer in April 2000. From March
1998 to April  2000,  he was Vice  President  of  Operations  for  Basic  Sports
Nutrition,  Surrey,  British  Columbia.  During 1996 to March 1998 Mr.  Casavant
served as Plant Manager for Nu-Life  Nutrition,  Maple Ridge,  British Columbia.
During 1995 through 1997 he was  Controller of Nutrion  Health & Fitness,  Maple
Ridge,  British  Columbia.  During 1993 to 1995, Mr.  Casavant was Controller of
Majestic Marketing Ltd., White Rock, British Columbia. From 1989 to 1993, he was
the Senior Accountant for Ebco Industries,  Ltd., in Richmond, British Columbia.
Mr. Casavant  obtained a Business  Administration  Diploma in 1985 from Okanagan
College, Kellowna, British Columbia.


Lucretia Schanfarber, Age 48, Director

Ms  Schanfarber  has  served as Vice  President  of Sales and  Marketing  of GFR
Nutritionals since inception.  She has over 25 years of marketing  experience in
all sectors of the Natural Health Products Industry.  She is the host and writer
of the Healthy Stuff with Lucretia  Radio Show and the host and writer of Health
Experts On Call Radio Show of CFUN 1410 AM Vancouver, British

                                       10

<PAGE>



Columbia.  She is also a  contributing  editor to the  Encyclopedia  of  Natural
Healing published by Alive Books in 1998 and is a regular contributing writer to
Alive  Magazine  and  Healthy  Living  Guide  Magazine.  From  1993 to 1996,  Ms
Schanfarber served as National Director of Sales and Marketing of Nutrion Health
and Fitness, Maple Ridge, British Columbia.

Dr. Mengchi Liu, Director

Dr. Liu has served as Director since July 12, 2000. He is a tenured professor of
computer science at the University of Regina, Saskatchewan,  Canada, with over 9
years  experience with 4 universities.  Dr. Liu has a Ph.D and M.Sc in Deductive
Databases  from  the  university  of  Calgary,   Alberta  Canada,  an  M.Eng  in
Distributed  Databases and a B.Sc in Computer  Software.  from Wuhan University,
Hubei, China.

Dr. Tok Wang Ling, Director

Dr. Ling has served as Director  since July 12, 2000. He is a tenured  professor
of computer  science at the National  University  of Singapore  and is also Vice
Dean of Research of the University.  Dr Ling received his Ph.D and M.Math., both
in computer science from Waterloo Unversity (Canada) and B.Sc (First Class Hons)
in mathematics  from Nanyang  Unversity  (Singapore).  He serves on the steering
committee of 3  international  database  conferences,  and has published over 80
papers in international journals and conferences.

Aileen Hongbo Liang, Director

Ms.  Liang has served as Director  since July 12,  2000.  She is  currently  the
Director and General Manager of WST Web Search Technologies, Inc. She has served
as a programmer  analyst,  as a Sessional  Instructor teaching java programming,
and as an Instructor teaching discrete mathematics, at the University of Regina,
Saskatchewan,  Canada.  She has a Masters of Computer Science and a Bachelors of
Computer Science from the University of Regina.


Item 10.          Executive Compensation.

Summary Compensation Table

For the 12 months  ended  December  31,  2000 and 1999,  the  President  and CEO
received  $63,992   ($96,000   Canadian)  and  $101,320   ($152,000   Canadian),
respectively in compensation pursuant to an oral agreement.

Laredo has not granted any options to Directors, Officers, or Key Personnel.

Compensation Of Directors

The members of Laredo's Board of Directors are  reimbursed  for actual  expenses
incurred in attending Board meetings.



                                       11

<PAGE>



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

Security  Ownership of Management  and Certain  Beneficial  Owners  holding five
percent or greater of the  32,200,000  shares of common stock  outstanding as of
December 31, 2000.


Title of   Name and Address           Amount and Nature                % of
Class      of Beneficial Owner        of Beneficial Ownership          Class
---------- -------------------------  ------------------------       -----------
Common     Richard Pierce (1)                10,100,000                 31.37%
           President, CEO, Director

           Mengchi Liu (1)                   10,000,000                 31.06%
           Director

           Lucretia Schanfarber (1)           1,900,000                  5.90%
           Director

           Marc Casavant (1)                          0                  0.00%
           Chief Financial Officer

           All officers and Directors        22,000,000                 68.32%
           as a Group (3 persons)

(1) c/o Suite 11405 - 201A Street, Maple Ridge, British Columbia V2X 0Y3

Compliance with Section 16 Reporting:

The above named Executive  Officers and Directors  failed to timely file Forms 3
Initial Statement of Ownership and Form 5 Annual Statement of Ownership. None of
the above named Executive Officers have entered into transactions  requiring the
filing  of a Form 4 Changes  in  Ownership.  All  holdings  of common  stock and
options to acquire common stock are accurately reported herein.

Changes In Control

On January 21, 2000,  Laredo  entered  into an  Acquisition  Agreement  with GFR
Nutritionals,  Ltd., a British Columbia  corporation,  (GFR), Richard Pierce and
Lucretia  Schanfarber  (the GFR Majority  Shareholders)  to acquire their shares
representing  100%  of the  outstanding  common  stock  of GFR in  exchange  for
19,000,000 shares of Laredo's restricted common stock.


Item 12.             Certain Relationships and Related Transactions.

On January 21, 2000,  Laredo  entered  into an  Acquisition  Agreement  with GFR
Nutritionals,  Ltd., a British Columbia  corporation,  (GFR), Richard Pierce and
Lucretia  Schanfarber  (the GFR Majority  Shareholders)  to acquire their shares
representing  100%  of the  outstanding  common  stock  of GFR in  exchange  for
19,000,000 shares of Laredo's restricted common stock



                                       12

<PAGE>



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

The following documents are filed as part of this report under Part II, Item 8:

Exhibits as required by Item 601 of Regulation S-B

Exhibit Number                 Description

           3.1                 Articles of Incorporation as amended

           3.2                 Bylaws


(1)  Incorporated by reference to Laredo's report on Form 10SB12G dated November
5, 1999

(b) Reports of Form 8-K

No report on Form 8-K was filed during the quarter ended December 31, 2000.



                                       13

<PAGE>


                                   SIGNATURES

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

LAREDO INVESTMENT CORP.


Dated: April 13, 2001




/s/ RICHARD PIERCE
Richard Pierce, President and C.E.O.




/s/ LUCRETIA SCHANFARBER
Lucretia Schanfarber, Director




/s/ MARC CASAVANT
Marc Casavant, Chief Financial Officer




/s/ MENGCHI LIU
Mengchi Liu, Director




/s/ TOK WANG LING
Tok Wang Ling, Director




/s/ AILEEN HONGBO LIANG
Aileen Hongbo Liang, Director

                                      14

<PAGE>
                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                      (Formerly A Development Stage Company

                                       -:-

                          INDEPENDENT AUDITOR'S REPORT

                           DECEMBER 31, 2000 AND 1999





<PAGE>






                                    CONTENTS


                                                                            Page

Independent Auditor's Report...............................................F - 1

Consolidated Balance Sheets
  December 31, 2000and 1999................................................F - 2

Consolidated Statements of Operations for the
  Years Ended December 31, 2000 and 1999...................................F - 4

Consolidated Statement of Stockholders' Equity for the
  Years Ended December 31, 2000 and 1999...................................F - 5

Consolidated Statements of Cash Flows for the
  Years Ended December 31, 2000 and 1999...................................F - 6

Notes to Consolidated Financial Statements.................................F - 7



<PAGE>









                          INDEPENDENT AUDITOR'S REPORT


Laredo Investment Corp. And Subsidiaries
(Formerly A Development Stage Company)


     We have  audited the  accompanying  consolidated  balance  sheets of Laredo
Investment Corp. and Subsidiaries  (formerly a development  stage company) as of
December 31, 2000, and the related consolidated  statements of operations,  cash
flows,  and  stockholders'  equity for the year ended  December 31, 2000.  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. The financial statements of Laredo Investment Corp. and Subsidiaries
(formerly GFR Nutritionals  Ltd.) as of December 31, 1999, were audited by other
auditors whose report dated February 29, 2000,  expressed an unqualified opinion
on those statements.

     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 December 31, 2000  financial  statements  referred to
above present fairly, in all material respects, the financial position of Laredo
Investment Corp. and Subsidiaries  (formerly a development  stage company) as of
December 31, 2000,  and the results of its operations and its cash flows for the
year ended December 31, 2000 in conformity  with generally  accepted  accounting
principles.

                                                Respectfully submitted



                                                /s/ ROBISON, HILL & CO.
                                                Certified Public Accountants

Salt Lake City, Utah
March 22, 2000


                                      F - 1

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS






                                                         December 31,
                                                   ----------------------------
                                                      2000             1999
                                                   -----------        ---------
ASSETS
Current Assets:
Cash and cash equivalents ..................       $      --          $    --
Receivables ................................           658,834          192,339
Inventory ..................................           432,276          140,020
Prepaid expense ............................             1,664              857
                                                   -----------        ---------

     Total Current Assets ..................         1,092,774          333,216
                                                   -----------        ---------

Fixed Assets:
Manufacturing Equipment ....................           456,025          212,024
Office Equipment ...........................            16,747           10,934
Furniture & Fixtures .......................             2,752            1,245
Leasehold improvements .....................            41,814            3,521
                                                   -----------        ---------
                                                       517,338          227,724
Less Accumulated Depreciation ..............           (69,332)         (28,924)
                                                   -----------        ---------
                                                       448,006          198,800
                                                   -----------        ---------

Other Assets:
Intangible Assets, Net .....................            21,667             --
                                                   -----------        ---------

     TOTAL ASSETS ..........................       $ 1,562,447        $ 532,016
                                                   ===========        =========














                                      F - 2

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                                   (Continued)






                                                               December 31,
                                                          ----------------------
                                                            2000       1999
                                                          -----------   --------
LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities ...............  $   496,267   $248,212
Bank Overdraft .........................................      289,943     19,179
Bank Line ..............................................       43,328     33,346
Short-Term Loans & Notes Payable .......................      553,802       --
Related Party Loans ....................................       69,248     63,481
Current Portion Long-Term Debt .........................       20,951     20,479
                                                          -----------   --------

     Total Current Liabilities .........................    1,473,539    384,697
                                                          -----------   --------

Long-Term Debt .........................................       95,655    120,600
                                                          -----------   --------

     Total Liabilities .................................    1,569,194    505,297
                                                          -----------   --------

STOCKHOLDERS EQUITY
Common Stock - $0.001 par value, 100,000,000
   shares authorized, 100 and 32,200,000 shares
   issued and outstanding at December 31, 2000 and 1999        32,200          1
Additional Paid-in Capital .............................       28,150       --
Currency Translation Adjustment ........................        5,155       --
Retained Earnings (Deficit) ............................      (72,252)    26,718
                                                          -----------   --------

     Total Stockholders' Equity ........................       (6,747)    26,719
                                                          -----------   --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .............  $ 1,562,447   $532,016
                                                          ===========   ========







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

                                      F - 3

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS





                                                        For The Year Ended
                                                           December 31,
                                                     --------------------------
                                                        2000          1999
                                                     ------------   -----------
REVENUES
Sales .............................................  $  2,309,461   $ 1,669,034
Cost of Sales .....................................     1,559,820     1,213,464
                                                     ------------   -----------
Gross Margin ......................................       749,641       455,570

EXPENSES
   Selling & Marketing ............................        47,656        14,547
   General & Administrative .......................       652,338       344,141
                                                     ------------   -----------
                                                          699,994       358,688
                                                     ------------   -----------

Net Income from Operations ........................        49,647        96,882
                                                     ------------   -----------

Other Income (Expense)
   Interest, Net ..................................       (66,658)      (22,224)
   Write Down of Assets ...........................       (20,350)         --
   Currency Exchange, Net .........................       (50,021)         --
                                                     ------------   -----------

Net Income (Loss) Before Income Taxes .............       (87,382)       74,658
Income Tax Expense ................................       (11,588)      (15,545)
                                                     ------------   -----------

NET INCOME (LOSS) .................................  $    (98,970)  $    59,113
                                                     ============   ===========

Basic and Diluted Income (Loss) Per Common Share ..  $       --     $    591.13
                                                     ============   ===========

Weighted Average Number of Common Shares ..........    29,008,224           100
                                                     ============   ===========









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

                                      F - 4

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                               Cumulative   Retained
                                                     Common Stock      Paid-In Translation  Earnings /
                                                   Shares    Par Value Capital Adjustment  (Deficit)
                                                  ----------  -------  -------  ------     --------

<S>                                               <C>         <C>      <C>      <C>        <C>
Balance at December 31, 1998 ...................         100  $     1  $  --    $ --       $(32,395)

Net Income .....................................        --       --       --      --         59,113
                                                  ----------  -------  -------  ------     --------

Balance at December 31, 1999 ...................         100        1     --      --         26,718

January 21, 2000, Shares Cancelled and
Shares issued to Acquire GFR Nutritionals, Ltd.   28,999,900   28,999    1,350    --           --

February 15, 2000, Shares issued for intangibles     200,000      200   19,800    --           --

July 12, 2000, Shares Cancelled and ............        --       --
Shares issued to Acquire WST Web Search
Technologies, Inc. .............................   3,000,000    3,000    7,000    --           --

Currency Translation Adjustment ................        --       --       --     5,155         --

Net Loss .......................................        --       --       --      --        (98,970)
                                                  ----------  -------  -------  ------     --------

Balance at December 31, 2000                      32,200,000  $32,200  $28,150  $5,155     $(72,252)
                                                  ==========  =======  =======  ======     ========

</TABLE>


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

                                      F - 5

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                           For The Year Ended
                                                                             December 31,
                                                                         ---------------------
                                                                            2000        1999
                                                                         ---------   ---------
Cash Flows From Operating Activities
<S>                                                                      <C>         <C>
   Net income (loss) for the period ...................................  $ (98,970)  $  59,113
Adjustments to reconcile net loss to net cash
   Provided by operating activities
     Currency translation adjustment ..................................      5,155        --
     Depreciation and Amortization ....................................     18,741      22,990
     Write Down of Assets .............................................     20,350        --
     Currency Exchange ................................................     50,021        --
     (Increase) in Receivables ........................................   (466,495)   (128,682)
     Decrease (Increase) in Inventory .................................   (292,256)     13,296
     (Increase) in Prepaid Expense ....................................       (807)        (63)
     Increase in Accounts Payable & Accrued Liabilities ...............    244,887      94,143
     Increase in Bank Overdraft .......................................    270,764       9,369
                                                                         ---------   ---------
Net Cash Provided by (Used in) Operating Activities ...................   (248,610)     70,166
                                                                         ---------   ---------

Cash Flows From Investing Activities
   Purchase of property and equipment .................................   (289,614)    (32,791)
                                                                         ---------   ---------
Net Cash Used by Investing Activities .................................   (289,614)    (32,791)
                                                                         ---------   ---------

Cash Flows From Financing Activities
   Proceeds/Payments on Bank Line .....................................     43,328        (298)
   Payments on Related Party Loans ....................................       --       (22,607)
   Proceeds from short-term notes payable .............................    514,162        --
   Principle payment on long-term debt ................................    (19,266)    (14,470)
                                                                         ---------   ---------

Net Cash Provided by (Used in) Financing Activities ...................    538,224     (37,375)
                                                                         ---------   ---------

Increase (Decrease) in Cash ...........................................       --          --
Cash at beginning of period ...........................................       --          --
                                                                         ---------   ---------
Cash at End of Period .................................................  $    --     $    --
                                                                         =========   =========


Supplemental Disclosure of Interest and Income Taxes Paid
   Interest paid during the period ....................................  $  19,257   $  17,282
                                                                         =========   =========
   Income taxes paid during the period ................................  $   2,781   $    --
                                                                         =========   =========

Supplemental Disclosure of Non-cash Investing and Financing Activities:
   Stock issued for Intangible Assets .................................  $  30,000   $    --
                                                                         =========   =========
</TABLE>


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

                                      F - 6

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     This  summary of  accounting  policies  for  Laredo  Investment  Corp.  and
Subsidiaries  ( the  "Company")  is  presented  to assist in  understanding  the
Company's  financial  statements.  The accounting  policies conform to generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation of the financial statements.

Organization and Basis of Presentation

     The  Company  was  incorporated  under  the laws of the  State of Nevada on
December 18, 1996. The Company ceased all operating activities during the period
from December 18, 1996 to July 9, 1999 and was  considered  dormant.  On July 9,
1999,  the Company  obtained a Certificate  of renewal from the State of Nevada.
From July 9, 1999 to January 21, 2000, the Company was in the development stage.

Acquisition of Subsidiaries

     On January 21, 2000, the Company entered into an Acquisition Agreement with
GFR Nutritionals,  Ltd., a British Columbia  corporation,  (GFR), Richard Pierce
and Lucretia Schanfarber (the GFR Majority Shareholders) to acquire their shares
representing  100%  of the  outstanding  common  stock  of GFR in  exchange  for
19,000,000  newly issued shares of the Company's  restricted  common stock.  The
transaction has been recorded as a reverse merger.

     On June 21, 2000, the Company  entered into an  Acquisition  Agreement with
Nutritionals (USA) Direct.Com, a Washington corporation,  (NDC), to acquire 100%
of the outstanding  common stock of NDC in exchange for $1,000.  The transaction
has been recorded as a purchase.

     On July 12, 2000, the Company  entered into an  Acquisition  Agreement with
WST Web Search Technologies, Inc., a Saskatchewan corporation, (WST), to acquire
100% of the  outstanding  common stock of WST in exchange for  10,000,000  newly
issued shares of the Company's restricted common stock. The transaction has been
recorded as a purchase.

     On November 1, 2000, the Company entered into an Acquisition Agreement with
Prohealth  Nutritionals Ltd., a British Columbia corporation,  (PHN), to acquire
100%  of the  outstanding  common  stock  of  PHN in  exchange  for  $0.01.  The
transaction has been recorded as a purchase.





                                      F - 7

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Principles of Consolidation

     The  consolidated  financial  statements for December 31, 2000 and the year
ended include the accounts of Laredo  Investment  Corp. and the following wholly
owned subsidiaries:

*          GFR Nutritionals, Ltd., a British Columbia corporation
*          Nutritionals(USA) Direct.com, a Washington corporation
*          WST Web Search Technologies, Inc., a Sasketchewan corporation
*          Prohealth Nutritionals Ltd.,  a British Columbia corporation

Nature of Business

     The Company specializes in formulating, blending, encapsulating and packing
nutritional  products.  The Company's  operations are located in the province of
British Columbia, Canada.

Cash and Cash Equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Inventories

     Raw materials  inventory is stated at a lower of weighted  average cost and
replacement  value.  Inventories  of work in  progress is stated at the lower of
weighted average cost and net realizable value.










                                      F - 8

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Depreciation

     Fixed  assets  are  stated  at  cost.   Depreciation  and  amortization  is
calculated  on a  straight-line  basis over the  estimated  useful  lives of the
assets as follows:


        Asset                    Rate
------------------------  ---------------------

Manufacturing equipment    10 years
Furniture and fixtures     5 years
Office equipment           5 years
Leasehold improvements     Term of lease
Automobile                 3 years

     Maintenance  and  repairs  are  charged  to  operations;   betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated  depreciation  thereon are eliminated  from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.

     The Company has adopted the Financial  Accounting Standards Board SFAS No.,
121,  "Accounting  for the  Impairment  of  Long-lived  Assets."  SFAS  No.  121
addresses  the  accounting  for (i)  impairment of  long-lived  assets,  certain
identified  intangibles and goodwill  related to assets to be held and used, and
(ii) long-live lived assets and certain identifiable  intangibles to be disposed
of.  SFAS No. 121  requires  that  long-lived  assets and  certain  identifiable
intangibles  be held and used by an entity be reviewed for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be  recoverable.  If the sum of the expected  future cash flows from the
used of the  asset  and its  eventual  disposition  (un-discounted  and  without
interest  charges) is less than the carrying  amount of the asset, an impairment
loss is recognized.

Revenue recognition

Revenue  is  recognized  from  sales  of  product  at the  time of  shipment  to
customers.





                                      F - 9

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Foreign currency translation

     The Company's primary functional currency is the Canadian dollar.  Monetary
assets and liabilities  resulting from  transactions  with foreign suppliers and
customers  are  translated at year-end  exchange  rates while income and expense
accounts are  translated at average  rates in effect during the year.  Gains and
losses on translation are included in income.

Pervasiveness of Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  required  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk

     The Company has no significant  off-balance-sheet  concentrations of credit
risk such as foreign  exchange  contracts,  options  contracts or other  foreign
hedging arrangements.

Income Taxes

     The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting  for Income  Taxes." SFAS No.109  requires  recognition  of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

Reclassifications

     Certain  reclassifications  have been made in the 1999 financial statements
to conform with the 2000 presentation.





                                     F - 10

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Earnings (Loss) per Share

     The  reconciliations of the numerators and denominators of the basic income
(loss) per share computations are as follows:


                                                                  Per-Share
                                     Income        Shares         Amount
                                     ------        ------         ------
                                    (Numerator)   (Denominator)

                                   For the year ended December 30, 2000
Basic & Diluted Loss per Share
Income to common shareholders      $    (98,970)     29,008,224  $      --
                                   ============   =============  ===========

                                   For the year ended December 30, 1999
Basic & Diluted Income per Share
Loss to common shareholders        $      59,113            100  $    591.13
                                   =============  =============  ===========

     The effect of outstanding  common stock  equivalents are  anti-dilutive for
September 30, 2000 and are thus not considered.

Stock Compensation for Non-Employees

     The Company  accounts for the fair value of its stock  compensation  grants
for  non-employees in accordance with FASB Statement 123. The fair value of each
grant is equal to the market price of the  Company's  stock on the date of grant
if an  active  market  exists  or  at a  value  determined  in  an  arms  length
negotiation between the Company and the non-employee.

NOTE 2 - INVENTORY

     As of September 30, 2000 and December 31, 1999,  Inventory  consists of the
following:


                             2000                   1999
                      ---------------------  ---------------------
Raw materials         $             414,010  $             106,760
Work in process                      18,266                 33,260
                      ---------------------  ---------------------
Total Inventory       $             432,276  $             140,020
                      =====================  =====================


                                     F - 11
<PAGE>

                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 3 - INCOME TAXES

     As of December 31, 2000, the Company had a net operating loss  carryforward
for income tax reporting  purposes of approximately  $110,000 that may be offset
against future taxable income through 2020. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,  because the Company  believes  there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount.

NOTE 4 - RELATED PARTY TRANSACTIONS

     As of  December  31,  2000  and  1999,  accrued  management  fees of GFR of
approximately  $40,096 ($60,151  Canadian) and $101320 ($152,000  Canadian) were
due to a major shareholder.  As at December 31, 1999,  accounts payable includes
approximately   $81,662  ($122,509   Canadian)  owing  to  the  Company's  major
shareholders.

NOTE 5 - SHORT-TERM OBLIGATIONS


                                                     September 30,  December 31,
                                                                 2000     1999
                                                               --------  -------
Promissory note, repayable to related parties upon
   demand, including interest at 12% ........................  $ 69,248  $63,481
Working Capital Loans, repayable in stock or options upon
    demand including interest at 1% over prime (9.5%) .......   553,802     --
                                                               --------  -------

Total .......................................................  $623,050  $63,481
                                                               ========  =======

     The Company has a bank line of credit with a total  amount owing of $43,328
and $33,346 as of December 31, 2000 and 1999 respectively.  This line carries an
interest rate of 9% a total available  credit of $56,659  ($85,000  Canadian) at
December 31, 2000.







                                     F - 12

<PAGE>



                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 6 - LONG-TERM DEBT


                                                      September 30, December 31,
                                                            2000         1999
                                                           --------     --------
TDBank Small  Business  loan,  repayable
 in monthly  instalments  $2,648 ($3,973
 Canadian),  including interest at 10.15%,
 maturing March 15, 2004, secured by certain
 manufacturing  equipment of the Company .............     $116,606     $141,079

Less current portion of long-term debt ...............       20,951       20,479
                                                           --------     --------

                                                           $ 95,655     $120,600
                                                           ========     ========

     Principal  payments  due on  long-term  debt  for  each of the  five  years
subsequent to December 31, 2000 and thereafter are as follows:


         Year ending:                    Amount
-------------------------------   --------------------

             2001                 $             20,951
             2002                               23,179
             2003                               25,644
             2004                               28,371
             2005                               17,970
          Thereafter                                 -
                                  --------------------
             Total                $            116,115
                                  ====================

NOTE 7 - ECONOMIC DEPENDENCE

     During 2000 and 1999, the Company sold approximately83% and 94% of sales to
Prairie Naturals Inc. Future operations of the Company depend on continuation of
the manufacturing arrangement with Prairie Naturals Inc.







                                     F - 13

<PAGE>


                             LAREDO INVESTMENT CORP.
                                AND SUBSIDIARIES
                     (Formerly A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   THE YEARS ENDED DECEMBER 31, 2000 AND 1999
                                   (Continued)


NOTE 8 - COMMITMENTS

     The Company has entered into a lease  agreement for its  manufacturing  and
office  facilities with the Company's major  shareholder and other parties.  The
rental charges are approximately  $40,000 ($60,000 Canadian) per year. The lease
expires December 31, 2001.

     The minimum  future  lease  payments  under these  leases for the next five
years are:


         Year Ended                                                Real Property
                                                                    December 31,
--------------------------------------------------------------           -------
                                                          2001           $40,000
                                                          2002              --
                                                          2003              --
                                                          2004              --
                                                          2005              --
Thereafter                                                                  --
                                                                         -------

Total minimum future lease payments                                      $40,000
                                                                         =======

     The leases generally provides that insurance,  maintenance and tax expenses
are  obligations  of the Company.  It is expected  that in the normal  course of
business,  leases  that  expire  will be renewed or  replaced by leases on other
properties.

NOTE 9 - STOCK INCENTIVE PLAN

     The Board of Directors has authorized and the Company has  established  the
2000 Incentive and  Non-qualified  Stock Option Plan. Under the plan the Company
is  authorized to issued up to 6,000,000  shares of the  Company's  common stock
with such exercise price and vesting  periods as the Board of Directors Deems to
be in the best interest of the Company.  As of December 31, 2000, no option have
been granted.





                                     F - 14