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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                   FORM 10-KSB

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

                      For the year ended December 31, 2002

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

                For the transition period from ______ to _______

                         Commission file number 0-24623

                          New Generation Holdings, Inc.
                    (formerly, New Generation Plastic, Inc.)
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                Delaware                               13-4056896
     -------------------------------          ----------------------------
     (State or other jurisdiction of         (IRS employer identification
             incorporation)                               no.)

 c/o Westerman Ball Ederer Miller & Sharfstein, LLP 170 Old Country Rd. 4th Fl.,
                                Mineola, NY 11501
         --------------------------------------------------------------
               Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (516) 622-9200

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

           Title of each class                  Name of each exchange on
                                                     which registered
     -------------------------------          ----------------------------
                  None                                    None

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

                     Common Stock, par value $.001 per share
                     ---------------------------------------

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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

<PAGE>

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, 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. [ ]


The issuer's consolidated revenues from continuing operations for the year ended
December 31, 2002 were $0.

As of December 31, 2002 the issuer had 21,056,690 shares of Common Stock, par
value $.001 per share, outstanding. The aggregate value of the common stock of
the Company held by non-affiliates as of December 31, 2002 was $495,058.08. As
of December 31, 2004 the issuer had 27,027,510 shares of Common Stock, par value
$.001 per share, outstanding. The aggregate value of the common stock of the
Company held by non-affiliates as of December 31, 2004 was $3,119,036.24.


          Transitional Small Business Disclosure Format YES [ ] NO [X]

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                                      -2-
<PAGE>

                                     PART I

                           FORWARD-LOOKING STATEMENTS

         When used in this Form 10-KSB, in filings by the Company with the
Securities and Exchange Commission (the "SEC"), in the Company's press releases
or other public or stockholder communications, or in oral statements made with
the approval of an authorized executive officer of the Company, the words or
phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.

         The Company cautions readers not to place undue reliance on any forward
looking statements, which speak only as of the date made, are based on certain
assumptions and expectations which may or may not be valid or actually occur,
and which involve various risks and uncertainties. The Company's actual results
for future periods could differ materially from those anticipated or projected.

         Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statement.

ITEM 1. DESCRIPTION OF BUSINESS.

BUSINESS


         New Generation Holdings, Inc. ("We," "Us," "NGH" or the "Company") is a
Delaware corporation founded in 1999. Our shares publicly traded on the Nasdaq
OTC:BB under the symbol "NGPX" until May 23, 2003 at which time our shares
were delisted from the OTC:BB as a result of our failure to timely file this
Form 10-KSB for the year ended December 31, 2002. Our business went completely
dormant in the beginning of 2003 due to a lack of liquidity and we did not have
sufficient resources to make our public filings. Our independent auditors
recently completed audits for the years ended December 31, 2002 and December 31,
2003. We anticipate filing any remaining delinquent filings and timely filing
our annual report for the year ended December 31, 2004. We then intend to file
with the SEC proxy materials for the purposes of among other things electing
directors and selecting the Company's independent auditors.

      We had hoped to build shareholder value through the operation of two (2)
separate and distinct business focuses: (a) the expansion and operation of a
mainframe computer software development business through our wholly owned
subsidiary New Generation Partners, Inc. and (b) the continued commercialization
of our patented plastic processing technology through our wholly-owned
subsidiary, New Generation Plastic, Inc. During the period December 2000 through
February 2001, the Company acquired Minerva Softcare N.V., a company formed
under the laws of the country of Belgium, and its wholly owned subsidiaries,
Case Belgium N.V., Case Nederland B.V., and Case France S.A ( the "Minerva
Group"). The Minerva Group was an integrated technology infrastructure solutions
provider, which specialized in developing and marketing data warehousing, life
cycle management and data modeling platforms and solutions. The Minerva Group's
operations were principally located in Belgium, with its other significant
operations in France, the United Kingdom, and the Netherlands. Due to a lack of
liquidity caused by declining sales and an overall downturn in worldwide demand
for software, Minerva could no longer profitably sell its software. Minerva
entered into a master license agreement with Ikan Finanz AG as of December 31,
2002 pursuant to which it licensed substantially all of its proprietary software
in exchange for certain royalty payments upon sales made by Ikan or any
sublicensee. Ikan also agreed to employ most of Minerva's then existing
employees. Ikan failed to make any sales of Minerva software in the first
quarter of 2003 and we were forced to cease Minerva's operations toward the end
of the first quarter of 2003 culminating with a liquidation of Minerva Softcare
N.V. under the bankruptcy laws of the Country of Belgium in April of 2003. At
approximately the same time, the Company suspended all of its business
operations due to a lack of liquidity and accordingly failed to timely file this
Form 10-KSB and all subsequent quarterly and annual reports. As discussed above,
the Company anticipates filing any remaining delinquent filings and timely
filing its annual report for the year ended December 31, 2004. The Company's
business operations remain dormant; however, in the second quarter of 2004 the
Company was able to raise limited funds for the purposes of filing all of its
delinquent public filings and attempting to commercialize its plastic technology
through one or more joint ventures or by raising additional capital.



                                      -3-
<PAGE>

NEW GENERATION PLASTIC BUSINESS

         New Generation Plastic, Inc. ("NGP"), a Delaware Corporation, our
wholly owned subsidiary, is the owner of a patented plastic blending
technology that enables the production of homogeneous, commercially usable
polymers from a varied stream of otherwise incompatible waste plastic or virgin
plastic feedstock (the "NGP Process"). We believe that the NGP Process
technology is unique in its ability to combine mixed plastic, including blending
different polymers that are normally incompatible, into homogenous compounds
(the "NGP Compounds") by means of a purely mechanical process. These NGP
Compounds are created without the use of costly additives, known as
compatibilizers, which are typically used to link non-compatible resins.

          We have prepared a model business plan for a plant that will process
Computer Scrap (CS) using the NGP Process for potential investors and/or joint
venture partners to assess the feasibility of the Computer Scrap application.

         We hope to contract with a third party that has sufficient resources to
commercially exploit our existing technology or to raise sufficient capital to
enable us to exploit our technology, but have not had more than preliminary
discussions with any potential venture partners.

PATENTS


      The NGP Process is currently protected by U.S. Patent Number 6,107,400 and
European Patent Number 92907183.5-2307.



RESEARCH AND DEVELOPMENT

         Prior to 2002, NGP had been engaged in internal and external research
and development efforts aimed at bringing our technology to a commercially
viable stage. In 2002, due to our lack of liquidity, all research and
development was terminated.


NUMBER OF EMPLOYEES

         As of December 31, 2002 we had no employees in the plastic business and
11 employees in our computer business. Currently the Company has no employees
but engages Jacques Mot as a consultant.

DISCONTINUED BUSINESS

         As of December 31, 2002, we had significantly curtailed our operations
in our computer business due to continuing losses and a lack of liquidity and
our plastic business continued to be dormant. In the first quarter of 2003 our
computer operations ceased with the involuntary liquidation of Minerva Softcare
under the bankruptcy laws of Belgium.


                                      -4-
<PAGE>


DEPENDENCE ON KEY CUSTOMERS; MAJOR SUPPLIERS


         The Company is dormant and is therefore not dependent on any customer
or supplier.



COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

         The Company currently has no costs associated with compliance with
environmental regulations as its operations are dormant. However, there can be
no assurances that we will not incur such costs in the future to the extent we
exploits our plastic technology.

ITEM 2. DESCRIPTION OF PROPERTIES.

LOCATION AND DESCRIPTION OF PROPERTIES

         As of December 31, 2002, Minerva had leases for office space in Elewjit
and Hasselt, Belgium. The aggregate monthly rentals were approximately $5,300
and $1,000, respectively. Minerva's leases were terminated as part of its
liquidation that commenced in April 2003.

ITEM 3. LEGAL PROCEEDINGS.

         As of December 31, 2002, the Company was a party to or was aware of the
pending legal proceedings or claims set forth below:


         (a) In April of 2003, Minerva's business was liquidated under the
bankruptcy laws of Belgium and all of its assets were liquidated by a court
appointed liquidator.


         (b) Mr. Eduard van Raay of Net-Invest, a former consultant to the
Company asserted a claim against the company for payment of fees and expenses in
the approximate amount of $77,000. The Company believes Mr. van Raay has
obtained a default judgment in the amount set forth above (plus interest);
however, the Company believes it has meritorious defenses.


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

         Meeting of Stockholders on January 23, 2002.

An annual meeting of stockholders was held on January 23, 2002. At this meeting,
the Stockholders elected Directors and approved the appointment of Stefanou &
Company, LLP as the Company's independent auditors for the year ended December
31, 2001.

Persons elected at this meeting of stockholders to serve as directors were Mr.
Paul Hokfelt, Mr. Jacques Mot, Mr. Thomas R. Marshall, Mr. Marcel Rokegem, and
Ms. Sylvie Challande. The results of voting for the nominees for director were:


                                      -5-
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                                         Votes
                                        Against
                                           or                       Broker
Nominee                Votes for        withheld    Abstentions   Non-Votes
-------                ---------        --------    -----------   ---------
Paul Hokfelt           12,469,207          0             0           0
Jacques Mot            12,469,207          0             0           0
Thomas R. Marshall     12,469,207          0             0           0
Marcel Rokegem         12,469,207          0             0           0
Sylvie Challande       12,469,207          0             0           0

At this meeting, the stockholders also approved the appointment of Stefanou &
Company, LLP as the Company's independent auditors for the year ended December
31, 2001. For the proposal to appoint Stefanou & Company, LLP as the Company's
independent auditor, 12,469,207 affirmative votes and 0 negative votes were
cast, with 0 abstentions and 0 broker non-votes.


PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

         Our business went completely dormant in the beginning of 2003 due to a
lack of liquidity and we did not have sufficient resources to make our public
filings. Our independent auditors recently completed audits for the years ended
December 31, 2002 and December 31, 2003. The Company anticipates filing any
remaining delinquent filings and timely filing its annual report for the year
ended December 31, 2004. Commencing on May 23, 2003 our shares were delisted
from the OTC Bulletin Board based upon our failure to timely file our annual
report on Form 10-KSB for the year ended December 31, 2002 and prices for our
common stock are now quoted on the "pink sheets." The following table sets forth
for the periods indicated the high and low bid quotations for our common stock
as reported on the OTC Bulletin Board, for the period from January 1, 2001
through December 31, 2002. These quotations reflect inter-dealer prices, without
retail mark-up, markdown or commission, and may not necessarily represent actual
transactions.

           -------------------------------------- ---------- ------------
                                                    High          Low
           -------------------------------------- ---------- ------------
           4th Quarter 2002, ended 12/31/02         $0.30        $0.04
           -------------------------------------- ---------- ------------
           3rd Quarter 2002, ended 9/30/02          $0.60        $0.08
           -------------------------------------- ---------- ------------
           2nd Quarter 2002, ended 6/30/02          $1.45        $0.49
           -------------------------------------- ---------- ------------
           1st Quarter 2002, ended 3/31/02          $2.90        $1.01
           -------------------------------------- ---------- ------------
           4th Quarter 2001, ended 12/31/01         $4.10        $2.75
           -------------------------------------- ---------- ------------
           3rd Quarter 2001, ended 9/30/01          $4.10        $3.00
           -------------------------------------- ---------- ------------
           2nd Quarter 2001, ended 6/30/01          $3.80        $2.88
           -------------------------------------- ---------- ------------
           1st Quarter 2001, ended 3/31/01          $3.19        $2.81
           -------------------------------------- ---------- ------------


                                      -6-
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           DIVIDEND POLICY

         No dividends have been paid by the Company since its inception. We do
not anticipate paying dividends on our common stock in the foreseeable future
but plan to retain earnings, if any, for the operation and expansion of our
businesses.

HOLDERS

         There were 127 stockholders of record of the Company's common stock as
of December 31, 2002 and 158 stockholders of record as of December 31, 2004.

RECENT SALES OF UNREGISTERED SECURITIES

         Except as set forth below or in our Annual Reports on Form 10-KSB for
2000 or in Quarterly Reports on Form 10-QSB for 2001 and 2002, there have been
no recent sales of unregistered securities as of December 31, 2002.

Issuances in consideration for services:
----------------------------------------

a.       Rubenstein Investor Relations, Inc.: 22,222 shares of common stock on
         March 19, 2002, in consideration of investor relations services per our
         agreement.

b.       The Research Works: 45,000 restricted shares in March 2002 in
         consideration of financial advisory and research coverage per our
         agreement

c.       Westerman Ball Ederer Miller and Sharfstein LLP: 90,436 shares in
         February 2002 in consideration of legal services provided between March
         2001 and January 2002 and an additional 11,922 shares in April 2002 in
         consideration of legal services provided in February - April 2002.

Issuances in Private Placements:
--------------------------------

a.       Perugino Holdings SA purchased an aggregate of 181,667 shares on August
         13, 2001 and September 26 2001, respectively, and an aggregate of
         141,111 warrants to purchase common stock at various exercise prices
         from $3.00 in exchange for an aggregate of $495,500.


Issuances of Stock Options under the 2000 Stock Compensation Plan (except as
otherwise set forth below, all options were issued on March 1, 2002):
----------------------------------------------------------------------


                                      -7-
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a.       Jacques Mot: 1,100,000 non-qualified options exercisable at $1.18

b.       Thomas R. Marshall: 1,090,000 qualified options exercisable at $1.18

d.       Jeffrey McArthur: 400,000 non-qualified options exercisable at $1.18

e.       Julie Strong: 200,000 non-qualified options exercisable at $1.18

f.       Damian Minervini: 10,000 non-qualified options exercisable at $1.18

g.       Marc Engel: 200,000 non-qualified options exercisable at $1.18

h.       Guido Cloetens: 10,000 non-qualified options exercisable at $9.00 and
         10,000 non-qualified options exercisable at $9.50

i.       Terri Jackson: 10,000 non-qualified options exercisable at $7.50

j.       Leonard Burningham: 10,000 non-qualified options exercisable at $8.50

k.       Keith Beisinger: 10,000 non-qualified options exercisable at $8.00

l.       Current Capital Corp.: 400,000 non-qualified stock options (200,000
         exercisable at $1.50 and 200,000 exercisable at $2.00) on April 15,
         2002 in consideration for investor relation services.

m.       Paul Hokfelt: 650,000 non-qualified options exercisable at $1.23 (on
         April 15, 2002).


                                      -8-
<PAGE>

ITEM 6.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.


Statements included in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, and in future filings by the company with
the Securities and Exchange Commission, in the company's press releases and in
oral statements made with the approval of an authorized executive officer which
are not historical or current facts are "forward-looking statements" and are
subject to certain risks and uncertainties that could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected. You are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the future
could affect the company's actual results and could cause the company's actual
financial performance to differ materially from that expressed in any
forward-looking statement: (i) the extremely competitive conditions that
currently exist in the market for companies similar to the company and (ii) lack
or resources to maintain the company's good standing status and requisite
filings with the Securities and Exchange Commission. The foregoing list should
not be construed as exhaustive and the company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events. The following discussion should be read in
conjunction with our financial statements and their explanatory notes included
as part of this annual report.



                                      -9-
<PAGE>

CRITICAL ACCOUNTING POLICIES

         The preparation of our consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires us
to make estimates and judgments that affect our reported assets, liabilities,
revenues, and expenses, and the disclosure of contingent assets and liabilities.
We base our estimates and judgments on historical experience and on various
other assumptions we believe to be reasonable under the circumstances. Future
events, however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting policies
affecting our consolidated financial statements; we believe the following
critical accounting policies involve the most complex, difficult and subjective
estimates and judgments:

         o        Business Combinations

         o        Goodwill and intangible asset impairment

         o        Stock-based compensation.



BUSINESS COMBINATIONS

         The Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards ("SFAS") No. 141, Business Combinations, which
established accounting and reporting standards for business combinations and
requires that all business combinations be accounted for by the purchase method.
Under the purchase method of accounting, the cost, including transaction costs,
is allocated to the underlying net assets, based on their respective estimated
fair values. The excess of the purchase price over the estimated fair values of
the net assets acquired is recorded as goodwill.

         The judgments made in determining the estimated fair values and
expected useful lives assigned to each class of assets and liabilities acquired
can significantly impact net income. For example, different classes of assets
will have useful lives that differ. Consequently, to the extent a longer-lived
asset is ascribed greater value under the purchase method than a shorter-lived
asset, there may be less amortization recorded in a given period.

         Determining the fair value of certain assets and liabilities acquired
is subjective in nature and often involves the use of significant estimates and
assumptions. We use a one-year period following the consummation of acquisitions
to finalize estimates of the fair values of assets and liabilities acquired. Two
areas, in particular, that require significant judgment are estimating the fair
values and related useful lives of identifiable intangible assets. While there
are a number of different methods used in estimating the value of acquired
intangibles, there are two approaches primarily used: the discounted cash flow
and market comparison approaches. Some of the more significant estimates and
assumptions inherent in the two approaches include: projected future cash flows
(including timing); discount rate reflecting the risk inherent in the future
cash flows; perpetual growth rate; determination of appropriate market
comparables; and the determination of whether a premium or a discount should be
applied to comparables. Most of the foregoing assumptions are made based on
available historical information.

GOODWILL AND INTANGIBLE ASSET IMPAIRMENT

We adopted Statement of Financial Accounting Standards No. 142-Goodwill and
Other Intangible Assets (SFAS 142) during the quarter ended June 30, 2002. Under
SFAS 142, goodwill and other intangible assets with indefinite useful lives are
no longer amortized, but are tested for impairment on an annual basis and
between annual tests if an event occurs or circumstances change that would more


                                      -10-
<PAGE>

likely than not reduce the fair value of the asset below its carrying value
amount. Events or circumstances which could trigger an impairment review include
a significant adverse change in the business climate, an adverse action or
assessment by a regulator, unanticipated competition, a loss of key personnel,
significant changes in the manner of our use of the acquired assets or the
strategy for our overall business, or significant negative industry or economic
trends.

Our principal consideration in determining impairment includes the strategic
benefit to the Company of the particular assets as measured by undiscounted
current and future operating income of the specified group of assets and
expected undiscounted cash flows. Should impairment be identified, a loss would
be reported to the extent that the carrying value of the asset exceeds the fair
value as determined by discounted future cash flows.

Upon adoption of FAS 142 in the second quarter of 2002, the Company recorded a
one-time, non- cash charge of approximately $15 million to reduce the carrying
value of its goodwill. Such charge is non-operational in nature and is reflected
as a cumulative effect of an accounting change in the accompanying consolidated
statement of operations. In calculating the impairment charge, the fair value of
the impaired reporting unit was estimated at the fair value of assets underlying
the business, thereby eliminating the goodwill element entirely.

Purchased intangible assets are carried at cost less accumulated amortization.
Amortization is computed over the estimated useful lives of the respective
assets, generally two to five years.


STOCK-BASED COMPENSATION

 In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
Compensation - Transition and Disclosure. This statement amends SFAS No. 123 -
Accounting for Stock-Based Compensation, providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002.

 The Company elected to continue to account for stock-based compensation plans
using the intrinsic value-based method of accounting prescribed by APB No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. Under
the provisions of APB No. 25, compensation expense is measured at the grant date
for the difference between the fair value of the stock and the exercise price.


MANAGEMENT'S PLAN OF OPERATION

         General.

          The post September 11, 2001 worldwide economic malaise has wrought
severe consequences on the capital markets in general and likewise on NGH. The
private equity market's focus has shifted from seed and second phase financings
to financings for more established companies with revenue and profitability. The
amount of risk capital available for investments in ventures like NGH has
dropped to about 10% of the capital that was available in 1999 and 2000.

         Despite the state of the market, NGH attempted to make a private
placement during May, June and July of 2002 through the investment-banking firm
M.H. Meyerson (MHM) in New York. The purpose was to raise US $5,500,000, in
order to refinance New Generation Partners Inc., and its subsidiary Minerva
Softcare NV/SA (Minerva) as well as building the first NGP eWaste factory. MHM
failed in its efforts and NGH decided to terminate them in the fall of 2002.
Therefore NGH decided to focus on developing industrial and personal
relationships with alternative finance strategies.


                                      -11-
<PAGE>


         Minerva. One of the main concerns for NGH was the Minerva activity,
because it was suffering a great deal due to the collapse of the IT market.
Several efforts were made to create a reseller relationship with IBM and other
IT industry leaders. NGH hired a consulting group in Canada that consisted of
previous top executives from IBM, and directed them to strengthen the
relationship with IBM and other organizations. Unfortunately, after 4 months of
negotiations, just when Minerva was about to receive an EMEA (Europe,
Middle-East, Asia) reseller agreement from IBM, IBM acquired Rational
Corporation, which was the main competitor to Minerva's product. The failure to
attain a foothold with IBM combined with the fact that several other large
software sales never closed, caused Minerva's management to find alternative
solutions. In order to reduce its operating cost a maximum, Minerva sold the
rights to develop, maintain and sell its products to another corporation, Ikan
AG. The licensee hired 22 of the Minerva people and agreed to pay royalties on
sales of the products. Sales never materialized and no royalties were paid, and
Minerva management was obliged to file for bankruptcy according to the laws of
Belgium.


         NGP and the NGP Process

         The company owns and develops patented and proprietary plastic blending
(NGP(TM)) technology, whereby various kinds of plastic can be mixed without the
use of expensive chemical additives. The uniqueness of this blending technology
stems from its potential cost-effective applications in many fields of the
plastic industry from the recycling of computer scrap to the creation of new
thermo plastic compound and, in conjunction with saw dust, to the creation of
new versions of wood plastic.

         The company's mission is to commercialize the technology through
applications in the virgin plastic markets (polymer alloys) and the plastic
recycling sector (recycling of obsolete computer and other electronic
equipment).

The Company has completed a rigorous R&D program and believes its patented
proprietary process, the NGP(TM) technology is capable of producing homogeneous,
commercially usable polymer end products from mixed virgin plastic and/or
recycled waste plastic without chemical additives, or so-called compatibilizers
which link non-compatible resins.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001

CONTINUING OPERATIONS

         Operating losses from continuing operations decreased from $6,300,063
in 2001 to $1,487,120 in 2002. The decrease of $4,812,943 was a result of a
reduction of $1,086,587 in general and administrative expenses from $2,426,428
in 2001 to $1,339,841 in 2002, which reflected managements' reduced activities
resulting from the weakening of the Minerva Group operations. Depreciation and
amortization expernses decreased from $3,428,620 in 2001 to $147,279 in 2002, a
reduction of $3,281,341. This decrease was a result of the Company adopting SFAS
142 Goodwill and Other Intangible Assets in 2002.

         Upon adoption of FAS 142 in the second quarter of 2002, the Company
recorded a one-time, non- cash charge of approximately $15,456,141 to reduce
the carrying value of its goodwill recognized in connection with the Minerva
Group acquisition in 2000 and 2001.

DISCONTINUED OPERATIONS

         On the 10th of December 2002, we decided to discontinue operations of
the Minerva Group of companies, our principal operating wholly owned
subsidiaries and classified their operating results as discontinued operations.
On the 4th of March 2003, the Minerva Group of companies was forced into
receivership in Brussels, Belgium. For the years ended December 31, 2003 and
2002, the Company's results from the discontinued operations were as follows:


                                      -12-
<PAGE>

                                      2002                         2001
                                      ----                         ----

         Revenues                 $ 2,094,198                  $ 2,461,100
         Net Loss                 $(1,766,381)                 $(1,197,251)

         From its acquisition, the Minerva Group was not profitable.

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2002, we had a deficiency in working capital of
$1,556,745. For the year ended December 31, 2002, we generated a net cash flow
deficit from operating activities of $988,099 consisting primarily of losses of
$18,709,642, adjusted for non cash expenses of $15,456,141 representing a change
in accounting for goodwill, depreciation and amortization expense of $147,279
and equity instruments issued in exchange for services of $198,095. Our cash
requirements were met with existing cash on hand of $788,099 along with the
proceeds of adavcnes from our President aggregating $200,000 in the form of a
non-interest bearing unsecured demand promissory note.

         By adjusting our operations and development to the level of
capitalization, we believe we have sufficient capital resources to meet
projected cash flow deficits. However, if during that period or thereafter, we
are not successful in generating sufficient liquidity from operations or in
raising sufficient capital resources, on terms acceptable to us, this could have
a material adverse effect on our business, results of operations liquidity and
financial condition.

         We have relied mostly on advances from shareholders and sale of our
common stock. There is no assurance the stockholders will continue to provide
sufficient funds for us to successfully continue our operations. Therefore, we
will need additional capital to continue our operations and will endeavor to
raise funds through the sale of equity shares and revenues from operations.

         There can be no assurance that we will generate revenues from
operations or obtain sufficient capital on acceptable terms, if at all. Failure
to obtain such capital or generate such operating revenues would have an adverse
impact on our financial position and results of operations and ability to
continue as a going concern. Our operating and capital requirements during the
next fiscal year and thereafter will vary based on a number of factors,
including the level of sales and marketing activities for its services and
products. There can be no assurance that additional private or public financing
including debt or equity financing, will be available as needed, or, if
available, on terms favorable to us. Any additional equity financing may be
dilutive to stockholders and such additional equity securities may have rights,
preferences or privileges that are senior to those of our existing common stock.

         Furthermore, debt financing, if available, will require payment of
interest and may involve restrictive covenants that could impose limitations on
our operating flexibility. Our failure to successfully obtain additional future
funding may jeopardize our ability to continue our business and operations.

         If we raise additional funds by issuing equity securities, existing
stockholders may experience a dilution in their ownership. In addition, as a
condition to giving additional funds to us, future investors may demand, and may
be granted, rights superior to those of existing stockholders.

OUR FINANCIAL RESULTS MAY BE AFFECTED BY FACTORS OUTSIDE OF OUR CONTROL

         Our future operating results may vary significantly from quarter to
quarter due to a variety of factors, many of which are outside our control. Our
anticipated expense levels are based, in part, on our estimates of future
revenues but, may vary from what we expect. We may be unable to adjust spending
rapidly enough to compensate for any unexpected revenues shortfall. Accordingly,
any significant shortfall in revenues in relation to our planned expenditures
would materially adversely affect our business, operating results, and financial
condition.


                                      -13-
<PAGE>

         We cannot predict with certainty our revenues and operating results.
Further, we believe that period-to-period comparisons of our operating results
are not necessarily a meaningful indication of future performance.

EMPLOYEES


         With the exception of our President, we have no full or part-time
employees. In order to conserve our limited working capital, we currently
utilize the services of three (3) consultants. As we grow, we will need to
attract an unknown number of qualified employees. This projected increase in
personnel is dependent upon our generating revenues and obtaining sources of
financing. There is no guarantee that we will be successful in raising the funds
required or generating revenues sufficient to fund the projected increase in the
number of employees.

BUSINESS CONCENTRATION

         During the years ended December 31, 2002, the Company recognized no
revenues from continuing operations, and accordingly had no relationships with
customers from continuing operations.

RECENT ACCOUNTING PRONOUNCEMENTS

         In December 2002, the FASB issued Statement No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure," which amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this Statement
amends the disclosure requirements of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The transition guidance and annual disclosure
provisions of Statement 148 are effective for fiscal years ending after December
15, 2002, with earlier application permitted in certain circumstances. The
interim disclosure provisions are effective for financial reports containing
financial statements for interim periods beginning after December 15, 2002. The
adoption of this statement did not have a material impact on the Company's
financial position or results of operations as the Company has not elected to
change to the fair value based method of accounting for stock-based employee
compensation.

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities." Interpretation 46 changes the criteria by which
one company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. We do not expect the adoption to have
a material impact to our financial position or results of operations.

         In April 2003, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 149, Amendment of Statement No. 133 on Derivative
Instruments and Hedging Activities. SFAS 149 amends SFAS No. 133 to provide
clarification on the financial accounting and reporting of derivative
instruments and hedging activities and requires that contracts with similar
characteristics be accounted for on a comparable basis. The provisions of SFAS
149 are effective for contracts entered into or modified after June 30, 2003,
and for hedging relationships designated after June 30, 2003. The adoption of
SFAS 149 did not have a material impact on the Company's results of operations
or financial position.

         In May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity. SFAS
150 establishes standards on the classification and measurement of certain
financial instruments with characteristics of both liabilities and equity. The
provisions of SFAS 150 are effective for financial instruments entered into or
modified after May 31, 2003 and to all other instruments that exist as of the


                                      -14-
<PAGE>

beginning of the first interim financial reporting period beginning after June
15, 2003. The adoption of SFAS 150 did not have a material impact on our results
of operations or financial position.

INFLATION

         In our opinion, inflation has not had a material effect on our
financial condition or results of our operations.

TRENDS, RISKS AND UNCERTAINTIES

         We have sought to identify what we believe to be the most significant
risks to our business, but we cannot predict whether, or to what extent, any of
such risks may be realized nor can we guarantee that we have identified all
possible risks that might arise. Investors should carefully consider all of such
risk factors before making an investment decision with respect to our common
stock.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

         We provide the following cautionary discussion of risks, uncertainties
and possible inaccurate assumptions relevant to our business and our products.
These are factors that we think could cause our actual results to differ
materially from expected results. Other factors besides those listed here could
adversely affect us.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

         Our quarterly operating results may fluctuate significantly in the
future as a result of a variety of factors, most of which are outside our
control, including: the demand for our products; seasonal trends in purchasing,
the amount and timing of capital expenditures and other costs relating to the
development of our products; price competition or pricing changes in the
industry; technical difficulties or system downtime; general economic
conditions, and economic conditions specific to the consumer plastics recycling
industry. Our quarterly results may also be significantly impacted by the impact
of the accounting treatment of acquisitions, financing transactions or other
matters. Particularly at our early stage of development, such accounting
treatment can have a material impact on the results for any quarter. Due to the
foregoing factors, among others, it is likely that our operating results will
fall below our expectations or those of investors in some future quarter.

DEPENDENCE UPON MANAGEMENT

         Our future performance and success are dependant upon the efforts and
abilities of our management. To a very significant degree, we are dependent upon
the continued services of Jacques Mot, our president. If we lost the services of
Mr. Mot before we could get qualified replacements, that loss could materially
adversely affect our business. We do not maintain key man life insurance on any
of our management.

LACK OF INDEPENDENT DIRECTORS

         We cannot guarantee that our board of directors will have a majority of
independent directors in the future. In the absence of a majority of independent
directors, our executive officers, which are also principal stockholders and
directors, could establish policies and enter into transactions without
independent review and approval thereof. This could present the potential for a
conflict of interest between our stockholders and us generally and the
controlling officers, stockholders or directors.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

         Our officers and directors are required to exercise good faith and high
integrity in our management affairs. Our articles of incorporation provide,
however, that our officers and directors shall have no liability to our
stockholders for losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated their
duty of loyalty, did not act in good faith, engaged in intentional misconduct or
knowingly violated the law, approved an improper dividend or stock repurchase,
or derived an improper benefit from the transaction. Our articles and bylaws


                                      -15-
<PAGE>

also provide for the indemnification by us of the officers and directors against
any losses or liabilities they may incur as a result of the manner in which they
operate our business or conduct the internal affairs, provided that in
connection with these activities they act in good faith and in a manner that
they reasonably believe to be in, or not opposed to, our best interests, and
their conduct does not constitute gross negligence, misconduct or breach of
fiduciary obligations.


MANAGEMENT OF POTENTIAL GROWTH

         Subject to receipt of financing, we anticipate rapid growth, which will
place a significant strain on our managerial, operational, and financial systems
resources. To accommodate our current size and manage growth, we must continue
to implement and improve our financial strength and our operational systems, and
expand.

          There is no guarantee that we will be able to effectively manage the
expansion of our operations, or that our facilities, systems, procedures or
controls will be adequate to support our expanded operations. Our inability to
effectively manage our future growth would have a material adverse effect on us.

LIMITED MARKET DUE TO PENNY STOCK

         Our stock differs from many stocks, in that it is a "penny stock." The
Securities and Exchange Commission has adopted a number of rules to regulate
"penny stocks." These rules include, but are not limited to, Rules 3a5l-l,
15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and
Exchange Act of 1934, as amended. Because our securities probably constitute
"penny stock" within the meaning of the rules, the rules would apply to our
securities and us. The rules may further affect the ability of owners of our
stock to sell their securities in any market that may develop for them. There
may be a limited market for penny stocks, due to the regulatory burdens on
broker-dealers. The market among dealers may not be active. Investors in penny
stock often are unable to sell stock back to the dealer that sold them the
stock. The mark-ups or commissions charged by the broker-dealers may be greater
than any profit a seller may make. Because of large dealer spreads, investors
may be unable to sell the stock immediately back to the dealer at the same price
the dealer sold the stock to the investor. In some cases, the stock may fall
quickly in value. Investors may be unable to reap any profit from any sale of
the stock, if they can sell it at all. Stockholders should be aware that,
according to the Securities and Exchange Commission Release No. 34- 29093, the
market for penny stocks has suffered in recent years from patterns of fraud and
abuse. These patterns include:

Control of the market for the security by one or a few broker-dealers that are
         often related to the promoter or issuer;

Manipulation of prices through prearranged matching of purchases and sales and
         false and misleading press releases;

"Boiler  room" practices involving high pressure sales tactics and unrealistic
         price projections by inexperienced sales persons;

Excessive and undisclosed bid-ask differentials and markups by selling
         broker-dealers; and

The wholesale dumping of the same securities by promoters and broker-dealers
         after prices have been manipulated to a desired level, along with the
         inevitable collapse of those prices with consequent investor losses.

         Furthermore, the "penny stock" designation may adversely affect the
development of any public market for our shares of common stock or, if such a
market develops, its continuation. Broker-dealers are required to personally
determine whether an investment in "penny stock" is suitable for customers.
Penny stocks are securities (i) with a price of less than five dollars per
share; (ii) that are not traded on a "recognized" national exchange; (iii) whose


                                      -16-
<PAGE>

prices are not quoted on the NASDAQ automated quotation system (NASDAQ-listed
stocks must still meet requirement (i) above); or (iv) of an issuer with net
tangible assets less than $2,000,000 (if the issuer has been in continuous
operation for at least three years) or $5,000,000 (if in continuous operation
for less than three years), or with average annual revenues of less than
$6,000,000 for the last three years. Section 15(g) of the Exchange Act, and Rule
15g-2 of the Commission require broker-dealers dealing in penny stocks to
provide potential investors with a document disclosing the risks of penny stocks
and to obtain a manually signed and dated written receipt of the document before
effecting any transaction in a penny stock for the investor's account. Potential
investors in our common stock are urged to obtain and read such disclosure
carefully before purchasing any shares that are deemed to be "penny stock." Rule
15g-9 of the Commission requires broker-dealers in penny stocks to approve the
account of any investor for transactions in such stocks before selling any penny
stock to that investor.

         This procedure requires the broker-dealer to (i) obtain from the
investor information concerning his financial situation, investment experience
and investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for the Company's
stockholders to resell their shares to third parties or to otherwise dispose of
them.

THE TRADING PRICE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR
CONTROL.

         The trading price of the common stock is subject to significant
fluctuations in response to numerous factors, including:

Variations in anticipated or actual results of operations;

Announcements of new products or technological innovations by us or our
competitors;

Changes in earnings estimates of operational results by analysts;

Results of product demonstrations.

Inability of market makers to combat short positions on the stock;

Inability of the market to absorb large blocks of stock sold into the market;

Comments about us or our markets posted on the Internet.

         Moreover, the stock market from time to time has experienced extreme
price and volume fluctuations, which have particularly affected the market
prices for emerging growth companies and which often have been unrelated to the
operating performance of the companies. These broad market fluctuations may
adversely affect the market price of our common stock. If our stockholders sell
substantial amounts of their common stock in the public market, the price of our
common stock could fall. These sales also might make it more difficult for us to
sell equity or equity related securities in the future at a price we deem
appropriate.

WE PAY NO DIVIDENDS

         We have never declared nor paid cash dividends on our capital stock. We
currently intend to retain any earnings for funding growth however these plans
may change depending upon capital raising requirements.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK


                                      -17-
<PAGE>

         We believe that we do not have any material exposure to interest or
commodity risks. We are exposed to certain economic and political changes in
international markets where we compete, such as inflation rates, recession,
foreign ownership restrictions, and trade policies and other external factors
over which we have no control.

         Our financial results are quantified in U.S. dollars and a majority of
our obligations and expenditures with respect to our operations are incurred in
foreign currencies. In the past the majority of our revenues were derived from
the business operations of our wholly owned subsidiaries, the Minerva Group,
whose operations were conducted in euros. Although we do not believe we
currently have any materially significant market risks relating to our
operations resulting from foreign exchange rates, if we enter into financing or
other business arrangements denominated in currency other than the U.S. dollars,
variations in the exchange rate may give rise to foreign exchange gains or
losses that may be significant.

         We currently have no material long-term debt obligations. We do not use
financial instruments for trading purposes and we are not a party to any
leverage derivatives.

         As discussed by our accountants in the audited financial statements
included in Item 7 of our Annual Report on Form 10-KSB, our revenue is currently
insufficient to cover its costs and expenses. The management anticipates raising
any necessary capital from outside investors coupled with bank or mezzanine
lenders. As of the date of this report, we have not entered into any
negotiations with any third parties to provide such capital.

RECENT DEVELOPMENTS

Processing of plastic polymers

During the second quarter of 2004 we have been able to reactivate the NGP BT 30
machine, which have been in storage since mid 2002, due to lack of operating
capital. Since than engineering staff has been retained in order to operate the
machinery and develop further testing for clients within the plastic Industry.
NGP is executing several research programs for various industry leaders and
government agencies. NGP has also secured financing in order to built its first
industrial size machine, with a capacity of 350KG per hour, or 2,400 Tons
annually, NGP anticipates this machine to be ready in the end of the second
quarter of 2005.


Corporate Restructure Recapitalization and reorganization  of Company

NGP has been able to raise funds through a private placement in Europe, which is
ongoing. The use of proceeds are to update all filings towards the SEC,
reactivate the NGP BT 30, retain plastic engineering professional as well as
hiring executives on management level and to built the NGP 350KG first
commercially viable machine and plant.



                                      -18-
<PAGE>

Minerva Group companies Bankruptcies

         As far as Minerva is concerned, significant efforts were made during
2002 in order to close a distribution agreement with IBM and others.
Unfortunately this never occurred, as IBM acquired a major competitor to
Minerva's product, Rational Corporation, and the existing pipeline at Minerva
didn't come through due to the world-wide economic slowdown.

         In an attempt to salvage its investment in Minerva, the Company the
Company entered into a Master License Agreement ("License Agreement") with Ikan
Finanz AG ("Ikan"), a company formed under the laws of the country of
Switzerland, in December 2002. Ikan also acquired most of Minerva' personnel.

         The license granted the Ikan the exclusive use of certain proprietary
intellectual property owned and developed by Minerva, in exchange for the
acquisition of certain assets (consisting primarily of office and computer
equipment and peripherals), assumption of certain trade debts, and continued
employment of certain Minerva personnel, in exchange for stipulated royalty
payments based upon sales of the Minerva licensed product.

         Unfortunately Ikan did not sell any Minerva licensed products and
produce any royalties in time and management of Minerva was forced by local
statute to file for involuntary bankruptcy in April of 2003, according to the
laws of Belgium.

         As a result of the bankruptcy, the License Agreement was voided.


OFF-BALANCE SHEET ARRANGEMENTS

         We do not have any off-balance sheet arrangements.



                                      -19-
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

         The following financial statements are included herewith. The Company's
audited Financial Statements as of and for the fiscal year ended December 31,
2002 and December 31, 2001.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

         On May 18, 2001, the Company dismissed its certifying accountant, KPMG
Fides Peat ("KPMG"). KPMG's report on the financial statements for the year
ended December 31, 2000 did not contain an adverse opinion or disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles, except that KPMG's report for the year ended December 31,
2000 contained an explanatory paragraph regarding the substantial doubt about
the Company's ability to continue as a going concern. The decision to dismiss
KPMG was approved by the Company's Audit Committee and Board of Directors.
During the year ended December 31, 2000 and the subsequent interim period
through May 18, 2001, the Company has not had any disagreements with KPMG on any
matter of accounting principals or practices, financial statement disclosure or
auditing scope or procedure. The Company engaged the accounting firm now known
as Russell Bedford Stefanou Mirchandani LLP ("Stefanou") as its certifying
accountant as of May 18, 2001 for the Company's fiscal year ending December 31,
2001. The Company had not consulted Stefanou previously.

ITEM 8A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures: As of February 1, 2005, the
Company's management carried out an evaluation, under the supervision of the
Company's Chief Executive Officer and the Chief Financial Officer of the
effectiveness of the design and operation of the Company's system of disclosure
controls and procedures pursuant to the Securities and Exchange Act, Rule
13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures were effective, as of the date of their
evaluation, for the purposes of recording, processing, summarizing and timely
reporting material information required to be disclosed in reports filed by the
Company under the Securities Exchange Act of 1934.

Changes in internal controls: There were no changes in internal controls over
financial reporting, known to the Chief Executive Officer or Chief Financial
Officer that occurred during the period covered by this report that has
materially affected, or is likely to materially effect, the Company's internal
control over financial reporting.


ITEM 8B. OTHER INFORMATION

  None.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS COMPLIANCE
WITH SECTION 16(a)

MANAGEMENT

         The following table sets forth the names, ages and positions of our
executive officers and directors as of December 31, 2002:

         Name                Age     Position and Offices with the Company
--------------------------------------------------------------------------------

         Jacques Mot         [46]      Chairman of the Board of Directors

         Thomas Marshall     [45]      Executive Vice President, Secretary and
                                       General Counsel and Director

         Marcel Rokegem      [53]      Director


                                      -20-
<PAGE>

         Jacques Mot served as the Chairman of the Board, President and CEO from
April of 1999 to January 24, 2000 and again from February 2002 until the
present. Mr. Mot was also a Director of Argenta & Magnum Management Company Ltd.
- - Gibraltar, a company that was engaged in providing financial advisory
services. From 1987 to 1992, Mr. Mot was the General Manager and Director of
Iesa Investissements S.A., a portfolio management and investment company, where
he handled portfolio and investment management on a confidential basis. Mr. Mot
attended the University of Lausanne, Switzerland studying economics from
1976-1979.

         Thomas Marshall served as General Counsel, Executive Vice President
and Secretary from August of 1999 through September 30, 2003 at which point he
resigned as an officer and director.

         Marcel Rokegem has served as a Director since April, 1999. Mr. Rokegem
is a consultant to Van Moer Santerre Group, a brokerage firm with offices in
Brussels, Luxemburg and Monaco. From 1987 to 1992 he was a co-founding Partner
and Director of Euro Suisse Limited London, a member of the London Stock
Exchange. Mr. Rokegem was a Partner of Jessup and Lamont International Limited
of London, an affiliate of Jessup and Lamont Securities Co., Inc., and a member
of the New York Stock Exchange from 1982 to 1987.

         Mr. Rokegem has a degree in Applied Economic Sciences for Antwerpen
Jesuit University, as well as a diploma from the International Securities
Marketing Association. Mr. Rokegem is fluent in Dutch, French, English and
German. Mr. Rokegem is the only independent director and as of the date of the
filing of this report in February 2005 is the sole member of the audit committee
and compensation committee.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         To the Company's knowledge each of Thomas Marshall, Jacques Mot, Marcel
Rokegem, Icare BVBA and Rapide BVBA failed to timely file any necessary filings
under Section 16(a) of the Securities Act during the period 2002 to 2004.

CODE OF ETHICS POLICY

        We have not adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller or persons performing similar functions as we have not had the
financial resources to do so and our businesses are dormant.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth information regarding compensation paid by us to
our Chairman and Chief Executive Officer, as well as officers of the Company who
were paid at a rate in excess of $100,000 per annum for the year ended December
31, 2002.


                                      -21-
<PAGE>

                           SUMMARY COMPENSATION TABLE


<TABLE>
<CAPTION>
------------------ -------- ---------------------------------------- ----------------------------------------------- --------------
                                      Annual Compensation                        Long-Term Compensation
------------------ -------- ---------------------------------------- ----------------------------------------------- --------------
                                                                                 Awards               Payouts
------------------ -------- --------------- ---------- ------------- -------------------------------- -------------- --------------
                                                                                       Securities
                                                          Other        Restricted      Underlying
Name and                                                  Annual         Stock          Options/           LTIP          All Other
Principal                   Salary          Bonus      Compensation     Award(s)          SARs            Payouts      Compensation
Position           Year      ($)             ($)           ($)            (#)             (#)               ($)             ($)
------------------ -------- --------------- ---------- ------------- --------------- ---------------- -------------- --------------
<S>                <C>       <C>            <C>        <C>             <C>              <C>               <C>             <C>
Paul Hokfelt
CEO and
Former             2001     $169,045                                                                                      $15,416
President          2002     $14,000 *                                                   650,000
------------------ -------- --------------- ---------- ------------- --------------- ---------------- -------------- --------------
Tom Marshall       2002     $168,274 *                                                  1,090,000
------------------ -------- --------------- ---------- ------------- --------------- ---------------- -------------- --------------
Jeffrey
MacArthur          2002     $45,000 *                                                   400,000
------------------ -------- --------------- ---------- ------------- --------------- ---------------- -------------- --------------
Jacques
Mot                2001     $324,000
Chairman           2002     $388,060*                                                   1,100,000
------------------ -------- --------------- ---------- ------------- --------------- ---------------- -------------- --------------
</TABLE>


* Salaries accrued, but not paid due to the Company's lack of liquidity.


Employment Agreements

         We entered into a Consulting Agreement with Jacques Mot dated July 5,
2000 pursuant to which Mr. Mot receives $27,000.00 per month for his services to
the Company. The Agreement has a one (1) year term with automatic renewal unless
terminated by either party.

Compensation of Directors

         Currently members of our Board of Directors do not receive any
compensation for service on our Board. We expect that a compensation plan for
Directors will be adopted in the future and Directors are eligible to receive
options under our existing stock incentive plan.


                                      -22-
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth, certain information, as of December 31, 2002,
regarding beneficial ownership of our common stock by


         -   each stockholder known by us to be the beneficial owner of more
             than five percent (5%) of the outstanding shares of our common
             stock;
         -   each of our directors;
         -   each of the named executive officers; and
         -   all of our current executive officers and directors as a group.

Name of                      Number of Shares
Beneficial Owner           Beneficially Owned(1)     Percent of Class (1)
- ----------------           ---------------------     --------------------

Icare BVBA(2)                    3,715,119                  17.65%
Rapide BVBA(3)                   3,715,119                  17.65%
Jacques Mot(4)                   1,200,000                   5.70%
Thomas R. Marshall(5)            1,090,000                   5.17%
Jeffrey McArthur(6)                200,000                   0.71%
Marcel Rokegem                      50,000                   0.24%
Paul Hokfelt(7)                    750,000                   3.60%

All executive officers and
directors as a group             2,640,000                  15.60%

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

(1)  Shares of common stock subject to warrants currently exercisable or
     exercisable within 60 days of the date hereof are deemed outstanding for
     computing the number of shares beneficially owned and the percentage of
     outstanding shares of the class held by a person holding such warrants, but
     are not deemed outstanding for computing the percentage of any other
     person. Except as indicated by footnote, and subject to community property
     laws where applicable, the persons named in the table have sole voting and
     investment power with respect to all shares of common stock shown as
     beneficially owned by them.

(2)  Includes shares restricted common owned by Icare BVBA (3,648,658) and
     Robert Jordaens (66,461).

(3)  Includes shares owned by Rapide BVBA (3,648,658) and Rene de Vleeschauwer
     (66,461).

(4)  Includes 1,100,000 vested options to purchase common stock @ $1.18 per
     share and 100,000 shares of common stock.

(5)  Includes 1,090,000 vested options to purchase common stock @ $1.18 per
     share. Mr. Marshall resigned as an officer and director as of September
     30,2003.

(6)  Includes 200,000 vested options to purchase common stock @ $1.18 per share.
     Mr. McArthur was granted a total of 400,000 options that vested one half on
     issuance and one half on September 1, 2002. Mr. McArthur resigned as our
     chief financial officer in September of 2002.

(7)  Includes 650,000 vested options to purchase common stock at $1.23. Mr.
     Hokfelt effective February 4, 2002 resigned as President/CEO and Director.


                                      -23-
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         We entered into a one (1) year rental agreement with MBM Realty LLC for
office space in New York in early 2002 and terminated the lease shortly
thereafter due to our lack of liquidity. The agreement called for a monthly rent
of $6,000, in addition to reimbursement of MBM for certain expenses, including a
portion of cost incurred for the phone system, phones charges, utilities and
cleaning services. MBM is controlled by Thomas Marshall who was one of our
officers and directors at the time of the lease.

         The landlord for the Elewjit, Belgium office was Tequila NV an entity
owned and controlled by Rene De Vleeschauwer and Robert Jordaens (the former
owners of Minerva and more than 5% shareholders). Minerva vacated the premises
in early 2003 as a result of its bankruptcy.

          In 2002, we received loans from Jacques Mot, our Chairman and chief
executive officer in amounts totaling $200,000. The loans are evidenced by a
demand promissory note in favor of Mr. Mot dated December 31, 2002.


ITEM 13. EXHIBITS, LIST AND REPORTS of FORM 8-K.

         (a)      The following documents are filed as part of this Form:

                  Financial Statements. See index of Financial Statements on
                  page F-1 at the beginning of the attached Financial
                  Statements.

         (b)Exhibits

         ++(3)    (i)      Amended and Restated Certificate of Incorporation
         ++       (ii)     By-Laws
         ++(4)    (i)      Specimen Certificate for Common  Stock
         ++       (ii)     Form of Warrant at $6.00 expiring 2 years after
                           Commencement Date
         ++       (iii)    Form of Warrant at $12.00 expiring March 5, 2004
         ++       (iv)     Form of Warrant at $12.00 expiring February 24, 2004
         ^        (v)      Form of Warrant at $8.00 expiring 2 years after
                           Commencement Date
         ++(10)   (i)      Employment Agreement of Paul Hokfelt dated January
                           25, 2000
         +        (ii)     Line of Credit Agreement dated as of April 15, 1999
         +        (iii)    Consulting Agreement dated as of April 15, 1999
         ^        (iv)     Strategic Collaboration Agreement dated as of March
                           31, 2000 by and between the Company and New
                           Generation Partners, Inc., on one hand, and Double
                           Impact, Inc., on the other


                                      -24-
<PAGE>

         ^        (v)      Share Transfer Agreement dated as of March 31, 2000
                           by and among Bachkine & Meyer Industries, S.A.,
                           Double Impact, Inc. and the Company.
         ^        (vi)     Termination Agreement dated as of April 15, 2000 by
                           and between the Company and BAMI Consulting, S.A.
         ^        (vii)    Subscription Agreement dated as of April 10, 2000 by
                           and between the Company and Gauk Holding, Inc.
         ^        (viii)   Subscription Agreement dated as of April 10, 2000 by
                           and between the Company and Mercer International S.A.
                  (ix)     (Reserved)
         #        (x)      Form of Subscription Agreement
         #        (xi)     Amendment to Line of Credit Agreement, dated July 15,
                           2000, between the Company and Bachkine & Meyer
                           Industries, S.A.
         **       (xii)    Loan Retirement Agreement dated as of November 13,
                           2000 by and between the Company and Bachkine & Meyer
                           Industries SA.
         **       (xiii)   Consulting Fee Conversion Agreement dated as of
                           November 13, 2000 by and between the Company and BAMI
                           Consulting, Inc.
         ***      (xiv)    Share Exchange Agreement dated as of December 29,
                           2000 by and among the Company and New Generation
                           Partners, Inc., on one hand, and Icare BVBA, Rapide
                           BVBA, Rene De Vleeschauwer and Robert Jordaens.
         ****     (xv)     Share Exchange Agreement dated as of February 28,
                           2001 by and among the Company and New Generation
                           Partners, Inc., on one hand, and Icare BVBA, Rapide
                           BVBA, Rene De Vleeschauwer and Robert Jordaens.
         +++      (xvi)    Consulting Agreement by and between New Generation
                           Partners, Inc and Jacques Mot dated as of July 5,
                           2000.
         *        (xvii)   Master License Agreement between Minverva
                           Softcare NV and Ikan Finanz AG effective as of
                           December 31, 2002
         *        (xviii)  Demand Promissory Note in favor of Jacques Mot dated
                           December 31, 2002.
         ++       (21)     Subsidiaries of the Registrant
         *        (31.1)   Certificate pursuant to section 302 of the
                           Sarbanes-Oxley Act of 2002.
         *        (32.1)   Certificate pursuant to section 906 of the
                           Sarbanes-Oxley Act of 2002.


                                      -25-
<PAGE>

--------
*        Filed herewith
+        Incorporated by reference to the Company's Form 10-QSB for the period
         ending June 30, 1999 filed on August 23, 1999.
++       Incorporated by reference to the Company's Form 10-KSB for the period
         beginning April 15, 1999 and ending December 31, 1999 filed on March
         30, 2000.
^        Incorporated by reference to the Company's Form 10-QSB for the period
         ending March 31, 2000 filed on May 23, 2000.
#        Incorporated by reference to the Company's Form 10-QSB for the period
         ending June 30, 2000 filed on August 30, 2000.
**       Incorporated by reference to the Company's Form 10-QSB for the period
         ending September 30, 2000 filed on November 21, 2000.
***      Incorporated by reference to the Company's Form 8-K filed on February
         28, 2001
****     Incorporated by reference to the Company's Form 8-K filed on March 12,
         2001
+++      Incorporated by reference to the Company's Form 10-KSB for year ended
         December 31, 2000 filed on April 16, 2001

(2)      Reports on Form 8-K

         No reports on Form 8-K were filed during the fourth quarter of fiscal
2002.



                                      -26-
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following is a summary of the fees billed to New Generation Holdings, Inc.
by Russell Bedford Stefanou Mirchandani LLP for professional services rendered
for the fiscal years ended December 21, 2002 and 2001:

Fee Category                  Fiscal 2002 Fees       Fiscal 2001 Fees
-------------                 -----------------      ----------------
Audit Fees                      $    164,079           $    56,200
Audit-Related Fees                         -                     -
Tax Fees                                   -                     -
All Other Fees                             -                     -

Total Fees                      $    164,079           $    56,200

AUDIT FEES. Consists of fees billed for professional services rendered for the
audit of New Generation Holdings, Inc.'s consolidated financial statements and
review of the interim consolidated financial statements included in quarterly
reports and services that are normally provided by Russell Bedford Stefanou
Mirchandani LLP in connection with statutory and regulatory filings or
engagements.

AUDIT-RELATED FEES. Consists of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of New
Generation Holding, Inc.'s consolidated financial statements and are not
reported under "Audit Fees." There were no Audit-Related services provided in
fiscal 2002 or 2001.

TAX FEES. Consists of fees billed for professional services for tax compliance,
tax advice and tax planning. There were no tax services provided in fiscal 2002
or 2001.

ALL OTHER FEES. Consists of fees for products and services other than the
services reported above. There were no management consulting services provided
in fiscal 2002 or 2001.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent auditors
and management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.


                                      -27-
<PAGE>

                                   Signatures

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

                                        New Generation Holdings, Inc.
                                        (Registrant)

                                        /s/ Jacques Mot
                                        -----------------------------
                                        Jacques Mot
                                        (Chief Presiding Officer)


         In accordance with the Exchange Act, this report has been signed below
on February 15, 2005 by the following persons in the capacities indicated:


                                        /s/ Jacques Mot
                                        -----------------------------
                                        Jacques Mot
                                                            Director and CEO
                                        (Principal Executive
                                        Officer)

                                        /s/ Jacques Mot
                                        -----------------------------
                                        Jacques Mot
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)

                                        /s/ Thomas Marshall
                                        -----------------------------
                                        Thomas Marshall
                                        Director and Secretary

                                        /s/ Marcel Rokegem
                                        -----------------------------
                                        Marcel Rokegem
                                        Director



                                      -28-
<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549



                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2002 AND 2001



                         FORMING A PART OF ANNUAL REPORT
                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934


                          NEW GENERATION HOLDINGS, INC.

<PAGE>

                          NEW GENERATION HOLDINGS, INC.

                          INDEX TO FINANCIAL STATEMENTS


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


                                                                            Page
                                                                            ----

Report of Registered  Independent Certified Public Accountants               F-3
Consolidated Balance Sheet at December 31, 2002                              F-4
Consolidated Statements of Losses and Comprehensive Losses for the two       F-5
years ended December 31, 2002 and 2001
Consolidated Statements of Stockholders' Equity for                          F-6
  the two years ended December 31, 2002 and 2001
Consolidated Statements of Cash Flows for the two
  years ended December 31, 2002 and 2001                                     F-7
Notes to Consolidated Financial Statements                               F-8-F22

<PAGE>

          REPORT OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


The Board of Directors
New Generation Holdings, Inc.
New York, New York

We have audited the accompanying consolidated balance sheet of New Generation
Holdings, Inc. and subsidiaries ("Company") as of December 31, 2002, and the
related consolidated statements of losses, comprehensive loss, stockholders'
equity and cash flows for each of the two years in the period ended December 31,
2002. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). 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 consolidated financial position of New Generation
Holdings, Inc. as of December 31, 2002, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 2002 in conformity with generally accepted accounting principles in
the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note M to the
financial statements, the Company has suffered recurring losses from operations
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 M. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.


                               /s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                               --------------------------------------------
                               Russell Bedford Stefanou Mirchandani  LLP

New York, New York

January 11,  2005

                                       F-3

<PAGE>

                          NEW GENERATION HOLDINGS, INC.

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 2002


                            ASSETS

CURRENT ASSETS:
       Total current assets                                        $         --

Property and equipment, net of accumulated deprecation of $ 93,965
(Note C)                                                                 43,776
Other Assets:
Patents, net of accumulated amortization of $ 383,549 (Note D )
                                                                        133,650
Other  assets                                                             1,345
                                                                   ------------
                                                                        134,995

                                                                   $    178,771
                                                                   ============

      LIABILITIES AND DEFICIENCY IN STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable and accrued liabilities (Note J)              $  1,556,745
                                                                   ------------
       Total current liabilities                                      1,556,745

Net Liabilities of Discontinued Operations (Note A)                   3,599,609
Commitments and contingencies (Note K)

DEFICIENCY IN STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000 shares
authorized, none issued or outstanding
Common stock, $0.001 par value; 50,000,000 shares authorized,
21,056,690 shares issued and outstanding at December 31, 2002            21,056
Additional paid-in capital                                           29,636,054
Accumulated deficit                                                 (34,634,693)
                                                                   ------------
       Total deficiency in stockholders' equity                      (4,977,583)
                                                                   $    178,771
                                                                   ============


           See accompanying notes to consolidated financial statements

                                       F-4

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
           CONSOLIDATED STATEMENTS OF LOSSES AND COMPREHENSIVE LOSSES

<TABLE>
<CAPTION>
                                                              Year Ended           Year Ended
                                                          December 31, 2002     December 31, 2001
                                                          -----------------     -----------------
<S>                                                         <C>                      <C>
OPERATING EXPENSES:
   General and administrative                               $  1,339,841             2,426,428
   Depreciation and amortization                                 147,279             3,428,620
   Impairment loss                                                    --               449,809
                                                            ------------          ------------
   Total Operating Expenses                                   (1,487,120)           (6,304,857)

Loss from operations                                          (1,487,120)           (6,304,857)

   Interest income  (expense), net                                    --                 4,794
                                                            ------------          ------------
Total Other (Expense) Income                                          --                 4,794
                                                            ------------          ------------
Loss before income taxes, discontinued operations and
  cumulative effect of accounting change                      (1,487,120)           (6,300,063)
Income taxes (benefit)                                                --                    --
                                                            ------------          ------------
Loss before discontinued operations and cumulative effect
  of accounting change                                        (1,487,120)           (6,300,063)
Loss from discontinued operations, net of tax                 (1,766,381)           (1,197,251)
                                                            ------------          ------------
Loss before cumulative effect of accounting change            (3,253,501)           (7,497,314)
Cumulative effect of accounting change                       (15,456,141)                   --
                                                            ------------          ------------
Net loss                                                    $(18,709,642)         $ (7,497,314)
                                                            ============          ============

(Loss) per common share (basic and assuming dilution)       $      (0.89)         $      (0.38)
Continuing Operations                                              (0.08)                (0.32)
Discontinued Operations                                            (0.08)                (0.06)
Cumulative effect of accounting change                             (0.73)                   --

Shares used to compute basic and diluted net loss per
  common share                                                21,024,312            19,898,321


COMPREHENSIVE  LOSS:
         Net loss                                           $(18,709,642)         $ (7,497,314)
         Foreign currency translation (loss) gain                 21,665               (50,043)
                                                            ------------          ------------
COMPREHENSIVE LOSS                                          $ 18,687,987)         $ (7,547,357)
                                                            ============          ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-5

<PAGE>

<TABLE>
<CAPTION>
                                                    NEW GENERATION HOLDINGS, INC.
                          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT AND COMPREHENSIVE LOSS
                                              FOR THE TWO YEARS ENDED DECEMBER 31, 2002


                                                                                                        Accumulated
                                                 Common Stock            Additional                        other
                                          ---------------------------     paid-in       Accumulated    comprehensive
                                              Shares        Amount        capital         deficit         income           Total
                                          ------------   ------------   ------------   ------------    ------------    ------------
<S>                                         <C>          <C>            <C>            <C>             <C>             <C>
Balance at December 31, 2000                15,074,788   $     15,075   $ 11,942,781   $ (8,427,737)   $     28,388    $  3,558,507

Issuance of common stock in exchange
  for cash                                     181,667            182        495,318             --              --         495,500
Issuance of common stock in exchange for
  services rendered                            132,391            132        394,089             --              --         394,221
Issuance of common stock  in connection
  with business acquisition                  5,498,264          5,498     16,605,940             --              --      16,611,438
Net loss                                            --             --             --     (7,497,314)             --      (7,497,314)
Currency translation adjustment                     --             --             --             --         (50,043)        (50,043)
                                          ------------   ------------   ------------   ------------    ------------    ------------
Balance at December 31, 2001                20,887,110   $     20,887   $ 29,438,128   $(15,925,051)   $    (21,655)   $ 13,512,309
Issuance of common stock in exchange
  for services rendered                        169,480            172        197,923             --              --         198,095
Currency translation adjustment                     --             --             --             --          21,655          21,655
Net Loss                                            --             --             --    (18,709,642)             --     (18,709,642)
                                          ------------   ------------   ------------   ------------    ------------    ------------
Balance at December 31, 2002                21,056,690   $     21,059   $ 29,636,051   $(34,634,693)   $         --    $ (4,977,583)
                                          ============   ============   ============   ============    ============    ============
</TABLE>


           See accompanying notes to consolidated financial statements

                                       F-6

<PAGE>

                  NEW GENERATION NEW GENERATION HOLDINGS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       Year Ended         Year Ended
                                                                   December 31, 2002  December  31, 2001
                                                                   -----------------  ------------------
<S>                                                                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss for the year from continuing operations and accounting change   $(16,943,261)      $ (6,300,063)
Adjustments to reconcile net loss to net cash used in
    operating activities:
Loss from discontinued operations                                      (1,766,381)        (1,197,251)
Cumulative change in accounting                                        15,456,141                 --
Depreciation and amortization                                             147,279          3,527,197
Equity instruments issued for services                                    198,095            394,221
Equity in net losses of affiliates                                             --           (239,627)
Impairment losses in associated companies, net                                 --            449,809
Minority interest in loss for the year                                         --            (41,183)
INCREASE (DECREASE) IN CASH RESULTING FROM CHANGES IN:
Prepaid expenses and other current assets, net                          3,036,920         (2,420,790)
Other non- current assets, net                                                 --            (13,715)
Accounts payable and accrued liabilities, net                          (1,116,892)         4,187,417
                                                                     ------------       ------------
Net cash used in operating activities                                    (988,099)        (1,653,985)
                                                                     ------------       ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) disposal  of property, plant and equipment, net                     --           (293,797)
Cash acquired in connection with acquisition                                   --          1,473,778
Minority interest at date of acquisition                                       --            (80,602)
                                                                     ------------       ------------
Net cash used in investing activities                                          --          1,099,379

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholder advances, net                                   200,000                 --
Issuance of common stock                                                       --            495,500
                                                                     ------------       ------------
Net cash provided by financing activities                                 200,000            495,500
                                                                     ------------       ------------

Effects of exchange rate changes on cash and cash equivalents, net                            (8,199)
                                                                     ------------       ------------
Net increase in cash and cash equivalents                                (788,099)           (67,305)
   Cash and cash equivalents at beginning of period                       788,099            855,404
                                                                     ------------       ------------
   Cash and cash equivalents at end of period                        $         --       $    788,099
                                                                     ============       ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for interest                            $         --       $     31,352
   Cash paid during the year for income taxes                                  --            116,995
   Common stock issued in exchange for services                           198,095            394,221
   Common stock issued in exchange for acquisitions                            --         14,293,076

Acquisition :
    Assets acquired, net                                                       --          1,458,966
    Goodwill and other intangible assets, net                                  --         13,942,532
     Liabilities assumed, net                                                  --         (1,108,422)
    Common stock issued                                                        --        (14,293,076)
                                                                     ------------       ------------
     Net cash paid for acquisition                                   $         --       $         --
                                                                     ============       ============
</TABLE>

           See accompanying notes to consolidated financial statements

                                       F-7

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.


Business and Basis of Presentation

New Generation Holdings, Inc. (the "Company"), was formed under the laws of
the State of Delaware in 1999. The Company is currently inactive with no
significant operations and is seeking to develop and market within Europe,
through its wholly subsidiary, a proprietary technology designed to process two
or more discrete plastic polymers.

Until ceasing operations in December, 2003, the Company was also engaged,
through a group of wholly and majority-subsidiaries, in the development of
mainframe computer system software solutions in the life cycle management, data
warehousing and data modeling sectors in Europe.

In April 2003, Minerva's creditors forced the Company into an involuntarily
liquidation, and as a result, the Court appointed Trustee overseeing the
liquidation foreclosed on substantially all of the Company's assets and Minerva
ceased all operations.


The consolidated financial statements include the accounts of the Company, and
domestic and foreign subsidiaries that are more than 50% owned and controlled.
Investments in affiliates in which the Company has the ability to exercise
significant influence, but not control, are accounted for by the equity method.
All other investments in affiliates are carried at cost. Minority interests
represent an outside shareholder's 20% ownership of the common stock of Minerva
France SA (a French company), a subsidiary of the Company. All significant
intercompany transactions and balances have been eliminated in the consolidated
financial statements.

Discontinued Operations

During the period December, 2000 through February 2001, the Company acquired
Minerva Softcare N.V., a company formed under the laws of the country of
Belgium, and its wholly owned subsidiaries, Case Belgium N.V., Case Nederland
B.V., and Case France S.A (the "Minerva Group"). The Company acquired the
Minerva Group in exchange for 7,430,238 shares of its restricted common stock,
valued at $19,219,603, plus net liabilities assumed of approximately
$1,108,000.

The Minerva Group was an integrated technology infrastructure solutions
provider, which specialized in developing and marketing data warehousing, life
cycle management and data modeling platforms and solutions. The Minerva Group's
operations were principally located in Belgium, with its other significant
operations in France, the United Kingdom, and the Netherlands.


In December, 2003, the Minerva Group ceased all operations and was subsequently
forced into receivership under the laws of the County of Belgium. Accordingly,
the Minerva Group's results have been accounted for as a discontinued operation
and beginning with the 2001 consolidated financial statements all periods shown
have been restated to reflect discontinued operations accounting

                                       F-8

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

The net liabilities of the Minerva Group segment included in the accompanying
consolidated balance sheet of December 31, 2002 consisted of the following:

           Current assets, net                                  $   1,962,097
           Property and Equipment , net                                85,686
           Other Assets, net                                            6,370
           Accounts payable and other current liabilities, net      (171,371)
           Other liabilities, net                                 (5,482,391)
                                                                -------------
           Net liabilities of discontinued operations           $ (3,599,609)
                                                                =============


The consolidated financial statements have been restated to present the Minerva
Group's operations as a discontinued operation. Operating results of discounted
operations are summarized as follows:

                                                  2002               2001
                                                  ----               ----
       Net sales                               $ 2,094,197       $  2,461,100
       Income (loss) before income taxes        (1,766,381)        (1,197,251)
       Income taxes (benefit)                           --                 --
                                               -----------       ------------
       Net income (loss)                       $(1,766,381)      $ (1,197,351)
                                              ============       ============


Going Concern

The financial statements have been prepared on a going concern basis, and do not
reflect any adjustments related to the uncertainty surrounding the Company's
recurring losses or accumulated deficit

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the consolidated financial statements and
accompanying disclosures. Although these estimates are based on management's
best knowledge of current events and actions the Company may undertake in the
future, actual results may differ from those estimates.



                                       F-9

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Liquidity

As reflected in the accompanying consolidated financial statements, the Company
incurred net losses of $18,709,642 and $7,497,314 for the years ended December
31, 2002 and 2001, respectively, and has an accumulated deficit of $34,634,693
as of December 31, 2002. In addition, the Company's current liabilities exceeded
its current assets by $1,556,745 as of December 31, 2002. Consequently, its
operations are subject to all risks inherent in the establishment of a new
business enterprise.

Foreign Currency Translation

The Company translates the foreign currency financial statements of its foreign
subsidiaries in accordance with the requirements of Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation." Assets and
liabilities are translated at current exchange rates, and related revenue and
expenses are translated at average exchange rates in effect during the period.
Resulting translation adjustments are recorded as a separate component in
stockholders' equity. Foreign currency translation gains and losses are included
in the statement of income.

Revenue Recognition

For revenue from products and services, the Company recognizes revenue in
accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements" ("SAB 101"). SAB 101 requires that four basic criteria
must be met before revenue can be recognized: (1) persuasive evidence of an
arrangement exists; (2) delivery has occurred or services have been rendered;
(3) the selling price is fixed and determinable; and (4) collectibility is
reasonably assured. Determination of criteria (3) and (4) are based on
management's judgments regarding the fixed nature of the selling prices of the
products delivered/services rendered and the collectibility of those amounts.
Provisions for discounts and rebates to customers, estimated returns and
allowances, and other adjustments are provided for in the same period the
related sales are recorded. The Company defers any revenue for which the product
has not been delivered or services has not been rendered or is subject to refund
until such time that the Company and the customer jointly determine that the
product has been delivered or services has been rendered or no refund will be
required.



                                      F-10

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (Continued)

On December 17, 2003, the SEC staff released Staff Accounting Bulletin (SAB) No.
104, Revenue Recognition. The staff updated and revised the existing revenue
recognition in Topic 13, Revenue Recognition, to make its interpretive guidance
consistent with current accounting guidance, principally EITF Issue No. 00-21,
"Revenue Arrangements with Multiple Deliverables." Also, SAB 104 incorporates
portions of the Revenue Recognition in Financial Statements - Frequently Asked
Questions and Answers document that the SEC staff considered relevant and
rescinds the remainder. The company's revenue recognition policies are
consistent with this guidance; therefore, this guidance will not have an
immediate impact on the company's consolidated financial statements.

Property and Equipment

Property, plant and equipment are recorded at cost of purchase and depreciated
over their estimated useful lives on a straight-line basis. Estimated useful
lives of major depreciable assets are as follows:

Furniture and fixtures                        3-5 years
Computer Equipment and software               2-3 years
Vehicles                                        5 years


Investments

The Company's investments in associated companies are accounted for under the
equity method if the Company has the ability to exercise significant influence
over the operating and financial policies of the investees, otherwise by the
cost method. Under the cost method, the Company's share of the earnings and
losses of such companies is not included in the consolidated statements of
operations. In general, the Company applies the equity method to investments
where it owns 20% or more of the outstanding voting stock of the investee.

Income Taxes

Deferred income taxes are provided using the asset and liability method for
financial reporting purposes in accordance with the provisions of Statements of
Financial Standards No. 109, "Accounting for Income Taxes". Under this method,
deferred tax assets and liabilities are recognized for temporary differences
between the tax bases of assets and liabilities and their carrying values for
financial reporting purposes, and for operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be removed or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
the consolidated statements of operations in the period that includes the
enactment date.



                                      F-11

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)


Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand and deposits held at call with
banks and are carried in the balance sheet at cost.


Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144
(SFAS 144). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should an impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.


Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and trade receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of applicable government mandated insurance limit. Concentrations of
credit risk with respect to trade receivables are limited to the large number of
customers comprising the Company's customer base. The Company's customers are
concentrated primarily in Europe and it periodically reviews its trade
receivables in determining its allowance for doubtful accounts. There was no
allowance for doubtful accounts at December 31, 2002.

Fair Value of Financial Instruments

SFAS No. 107, "Disclosures About Fair Value of Financial Instruments," requires
disclosure of the fair value of certain financial instruments. The carrying
value of cash and cash equivalents, accounts receivable, accounts payable and
short-term borrowings, as reflected in the balance sheets, approximate fair
value because of the short-term maturity of these instruments.

Derivative Financial Instruments

The Company does not actively engage in activities to hedge its exposure to
foreign currency exchange fluctuations. However, as of December 31, 2001, the
Company was party to a currency forward contract to mitigate its exposure to
foreign currency fluctuations in relation to a US Dollar ("USD") denominated
note receivable. The contract, which carried a notional value of USD 200,000,
matured in April 2001. The proceeds received are $208,612 and a transaction gain
of $41,725 has been recorded in other income for the year ended December 31,
2001.


                                      F-12

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Product Development Costs

Product development costs include expenses incurred by the Company for research,
design and development of the Company's proprietary technology. Fro the years
ended December 31, 2002 and 2001, product development costs were not material to
the consolidated statement of operations.

Advertising

The Company follows the policy of charging the costs of advertising to expenses
incurred. For the years ended December 31, 2002 and 2001, advertising costs were
not material to the consolidated statement of operations.

Stock Based Compensation
In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide
alternative methods of transition for a voluntary charge to the fair value based
method of accounting for stock-based employee compensation. In addition, this
statement amends the disclosure requirements of SFAS No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. The Company has chosen to continue to account
for stock-based compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related interpretations. Accordingly, compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the Company's stock at the date of the grant over the exercise price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its financial reports for the years ended December 31, 2002 and 2001
and for subsequent periods. Had compensation costs for the Company's stock
options been determined based on the fair value at the grant dates for the
awards, the Company's net loss and losses per share would have been as follows
(transactions involving stock options issued to employees and Black-Scholes
model assumptions are presented in Note G):

<TABLE>
<CAPTION>
                                                                 2002           2001
                                                             ------------    -----------
<S>                                                          <C>             <C>
Net loss - as reported                                       $(18,709,642)   $(7,497,314)
Add:  Total stock based  employee  compensation  expense
  as reported under intrinsic value method (APB. No. 25)               --             --
Deduct: Total stock based employee  compensation expense
  as reported under fair value based method (SFAS No. 123)     (2,097,300)            --
                                                             ------------    -----------
Net loss - Pro Forma                                         $(20,806,942)   $(7,497,314)
Net loss attributable to common stockholders - Pro forma     $(20,806,942)   $(7,497,314)
Basic (and assuming dilution) loss per share - as reported   $      (0.89)   $     (0.38)
Basic (and assuming dilution) loss per share - Pro forma     $      (0.99)   $     (0.38)
</TABLE>


                                      F-13

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)


Segment Information

The Company adopted Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information ("SFAS 131")
in the year ended December 31, 1999. SFAS establishes standards for reporting
information regarding operating segments in annual financial statements and
requires selected information for those segments to be presented in interim
financial reports issued to stockholders. SFAS 131 also establishes standards
for related disclosures about products and services and geographic areas.
Operating segments are identified as components of an enterprise about which
separate discrete financial information is available for evaluation by the chief
operating decision maker, or decision-making group, in making decisions on how
to allocate resources and assess performance. The information disclosed herein,
materially represents all of the financial information related to the Company's
principal operating segments.

Reclassifications

Certain reclassifications have been made in prior years' financial statements to
conform to classifications used in the current year.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting
Comprehensive Income," establishes standards for reporting and displaying of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
130 requires that all items that are required to be recognized under current
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 includes gains and losses on foreign
currency translation adjustments and is included as a component of stockholders'
equity.

New Accounting Pronouncements

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement will not have a material
impact on the Company's results of operations or financial positions.


                                      F-14

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with Statement of
Financial Accounting Standard ("SFAS") No. 128, "Earnings Per Share." Under the
provisions of SFAS 128, basic net income (loss) per share is computed by
dividing the net income (loss) for the period by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share
is computed by dividing the net income (loss) for the period by the weighted
average number of common and dilutive potential common shares outstanding during
the period. As the Company had net losses during the periods presented, basic
and diluted net income (loss) per share are the same.

NOTE B - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF STATEMENT 142

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 "Business Combinations" (SFAS No. 141)
and Statement of Financial Accounting Standards No. 142 "Goodwill and Other
Intangible Assets" (SFAS No. 142). SFAS No. 141 addresses financial accounting
and reporting for business combinations. This statement requires the purchase
method of accounting to be used for all business combinations, and prohibits the
pooling-of-interests method of accounting. This statement is effective for all
business combinations initiated after June 30, 2001 and supercedes APB Opinion
No. 16, "Business Combinations" as well as Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 38, "Accounting for
Preacquisition Contingencies of Purchased Enterprises."

SFAS No. 142 addresses how intangible assets that are acquired individually or
with a group of other assets should be accounted for in financial statements
upon their acquisition. This statement requires goodwill amortization to cease
and for goodwill to be periodically reviewed for impairment for fiscal years
beginning after October 31, 2001. SFAS No. 142 supercedes APB Opinion No. 17,
"Intangible Assets." The Company adopted the provisions of this standard for its
second quarter of fiscal 2002.

Upon adoption of FAS 142 in the second quarter of 2002, the Company recorded a
one-time, non-cash charge of approximately $15 million to reduce the carrying
value of its goodwill. Such charge is non-operational in nature and is reflected
as a cumulative effect of an accounting change in the accompanying consolidated
statement of operations. In calculating the impairment charge, the fair value of
the impaired reporting unit was estimated at the fair value of assets underlying
the business, thereby eliminating the goodwill element entirely.


                                      F-15

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE B - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF STATEMENT 142
(CONTINUED)

The following table presents the impact of SFAS 142 on net income (loss) and net
income (loss) per share had SFAS 142 been in effect for the years ended December
31, 2002 and 2001:

<TABLE>
<CAPTION>
                                                  Year ended         Year Ended
                                              December 31, 2002  December 31, 2001
                                                 ------------      ------------
<S>                                              <C>               <C>
           Net (loss)                            $(18,709,642)     $ (7,497,314)
           Adjustments:
           Amortization of goodwill                        --         3,283,097
           Impairment of goodwill                  15,456,141                --
                                                 ------------      ------------
           Adjusted Net Loss                     $ (3,253,501)     $ (4,214,217)
                                                 ============      ============
           Shares used to compute basic and
             diluted net loss per common share     21,024,312        19,898,321
           Adjusted basic and diluted
              net loss per common share          $      (0.15)     $      (0.21)
                                                 ============      ============
         Reported basic and diluted
              net loss per common share          $      (0.89)     $      (0.38)
                                                 ============      ============
</TABLE>

NOTE C - PROPERTY, PLANT AND EQUIPMENT

The Company's property and equipment at December 31, 2002 consist of the
following:

  Office Furniture and equipment                         $ 112,681
  Computer Equipment                                        25,060
                                                         ---------
     Total                                                 137,741
  Accumulated Depreciation                                 (93,965)
                                                         ---------
                                                         $  43,776
                                                         =========

Depreciation expense included as a charge to losses from continuing operations
amounted to $43,839 and $36,223 for the years ended December 31, 2002 and
2001, respectively.

NOTE D-INTANGIBLE ASSETS

The costs and accumulated amortization of intangible assets at December 31, 2002
are summarized as follows:

Patents and related costs                  $ 517,199

Less:  accumulated amortization              383,549
                                           ---------
Intangible assets, net                     $ 133,650
                                           =========

Amortization expense included as a charge to income amounted to $ 103,400 in
each of the years ended December 31, 2002 and 2001, respectively.


                                      F-16

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE E - IMPAIRMENT OF LONG-LIVED ASSETS

During the year ended December 31, 2001 the Company's management determined
there would be no cash flows derived from the Company's equity investments in
certain associated companies. The companies experienced significant changes in
market conditions, which led to substantial declines in sales and operating cash
flow. During the year 2001, these companies have either filed for bankruptcy or
compulsory winding up. Accordingly, the Company recognized an asset impairment
loss of $449,809, the carrying value of the investments, as of December 31, 2001
in their entirety and charged to operations. The investments include Washnet
(the Netherlands), Tarinfo (Sweden), Adventagon (Sweden), Waparesult (England),
and QID N.V. (Belgium). All of these companies are engaged in wireless
applications and internet-based business services, except QID, which is in the
computer software industry.

NOTE F - CAPITAL STOCK

The Company is authorized to issue 50,000,000 shares of common stock with a par
value of $.001 per share. As of December 31, 2002 the Company has issued and
outstanding 21,056,690 shares of common stock. The Company is also authorized to
issue 1,000,000 shares of preferred stock with a par value of $.001 per share.
There are no preferred shares are outstanding at December 31, 2002.

In 2001, the Company issued 5,498,264 shares of common stock valued at
$16,611,438 in connection with the Company's acquisition of the balance of
Minerva, or 75% (see Notes A and E). The shares issued in connection with the
acquisition were based upon the market price of the Company's common stock at
the date of acquisition.

In 2001, the Company issued 181,667 shares of common stock and 141,111 warrants
to acquire its common stock (see Note E) in exchange for $495,500, net of
offering costs and fees. In addition, the Company issued 132,391 shares of
common stock for $394,221 of services rendered in 2001.

In 2002, the Company issued 169,580 shares of common stock in exchange for
$198,095 of services rendered in 2002.

All valuations of common stock issued for services were based upon value of the
services rendered, which did not differ materially from the fair value of the
Company's common stock during the period the services were rendered.


NOTE G - WARRANTS AND STOCK OPTIONS

Employee Stock Options

The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's common stock issued to employees
of the Company under a non-qualified employee stock option plan.

<TABLE>
<CAPTION>
                                Options Outstanding                                     Options Exercisable
                                -------------------                                     -------------------
                                            Weighted Average         Weighted                        Weighted
                           Number        Remaining Contractual        Average         Number         Average
    Exercise Prices     Outstanding           Life (Years)        Exercise Price    Exercisable   Exercise Price
    ---------------     -----------           ------------        --------------    -----------   --------------
<S>                       <C>                      <C>                <C>                            <C>
      $1.18- $9.50        4,100,000                4.25               $ 1.33                         $  1.33
</TABLE>


                                      F-17

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE G - WARRANTS AND STOCK OPTIONS  (CONTINUED)

Transactions involving stock options issued to employees are summarized as
follows:

                                                Number of       Weighted Average
                                                  Shares        Price Per Share
                                                ----------      ----------------
       Outstanding at January 1, 2001                   --         $     --
          Granted                                       --               --
          Exercised                                     --               --
          Canceled or expired                           --               --
                                                ----------         --------
       Outstanding at December 31, 2001                 --               --
          Granted                                4,100,000             1.33
          Exercised                             (       --)              --
          Canceled or expired                   (       --)              --
                                                ----------         --------
       Outstanding at December 31, 2002          4,100,000         $   1.33
                                                ==========         ========

The weighted-average fair value of stock options granted to employees during the
years ended December 31, 2002 and 2001 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:

                                                              2002         2001
                                                              ----         ----
       Weighted average grant date fair value per share:    $ 1.40       $  --
       Significant assumptions (weighted-average):
           Risk-free interest rate at grant date               4.0%       4.25%
           Expected stock price volatility                      26%         21%
           Expected dividend payout                             --          --
           Expected option life-years (a)                        5           5

       (a)The expected option life is based on contractual expiration dates.

If the Company recognized compensation cost for the non-qualified employee stock
option plan in accordance with SFAS No. 123, the Company's pro forma net loss
and net loss per share would have been $(20,806,942) and $(0.99) in 2002 and
$(7,497,314) and $(0.38) in 2001, respectively.


Warrants

The following table summarizes the changes in warrants outstanding and the
related prices for the shares of the Company's common stock issued to
shareholders at December 31, 2002.

                Warrants Outstanding                   Warrants Exercisable
                --------------------                   --------------------
                                 Weighted Average
                      Number     Contractual Life      Number   Weighted Average
Exercise prices:   Outstanding        (Years)       Exercisable  Exercise Price
----------------   -----------   ----------------   ----------- ----------------
   $  6.00          2,960,706           2.5          2,960,706       $ 6.00
      8.00             91,400           3.2             91,400         8.00
     12.00            115,000           3.2            115,000        12.00
      1.80            141,111           3.0            141,111         1.80
                    ---------         -----          ---------       ------
                    3,308,217           3.0          3,308,217       $ 6.00
                    =========         =====          =========       ======


                                      F-18

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE G - WARRANTS AND STOCK OPTIONS  (CONTINUED)

Transactions involving the Company's warrant issuance are summarized as follows:

                                         Number of   Weighted Average
                                          shares      Exercise Price
                                         ---------   ----------------
   Outstanding at December 31, 2000      3,167,106      $    6.28
   Granted                                 141,111           1.80
   Exercised                                    --             --
   Cancelled                                    --             --
                                         ---------      ---------
   Outstanding at December 31, 2001      3,308,217           6.00
                                         =========      =========
   Granted                                      --             --
   Exercised                                    --             --
   Cancelled                                    --             --
                                         ---------      ---------
   Outstanding at December 31, 2002      3,308,217      $    6.00
                                         =========      =========


NOTE H - INCOME TAXES

The Company has adopted Financial Accounting Standard No. 109 which requires the
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statement or tax
returns. Under this method, deferred tax liabilities and assets are determined
based on the difference between financial statements and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.

For income tax reporting purposes, the Company's aggregate unused net operating
losses approximate $14,000,000 which expire through 2022, subject to limitations
of Section 382 of the Internal Revenue Code, as amended. The deferred tax asset
related to the carryforward is approximately $4,800,000. The Company has
provided a valuation reserve against the full amount of the net operating loss
benefit, because in the opinion of management based upon the earning history of
the Company, it is more likely than not that the benefits will not be realized.


Components of deferred tax assets as of December 31, 2002 are as follows:

              Non Current:
                 Net operating loss carryforward             $ 4,800,000
                 Valuation allowance                          (4,800,000)
                                                             -----------
                 Net deferred tax asset                      $        --
                                                             ===========



                                      F-19

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE I - LOSSES PER COMMON SHARE

The following table presents the computation of basic and diluted loss per
share:

<TABLE>
<CAPTION>
                                                            2002            2001
                                                            ----            ----
<S>                                                    <C>               <C>
        Net loss available for common shareholders     $ (18,709,642)    $(7,497,314)
                                                       =============     ===========
        Basic and fully diluted loss per share         $       (0.89)    $      (.38)
                                                       =============     ===========
        Weighted average common shares outstanding        21,024,312      19,898,321
                                                       =============     ===========
</TABLE>

NOTE J - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at December 31, 2002 are as follows:

        Accounts payable                                $    535,257
        Accrued expenses                                   1,021,488
        Provision for income taxes                                --
                                                        ------------
        Total                                           $  1,556,745
                                                        ============


NOTE K - CONTINGENCIES AND COMMITMENTS

Lease Commitments

Minimum rental commitments for office facilities under non-cancellable leases at
the end of 2002 are as follows:

                           2003                         $ 152,081
                           2004                            91,913
                           2005                            82,762
                           2006                            51,302




                                      F-20

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001

NOTE K - CONTINGENCIES AND COMMITMENTS (CONTINUED)

Rent expense included as a charge to operations amounted to $36,408 and
$171,943 for the years ended December 31, 2002 and 2001, respectively.

Litigation

In December 2001, a former Director of Minerva filed a complaint against Minerva
in Belgium. The complaint alleges a breach of employment contract and
reimbursement of certain expenses. In 2001, the Company recorded a pre-tax
charge of $77,000 to reserve for this claim and other related costs. The charge
is reflected in selling, general and administrative expenses in the 2001
consolidated statement of losses. At December 31, 2002, the remaining liability
for this obligation was $77,000 and was classified as an accrued expense in the
consolidated balance sheet.

In November 2001, Minerva filed a criminal complaint against the same former
director mentioned in the prior paragraph for use of forgery, attempt of fraud,
misuse of trust, and misuse of company's assets. The case is pending preliminary
investigation by the Court.

The Company is subject to other legal proceedings and claims, which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters should not have a material adverse effect on its financial position,
results of operations or liquidity.


NOTE L-RELATED PARTY TRANSACTIONS

During the year ended December 31, 2002 the Company's President advanced funds
to the Company for working capital purposes in the form of a non-interest
bearing unsecured promissory note payable on demand. The net amount of the
advances due the Company's President at December 31, 2002 is $200,000 and is
included in accrued expenses (see Note J).



                                      F-21

<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2002 AND 2001


NOTE M - GOING CONCERN MATTERS

As reflected in the accompanying consolidated financial statements, the Company
incurred net losses of $18,709,642 and $7,497,314 for the year ended December
31, 2002 and 2001, respectively, and has an accumulated deficit of $34,634,693
as of December 31, 2002. The Company has discontinued substantially all
operations and incurred negative cash flow from operating activities since
inception. These factors among others may indicate that the Company will be
unable to continue as a going concern for a reasonable period of time.

The Company's existence dependent upon management's ability to develop
profitable operations and resolve it's liquidity problems. While the Company is
currently inactive with no significant operations, management is seeking to
exploit its plastic polymer proprietary technology. Management anticipates the
Company will improve its liquidity through the additional equity investment in
the Company. The accompanying financial statements do not include any
adjustments that might result should the Company be unable to continue as a
going concern.

In order to improve the Company's liquidity, the Company is actively pursing
additional equity financing through discussions with investment bankers and
private investors. There can be no assurance the Company will be successful in
its effort to secure additional equity financing.

If operations and cash flow improve through these efforts, management believes
that the Company can continue to operate. However, no assurance can be given
that management's actions will result in profitable operations or the resolution
of its liquidity problems.


                                      F-22