<PAGE>

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             ----------------------

                                   FORM 10-KSB/A

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

                      For the year ended December 31, 2001

             [ ] 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.)

             400 West Broadway, 6th Floor; New York, New York 10012
         ---------------------------------------------------- ----------
               Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (212) 937-5054

      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. [X] Yes [ ] No

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 for its most recent fiscal year were
$2,461,000.


The aggregate value of the common stock of the Company held by non-affiliates is
$16,305,952 based on the price at which the freely tradable common stock was
sold on April 15, 2002.


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



<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

         Founded in 1999, New Generation Holdings, Inc. ("We," "Us," "NGH" or
the "Company") is a United States corporation with shares publicly traded on the
Nasdaq OTC:BB under the symbol "NGPX." Our business is to build shareholder
value through the acquisition and development of businesses or technologies that
we believe have the "potential" to provide exceptional financial returns for our
shareholders with proper guidance and planning. Presently, we have two (2)
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. NGH operates internationally through offices in New York and
Geneva with an experienced and effective team of professionals focused on
identifying and acquiring under valued assets.

NEW GENERATION PARTNERS, INC.

         New Generation Partners, Inc. ("NGPartners") is a wholly owned
subsidiary of NGH. Its mission is to identify technology investment
opportunities presenting a potential of exceptional growth. Currently,
NGPartners' "primary mission" is to expand and develop the core software
development business we acquired from Minerva Softcare NV ("Minerva") in 2001.
We have a very well regarded offering of JAVA and XML based development tools
and data warehousing software solutions targeted at the IT departments of large
businesses (i.e., Banks, Insurance Companies, Financial Services Firms,
Airlines, etc.). These target customers have large IT departments that must
manage, expand and adapt their systems to meet the changing demands of their
organization's business goals. Minerva successfully established a customer base
in the Benelux region of Europe (Belgium, The Netherlands and Luxembourg), the
United Kingdom, France and Germany serving such clients as Dexia Bank, KLM,
Deutsche Bahn, London Electricity Plc, among others. Our goal is to broaden our
geographical footprint. During 2001, we made our first sales of our new Minerva
Change(TM) software configuration management (SCM) product in Scandinavia
(Denmark, Finland, Norway and Sweden) and have retained InCase Consulting ApS as
our value added reseller for that region.

                                     - 2 -


<PAGE>

         As evidenced by the execution of the Value Added Reseller Agreement
with InCase Consulting ApS for the Scandinavian territory, we are actively
seeking additional reseller agreements to broaden our sales and distribution
channels. We have a highly marketable line of Software Configuration Management
(SCM), Modeling and Data Warehousing software products ready to sell. We are
actively accumulating the contacts and sales expertise to increase our customer
base.

         To further leverage our growth, we are also seeking to acquire
complimentary software businesses or products. Our view is that many more
"Minerva-type" acquisition opportunities exist, especially in Europe, where
access to capital and/or the capital markets is limited. We believe we can offer
the owners of these small software businesses the opportunity to get to the next
level of development and growth.

         In addition, we are actively pursuing discussions with mega vendors
such as IBM, HP and Sun Microsystems in order to further add to our sales
channels.

MINERVA SOFTCARE BUSINESS

         Minerva is active in the domains of data transformation (ETL), software
configuration management tools and data modeling. Minerva was founded in Belgium
in 1993, but its origins go back to 1989. The company started off as a software
distribution company. In recent years, however, the company has embarked upon
the development of its own successful software products: Minerva Metasuite(TM)
(re. ETL and data transformation), Minerva Change(TM) (re. life cycle
application management), and Minerva DBA(TM) (re. data modeling).

         We use an in-house proprietary platform, Minerva Frame, to develop our
software. Minerva Frame provides for a Java and XML based computer environment
that is object-oriented, distributed, language-independent and hardware-neutral.
The platform was created to respond to the need for interoperability among the
rapidly proliferating number of hardware and software products available today.

         One of the successful new product roll-outs in 2001 involved Minerva
Change(TM), a web based life cycle management tool that manages and controls
software and development projects. Its unique object-based architecture exploits
the power of the latest internet technology. Specifically, it has proven to be a
very effective tool in conjunction with the deployment of IBM's WebSphere(R)
application server.

         Minerva currently operates in seven countries in Europe and its client
base encompasses big banks, insurance and industrial companies. Its clients
attest to Minerva's high quality products and excellent customer care. We have
built a solid reputation and are known for our in-depth knowledge of mainframe
and legacy computer systems and its high-end, innovative solutions.

                                     - 3 -


<PAGE>

      We currently market our proprietary software products in the following
areas:

         a.   MINERVA METASUITE(TM) -THE EXPERT WAY TO RETRIEVE AND CAPITALIZE
              ON BUSINESS-CRITICAL DATA. Minerva Metasuite is data integration
              software that enables the user to rapidly move large volumes of
              data from any data source and so capitalize on enterprise data in
              its e-business, customer relationship management and other
              business-critical initiatives.

         b.   MINERVA CHANGE(TM) -THE EXPERTS CHOICE FOR APPLICATION LIFE CYCLE
              MANAGEMENT. Minerva Change manages and controls the user's
              development projects, increases the productivity and improves
              overall quality by means of a robust workflow. Its unique
              object-based architecture exploits the power of the latest
              Internet technology so that maximum throughput, scalability,
              performance and flexibility can be achieved within a heterogeneous
              world of computing resources. Minerva Change's efficacy was
              recently validated when IBM Belgium entered into a reseller's
              agreement for Minerva Change.

         c.   MINERVA DBA(TM) -THE EXPERTS TOOL TO SYNCHRONIZE BUSINESS AND
              TECHNOLOGY. Minerva DBA is an expert tool for data modeling and
              database design for business-critical data. It has Entity
              Relationship Diagramming functionality as well as capabilities for
              designing and managing databases. All DBA objects are supported.
              For the year 2002 we have planned two releases aimed at replacing
              products previously put on the market by other software companies.

         Through this combination of software products, Minerva offers
integrated back-office solutions for the development, implementation,
maintenance and support of corporate intellectual technology infrastructures,
with the provision of technical consulting support at all stages of the product
life cycle.

       Minerva has gained a highly sophisticated and reputable client list,
which includes well-known names such as Commerzbank, Skandia, DaimlerChrysler,
Deutsche Bahn Railways, DEXIA Bank, Interbrew, KLM Airlines, London Electricity
Plc, MAN AG, National Australia Bank and Nederlandse Postbank, to name a few.

MINERVA CUSTOMER SOFTCARE APPROACH -"IT EXPERT FOR IT EXPERTS"

         Minerva's excellent technical reputation, particularly its in-depth
knowledge of mainframe and legacy computer systems, combined with extensive R&D
and skills in new and emerging technologies, enable Minerva to deliver on time
and on budget with what we believe is an unmatched level of customer driven
service throughout the full life cycle of the product. The Minerva Customer
SoftCare Approach is driven by our research into Minerva's target market that
revealed:

         a.   Customers want to continue to leverage often very large historical
              capital expenditure in mainframes that have long life cycles;

         b.   Customers are not price sensitive but rather make buying decisions
              based on building trust and long-term relationships with a
              supplier who is able to provide a fully integrated product and
              service solution for the full length of a system's life;

         c.   Customers are loyal to suppliers who provide the best customer
              service and support for their large capital expenditure on
              infrastructure technology.

                                     - 4 -


<PAGE>

         We recognize that meeting customers' high expectations of customer
service are paramount in winning and retaining long-term clients. To do this we
must continue to build Minerva's reputation among business analysts and
consultants. Minerva recognizes the strategic importance of building strong
mutually beneficial relationships with business consultants given their
influential role in the sales process.

CHANGE MANAGEMENT AND DATA WAREHOUSING SOFTWARE MARKETS

         Change management software is generally referred to as Software
Configuration Management (SCM) tools. SCM tools not only control processes of
application development and deployment, but also have become increasingly more
sophisticated to incorporate process management and change request tracking.
Additionally, most SCM vendors are now positioning their products for
Web-content management to catch the e-business wave.

         SCM products are development tools used primarily by application
developers. The market can be subdivided as follows:

         a.   Technical or Information Systems - software development, quality
              assurance and version control.

         b.   Process-based SCM - extending beyond traditional SCM tools to
              provide organization and control of processes and procedures used
              in software development and deployment, as well software version
              control.

         The SCM market worldwide in 1999 grew 24.7%, increasing from $592
million to $738 million in worldwide revenue. The 32-bit Windows operating
environment accounted for most SCM revenue in 1999, with a 42.8% share; Unix
made up 26.7% and the mainframe environment accounted for 25.6%.

         We believe Data Warehouses will become the hub technology for vast
information distribution systems. The following are some forecast highlights:

         a.   15% of businesses will use data warehousing and analysis
              application service providers by 2005. (Source: Gartner Group,
              July 2000.)

         b.   $20 billion in worldwide revenues generated from Customer
              Relationship Management ("CRM") data warehousing software and
              services by 2004. (Source: Gartner Group, July 2000.)

         c.   85% increase in expenditures for business intelligence and data
              warehousing ("BI/DW") applications in Europe over the next three
              years. (Source: Survey.com, Aug 2000)

         d.   4-5x growth in BI/DW applications in Europe by 2002. (Source:
              Survey.com, Aug 2000)

COMPETITION

         OUR SCM COMPETITORS

         RATIONAL SOFTWARE

         Rational was the market leader in 2001 with $195 million worldwide
revenue. It is focusing on providing one-stop shopping for developers of
e-business applications. Their two flagship products are ClearCase and
ClearQuest. Rational has worked extensively in partnership with IBM and Rational
products are part of the SCM strategy for IBM customers.

                                     - 5 -


<PAGE>

         COMPUTER ASSOCIATES (CA)

         CA was the revenue leader in 2001 in the mainframe-centric segment of
the SCM market with its Endevor product. CA also acquired Platinum Technologies
with its CCC/Harvest products.

         MERANT

         Merant's PVCS product had $100 million in revenues in 2001 or 13.5%
market share.

         SERENA SOFTWARE

         Serena's SCM revenue was $68 million in 2001 or 9.2% market share.
Serena is the main competitor for CA in the mainframe arena, but is also
concentrating on the distributed software and client/server market.

         The clear trend from all the major vendors is their target on the
e-business market, as they are all shifting emphasis to developing tools for
this arena.

         OUR DATA WAREHOUSING COMPETITORS

         ETI (EVOLUTIONARY TECHNOLOGIES INTERNATIONAL)

         ETI is a major player in the mainframe ETL market, enjoying strategic
partnerships with IBM, NCR and SAP. Additionally, ETI is active in the mid-range
Unix arena and PC network systems. The flagship product is the ETL product,
ETI EXTRACT Toolkit.

         INFORMATICA

         Informatica is an ETL solutions provider that has its main market focus
in the mid-range Unix market. Informatica also provides e-business analytic
software that enables companies to interrogate the database, and hence is active
in both the front and back office.

         OUR MODELING COMPETITORS

         ERWIN: (Computer Associates)

         AllFusion Erwin Data Modeler is a data modeling solution for creating
and maintaining databases, data warehouses and enterprise data models.

         MEGA: (MEGA)

         MEGA Database is used to design, build and reverse engineer databases.
It uses class diagrams and relational diagrams. The MEGA repository provides
multi-user functionality for MEGA Database users. It also enables them to share
the same repository information.

SOURCES AND AVAILABILITY OF EQUIPMENT/RAW MATERIALS

         Minerva uses standard computer hardware and software as equipment. All
these systems are readily available and maintained with the necessary upgrades
when required.

                                     - 6 -


<PAGE>

RESEARCH AND DEVELOPMENT

         We believe that the best products come about from the needs of our
customers. We have therefore defined a unique process to gather information
about customer requirements in everything we do. We then take this input and use
it as a basis for creating new products and launching new versions of our
software. Whenever possible, we add unique requirements to the maintained
product. This means we build robustness and functionality into all our products.

         Our research and development activities are based on providing
functionality with new technology to ensure all our products will run on all
platforms. This new scalable development framework is defined on Java2
components exchanging XML messages over the HTTP Internet protocol. With this
technology, users will be able to use Minerva's applications at any place in the
world, at any time using any computing platform, making people even more
reactive to business changes. Minerva's applications have embedded change
management functions using the same technology to make sure that all business
changes are being securely stored and controlled.

EMPLOYEES

         Minerva currently has 42 employees. We intend to hire some experienced
senior level management/marketing personnel with experience in the SCM and data
warehousing software markets.

PATENTS AND TRADEMARKS

         Minerva has initiated applications worldwide for trademarks for each of
its "Minerva" products.

NEW GENERATION PLASTIC BUSINESS

         New Generation Plastic, Inc. ("NGP"), a Delaware Corporation, our
wholly owned subsidiary, is the owner of a unique 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"). 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.

         The core component of the NGP Process is an integrated ultra high
shearing ("UHS") chamber that creates in situ compatibilization of otherwise
non-compatible resins and deeply microhomogenizes different polymers into a
continuous amalgam. The chamber is a cylindrical structure within which a rotor
with impellers turns at very high speed (peripheral tip speed ranges between 40
and 65 m/sec during final processing). The speed and timing of the motor is
programmed according to the materials being processed and the nature of the
compounds to be created. The mixed plastic, as a result of the friction between
the plastic particles, rotor blades and chamber wall, are melted into a
homogeneous blend. A sharp increase of the torque indicates that the molten
mixture has reached the predetermined "gelification" level and is ready to be
discharged from the chamber.

         All processing steps are computer controlled by software that we have
customized for the NGP Process. Parameters for programming include temperature,
rotor speed, torque variation and time. Depending on the type of mixture
processed, the cycle time should last between 20 and 60 seconds and temperatures
of the expulsed hot compound melt range between 180(Degree)C and 280(Degree)C.

                                     - 7 -


<PAGE>

NGP PROCESS TECHNOLOGY - COMPUTER/TELECOMMUNICATIONS EQUIPMENT SCRAP RECYCLING
APPLICATION

         Over the last few years, NGP has tested hundreds of potential
commercial applications for the NGP Process, and we have determined that the
most advantageous application to launch our first commercial application is the
Computer/Telecommunications Equipment Scrap ("COMPUTER SCRAP") Recycling
Application.

         The NGP Process turns the Computer Scrap (made up of primarily ABS and
up to seven (7) other different polymers) into an economically viable new
plastic compound that serves as a substitute for virgin high grade ABS. ABS
users can purchase this NGP Compound at stable pricing (approximately sixty
percent (60%) of the cost of virgin ABS) with long-term contracts and improve
their bottom line substantially (please note that, typically, a plastic product
manufacturer's commodity cost accounts for about 80% of its overall production
costs).

         Our contacts in the plastic industry alerted us more than two (2) years
ago of the growing problem with the disposal of carcasses of obsolete computer
and telecommunications equipment. In fact, the disposal of this mixed waste is
becoming a topic of worldwide discussion. For example, Thomas Donlan of Barron's
recently published an editorial lamenting the growing problem of disposing of
computer scrap, which he described as a "bedrock of almost completely worthless
glass and plastic." California and Massachusetts no longer allow the disposal of
computers in their landfills and the same is true across Europe.

         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
are presently in discussions with several groups in Europe and North America
interested in venturing with us in a series of pilot NGP Process plants running
the CS application. For the long term we are formulating plans for a number of
wholly owned operating NGP Process facilities running the CS application as well
as other applications for which we have identified an economically sound end
market for the output.

PLANT OVERVIEW

         The single NGP Unit Computer Scrap plastic recycling application of the
NGP Process is a three-zone system that requires a 25,000 square foot facility
(A large part of the area is necessary to allow room for storing an adequate
supply of the CS feedstock). The activities within each zone are as follows:

Zone One - Cleaning and Size Reduction. Within the first zone, waste plastic
materials are shred, separated, washed, dried and ground to specification for
the process feedstock. Material is then conveyed to silos for composition
analysis and short-term storage. If necessary, the mixture can be supplemented
with mono-materials and/or additives for specific applications/technical
specifications.

Zone Two - NGP Process Unit. Within the second zone, material is transported
into the ultra high shearing ("UHS") processing chamber. The cycle time lasts
between 35 and 45 seconds. The peripheral tip speed of the UHS rotor blades
ranges between 40 to 65 m/sec and temperatures of the expulsed hot compound melt
ranges between 180(Degree)C and 280(Degree)C during final processing. It is
believed that within 20 - 60 seconds a phase change occurs, causing molecular
grafting or linking (re-arranging of the various polymers) of various polymer
chains, creating a homogeneous amalgam. The amalgam is then extracted by
centrifugal force from the inner chamber and is forced into the reception area
of a specially designed first phase extruder for temperature control and
extrusion. At the end of the first stage extruder is a special filtration unit
combined with an extrusion die designed to discharge the hot melt in a

                                     - 8 -


<PAGE>

spaghetti-like state into the degassing chamber. The filtered and degassed hot
melt is then introduced to the mouth of the second stage extruder for
pelletization or direct extrusion/compression of end products.

Zone Three - Packaging. Within the third zone, the pellets are conditioned and
transferred into 25 kg or larger containers to be shipped to production
equipment either on site or at an off-site manufacturing facility.

OTHER NGP(TM) COMPOUNDS

         As discussed above, NGP has been testing various other potentially
commercial applications for the NGP Process. We believe that the thermoplastic
end products created by the New Generation Plastic(TM) Process will have
physical and chemical properties that are comparable to certain virgin resins.
In our opinion, the poor physical and chemical properties of the current
recycled mixed plastic products have limited their commercial acceptance. NGP
believes that it can produce a series of NGP(TM) Compounds with specified
characteristics by controlling the mix of the recycled plastic feedstock without
the use of costly compatibilizers. In addition, the Company believes that the
NGP(TM) Compounds can be manufactured from mixed virgin resins, which is not now
typically done due to the costs of the current chemical processes and the
limited market due to the high end product costs.

MANUFACTURING

         The design for a full-scale industrial capacity NGP(TM) Unit rated at a
peak of 350 kg/h is complete and ready for fabrication. The Company has
identified a Swiss machine manufacturer that will build the first production run
of NGP Units. The remainder of the machinery and equipment (for shredding,
ferrous and non-ferrous metal separation, washing/paper separation, drying,
conveyance, storage, extrusion, filtration, pelletization, degassing and
packaging systems) that comprise the remainder of the three zones of a New
Generation Plastic(TM) Plant are available from a number of reliable suppliers.

THE PLASTIC RECYCLING AND PLASTIC MARKETS

         Recycling of consumer waste plastic in the United States is projected
to grow from 2.8 billion pounds in the Year 2002 (a $1.3 billion market) to 4.2
billion pounds in the Year 2005 (over a $2 billion market). There are over 1,500
companies participating in some form of plastic recycling, including haulers,
brokers, recycling facility operators who pre-treat and separate plastic wastes,
processors and end users (chemical companies and consumer product companies)
which utilize recycled plastics in a range of products. Given that the United
States accounts for approximately 35% of the world recycling market, it is
assumed that the worldwide plastic recycling market will have revenues in excess
of $6 billion in 2005. Industrial plastic waste volumes are not included in any
of the totals mentioned in this document. The market for virgin resins and
manufactured plastic products is a multi-trillion dollar industry that is
growing at a rate of approximately 4% per annum.

         PLASTIC COLLECTION AND PROCESSING. Plastic waste is collected curbside,
at "drop off" centers or within closed loop recycling systems. Hauling companies
transport the waste to waste management facilities where preliminary sorting and
bulking occurs. Current plastic recycling typically relies on costly mechanical
or manual separation of various types of plastic to facilitate the segregated
reprocessing of a single type of plastic. Contaminants such as aluminum,
closures, paper, adhesives and inks are often removed prior to processing.
Material is then washed, granulated and packaged for use at a manufacturing
facility. Plastic waste that has been properly sorted and processed typically
has higher value than commingled processed plastic. Regardless of the growth of
plastic recycling, the vast majority of material is still being incinerated or
land filled.

                                     - 9 -


<PAGE>

         RECYCLED PRODUCTS. The range of items created from recycled plastic
include consumer and industrial packaging such as bottles, pails, pallets,
protective foam packaging, strapping and film; construction products such as
plastic lumber, outdoor furniture, children's jungle gyms and drain pipes; and
other consumer applications such as carpets, apparel and home furnishings. The
majority of processed recycled plastic products do not compare to the physical
and chemical characteristics of virgin resins. Products utilizing recycled
plastic typically need the addition of virgin resins or other additives to
attain satisfactory levels of quality and consistency.

COMPETITION

         We believe that current plastic or rubber processing equipment
manufacturers COULD compete with us through the use of new or existing
technology. There are more established and better funded waste processing
equipment companies that currently manufacture waste processing equipment that
may compete with equipment utilizing our technology. Presently, we know of no
other technology that can effectively process mixed plastic waste without
compatibilizers. In addition, we anticipate that one or more of those potential
competitors will be the exclusive or nonexclusive manufacturers for our NGP
Units.

         While there are numerous companies involved in plastic recycling, most
of these firms are focused on collection, separation and mono-stream processing
rather than mixed plastic processing or technology development in that area.

PATENTS AND TRADEMARKS

         The NGP Process is currently protected by three related U.S. Patents,
Number 5,891,955 issued on April 6, 1999, Number 5,945,479 issued on August 31,
1999 and Number 6,107,400 issued on August 22, 2000, entitled Process for
Transforming a Starting Material Containing At Least Two Different Thermoplastic
Materials Into A New Homogenous Thermoplastic Material. These patents have been
filed or are pending in 62 jurisdictions worldwide. The European Patent No.
92907183.5-2307 issued on September 16, 1998 was opposed by Solvay, SA. In a
hearing on February 8, 2001, the European Patent Office upheld the European
Patent limiting it to recycling applications. We intend to appeal this decision.
We, however, still have separate patents issued in each of the individual
European countries that do not have the recycling applications limitation.

         NGP has the following three (3) trademarks registered and/or pending
with the United States Patent and Trademark Office:

                  a.       Mark: New Generation Plastic
                           App. No.: 75/628132
                           App. Date: January 27, 1999
                           Status: Granted

                  b.       Mark: NewGen Plastic
                           App. No.: 75/628971
                           App. Date: January 27, 1999
                           Status: Granted

                  c.       Mark: NGP
                           App. No.: 75/627,960
                           App. Date: January 27, 1999
                           Status: Pending

         Each trademark covers the following goods and services: (a) Machinery
for the Production of Plastic Material, (b) Computer Software Used for the
Production of Plastic Material, (c) Plastic Material Used for Manufacturing and
(d) Manufacture of Plastic Products for Others, Recycling of Mixed Waste Plastic
Products for Others.

                                     - 10 -


<PAGE>

RESEARCH AND DEVELOPMENT

         NGP has been engaged in internal and external research and development
efforts aimed at bringing our technology to a commercially viable stage. A
research agreement was entered into with an independent polymer research and
testing organization called Pole European de Plasturgie ("PEP") located in
Oyonnax, France to further analyze our technology and the NGP Compounds it
produces. In addition, some of the materials produced by our bench type
prototype were tested by Polymer Diagnostics, Inc. ("PDI"), an independent
testing group based in Lake Avon, Ohio. PEP and PDI were commissioned to
accelerate the development and commercialization of our technology. Their
objectives were to: 1) show the improved technology performance relative to
conventional blending equipment, 2) show the commercial potential by processing
several readily available mixed plastic waste streams and some innovative blends
from virgin materials, and 3) gain process understanding to predict material
properties and develop quality control software in commercial machines.

         The research agreement with PEP was terminated and further testing at
PDI was suspended. NGP has continued its internal development efforts focused on
the "commercial" applications, the first of which is being Computer Scrap.

NUMBER OF EMPLOYEES

         We have no employees as of the date hereof directly engaged in the
plastic business, however, we do use the services of independent consultants. We
expect that, as joint ventures are established to exploit the NGP technology, we
may hire employees to meet the requirements of such business plans.

DISCONTINUED BUSINESS

         We originally formed New Generation Partners, Inc., one of our
wholly-owned Delaware Subsidiaries in February of 2000 for the purpose of
establishing an Internet Development & Acceleration (D&A) Network throughout
Europe. The focus of the D&A network was broadened to include interest in
technology, Internet, mobile and entertainment ("TIME") sectors. During the
course of 2000, we invested a total of $976,629 in five (5) ventures within
these sectors.

         In view of various factors, including the current market conditions for
TIME ventures and our recent acquisition of Minerva, we have discontinued our
activities in the D&A business.

DEPENDENCE ON KEY CUSTOMERS

         The Company is currently not dependent on any single customer for a
significant portion of its annual sales.

MAJOR SUPPLIERS

         The Company is currently not dependent on any major suppliers. The
Company does rely on its investor and lender relationships as a source of
capital for its operations.

REGULATION

         The Company intends to fully comply with all laws and regulations that
could impact the success of the Company.

                                     - 11 -


<PAGE>

COST OF COMPLIANCE WITH ENVIRONMENTAL REGULATIONS

         The Company currently has no costs associated with compliance with
environmental regulations. However, there can be no assurances that the Company
will not incur such costs in the future.

ITEM 2. DESCRIPTION OF PROPERTIES.

LOCATION AND DESCRIPTION OF PROPERTIES

         We have a three (3) year lease for office space at Rue des Pierres-du
Niton 17, Geneva, Switzerland. Currently, the rental is at a monthly rate of
$3,206. In early 2001, we discontinued the tenancy in London after incurring
$4,700 in rental expense and we do not expect to need any further office space
in London in the near term. In New York, we utilize space for NGH, NGPartners,
NGP and Minerva at 400 West Broadway provided by MBM Realty LLC, an entity
controlled by Thomas Marshall, a Director and EVP/General Counsel. To date, we
are responsible for a proportional share of certain expenses relating to the
operation of the office and beginning on May 1, 2002, we have also agreed to pay
$7,500 per month in rent. With the expansion of the US business operations of
both Minerva and NGP we are now negotiating for an additional floor
(approximately 1,500 square feet) in the same building. We expect that the rent
on the additional space will be at least $5,000 per month. In Belgium, Minerva
has leases on office space in Elewjit and Hasselt. The aggregate monthly rentals
are approximately $5,300 and $1,000, respectively. In The Netherlands, Minerva
rents office space for approximately $4,000 per month in Delft. Lastly, Minerva
pays approximately $3,000 for an office in Paris, France. The landlord for the
Elewjit, Belgium office is Tequila NV, an entity owned and controlled by Rene De
Vleeschauwer and Robert Jordaens (the former owners of Minerva and more than 5%
shareholders in NGH).

         The foregoing arrangements are sufficient to conduct the day to day
operations of our businesses.

ITEM 3. LEGAL PROCEEDINGS.

         Except as set forth below, we are not a party to any pending legal
proceedings and, to the best of our knowledge, no such action by or against us
has been threatened. None of our officers, directors, or beneficial owners of 5%
or more of our outstanding securities is a party to proceedings adverse to the
us nor do any of the foregoing individuals have a material interest adverse to
us.

         In November 2001, Minerva filed a criminal complaint against Mr.
Jordaens for use of forgery, attempt of fraud, misuse of trust, and misuse of
company's assets. The criminal case is pending preliminary investigation by the
Court. The civil action has been stayed until the criminal complaint has been
determined. In December 2001, Robert Jordaens, a former Director of Minerva,
filed a complaint against Minerva in Belgium.

         In May 2001, Minerva filed a claim against QID N.V., a former equity
investment company, in Belgium. The complaint seeks a rescission of the
acquisition agreement and collection of a $110,000 loan advanced by Case
Associates. In 2001, the Court has issued an order granting seizure of QID's
assets.

                                     - 12 -


<PAGE>

         In March 2000, Minerva filed a complaint against Computer Associates in
Belgium, The Netherlands, and France. Minerva is claiming damages for a breach
of contract and illegal use of software.

         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.

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

         No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of fiscal 2001.

                                     - 13 -


<PAGE>

PART II

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

MARKET INFORMATION

         Our common stock is traded on the OTC Bulletin Board under the symbol
"NGPX". 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 June 11, 1999 through December 31, 2001. These quotations
reflect inter-dealer prices, without retail mark-up, markdown or commission, and
may not necessarily represent actual transactions.

           -------------------------------------- ---------- ------------
                                                    High         Low
           -------------------------------------- ---------- ------------
           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
           -------------------------------------- ---------- ------------
           4th Quarter 2000, ended 12/31/00         $5.25        $2.875
           -------------------------------------- ---------- ------------
           3rd Quarter 2000, ended 9/30/00          $7.5         $5.125
           -------------------------------------- ---------- ------------
           2nd Quarter 2000, ended 6/30/00          $8.375       $6.50
           -------------------------------------- ---------- ------------
           1st Quarter 2000, ended 3/31/00          $8.375       $6.00
           -------------------------------------- ---------- ------------
           4th Quarter 1999, ended 12/31/99         $8.50        $6.25
           -------------------------------------- ---------- ------------
           3rd Quarter 1999, ended 9/30/99          $8.25        $4.125
           -------------------------------------- ---------- ------------
           6/10/99 to 6/30/99                       $8.25        $3.00
           -------------------------------------- ---------- ------------

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 133 stockholders of record of the Company's common stock
as of December 31, 2001.

RECENT SALES OF UNREGISTERED SECURITIES

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

                                     - 14 -


<PAGE>

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.       Century America Promotions, Inc.: 21,000 shares of Restricted Stock on
         April 16, 2002 in consideration of investor relations and promotional
         services.

d.       Westman Ball Ederer Miller and Sharpstein LLP: 90,436 shares in
         February 2002 in consideration of legal services provided between March
         2001 and January 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
         121,111 warrants to purchase common stock at exercise prices ranging
         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):
---------------------------------------------------------------------

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.

                                     - 15 -


<PAGE>

ITEM 6.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

         The following discussion contains forward-looking statements that are
subject to significant risks and uncertainties about us, our current and planned
products, our current and proposed marketing and sales, and our projected
results of operations. There are several important factors that could cause
actual results to differ materially from historical results and percentages and
results anticipated by the forward-looking statements. The Company has sought to
identify the most significant risks to its business, but cannot predict whether
or to what extent any of such risks may be realized nor can there be any
assurance that the Company has identified all possible risks that might arise.
Investors should carefully consider all of such risks before making an
investment decision with respect to the Company's stock. In particular,
investors should refer to the section entitled, "Risk Factors that May Affect
Future Results and Market Price of Stock".

The following discussion and analysis should be read in conjunction with the
financial statements of the Company and notes thereto. This discussion should
not be construed to imply that the results discussed herein will necessarily
continue into the future, or that any conclusion reached herein will necessarily
be indicative of actual operating results in the future. Such discussion
represents only the best present assessment from our Management.

OVERVIEW

         The Company has transitioned from a development stage enterprise to
that of an active growth and acquisition stage Company. We began generating
revenue in the first quarter of 2001 following our acquisition of Minerva
Softcare N.V. and are directing much of our efforts to the development and
expansion of Minerva's operations. Our businesses are carried out in two of our
subsidiaries formed for those purposes. We are presently a holding company with
no operations aside from the ownership of the subsidiary corporations' stock.

YEAR ENDED DECEMBER 31, 2001

Revenues

         The Company's revenues increased to $2,461,000 during the year ended
December 31, 2001 as compared to no revenues during the same period in 2000. The
Company's Minerva software segment, 25% of which was acquired in December, 2000,
and the remaining 75% of which was acquired in February, 2001, generated
$2,461,000 in revenues from licensing the Company's software products and
related service activities during the year ended December 31, 2001.

Costs and Expenses

         The Company's costs and expenses increased from $4,709,531 during the
year ended December 31, 2000 to $10,159,948 during the year ended December 31,
2001.

         General and administrative expenses increased $2,455,396 or 66% to
$6,182,942 during the same period. In addition to incurring costs associated
with implementing the Company's business plan (e.g. travel, professional fees,
and consulting fees) during the year ended December 31, 2001, the Company issued
common stock to consultants in lieu of compensation. The Company also incurred
the costs associated with the operation of its subsidiary Minerva Softcare N.V.
The Company incurred amortization expense of $3,527,197 during the year ended
December 31, 2001 as a result of the Company's acquisition of Minerva Softcare
N.V. and recognition of related goodwill.

                                     - 16 -


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2001, the Company had a deficit in working capital
of $1,577,629 compared to available working capital of $256,305 at December 31,
2000, a decrease in working capital of $1,833,933. The decrease in working
capital was substantially due to the company's operating losses and increases in
accounts payable and accrued expenses.

         As a result of the Company's net loss of $7,497,314 during the year
ended December 31, 2001, the Company generated a cash flow deficit of $1,653,983
from operating activities, adjusted principally for depreciation and
amortization of $3,527,197, and equity based compensation of $394,221. The
Company met its cash requirements during the year ended December 31, 2001
through the receipt of $1,473,778 of cash acquired in connection with its
acquisition of 75% of Minerva Softcare N.V. as well as $495,500 received in
exchange for the sales of the Company's common stock in a private placement to
sophisticated investors

         While the Company has raised capital to meet its working capital
requirements in the past, additional financing is required, in order to meet
current and projected cash flow deficits. The Company is seeking financing in
the form of equity and debt. There are no assurances the Company will be
successful in raising the funds required.

         In prior periods, the Company has borrowed funds from significant
shareholders of the Company to satisfy certain obligations. There are no
assurances that the Company will be able to borrow funds from significant
shareholders of the Company in the future.

         As the Company continues to expand, the Company will incur additional
costs for personnel. In order for the Company to attract and retain quality
personnel, management anticipates it will continue to offer competitive
salaries, issue common stock to consultants and employees, and grant Company
stock options to current and future employees.

         The effect of inflation on the Company's revenue and operating results
was not significant. The Company's operations are located primarily in Europe
and there are no seasonal aspects that would have a material effect on the
Company's financial condition or results of operations.

         The Company's independent certified public accountants stated in their
report included in the Company's December 31, 2001 Form 10-KSB, that the Company
has incurred operating losses in the last two years, and that the Company is
dependent upon management's ability to develop profitable operations. These
factors among others may raise substantial doubt about the Company's ability to
continue as a going concern.

RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

         In March 2000, the Financial Accounting Standards Board issued
interpretation No. 44 (FIN 44), "Accounting for Certain Transactions Involving
Stock Compensation, and Interpretation of APB Opinion No. 25". FIN 44 clarifies
the application of APB No. 25 for (a) the definition of employee for purposes of
applying APB 25, (b) the criteria for determining whether a plan qualifies as a
non-compensatory plan, (c) the accounting consequences of various modifications
to previously fixed stock options or awards, and (d) the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 2, 2000 but certain conclusions cover specific events that occur

                                     - 17 -


<PAGE>

after December 15, 1998 or January 12, 2000. The adoption of FIN 44 did not have
an affect on the Company's financial statements but may impact the accounting
for grants or awards in a future period.

         In July 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. ("FAS") 141, "Business Combinations" ("FAS
141") and FAS 142, "Goodwill and Other Intangible Assets" ("FAS 142"). FAS 141
addresses the initial recognition and measurement of goodwill and other
intangible assets acquired in a business combination. FAS 142 addresses the
initial recognition and measurement of intangible assets acquired outside of a
business combination, whether acquired individually or with a group of other
assets, and the accounting and reporting for goodwill and other intangibles
subsequent to their acquisition. These standards require all future business
combinations to be accounted for using the purchase method of accounting.
Goodwill will no longer be amortized but instead will be subject to impairment
tests at least annually. The Company is required to adopt FAS 141 and FAS 142 on
a prospective basis as of January 1, 2002; however, certain provisions of these
new standards may also apply to any acquisitions concluded subsequent to June
30, 2001. As a result of implementing these new standards, the Company will
discontinue the amortization of goodwill as of December 31, 2001. The
amortization of goodwill increased our net loss by $3,283,097 - during the year
ended December 31, 2001. We have not quantified the impact of adopting other
provisions of these standards. If amortization of goodwill was not applied
during the year ended December 31, 2001 and 2000, loss from continuing
operations before income tax would have been $4,184,813 and $4,874,118
respectively.

         In October 2001, the Financial Accounting Standards Board issued FAS
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (FAS 144).
FAS 144 addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. This statement supersedes FAS 121, "Accounting
for the Impairment of Long Lived Assets for Long-Lived Assets to be Disposed of"
(FAS 121) and related literature, establishes a single accounting model, based
on the framework established in FAS 121, for long-lived assets to be disposed of
by sale. The Company is required to adopt FAS 144 no later than January 1, 2002.
The Company does not believe that the adoption of FAS 144 will have a material
impact on its consolidated financial statements.

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.

LIMITED OPERATING HISTORY ANTICIPATED LOSSES; UNCERTAINTY OF FUTURE RESULTS
---------------------------------------------------------------------------

         Our prospects must be evaluated with a view to the risks encountered by
a company in an early stage of development, particularly in light of the
uncertainties relating to the new and evolving distribution methods with which
we intend to operate and the acceptance of our business model. We will be
incurring costs to: (i) acquire and market our software products; (ii) to

                                     - 18 -


<PAGE>

establish marketing relationships; and (iii) to build an organization. To the
extent that such expenses are not subsequently followed by commensurate
revenues, our business, results of operations and financial condition will be
materially adversely affected. We, therefore, cannot insure that we will be able
to immediately generate sufficient revenues. We expect negative cash flow from
operations to continue for the next 12 months as we continue to develop and
market our business. If cash generated by operations is insufficient to satisfy
our liquidity, we may be required to sell additional equity or debt securities.
The sale of additional equity or convertible debt securities would result in
additional dilution to our stockholders. Our initial operations may not be
profitable, since time will be required to build our business to the point that
our revenues will be sufficient to cover our total operating costs and expenses.
Our reaching a sufficient level of sales revenues will depend upon a large
number of factors, including availability of sufficient working capital,
customer acceptance of our software products, and customer perception of value.

LIQUIDITY AND WORKING CAPITAL RISKS; NEED FOR ADDITIONAL CAPITAL TO FINANCE
---------------------------------------------------------------------------
GROWTH AND CAPITAL REQUIREMENTS
-------------------------------

         We have had limited working capital and we are relying upon funding
from principal shareholders to operate. We may seek to raise capital from public
or private equity or debt sources to: (i) provide working capital to meet our
general and administrative costs until net revenues make the business
self-sustaining; (ii) make acquisitions of additional related businesses ; and
(iii) exploit and expand such acquisitions. We cannot guarantee that we will be
able to raise any such capital on terms acceptable to us or at all. Such
financing may be upon terms that are dilutive or potentially dilutive to our
stockholders. If alternative sources of financing are required, but are
insufficient or unavailable, we will be required to modify our growth and
operating plans in accordance with the extent of available funding.

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 acceptance by the market of our software products and
related applications; seasonal trends in customer procurement cycles ; price
competition or pricing changes in the industry; technical difficulties ; general
economic conditions, and economic conditions specific to the software 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 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.

ACHIEVING MARKET ACCEPTANCE
---------------------------

         The software development business is highly competitive. We have
selected a particular market niche for our Minerva suite of products. Achieving
market acceptance for our software products has required and will continue to
require substantial marketing efforts and expenditure of significant funds to
create awareness and demand by potential customers. There is no guarantee that
we will have available funds or other resources necessary to achieve such
acceptance.

                                     - 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,
2000 and for the period from April 15, 1999 (Inception) to December 31, 1999 are
set forth at the pages indicated at Item 13(a).

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINACIAL 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 has engaged Stefanou & Company 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.

                                     - 20 -


<PAGE>

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:

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

         Jacques Mot         45      Chairman of the Board of Directors

         Thomas Marshall     44      Executive Vice President, Secretary and
                                     General Counsel and Director

         Jeffrey Mc Arthur   39      Chief Financial Officer

         Sylvie Challande    32      Director

         Marcel Rokegem      52      Director

         Jacques Mot has served as the Chairman of the Board since April of 1999
and he served as President and Chief Executive Officer from April 1999 to
January 24, 2000. Mr. Mot is a founder of Bachkine & Meyer Industries, S.A.
("BMI"). Prior to the start up of BMI, Mr. Mot was an independent consultant to
Unilabs Group (listed on the Nasdaq and Swiss Stock Exchanges). Mr. Mot's
activities have primarily been securities related matters and investor
relations.

         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 has served as General Counsel, Executive Vice President
and Secretary since August of 1999. He has also been a member of our Board of
Directors since April of 1999. Prior to joining us, Mr. Marshall was counsel to
the New York office of the law firm of Schnader Harrison Segal & Lewis LLP (from
1996 to 1999) where he concentrated in Taxation and Corporate and Securities
law. From 1993 to 1996, he was associated with the law firm of Keck, Mahin &
Cate where he performed similar duties.

         Mr. Marshall holds a BS in Business Administration from the University
of Rhode Island, a JD from St. John's University School of Law and he was
awarded an LLM in Taxation from the New York University School of Law.

                                     - 21 -


<PAGE>

         Jeffrey McArthur has served as Chief Financial Officer since August,
2001. He is a Chartered Certified Accountant, and has previously held positions
at KPMG and Autodesk Development BV. Mr. McArthur, a British national, received
a degree in Government from the University of Essex.

         Sylvie Challande has served as a Director since May, 2000. Ms.
Challande is an attorney-at-law with the prestigious Geneva firm Budin &
Partners. Prior to being with Budin, she was with the law firm Poncet Warluzel &
Partners. Ms. Challande has a range of International experience specializing in
international corporate transactions. She graduated from the law school at the
University of Geneva in 1991, spent a year in the postgraduate program at the
University of Geneva and passed her Geneva Bar exam in 1993.

         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. Prior to that, Mr. Rokegem
served as the Partner in Charge of International Equity trading for BIARD,
Hombergen, Pringiers & Co. Mr. Rokegem began his career in 1970 with
Kredietbank, NV of Brussels where he was responsible for domestic and
international equity trading and Eurobond sales until 1980.

         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.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         The information required relating to compliance with Section 16(a) of
the Securities Act will be incorporated by reference to the Company's definitive
proxy statement or an amendment to this Form 10-KSB to be filed on or about June
30, 2002.

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, 2001.

                                     - 22 -


<PAGE>

<TABLE>
                           SUMMARY COMPENSATION TABLE

<CAPTION>
                                       Annual Compensation                                 Long-Term Compensation
                              ----------------------------------- -----------------------------------------------
                                                                            Awards                  Payouts
                                                                  -------------------------- --------------------
                                                                                  Securities
                                                        Other      Restricted    Underlying
                                                       Annual        Stock        Options/    LTIP    All Other
                                Salary       Bonus  Compensation    Award(s)        SARs     Payouts Compensation
Name and Principal      Year      ($)         ($)        ($)          ($)           (#)        ($)       ($)
Position                (b)       (c)         (d)        (e)          (f)           (g)        (h)       (i)
---------------------- ------ ------------ --------- ------------ -------------- ----------- ------- ------------
<S>                    <C>    <C>          <C>       <C>          <C>            <C>         <C>     <C>
Paul Hokfelt           2001   $169,045               $15,416
CEO and
President
---------------------- ------ ------------ --------- ------------ -------------- ----------- ------- ------------
Jacques Mot            2001   $324,000
Chairman
---------------------- ------ ------------ --------- ------------ -------------- ----------- ------- ------------
</TABLE>

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 then existing stock incentive plan.

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

The following table sets forth, certain information, as of April 16, 2002,
regarding beneficial ownership of our common stock by


                                     - 23 -


<PAGE>

         -   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%
Sylvie Challande                         0                   0.00%
Marcel Rokegem                      50,000                   0.24%
Paul Hokfelt(7)                    100,000                   0.48%

All executive officers and
directors as a group             2,640,000                  12.54%

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

         (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.
         (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.
         (7)  Mr. Hokfelt effective February 4, 2002 resigned as President/CEO
              and Director.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         We recently entered into a one (1) year rental agreement with MBM
Realty LLC for our office space in New York. The agreement calls for a monthly
rent of $6,000, in addition we reimburse 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 is one of our
officers and who is also a Director.

                                     - 24 -


<PAGE>

         The landlord for the Elewjit, Belgium office is Tequila NV an entity
owned and controlled by Rene De Vleeschauwer and Robert Jordaens (the former
owners of Minerva and more than 5% shareholders).

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
         ^        (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.

                                     - 25 -


<PAGE>

         *        (xvii)  Consulting Agreement by and between New Generation
                           Holdings,  Inc. and Net-Invest dated as of February
                           1, 2002.
         *(21)            Subsidiaries of the Registrant

-----------------------------
*        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
2001.

                                     - 26 -


<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 April 16, 2002 by the following persons in the capacities indicated:

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

                                        /s/ Jeffrey McArthur
                                        -----------------------------
                                        Jeffrey McArthur
                                        Chief Financial Officer
                                        (Principal Financial and Accounting
                                        Officer)

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

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

                                        /s/ Sylvie Challande
                                        ----------------------------------
                                        Sylvie Challande
                                        Director



<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                           DECEMBER 31, 2001 AND 2000

                         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 Independent Certified Public Accountants                      F-3

Consolidated Balance Sheet at December 31, 2001                         F-4

Consolidated  Statements  of Losses  and  Comprehensive
 Losses for the two years ended December 31, 2001 and 2000              F-5

Consolidated Statements of Stockholders' Equity for
  the two years ended December 31, 2001 and 2000                        F-6

Consolidated Statements of Cash Flows for the two
  years ended December 31, 2001 and 2000                                F-7

Notes to Consolidated Financial Statements                           F-8 - F-28



<PAGE>

                             STEFANOU & COMPANY, LLP
                          CERTIFIED PUBLIC ACCOUNTANTS

                                1360 Beverly Road
                                    Suite 305
                              McLean, VA 22101-3621
                                  703-448-9200
                               703-448-3515 (fax)

                                                               PHILADELPHIA, PA
--------------------------------------------------------------------------------

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------

The Board of Directors
New Generation Holdings, Inc.:

We have audited the accompanying consolidated balance sheet of New Generation
Holdings, Inc. and subsidiaries (together, the "Company") as of December 31,
2001, and the related consolidated statements of loss, comprehensive loss
stockholders' equity and cash flows for the year ended December 31, 2001. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit. The financial statements of the Company
as of December 31, 2000 were audited by other auditors whose report, dated April
19, 2001 on those statements included an explanatory paragraph that described
the uncertainty regarding the Company's ability to continue as a going concern.

We conducted our audit in accordance with generally accepted auditing standards
in the 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 audit provides a
reasonable basis for our opinion.

In our opinion, the 2001 financial statements referred to above present fairly,
in all material respects, the consolidated financial position of New Generation
Holdings, Inc. as of December 31, 2001, and the results of its operations and
its cash flows for the year then ended 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 R 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 R. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

                                                /s/ STEFANOU & COMPANY, LLP
                                                    ----------------------------
                                                    Stefanou & Company, LLP
                                                    Certified Public Accountants
McLean, Virginia
March 14, 2002
                                       F-3



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001

                                 ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                      $    788,099
    Accounts receivable, net of allowance for
     doubtful accounts of $82,353                                     1,002,957
    Prepaid expenses and other current assets                         1,464,357
                                                                   -------------
       Total current assets                                           3,255,413

Property, plant and equipment, net (Note B)                             277,755
Intangibles, net of accumulated amortization
 of $3,563,206 (Note C)                                              14,837,887
Other non-current assets                                                 13,715
                                                                   -------------
       Total non-current assets                                      15,129,357
                                                                   -------------
                                                                   $ 18,384,770
                                                                   =============

                  LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable and accrued liabilities (Note M)              $  4,393,864
    Short-term debt (Note I)                                            439,178
                                                                   -------------
       Total current liabilities                                      4,833,042
Commitments and contingencies (Note N)                                        -
Minority interest
                                                                         39,419

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,
    20,887,110 shares issued and outstanding
     at December 31, 2001                                                20,887
    Additional paid-in capital                                       29,438,128
    Accumulated deficit                                             (15,925,051)
    Accumulated other comprehensive income (losses)                     (21,655)
                                                                   -------------
       Total stockholders' equity                                    13,512,309
                                                                   -------------
                                                                   $ 18,384,770
                                                                   =============

           See accompanying notes to consolidated financial statements
                                       F-4



<PAGE>

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

                                                      Year Ended    Year Ended
                                                     December 31,   December 31,
                                                        2001           2000
                                                    -------------  -------------

REVENUES:
    Consultancy                                     $    881,470      $       -
    License Fees                                         691,981              -
    Maintenance                                          887,412              -
    Other                                                    137              -
                                                    -------------  -------------
    Total Revenues                                     2,461,000              -

OPERATING EXPENSES:
   General and administrative                          6,182,942      3,727,546
   Depreciation and amortization                       3,527,197        123,643
   Product development                                         -        252,342
   Impairment loss                                       449,809        606,000
                                                    -------------  -------------
   Total Operating Expenses                          (10,159,948)    (4,709,531)

LOSS FROM OPERATIONS                                  (7,698,948)    (4,709,531)

   Interest income, net                                   20,645         85,990
   Other (expense), net                                  (70,418)             -

                                                    -------------  -------------
Total Other (Expense) Income                             (49,773)        85,990

Equity in earnings (losses) in affiliates                239,628       (250,577)

Minority interest                                         41,183              -
                                                    -------------  -------------

Net loss before income taxes                          (7,467,910)    (4,874,118)

Income taxes                                             (29,404)        (6,293)

                                                    -------------  -------------
NET LOSS                                            $ (7,497,314)  $ (4,880,411)
                                                    =============  =============

Basic and diluted net loss per common share         $      (0.38)  $      (0.40)

Shares used to compute basic and diluted net
 loss per common share                                19,898,321     12,286,241

COMPREHENSIVE  LOSS:
         Net loss                                     (7,497,314)    (4,880,411)
         Foreign currency translation (loss) gain        (50,043)        28,388
                                                    -------------  -------------
COMPREHENSIVE LOSS                                  $ (7,547,357)  $ (4,852,023)
                                                    =============  =============

           See accompanying notes to consolidated financial statements
                                       F-5



<PAGE>
<TABLE>
                                                   NEW GENERATION HOLDINGS, INC.
                          CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT AND COMPREHENSIVE LOSS
                                              YEARS ENDED DECEMBER 31, 2001 AND 2000

<CAPTION>
                                               COMMON STOCK
                                                                                                     ACCUMULATED
                                                                      ADDITIONAL                       OTHER
                                                                       PAID-IN       ACCUMULATED    COMPREHENSIVE
                                           SHARES        AMOUNT        CAPITAL         DEFICIT         INCOME           TOTAL
                                       -------------  -------------  -------------  -------------   -------------   -------------
<S>                                      <C>          <C>            <C>            <C>             <C>             <C>
BALANCE AT DECEMBER 31, 1999             11,842,761   $     11,843   $    804,690   $ (3,547,326)   $          -    $ (2,730,793)
ISSUANCE OF COMMON STOCK                    706,556            707      5,298,225              -               -       5,298,932
ISSUANCE OF COMMON STOCK FOR
  SERVICES RENDERED                          25,058             25        155,398              -               -         155,423
ISSUANCE OF COMMON STOCK TO
   BACHKINE & MEYER INDUSTRIES SA           568,439            568      2,040,135              -               -       2,040,703
SATISFACTION OF LIABILITY BY
   BACHKINE & MEYER INDUSTRIES SA                 -              -        500,000              -               -         500,000
ISSUANCE OF COMMON STOCK FOR
   BUSINESS ACQUIRED                      1,931,974          1,932      2,606,233              -               -       2,608,165
ISSUANCE OF WARRANTS FOR SERVICES                 -              -        538,100              -               -         538,100
NET LOSS                                          -              -              -     (4,880,411)              -      (4,880,411)
CURRENCY TRANSLATION ADJUSTMENT                   -              -              -              -          28,388          28,388
                                       -------------  -------------  -------------  -------------   -------------   -------------
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                    181,667            182        495,318              -               -    $    495,500
ISSUANCE OF COMMON STOCK FOR
   SERVICES RENDERED                        132,391            132        394,089              -               -         394,221
ISSUANCE OF COMMON STOCK FOR
   BUSINESS ACQUIRED                      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
                                       =============  =============  =============  =============   =============   =============

                                           See accompanying notes to consolidated financial statements
</TABLE>
                                                                       F-6



<PAGE>
<TABLE>

                               NEW GENERATION HOLDINGS, INC.
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                              Year Ended        Year Ended
                                                              ----------        ----------
                                                              December 31, 2001 December 31, 2000
                                                              ----------------- -----------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                        $ (7,497,314)   $ (4,880,411)
Adjustments to reconcile net loss to net cash used in
    operating activities:
Depreciation and amortization                                      3,527,197         123,643
Equity instruments issued for services                               394,221         693,523
Equity in net losses of affiliates                                  (239,627)        250,577
Impairment losses in associated companies, net                       449,809         606,000
Minority interest in loss for the year                               (41,183)              -
INCREASE (DECREASE) IN CASH RESULTING FROM CHANGES IN:
Prepaid expenses and other current assets                         (2,420,790)        110,948
Other non-current assets                                             (13,715)              -
Accounts payable and accrued liabilities                           4,187,417         161,030
                                                                -------------   -------------
Net cash used in operating activities                             (1,653,985)     (2,934,690)
                                                                -------------   -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment                           (293,797)       (144,862)
Cash acquired in connection with acquisition                       1,473,778               -
Minority interest at date of acquisition                             (80,602)              -
Acquisition of equity in associated companies                              -        (476,629)
Advances to associated companies                                           -        (106,000)
Increase in secured loans                                                  -        (500,000)
                                                                -------------   -------------
Net cash used in investing activities                              1,099,379      (1,227,491)
                                                                -------------   -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Change in shareholders loan                                                -        (300,000)
Issuance of common stock                                             495,500       5,298,932
                                                                -------------   -------------
Net cash provided by financing activities                            495,500       4,998,932
                                                                -------------   -------------

Effects of exchange rate changes on cash and cash equivalents         (8,199)         14,945
                                                                -------------   -------------
Net increase in cash and cash equivalents                            (67,305)        851,696
   Cash and cash equivalents at beginning of period                  855,404           3,708
                                                                -------------   -------------
   Cash and cash equivalents at end of period                   $    788,099    $    855,404
                                                                =============   =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
   Cash paid during the year for interest                             31,352           3,357
   Cash paid during the year for income taxes                        116,995               -
   Common stock issued in exchange for services                      394,221         693,523
   Common stock issued in exchange for acquisitions               14,293,076       4,926,527
   Common stock issued in exchange for debt                                -         500,000
Acquisition :
    Assets acquired, net                                           1,458,966         429,302
    Goodwill and other intangible assets, net                     13,942,532       4,796,706
     Liabilities assumed, net                                     (1,108,422)       (299,481)
    Common stock issued                                          (14,293,076)     (4,926,527)
                                                                -------------   -------------
     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, 2001 AND 2000

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., a Delaware corporation (the "Company"), through
its subsidiary, is in the business of developing and marketing a proprietary
technology designed to process two or more discrete plastic polymers. The
Company is also engaged, through another group of subsidiaries, in the
development of mainframe computer system software solutions in the life cycle
management, data warehousing and data modeling sectors. Both activities are now
conducted primarily in Europe.

The Company, formerly known as New Generation Plastic, Inc. completed a merger
in June 1999 with SW Ventures, Inc., an inactive Delaware corporation with no
significant assets or operations. The resulting merged corporation was
subsequently renamed New Generation Plastic, Inc. On May 17, 2000, the Company
changed its name to New Generation Holdings, Inc.

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.

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.

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. See Note R to the consolidated
financial statements.

                                       F-8



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Liquidity
---------

As reflected in the accompanying consolidated financial statements, the Company
incurred net losses of $7,497,314 and of $4,880,411 for the years ended December
31, 2001 and 2000, respectively, and has an accumulated deficit of $15,925,051
as of December 31, 2001. In addition, the Company's current liabilities exceeded
its current assets by $1,577,629 as of December 31, 2001. 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
-------------------

The Company accounts for revenue recognition in accordance with AICPA Statement
of Position 97-2 ("SOP 97-2"), Software Revenue Recognition. That statement
requires that revenue recognized from software arrangements be allocated to each
element of the arrangement based on the relative fair values of the elements,
such as software products, upgrades, enhancements and post contract support.

The Company's revenue is derived from three primary activities, licensing of its
proprietary software products, maintenance and consultancy. The licensing of the
Company's software product is generally accompanied by a maintenance agreement
covering a one-year period. The product license is granted for an indefinite
period of time and revenue related to the sale of the software product is
recognized upon delivery to the customer.

Post contract support or maintenance agreements included in the license
agreement are renewable annually at the option of the customer. Under these
agreements, the Company provides technical inquiry services and additional
services such as the distribution of patches for corrections of discovered
software errors. While the maintenance agreements are effective, the customer is
entitled to receive new releases of the software products as they become
available. The Company's licenses do not provide for specific upgrade or return
rights. Revenues related to the maintenance agreements are recognized over the
term of the agreement. Amounts that have been deferred under these contracts are
recorded as deferred income in the Company's financial statements.

                                       F-9



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

The fair values attributable to the sale of the software product and the post
contract service are determined by the Company by reference to the rates charged
for renewal of such post contract service agreements upon expiration of the
original agreements. The customer may renew the maintenance agreements annually,
based on the original maintenance fee established with minor increases.

Additionally, the Company offers consultancy services to its clients in the form
of formal training on the use of software or system enhancements. These services
are not integral to the operation and use of the Company's products and thus the
Company recognizes revenue related to consultancy based upon established hourly
rates as the services are performed.

Software Development Costs
--------------------------

The Company accounts for software development costs under the Financial
Accounting Standards Board's Statement of Financial Accounting Standards
("SFAS") No. 86, Accounting for Costs of Computer Software to be Sold, Leased or
Otherwise Marketed. Under SFAS No. 86, the costs associated with software
development are required to be capitalized after technological feasibility has
been established. Based on the Company's product development process,
technological feasibility is generally established upon completion of the
working model. Costs incurred by the Company between completion of the working
model and the point at which the product is ready for general release have been
insignificant and, as a result, the Company has not capitalized any software
development costs. Total software development costs approximated $834,000 and
$726,000 in 2001 and 2000, respectively, and is recorded within selling, general
and administrative costs.

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

                                      F-10



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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.

Acquisitions
------------

The Company has accounted for its business acquisitions using the purchase
method of accounting. Under this method, the costs of the acquisition are
allocated to the assets acquired and liabilities assumed based upon respective
fair values (See Note E).

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.

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. 121
(SFAS 121). 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. SFAS 121 also requires assets to be disposed of
be reported at the lower of the carrying amount or the fair value less costs to
sell.

                                      F-11



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

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. The allowance
for doubtful accounts was $82,353 at December 31, 2001.

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, during the year 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.

Product Development Costs
-------------------------

Product development costs include expenses incurred by the Company for research,
design and development of the Company's proprietary technology. Product
development costs are expensed as incurred, and amounted to $0 and $252,342 in
2001 and 2000, respectively.

Advertising
-----------

The Company follows the policy of charging the costs of advertising to expenses
as incurred. For the years ended December 31, 2001 and 2000, advertising costs
were not material to the consolidated statement of operations.

                                      F-12



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Goodwill and Other Intangibles
------------------------------

Goodwill represents the excess of the aggregate purchase price over the fair
value of net assets acquired and is being amortized on a straight-line basis
over a period not exceeding 5 years. The Company reviews impairment of goodwill
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of the assets to future
undiscounted cash flows of the businesses acquired. Should impairment be
identified, a loss would be reported to the extent that the carrying value of
the related goodwill exceeds the fair value of that goodwill based upon the
expected discounted future cash flows. Through December 31, 2001, no impairment
has occurred.

The Company is required to adopt SFAS 141 and 142 on a prospective basis as of
January 1, 2002. As a result of implementing these new standards, goodwill will
continue to be recognized as an asset, but will not be amortized as previously
required by APB Opinion No. 17 "Intangible Assets." Instead, goodwill will be
subject to periodic (at least annual) tests for impairment and recognition of
impairment losses in the future will be based on a new methodology for measuring
impairments prescribed by these pronouncements.

Stock Based Compensation
------------------------

The Company accounts for stock transactions in accordance with APB Opinion 25,
"Accounting for Stock Issued to Employees." In accordance with Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation," the Company has adopted the proforma disclosure requirements.

Comprehensive Income (Loss)
---------------------------

Comprehensive income includes gains and losses on foreign currency translation
adjustments and is included as a component of stockholders' equity.

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.

                                      F-13



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE A - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Reclassifications
-----------------

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

New Accounting Pronouncements
-----------------------------

In March 2000, the FASB issued interpretation No. 44 ("FIN 44"), "Accounting for
Certain Transactions Involving Stock Compensation, an Interpretation of APB
Opinion No. 25". FIN 44 clarifies the application of APB No. 25 for (a) the
definition of employee for purposes of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequences of various modifications to previously fixed stock
options or awards, and (d) the accounting for an exchange of stock compensation
awards in a business combination. FIN 44 is effective July 2, 2000 but certain
conclusions cover specific events that occur after either December 15, 1998 or
January 12, 2000. The adoption of FIN 44 did not have an affect on the Company's
financial statements but may impact the accounting for grants or awards in
future periods.

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141, Business Combinations (FAS 141), and FAS
142, Goodwill and Other Intangible Assets (FAS 142). FAS 141 addresses the
initial recognition and measurement of goodwill and other intangible assets
acquired in a business combination. FAS 142 addresses the initial recognition
and measurement of intangible assets acquired outside of a business combination,
whether acquired individually or with a group of other assets, and the
accounting and reporting for goodwill and other intangibles subsequent to their
acquisition. These standards require all future business combinations to be
accounted for using the purchase method of accounting. Goodwill will no longer
be amortized but instead will be subject to impairment tests at least annually.
The Company is required to adopt FAS 141 and FAS 142 on a prospective basis as
of January 1, 2002; however, certain provisions of these new standards may also
apply to any acquisitions concluded subsequent to June 30, 2001. The Company
does not believe that the adoption of FAS 141 or 142 will have a material impact
on its consolidated financial statements.

In October 2001, the Financial Accounting Standards Board issued FAS 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" (FAS 144). FAS
144 addresses financial accounting and reporting for the impairment or disposal
of long-lived assets. This statement supersedes FAS 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
(FAS 121) and related literature and establishes a single accounting model,
based on the framework established in FAS 121, for long-lived assets to be
disposed of by sale. The Company is required to adopt FAS 144 no later than
January 1, 2002. The Company does not believe that the adoption of FAS 144 will
have a material impact on its consolidated financial statements.

                                      F-14



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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 - PROPERTY, PLANT AND EQUIPMENT

The Company's property, plant and equipment at December 31, 2001 consists of the
following:

  Office Furniture                                      $  313,958
  Computer Equipment                                       537,969
                                                        -----------
     Total                                                 851,927
  Accumulated Depreciation                                (574,172)
                                                        -----------
                                                        $  277,755
                                                        ===========

Depreciation expense included as a charge to income amounted to $ 140,660 and
$20,244 for the years ended December 31, 2001 and 2000, respectively.

NOTE C - INTANGIBLE ASSETS

The costs and accumulated amortization of intangible assets at December 31, 2001
are summarized as follows:

                                                           2001
                                                      -------------
  Goodwill, net                                       $ 17,883,894
  Patent                                                   517,199
                                                      -------------
     Total                                              18,401,093
  Less:  accumulated amortization                       (3,563,206)
                                                      -------------
  Intangible assets, net                              $ 14,837,887
                                                      =============

Amortization expense included as a charge to income amounted to $3,386,537 and
$103,399 for the years ended December 31, 2001 and 2000, respectively.

                                      F-15



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE D- EQUITY INVESTMENTS IN ASSOCIATED COMPANIES

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. 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.

The combined net earnings (loss) of the equity method investee companies for the
years ended December 31, 2001 and 2000 were $239,628 and $(250,577),
respectively (see Notes E and F).

NOTE E - ACQUISITIONS

On December 29, 2000, the Company acquired a 25% interest in Minerva, an
integrated technology infrastructure solutions provider of extraction modeling
and lifecycle management software, in exchange for 1,931,974 restricted shares
of the Company's common stock. The total cost of the acquisition was initially
valued at $2,608,165 and subsequently revised to $4,926,527 in 2001. Management
reassessed the value of the restricted stock issued at 85 percent of the average
of the stock's closing price. As of the acquisition date, the Company's share of
the net book value of Minerva was $129,821. As of December 31, 2000, the excess
cost of $4,796,707 over its share of the Minerva net assets at the acquisition
date has been recorded as goodwill, and will be allocated to identified
intangibles and other assets acquired and liabilities assumed. This goodwill is
being amortized on a straight line basis over 5 years.

On February 28, 2001, the Company acquired the 937,500 shares of Minerva common
stock not previously owned, representing the remaining 75% of the issued and
outstanding shares of Minerva. In exchange for the remaining shares of Minerva,
the Company issued an aggregate of 5,365,342 unregistered shares of its own
Common Stock, with a value of $13,955,255, in a transaction accounted for using
the purchase method of accounting. The aforementioned transaction contemplates
the seller's reorganization and contribution of its ownership interests in Case
Belgie N.V., Case Nederland B.V., and Case France S.A. as part of the
acquisition of Minerva. These entities together are referred to as the "Minerva
Group."

On April 26, 2001, the Company issued a further 132,922 unregistered shares of
its common stock, with a value of $337,821, in connection with the acquisition
by Minerva Softcare N.V. of 80 percent of the issued share capital of Case
Associates S.A. (a French company) and 60 percent of the issued share capital of
Case Associates N.V. (a Belgian company). Case Associates NV was already 40
percent owned by Minerva Softcare N.V., and as a result of the latest
transaction, is now 100 percent owned.

                                      F-16



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE E - ACQUISITIONS (CONTINUED)

The total purchase price and carrying value of the seventy-five percent (75%) of
the net assets acquired of Minerva Softcare N.V. were as follows:

        Assets acquired                               $  1,458,966
        Goodwill and other intangibles                  13,942,532
        Liabilities assumed                             (1,108,422)
                                                      -------------
        Total                                         $ 14,293,076
                                                      =============

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

The following unaudited pro forma information presents the condensed
consolidated statement of losses of the Company as if the investment of 100% of
the common stock of Minerva had been completed as of January 1, 2000.

                                                  Year Ended        Year Ended
                                                  December 31,      December 31,
                                                     2001              2000
                                                  ------------      ------------
   Revenues                                       $ 4,222,293       $ 4,707,939

   Net loss attributable to common shareholders   $(6,897,648)      $(4,378,048)

   Weighted average common shares outstanding:
         Basic and diluted                         20,734,342        19,700,643

   Loss per share:
         Basic and diluted                        $     (0.33)      $     (0.22)

These unaudited pro forma results have been prepared for comparative purposes
only and include certain adjustments, such as additional amortization expense as
a result of the goodwill. They do not purport to be indicative of the results of
operations that actually would have resulted on the date indicated, or which may
be obtained in the future.

                                      F-17



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE F- IMPAIRMENT OF LONG-LIVED ASSETS

The Company recorded impairment charges of $449,809 and $106,000 related to its
equity investments accounted for under the equity method for the years ended
December 31, 2001 and 2000, respectively. 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. As a result, the Company wrote off the book
values of these investments.

The Company also recorded an impairment charge of $500,000 during the year ended
December 31, 2000 in connection with an advance to a consulting firm
subsequently deemed to be uncollectible (see Note Q).

NOTE G -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, 2001 the Company has issued and
outstanding 20,887,110 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 outstanding at December 31, 2001.

In 2000, the Company issued a total of 568,439 shares of common stock in
exchange for $2,040,703 of previously incurred debt. In 2000, the Company issued
706,556 shares of common stock in exchange for $5,298,923, net of offering costs
and fees. In addition, the Company issued 25,058 shares of common stock for
$155,423 of services rendered in 2000. The shares issued for services were based
upon the value of the services rendered or the market price of the Company's
common stock during the period the services were rendered. In connection with
the Company's acquisition of 25% of Minerva, the Company issued 1,931,974 shares
of common stock valued at $ 2,608,165 (see Note 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 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 Note 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 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. The
shares issued for services were based upon the value of the services rendered or
the market price of the Company's common stock during the period the services
were rendered.

                                      F-18



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE H- WARRANTS AND STOCK OPTIONS

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 and non-employees at December 31, 2001.

            Warrants Outstanding                    Warrants Exercisable
            --------------------                    --------------------
                                Weighted Average
                     Number       Contractual       Number    Weighted Average
Exercise prices:   Outstanding    Life (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
          $3.00       121,111          5.0          121,111          $  3.00
          $1.80        20,000          3.0           20,000          $  1.80
                   -----------    ------------   -----------   --------------
                    3,308,217          2.64        3,308,217         $  6.13
                   ===========    ============   ===========   ==============

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

                                                   Number       Weighted Average
                                                   of shares     Exercise Price
                                                   -----------       -----------
Outstanding at April 15, 1999                               -        $        -
                                                   ===========       ===========
Granted                                             2,960,706              6.00
Exercised                                                   -                 -
Cancelled                                                   -                 -
                                                   -----------       -----------
 Outstanding at December 31, 1999                   2,960,706        $     6.00
                                                   ===========       ===========
Granted                                               206,400             10.23
Exercised                                                   -                 -
Cancelled                                                   -                 -
                                                   -----------       -----------
 Outstanding at December 31, 2000                   3,167,106        $     6.28
                                                   ===========       ===========
Granted                                               141,111              2.83
Exercised                                                   -                 -
Cancelled                                                   -                 -
                                                   -----------       -----------
Outstanding at December 31, 2001                    3,308,217        $     6.13
                                                   ===========       ===========

                                      F-19



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE H- WARRANTS AND STOCK OPTIONS (CONTINUED)

The weighted-average fair value of stock options granted to shareholders during
the years ended December 31, 2001 and 2000 and the weighted-average significant
assumptions used to determine those fair values, using a Black-Scholes option
pricing model are as follows:

                                                                2001      2000
                                                               ------    ------
   Weighted average grant date fair value per share:           $3.31     $2.75
   Significant assumptions (weighted-average):
       Risk-free interest rate at grant date                    3.89%     6.40%
       Expected stock price volatility                            21%       57%
       Expected dividend payout                                    -         -
       Expected option life-years (a)                            3.0       3.1
         (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 $7,659,154 and $(0.38) in 2001 and
$5,448,174 and $(0.44) in 2000, respectively.

In addition to the above warrant activity, the Board of Directors approved a
Stock Compensation Plan on September 27, 2000, to provide for the granting of
options to employees to buy shares of the Company's common stock. The Company
has designated 4,100,000 shares of common stock for this plan. These options are
to vest in periods ranging from the date of grant to one year after the grant
date. As of December 31, 2001, there have been no grants under this plan.

NOTE I - SHORT-TERM BORROWINGS

Short-term debt at December 31, 2001 consists of the following:

    90 day bank note payable; interest payable
       monthly at 5.04% per annum; unsecured              $ 219,589
    24 day bank note payable; interest payable
       monthly at 5.937% per annum; unsecured               219,589
                                                          ----------
             Total                                        $ 439,178
                                                          ==========

                                      F-20



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE J - INCOME TAXES

Financial Accounting Standard No. 109 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.

Losses before income taxes for the years ended December 31, 2001 and 2000
consist of:

                                               Year Ended         Year Ended
                                               December 31,       December 31,
                                                   2001              2000
                                             ----------------    ---------------
  Domestic                                   $    (1,352,929)    $   (3,751,205)
  Foreign                                         (6,114,981)        (1,122,913)
                                             ----------------    ---------------
  Loss before taxes                          $   ( 7,467,910)    $   (4,874,118)
                                             ================    ===============

The provision for income taxes for the years ended December 31, 2001 and 2000
consists of:

Year ended December 31, 2001                Current       Deferred       Total
----------------------------             ------------     ---------     --------
Federal and state                        $         -      $      -      $     -
Foreign                                       29,404             -       29,404
                                         ------------     ---------     --------
                                         $    29,404      $      -      $29,404
                                         ============     =========     ========

Year ended December 31, 2000                Current       Deferred        Total
----------------------------             ------------     ---------     --------
Federal and state                        $         -      $      -      $     -
Foreign                                        6,293             -        6,293
                                         ------------     ---------     --------
                                         $     6,293      $      -      $ 6,293
                                         ============     =========     ========

                                      F-21



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE J - INCOME TAXES (CONTINUED)

Income tax expense was $ 29,404 and $6,293 for the periods ended December 31,
2001 and 2000, respectively, and differed from the amounts computed by applying
the U.S. federal income tax rate of 35% to net loss before income taxes as a
result of the following:

                                                      Year Ended    Year Ended
                                                      December 31,  December 31,
                                                         2001           2000
                                                     ------------   ------------
Expected tax benefit                                    (473,525)   $(1,705,941)
State and local income tax benefit, net of
federal tax benefit                                      (81,175)      (243,700)
Equity in net earnings (losses) of affiliates,
minority interests and other adjustments, net            257,002         87,702
Change in valuation allowance, net                       327,102      1,868,232
                                                     ------------   ------------

Income taxes                                         $    29,404    $     6,293
                                                     ============   ============

At December 31, 2001, the Company has available for federal income tax purposes
a net operating loss carryforward of $ 8,900,000, expiring the year 2021, that
may be used to offset future taxable income. The Company has provided a
valuation reserve against the full amount of the net operating loss benefit,
since in the opinion of management based upon the earnings history of the
Company, it is more likely than not that the benefits will not be realized. Due
to significant changes in the Company's ownership, the Company's future use of
its existing net operating losses may be limited.

Components of deferred tax assets as of December 31, 2001 are as follows:

                Non current:
                Net operating loss carryforwards and other         $ 3,649,738
                Valuation allowance                                 (3,649,738)
                                                                   ------------
                Net deferred tax asset                             $         -
                                                                   ============

NOTE K - EMPLOYEES BENEFIT PLANS

The Company has contributed $42,186 and $20,745 to retirement plans for
employees in Geneva, Switzerland and London, England during the period ended
December 31, 2001 and 2000, respectively.

                                      F-22



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE L - LOSSES PER COMMON SHARE

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

                                                        2001            2000
                                                        ----            ----
Net loss available for common shareholders          $(7,497,314)   $ (4,880,411)
                                                    ============   =============
Basic and fully diluted loss per share                     (.38)           (.40)
                                                    ============   =============
Weighted average common shares outstanding           19,898,321      12,286,241
                                                    ============   =============

NOTE M - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at December 31, 2001 are as follows:

        Accounts payable                                           $  2,615,775
        Accrued expenses                                              1,748,685
        Provision for income taxes                                       29,404
                                                                   -------------
        Total                                                      $  4,393,864
                                                                   =============

NOTE N - CONTINGENCIES AND COMMITMENTS

Lease Commitments
-----------------

Minimum rental commitments for office facilities under non-cancellable leases at
the end of 2001 are as follows:

                           2002                        $  174,411
                           2003                           152,081
                           2004                            91,913
                           2005                            82,762
                           2006                            51,302

Rent expense included as a charge to income amounted to $ 171,943 and $ 62,537
for the years ended December 31, 2001 and 2000, respectively.

Other
-----

The Company has issued a guarantee of $32,754 to the owners of its Geneva
premises and $21,867 to the owners of its Belgian premises securing payment of
the Company's lease obligations (see Note Q).

                                      F-23



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE N - CONTINGENCIES AND COMMITMENTS (CONTINUED)

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, 2001, 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.

In May 2001, Minerva filed a claim against QID N.V., a former equity investment
company, in Belgium. The complaint seeks a rescission of the acquisition
agreement and collection of a $110,000 loan advanced by Case Associates. In
2001, the Court has issued an order granting seizure of QID's assets.

In March 2000, Minerva filed a complaint against Computer Associates in Belgium,
The Netherlands, and France. Minerva is claiming damages for a breach of
contract and illegal use of software.

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 O-MAJOR CUSTOMERS

Revenue from three (3) major customers approximated $908,000 or 37% and $0 or 0%
of sales for the years ended December 31, 2001 and 2000, respectively.

                                      F-24



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE P - SEGMENT INFORMATION

The Company's three reportable segments are managed separately based on
fundamental differences in their operations. During 2001 and 2000, the Company
operated in the following three reportable segments:

         o        Software Technology, which is engaged in the business of
                  software development and providing software solutions.

         o        Plastics recycling and Blending, which is in the development
                  stage of commercializing patented plastic technology.

         o        Corporate, which is seeking new investment opportunities in
                  established software and consulting businesses.

The Company also segments its business through geographic locations. Those
geographic segments are:

         o        United States
         o        France
         o        Benelux countries
         o        Other Europe (Sweden, Switzerland, and United Kingdom)

Segment operating income is total segment revenue reduced by operating expenses
identifiable with the business segment. Corporate includes general corporate
administrative costs.

The Company evaluates performance and allocates resources based upon operating
income. The accounting policies of the reportable segments are the same as those
described in the summary of accounting policies. There are no inter-segment
sales.

                                      F-25



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE P - SEGMENT INFORMATION (CONTINUED)

The following table summarizes segment asset and operating balances by
reportable segment.

                                                         2001          2000
                                                         ----          ----
NET SALES TO EXTERNAL CUSTOMERS:
Software Technology                                   2,461,000               -
Plastics Recycling and Blending                               -               -
Corporate                                                     -               -
                                                   -------------   -------------
    TOTAL SALES TO EXTERNAL CUSTOMERS              $  2,461,000         $     -
                                                   =============   =============

DEPRECIATION AND AMORTIZATION:
Software Technology                                     (98,577)              -
Plastics Recycling and Blending                        (103,440)       (103,399)
Corporate                                            (3,325,180)        (20,244)
                                                   -------------   -------------
   TOTAL DEPRECIATION AND AMORTIZATION             $ (3,527,197)   $   (123,643)
                                                   =============   =============

GENERAL AND ADMINISTRATIVE EXPENSE:
Software Technology                                  (3,736,205)              -
Plastics Recycling and Blending                         (59,611)              -
Corporate                                            (2,387,126)     (3,727,546)
                                                   -------------   -------------
   TOTAL GENERAL AND ADMINISTRATIVE EXPENSE        $ (6,182,942)   $ (3,727,546)
                                                   =============   =============

CAPITAL EXPENDITURES:
Software Technology                                    (292,954)              -
Plastics Recycling and Blending                               -               -
Corporate                                                  (843)       (144,862)
                                                   -------------   -------------
  TOTAL CAPITAL EXPENDITURES                       $   (293,797)   $   (144,862)
                                                   =============   =============

OPERATING (LOSSES):
Software Technology                                  (4,939,425)              -
Plastics Recycling and Blending                        (163,051)       (355,741)
Corporate                                            (2,596,472)     (4,353,790)
                                                   -------------   -------------
   TOTAL SEGMENT OPERATING LOSSES                  $ (7,698,948)   $ (4,709,531)
                                                   =============   =============

SEGMENT ASSETS:
Software Technology                                  17,929,853
Plastics Recycling and Blending                         239,688
Corporate                                               215,229
                                                   ------------
    TOTAL SEGMENT ASSETS                           $ 18,384,770
                                                   =============

                                      F-26



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE P - SEGMENT INFORMATION (CONTINUED)

Information concerning principal geographic areas is presented below according
to the area where the activity is taking place.

                                                          2001          2000
                                                          ----          ----
NET SALES TO EXTERNAL CUSTOMERS:
United States                                                 -               -
France                                                  320,417               -
Benelux                                               2,140,583               -
Other Europe                                                  -               -
                                                    ------------    ------------
  TOTAL SALES TO EXTERNAL CUSTOMERS                 $ 2,461,000     $         -
                                                    ============    ============

ASSETS:
United States                                           356,515
France                                                  960,783
Benelux                                              16,940,195
Other Europe                                            127,277
                                                    ------------
   TOTAL ASSETS                                     $18,384,770
                                                    ============

NOTE Q- RELATED PARTY TRANSACTIONS

In 2000, the Company advanced an unrelated third party $500,000 and entered into
a Consulting Agreement with the entity whereby the entity would provide certain
strategic consulting services to the Company. The entity defaulted on the terms
of the loan and the Company agreed to forgive repayment of the loan in exchange
for terminating the Consulting Agreement. The Company recorded the forgiveness
of repayment of the $500,000 as an asset impairment loss charged to operations
in 2000.

In connection with the termination of the Consulting Agreement and forgiveness
of the indebtedness, Bachkine & Meyer Industries SA ("BMI"), an entity
controlled by the Company's President and Chief Executive Officer and a
significant Company shareholder, forgave a previously advanced BMI loan of
$500,000 to the Company. The unrelated third party mentioned in the previous
paragraph, in return, released BMI from its obligation to deliver 500,000 shares
of the Company's common stock to them.

In November 2000, BMI agreed to forgive $2,165,703 of previously advanced funds
to the Company under a convertible line of credit in exchange for $300,000, the
forgiveness of $500,000 of indebtedness, and the conversion of the remaining
balance of $1,365,703 into 380,417 shares of the Company's restricted common
stock, valued at the market value on the date of the agreement. The impact of
this related party transaction has been recorded in shareholders' equity, with
no gain or loss recorded in the statement of operations.

                                      F-27



<PAGE>

                          NEW GENERATION HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE Q- RELATED PARTY TRANSACTIONS (CONTINUED)

In December 2000, the Company issued 188,022 shares of the Company's restricted
common stock to an entity affiliated with BMI in exchange for $675,000 of
previously incurred services rendered to the Company. The Company valued the
shares issued at $3.59 per share, which approximated the fair value of the
shares at the dates of issuance.

In connection with the Minerva acquisition, a finder's fee of $106,000 was paid
to one of the Directors of the Company. This amount was recorded in selling,
general and administrative expenses in the consolidated statement of losses as
of December 31, 2000.

In 2001 and 2000, the Company utilized office space in New York provided by an
entity controlled by a director of the Company. Amounts paid and recorded in the
consolidated statement of operations for certain expenses relating to the
operation of the office were immaterial.

Two of the Company's significant shareholders provide management services to
Minerva Softcare. These services consist of technical assistance as well as
administrative and marketing assistance. Compensation paid to these shareholders
for the years ended December 31, 2001 and 2000 was $260,975 and $0,
respectively. Amounts payable to these shareholders at December 31, 2001 were
$9,806.

The Company's subsidiary, Minerva, leases office space in Belgium from an entity
in which significant shareholders of the Company have an ownership interest.
Rental expense paid to this entity for the years ended December 31, 2001 and
2000 was $54,512 and $0, respectively. Additionally, the Company pays an annual
management fee to the entity of $7,394 per year. Amounts payable to this entity
at December 31, 2001 were $85,946. Amounts due from this entity at December 31,
2001 resulting from cash advances were $15,933.

NOTE R - GOING CONCERN MATTERS

As reflected in the accompanying consolidated financial statements, the Company
incurred net losses of $7,497,314 and $4,880,411 for the year ended December 31,
2001 and 2000, respectively, and has an accumulated deficit of $15,925,051 as of
December 31, 2001. In addition, the Company has had 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 is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its products and additional
equity investment in the Company. The accompanying consolidated 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 flows continue to 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-28